When a dispute stalls on what each side wants, a sponsor proposes settling it by a standard both already respect, such as market rates, precedent, or a published benchmark, and argues within it.
An example
Machined brackets were the subject of a year-long argument between two divisions of an auto parts supplier: the castings division charged $4.10 each, and the assembly division said it could buy them outside for less. Each side had a cost model that proved its own number. The assembly division's controller stopped arguing hers. She proposed that the price be set by three outside quotes for the same part, collected by procurement, with the castings division allowed to match the lowest. Both division presidents agreed to the method before anyone saw a quote. The quotes came in at $3.60, $3.85, and $4.30. Castings matched $3.60 and kept the volume. The argument, which had eaten two hours of every quarterly review, did not come up again.
Why it works
Arguments over positions become contests of will, where giving ground looks like weakness. A standard both sides already accept, such as a market price, a precedent, or a published benchmark, moves the question from who wins to what is fair, so agreement looks better and is easier to give: either side can accept the answer without losing face. It depends on finding a standard each side respects, on agreeing to the method before seeing the result, and on the comparison set and method being open.
The thinking behind it
Roger Fisher Getting to Yes: Negotiating Agreement Without Giving In (1981), by Fisher and Ury, advises insisting on objective criteria: negotiate on a basis independent of either side's will, such as market value or precedent, search for criteria jointly, and yield to principle and never to pressure. Outside quotes for a machined part are such a basis, and agreeing to them before anyone sees the numbers is the joint search the book describes.
William Ury Getting Past No: Negotiating with Difficult People (1991) advises building the other side a golden bridge: remove the obstacles to agreement, involve them in shaping the solution, and help them save face so that agreeing does not look like giving in. A standard both sides already respect does this, because a division that accepts the market price has deferred to the market, and conceded nothing to its rival.
When it fits
Disputes over numbers or rules where the parties are stuck on positions are the classic case: transfer prices, budget splits, service levels, pay bands. You need a standard that exists outside the dispute, access to the data, and the willingness to accept the result when it goes against you.
How to use it well
Move the question from what each side wants to what would be fair, and ask the other side what standard they would accept.
- Offer two or three candidates: market prices, past practice, industry benchmarks, an outside expert.
- Agree on the standard and the method before anyone runs the numbers.
- Have the data collected by someone neutral, and share it in full.
- Argue within the standard: which comparison is closest, how to adjust for differences.
If the other side refuses every standard, ask them to name one. Refusing all of them shows they want their number whatever the evidence says.
What it costs and where it backfires
You have to live with the result, and the standard may go against you. Choosing the standard can itself become a fight, and whoever proposes one will be suspected of picking a friendly one. Hand-picking the comparison set, or hiding the method so the answer is fixed in advance, rigs the benchmark and destroys trust in every comparison you offer afterward.
When it is used on you
Find out who chose the comparison set, and how, when someone proposes a standard to settle a dispute with you. Ask for the full data and the method in writing. Propose alternative standards if theirs is narrow, and agree on a method before either side sees results.