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Managing Business Risk

This article originally printed in BusinessComment, Dec 12/Jan 13.

Few of us find it easy to deal with difficult
situations, whether these are to do with
personnel issues, sub-contractors or supply
chains, boardroom or senior management
conflict, problems with funding or dealmaking,
or just long-standing unresolved
disputes.

When problems arise they can quickly
escalate, given human nature and our
cultural tendency to become defensive and
take positions – or simply our need to save
face. Escalation can lead to polarisation and
festering unease, whether in internal matters
or in external relationships. Morale and
productivity can drop. This is not good for
business.

These days, there have been significant
advances in our understanding of how
conflict arises, how to manage it and even
how to prevent it – and how to achieve more
collaborative approaches to resolving disputes.
These give small and large organisations better
opportunities than ever to build, maintain or
renew important business partnerships and
other commercial relationships or to bring
difficult contracts and joint ventures to an end
with the minimum of cost and time. Nipping
things in the bud. In other words, we can all
now be more effective at managing the risks
inherent in unresolved conflict. The bottom
line impact can be significant, allied to better
reputation management and more effective
customer and staff retention and project
management.

What can we do to be more effective negotiators as
we address actual or potential conflict? Here are
some tips from experienced mediator and
negotiator, John Sturrock QC, chief executive
of Core Solutions Group.

Separate the people from the problem

Approach the issues with frankness and
clarity, and always treat the individuals
involved, whatever you think of them and
their behaviour, with respect and courtesy.
Avoid making assumptions about people;
most people are trying their best in the
circumstances in which they fi nd themselves.
As the writer Margaret Wheatley has
observed: “It’s not our differences that separate
us but our judgments about each other.” Identify
your own triggers and manage your own
emotions.

Detoxify the language

Take time, pause before speaking. Choose
your words with care. One word can make all
the difference, as can your tone and manner.
Don’t demonise or personalise. You can be
clear and direct whilst also being measured,
under-stated and courteous. But this requires
self-discipline because, under pressure, we can
tend to default back into defensiveness and
antagonist language.

Search for the other person’s underlying
needs and real concerns

In the jargon of effective negotiation, this
is called identifying the interests of those
involved, in contrast to their positions. What
is this really all about? What are their hopes,
fears, aspirations and worries? We can’t change
the past but we can certainly infl uence the
present and the future. Ask questions – and
listen, really listen to the answers. Try and get
into their shoes: how do they see it? As Atticus
Finch said in To Kill a Mockingbird, “You
never really understand things from another person’s
point of view…until you climb into his skin and
walk around in it.”

Make a unilateral concession – give to gain

The power of reciprocity is strong; if you
understand what the other party’s needs
and concerns are, you can offer something
to address these, directly or indirectly. Don’t
fear making a unilateral concession or
surprising someone with a gift: it will very
often stimulate a reciprocal response. This is
all much easier if you keep in mind the Big
Picture, the overall purpose, where your and
their interests converge. Make sure you help
people to save face.

Develop your options creatively

Search for the nuggets that create value. It’s
usually not just about money. What nonmonetary
possibilities are there? Use your
imagination. Weigh up the pros and cons,
the risks, the alternatives. Don’t be boxed in
by bottom lines. Keep an open mind – the
person with the greatest fl exibility will have
the greatest infl uence on the outcome. Don’t
just assert but look for objective justifi cation
to support any proposals.

If you get stuck or need help, call in a
mediator

The ideas discussed above are not easy
to implement, especially in diffi cult
circumstances. A skilled, independent
mediator can provide the necessary context
and structure to enable tough conversations
to be carried out, to bridge gaps and build
understanding. Often the communication
chasm is the real problem. An experienced
mediator will know how to help people to
re-engage. In pulling deals together, managing
workplace conflicts, resolving difficult disputes
and breaking deadlock, a mediator assists
individuals and businesses to find their own
solutions.

Mediation has a fine track record here in
Scotland and elsewhere. It is used increasingly
in commercial contracts, employment
disputes, claims against professional
advisers, the financial services industry,
sports governance, SME issues and disputes
involving local and other public authorities.
Consider trying mediation before resorting
to litigation, tribunals or arbitration, or even
internal grievance procedures. Many matters
are resolved successfully in a day or two using
mediation.

What do people say about mediation?

“I would like to thank you and your team for
your assistance in bringing such a long standing
complicated dispute between the parties to a
mutually acceptable conclusion. The mediation
process was instrumental in reaching a resolution
in a very complicated set of circumstances. It was
an interesting and rewarding experience, both
professionally and personally, to be involved in the
mediation.”

                        author

John Sturrock

John Sturrock is the founder and senior mediator at Core Solutions, Scotland's pre-eminent provider of commercial mediation services. As a pioneer of mediation throughout the UK and elsewhere, his work extends to the commercial, professional, sports, public sector, policy and political fields. He is a Distinguished Fellow of the international… MORE >

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