Negotiating Mistakes You Should Avoid

Our lives are an endless chain of negotiations, from negotiating when to go to bed as a kid, to negotiating an insurance deal for your car. We instinctively know our limits based on our options, namely our Best Alternative To a Negotiated Agreement – BATNA.

The most powerful tool you can have in a negotiation is knowing your alternatives and those of your opponent.

It all boils down to knowing your cards and how to play them right. Ryan Gray, from The Negotiating Society, pointed to a recent spat between Disney and Sony over Spider-Man’s role in The Marvel Cinematic Universe, to showcase common negotiating errors and the significance of BATNA when negotiating.

Overestimating your Position

Currently Disney gets 5% of Sony’s box office profits from Spider-Man movies. Disney thought that the latest Spider-Man movie, “Far From Home”, owes its record breaking success to the super hero’s appearance in The Avengers franchise. Feeling itself in a position of power, Disney decided to try and squeeze Sony a little and demanded 50% of the profit from future Spider-Man movies when they were renegotiating the terms of their agreement. The plan backfired and Sony “walked away” from the negotiating table, removing Spider-Man, arguably one of The MCU’s most popular heroes, from the franchise, leaving fans shocked and Disney baffled.

Disney overestimated their power over Sony, and underestimated how valuable the Spider-Man character is to The MCU. which brings us to the next mistake commonly made in negotiations.

Mischaracterizing your BATNA

Jim Sebenius, from the Harvard Business School, points out in a working paper that your BATNA is for the case that negotiations fail, an outside option. But in some cases there is no outside option except cancelling the project. As Sebenius puts it – take it or go jump in a lake.

In the case between Disney and Sony, their BATNA was practically go jump in a lake, if not that drastic. Both sides were dependent on each other to benefit from future Spider-Man movies, with no real alternative. Neither could have gone to another studio to negotiate another deal, this naturally changes the dynamics of a negotiation. In this case there is no real BATNA to give you leverage over your counterpart, only consequences of a no-deal outcome.

Misusing your BATNA

Your BATNA shouldn’t be seen as your last resort to fall back on if negotiations fail, it should be seen as the powerful tool it is to strengthen your position in a negotiation. Seeing your BATNA as a plan B in case all goes south robs you of the chance to gain leverage over the opposing party. Knowing your needs and the alternatives available will give the capability to better analyse and evaluate any offer on the table.

Knowing your opponents BATNA, as well as your own, will help you better find creative solutions or compromises in deadlocked situations.

Fisher and Ury’s advice in “Getting to Yes”  is not to establish a bottom line to protect yourself from a bad deal, but to have a clear idea of your BATNA to make the most of your assets. They conclude that developing your BATNA not only enables you to determine what is minimally acceptable, it will probably raise that minimum. In the above mentioned case Disney didn’t consider Sony’s alternatives and Sony didn’t try to offer a compromise that would benefit both sides. Instead their negotiations evolved into a public standoff but after a lot of public debate, a lot of angry fans and realising that their alternative was to “go jump in a lake”, both parties found a compromise where Disney gets 25% of the box office profit and shoulders a part of the production costs on future Spider-Man movies.