I came across this interesting experiment while listening to “Difficult Conversations: How to Discuss What Matters Most” by a few authors associated with Harvard Law School and the Harvard Negotiation Project.
Howard Raiffa, the Frank P. Ramsey Professor (Emeritus) of Managerial Economics at Harvard Business School posed this assignment to 3 teams: determine an objective value for a business based on a fact sheet. One team was informed they would be selling the business, another team informed they would be purchasing it, and the final team informed they were providing an independent appraisal. All teams were given the same fact sheet about the business, all directed to provide an objective price (not a list price, or purchase price).
The results?
The team selling the business valued it 30% higher than the independent appraisal team, and the purchasing team valued it 30% less than the independent team.
Different values aren’t surprising, what I found surprising was how far the spread was – considering they were only role playing and theoretically not emotionally involved in the success of the transaction!
Which lenses are you wearing? Your chances of arriving at an agreement improve drastically when you can put on the lenses of the other party. However, this doesn’t mean you must keep those glasses on . . .
