The Best Argument Doesn't Always Win

Years ago, I found myself sitting in an arbitration hearing over the value of a hydroelectric plant. The seller's experts believed the plant was worth more than $25 million. Our expert believed it was worth less than $10 million. After several days of testimony, both sides had spent a lot of time explaining why their number was correct and the other side's number was wrong.

As I listened, I became increasingly concerned. Not because I thought our expert was wrong, but because I wasn't convinced the arbitrators were headed toward an outcome that made sense for my utility.

So, I went back and reviewed every appraisal that had been prepared during the process. Some seemed more credible than others. Some relied on assumptions I found difficult to accept. Some struck me as overly optimistic. Others felt overly conservative.

Instead of asking which appraisal was right, I started asking a different question: “If I were a willing buyer looking at all the information, what would I be willing to pay?” I assigned my own weight to each valuation and built what I believed was a reasonable answer.

When I testified, the lead arbitrator eventually asked me a direct question: “Having reviewed the appraisals, what do you believe a willing buyer would pay?” I told him: “I wouldn't be willing to pay more than $16 million.” The arbitration panel ultimately adopted that exact number. I was surprised. I thought they might move in that direction. I didn't expect them to land exactly there.

What stayed with me afterward wasn't the result. It was the process. Most people entered that room trying to prove they were right. I was trying to understand how the arbitrators would decide. Those are not the same thing.

Decision makers are often forced to choose between competing interpretations of the facts. The question is rarely which side believes they are right. The question is which conclusion the decision maker can reasonably defend.

I've seen the same pattern repeat itself in boardrooms, negotiations, regulatory proceedings, and public policy debates. People become so focused on defending their position that they stop asking what the decision maker needs in order to reach a conclusion.

The strongest argument doesn't always win. The most useful argument often does.

If you want to influence an outcome, it helps to stop thinking only about your position and start thinking about the person who must make the decision. How are they weighing the evidence? What are they trying to reconcile? What conclusion can they credibly defend? That's not compromise. It's understanding how decisions get made.

 And in my experience, organizations that understand how decisions get made tend to outperform organizations that simply spend more time arguing.