The importance of a common goal or purpose to unite and direct efforts in an organisation is well-documented. Despite this, organisations struggle to maintain strong alignment in practice, particularly as they grow.
Mediation is a way to create agreement and strengthen relationships. Furthermore, its attributes make it suitable for internal situations where other forms of dispute resolution are impractical.By helping to resolve disputes in an organisation, mediation can unleash the power of a shared mission.
A brief history of mediation
Simply speaking, mediation is any instance in which a third party helps others reach an agreement. However, as a specific discipline of Alternative Dispute Resolution (ADR), mediation has a special structure, features and process that facilitates settlements in situations when other forms of dispute resolution might not be practical and can often succeed even when an impasse appears to have been reached. As such, mediation is a growing practice and an increasingly valuable part of our modern legal system.
Indeed following Lord Woolf’s reforms outlined in his 1997 report, parliament introduced the Civil Procedure Rules of 1998 and continues to promote mediation alongside other ADR techniques. A key principle of this is to consider ADR for almost all litigation cases before they can go forward. This support is based on the potential for mediation and other forms of ADR to help “democratize” the legal system by making it more affordable, approachable and user-friendly.
Mediation is now recognised as a legitimate and often primary option for dispute resolution in a range of areas including property, commercial, family and workplace disputes. Commercial disputes present one of the biggest opportunities for mediation, with the added benefit of the potential to quantify the economic value of resolving disputes; especially as commercial organisations measure their activity (and output) in economic terms.
Commercial mediation typically focuses on disputes between companies or workplace disputes (between companies and their employees including wrongful termination or grievance cases). An underserved area is where internal conflicts flare up between parties within an organisation that prevent it working effectively. Such clashes can hamper efforts to strive towards shared goals which require the collective efforts of all the parts of an organisation pushing in the same direction. Avoiding this disruption can be a source of significant competitive advantage.
Unleashing the power of shared interest
Organisations of all types need an aligned workforce, working towards the same end, to operate effectively. Books such as Built to Last [1] and Sir Terry Leahy’s Management in Ten Words [2] explain and promote the importance of alignment within an organisation to a shared, long-term goal, vision or ideology: a purpose that endures to motivate and steer the collective efforts of, perhaps, thousands of people in the same direction. Where this is missing or becomes weakened, problems can set in. As Sir Terry puts it in his chapter on “Balance”:
“And so the day arrives when, at a meeting, you realise that everyone around the table has a completely different take on the problem under discussion…Then the organisation is really in trouble: it has become fragmented, unbalanced and impossible to move forward.”
Despite it being in the interests of all organisations to foster close alignment, misalignment tends to develop over time. Teams tend to develop their own “culture” as they grow, and often focus on targets that are easy for them to understand and to control. Although well-intended, these efforts can become disconnected from the bigger picture leading to teams pushing in different, even conflicting directions.
An example from my career illustrates this point. In the halcyon days of the mobile industry the market was growing very quickly, there were few competitors and a promise of vast future returns. This led mobile operators to adopt a land grab strategy: the commercial model and organisational focus was directed firmly at acquiring new customers. Targets followed this approach, and “gross additions” (the number of new customers added) were one of the most closely followed metrics. Sales and marketing strategies were focused on this goal, resulting in high subsidies for new handsets offered with pay monthly contracts.
This tactic worked well in acquiring new subscribers as people signed up to contracts in exchange for shiny new devices, apparently for free. However, as competition pushed subsidies higher and market growth slowed, this tactic started to backfire. Huge numbers of customers were leaving at the end of their contracts, walking back into the shop and signing up again to get a new phone. An expensive handset replacement cycle had set in with subsidies driving customer churn higher, requiring more new customers to replace them.
The focus on gross additions was now disconnected from the true objective: profitable growth. This misalignment is easy to see in hindsight but was harder to resolve as targets and tactics had become entrenched. Sales teams still targeted on new sales were understandably reluctant to abandon aggressive subsidies.
In cases such as these where misalignment leads organisations to operate in suboptimal ways, mediation techniques can been used to uncover the issues, realign incentives and redirect efforts. By creating more harmonious operating practices that direct all resources toward the same goal, mediation can unleash the power of genuine shared interest.
The advantages of mediation for settling internal disputes
The advantages of mediation for all use cases can be summarised as speed, cost and the ability of participants to maintain control over their own solution. They are well documented elsewhere (for example in Andrew Goodman’s book Effective Mediation Advocacy [3], summarised in this article, or this one on lawontheweb.co.uk) so will not be repeated at length here. Nevertheless, it is worth highlighting the particular strengths of mediation for use in this scenario.
Speed: these internal issues need to be resolved quickly and mediation meets this need. Mediations can also be easily flexed to account for the scope, complexity and strategic importance of disputes.
Inexpensive: the use of trained internal resources or a relatively inexpensive outlay for external mediators make this a cost-effective approach whereas litigation would be prohibitively expensive.
Control: the outcome of mediation remains in the control of the organisation, offering solutions beyond the remit of the courts but appropriate for the organisation. In addition, the timing, duration and costs remain firmly in the control of the organisation.
Confidentiality: unlike court proceedings, the contents of mediation can be kept confidential, a prerequisite for such intra-organisation concerns.
Flexibility of process: despite its particular structure and features, mediation has sufficient flexibility to adapt to an internally managed process.
Flexibility of scope: Mediation allows the scope of topics to shift as circumstances change or new issues are uncovered, allowing mediators to focus on solving the real issues as they emerge rather than sticking rigidly to the original scope.
Sustainability: settlements reached in mediation are more sustainable because they are agreed voluntarily by both parties, or at least ratified by senior leadership.
In addition to the considerable advantages outlined above, the significant weaknesses typically directed at mediation are either not relevant or easily mitigatable in relation to this use.
Failure to reach a settlement: although mediation does not necessarily deliver an agreement, organisations using it in this way could easily develop mechanisms to mandate a settlement.
Lack of legal precedent: there is no need to extract a legal precedent from the court because organisations can, if appropriate, build mediated decisions into their internal governance.
No formal discovery process: mediation’s lack of a legal right to enforce full disclosure can be mitigated by giving mediators a mandate to investigate specific, related areas.
The advantages and the lack of significant, residual disadvantages means there is a convincing case for using mediation to resolve potentially damaging internal disputes. Organisations will find mediation suitable because it offers the speed, affordability, confidentiality and level of control they require. Given the frequency and materiality of those disputes the business case for many organisations will also be compelling. Once a mediation capability is established it can quickly and efficiently disentangle and diffuse internal wrangles, empowering it to operate more flexibly and efficiently.
A call to build and maintain alignment
Most large organisations, at some time, will suffer sub-optimal performance due to mis-alignments between departments, teams or functions. Mediation is a discipline that can help resolve these internal differences quickly, cheaply and within familiar organisational governance practices. Although it requires a thoroughly thought-through and expertly executed process to ensure mediations operate smoothly and successfully without disturbing day-to-day operations, this is within the grasp of most large businesses.
With appropriate training and support from the expert mediation community, this can be done relatively quickly and easily. The high cost of such disputes and comparatively low incremental cost of mitigation makes the business case persuasive. With this a fast-growing field, progressive businesses should take advantage now to stay in touch.
References
[1] Built to Last, Jim Collins and Jerry I Porras.
[2] Management in Ten Words, Terry Leahy, page 182.
[3] Effective Mediation Advocacy – A Guide for Practitioners, Andrew Goodman, page 28-29 and page 35.