Tom Stilp, JD, MBA/MM, LLM, MSC
Zig Ziglar’s famous line says: “Expect the best. Prepare for the worst. Capitalize on what comes.” Ziglar, Z. (2012). citation below
There are things we know. There are things we don’t know. And there are things we don’t know that we don’t know. At the risk of being lampooned for matching verbs and nouns of the same words, it has been said that there are “known knowns, known unknowns and unknown unknowns.” citation below
Having handled hundreds of lawsuits, we know that all settlement comes from the creation and sustenance of doubt. Creating and sustaining doubt in the other side motivates settlement.
We use a “subjective expected utility,” or SEU, in trials. The SEU of any rational decision can be determined in the following five (5) steps (and these steps are useful in business decisions as well as in trial decisions):
||Identify what options are available for action|
||Identify the possible outcomes of each option|
||Estimate the likelihood of various outcomes happening|
||Calculate the value of the outcomes|
||Combine the information according to probability to estimate the SEU of each option|
The option with the highest SEU is then chosen. (Based on Murnighan, J. & Mowen, J. (2002). The Art of High-Stakes Decision-Making, 131-132.)
In the face of knowing or not knowing, as humans, we have always prided ourselves on having big brains and figuring out the appropriate response to settle a dispute:
There is a constant tension between law and business. The law and business sometimes converge at exactly the right spot. We make judgment calls each time. We balance the pros and the cons. And we get closer and closer to the truth as we gather more evidence.
But how we react, and perhaps more importantly, how people perceive how we react to knowing and not knowing makes the difference between success and failure.
With over 150 trials, and hundreds of settlements, we’ve developed rules that separate outcomes from probabilities to reach the “right” result.
As always, we are interested in hearing your comments.
image cred: https://designabetterbusiness.com/2016/06/08/many-shapes-uncertainty/
Ziglar cite: https://academic.oup.com/jxb/article/60/3/712/453685
“Things we know” cite: https://academic.oup.com/jxb/article/60/3/712/453685