Business Dispute Mediation – A Profit Proposition©

By Dave Finch

Reflect for a moment on the question of whether it would be valuable to you and to the bottom line of your business, (now or in the future) to have a process you could turn to instead of lawyers and courts, to resolve conflicts including those that arise between employees, between you and your employees, between you and your suppliers, or between you and your customers, or between you and your competitors, or between you and your partners. And what if that same process had the potential for positively transforming the relationship between the parties increasing productivity and good will.

You can access this almost magical resource quite easily. Moreover it costs very little when compared to the arbitration and court process alternatives.

Mediation – An almost magical resource.

Most of the time people in conflict will attempt direct discussion and negotiation with the person on the other side of the disagreement. That will often work and will be the best means of resolution when the parties are able to communicate effectively. Unfortunately, a number of obstacles to effective communication are often present. These obstacles include lack of trust; widely different perceptions of what is fair, ethical or just; personality clashes; inequality of negotiating acumen; and a failure on one or both sides to appreciate fundamental interests and how best to realize or protect them. When any of these obstacles is present the available options are often thought to be either legal action, or the unhappy acceptance of unresolved conflict. Yet a third and far better option exists and its name is mediation.

First and foremost mediation of disputes means that the parties in conflict have together engaged a neutral person to facilitate their communication about a problem. When neutral facilitation is allowed to work, communication becomes effective and such communication leads both to a resolution of the particular issue, and, often, a positive transformation of the relationship between the parties.

Win-Win” versus Cutting the Pie

We all know or think we know the meaning of the phrase “win-win”, but parties in dispute seldom think it applies to them; that it could be possible given the unreasonableness of the “other guy”. Consider for a moment, how most of us have traditionally thought about disputes. Usually there is an economic component and each party, convinced that he is right and entitled to quantity “X” is sure in his own mind that there is a pie on the table that must be cut just so that he gets “X”, because if he doesn’t get “X” a terrible injustice will have been done. It always follows, of course, that if one party gets “X”, the other party has to be satisfied with “Y”, which is merely what is left of the pie.

One of the things a mediator does, however, is to invite the parties to reexamine the idea that there is merely a pie to be divided, as opposed to a huge world full of opportunities in which agreement might accomplish far more than just that finite slice of a limited quantity. When intelligent men and women begin to put their minds together, instead of just butting their heads, amazing things can happen and a little pie can be transformed into something entirely different, maybe a big pie, or even something resembling a growing tree with a variety of profitable branches.

While not all mediations succeed, the vast majority do in fact. There is opportunity here, and taking advantage of opportunity is what good business people do. “Win-win” is not a cliché, it is a reality, a solution created by people who are themselves creative, or helped to be so through neutral-facilitated communication, i.e., mediation.

What are some other advantages of mediation?

Winston Churchill said: “Where you stand, depends on where you sit.” When people find themselves in a conflict, especially if they are angry about what the other person said, or did, or intends to do, they go into a state of “selective perception in making evaluations”. There is probably not a human alive who does not have this tendency in a serious dispute, and most of us succumb to it even in disputes that are trivial. He marshal’s his weapons, he polishes them, he reviews his battle plan, and he intensifies his convictions of his righteous cause. Busily focused upon his own point of view, from “where he sits”, he has no time to examine the other side’s arguments or concerns. No successful salesman who wants to make a deal, would practice such an approach to overcoming resistance for he knows that it is more likely to intensify that resistance.

Mediation provides not only a time out from all this saber sharpening and pistol polishing, but it insists upon a more than token listening to the opposing side. A mediator will not prevent you from exhibiting your strengths and best arguments, for those are what your opposition needs to consider in arriving at a solution. But, the mediator will challenge and encourage you to take the additional useful and often critical step of carefully listening to the opposing arguments and discussing them in a dispassionate and respectful way.

Think of it this way. You want to persuade the other person to your point of view; to accept the resolution or something close to it that you propose. As every salesman knows, the other party will be more willing to listen to you if he feels that you have listened to him, that you have respected his viewpoint; that you understand and care about his needs or his specific interests. When one shows such respect and caring attitude there is typically a positive reciprocal response. This is the heart of effective communication. It is not a giving away or a showing of weakness. Quite the contrary. One who conducts a negotiation in this manner actually shows fearlessness plus an earnest motivation toward reaching agreement.

A psychologist’s term, “reactive devaluation”, refers to a common problem in negotiation. When a party makes a suggestion for a resolution, there is a tendency on the other side of the table toward a devaluing reaction, i.e., to think that if the other side is proposing it, it must be better for them than it is for us. A feature of human nature, studies tell us, is that we tend (and it is a tendency not a constant) to take less than the best in order to avoid allowing our opposition to profit more than us. A proposed resolution that achieves a good outcome for a party will often be rejected by that party out of a perception that it benefits the other party more. This fits with other research findings that people tend to consider “fairness” to be synonymous with “equality”. Therefore, for many, if the two sides do not appear to benefit to precisely equal degrees, then the deal is not precisely fair.

From a neutral position the mediator is able to help each side make a more rational, i.e., less visceral assessment of the settlement options and avoid unproductive and self defeating decisions.

Writing for the Wall Street Journal (August 28, 2002) Holman W. Jenkins detailed the principle points of an article in the Sloan Management Review, (January, 1996) by Harvard’s Max Bazerman and Northwestern’s David Messick as follows:

  1. There is a tendency to reduce the set of possible consequences or outcomes to make the decision manageable. In extreme cases, all but one aspect of a decision will be suppressed, and the choice will be made solely on the basis of the one chosen aspect.
  2. A reason we think we are relatively immune from common risks is that we exaggerate the extent to which we can control random events.
  3. People believe their wants and demands are “fair” and “deserved”. People overestimate the likelihood that they will experience “good” future events and underestimate the likelihood of “bad” future events.
  4. People overestimate the likelihood that they will experience “good” future events and underestimate the likelihood of “bad” future events.
  5. People are erroneously confident in their knowledge and underestimate the odds that their information or beliefs will be proven wrong. They tend to seek additional information in ways that confirm what they already believe.

These human tendencies can be extremely pernicious in conflict situations, especially when one’s ability to make rational choices is compromised by emotions such as anger, envy, irritation, frustration and the like. The mediation process provides the needed opportunity for calm discussion and real communication, for reflection on one’s real interests, for deliberation in evaluating supposed benefits and negatives of a proposal, and for taking the time to identify and responsibly deal with one’s own foibles and fallacies, toward a workable resolution of the conflict.

Conclusion

The complexities and vagaries of conflict in our supercharged and complex world are largely the result of ineffective communication, a problem with which mediation is superbly equipped to deal. Helping to clear the clutter of those humanly natural traits and tendencies that get in the way of rational thinking and effective communication is what mediators are trained to do. The businessperson with a disruptive conflict that seems unlikely to yield to direct discussion and negotiation has a next best choice in mediation. Once agreement is obtained between the parties to cooperate in mediation, the process takes over and with relatively minor cost it is highly likely that resolution will be achieved to the satisfaction of the parties and the profit of the businessperson.

 

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