Although a mediation itself is not a negotiation, ultimately there comes a point certain key aspects of a proposed agreement are subject to negotiation, although the mediator is not representing any of the parties, unlike a hired negotiator who is working for their master.
So, at the heart of every business mediation and boardroom dispute resolution lies the negotiation, albeit kicking in around the middle to closing stages of the mediation.
It would be true to say that mediation is the facilitation of negotiation, where a third party helps the disputing parties negotiate more effectively where they haven’t been able to reach agreement themselves.
The Challenges
In order for mediators to be effective in their role, it is indispensable for mediators (and by extension useful for their clients) to have a firm understanding of the challenges of negotiation. Professor Robert Mnookin of the Harvard Negotiation Research Project shares three of the core principals involved in any successful negotiation.
Professor Mnookin says that negotiation requires the effective management of three tensions. Negotiations often fail because these tensions are not managed very well, and a skilled mediator can help people manage these tensions better.
Tension One: Creating Value v Dividing Value
This is the tension between creating value and expanding the pie and the inevitable necessity of having to divide the pie into slices. In order to negotiate successfully, both parties need to be open and forthcoming about what their real needs and interests are.
If parties focus only on their stated positions, the negotiations will likely fail, or end up with a deal that really suits no-one. But being too open and up front about needs and interests runs the risk of one side exploiting the openness of the other side. So, there is a tension between being open and not being too open.
Professor Mnookin gives an example: Imagine two people on a desert island, on Person 1’s half there is an orange grove, and on Person 2’s half there is an apple grove. If Person 1, being open about his needs, says, ‘apples give me indigestion, so let’s do a deal’. What will likely happen is that he will end up with one orange and no apples, because he has naively disclosed too much! So, the first tension between creation of value and distribution of value comes from the fact that to create value it’s important to know what people’s underlying interests are, what their resources are, what they might have to trade, what their concerns are, however the dilemma is that the naïve disclosure of too much information by one side, if it’s not reciprocated, can lead to exploitation.
How can a mediator help? A trusted mediator can improve the communication between the parties and can really learn from the parties what their underlying interests are and help them articulate them in a way which avoids the risks of exploitation, whilst creating more shared information.
Tension Two: Empathy v Assertiveness
Empathy for negotiation purposes does not mean sympathy; it is the capacity to understand the world through the eyes of the other party; to be able to see the world from their perspective. It does not mean you are going to agree with them, but it means that you are going to work really hard to understand their perspective.
Assertiveness means the ability to put forward in a clear and persuasive way what your own needs, interests, concerns are; to be a good advocate for yourself. Why is there a tension between empathy and assertiveness? The reason there is often a tension is because many of us are often far better at one than the other. For example, people who are naturally very competitive, are terrific at assertion, but they are lousy listeners, they really have a hard time understanding the perspective of the other side. Other people are the opposite: once they really absorb and understand the other side’s perspective can’t hold on to their own interests, and they fall into accommodation mode. So, falling into purely competitive mode or falling into purely accommodation mode is not good for negotiation.
A good mediator can help people articulate their own perspective in a strong way and then help the other party understand and demonstrate understanding of the other parties’ perspective without agreeing and becoming accommodating. This raises the question: if both parties understand each other but don’t accommodate each other, how will they reach a resolution? Professor Mnookin suggests that what is extremely useful in conflict resolution is even if parties don’t agree about what happened, if they can demonstrate to each other that they understand what the other side’s perspective is, that can often provide enough of a foundation, that at least if you can get to look at the future and try to figure out what their needs are in the long run, they can better reach an agreement.
Tension Three: Principles and Agents
Most negotiation of any complexity involve someone negotiating on behalf of a party, for example, a manager negotiates on behalf of a company; a lawyer negotiates on behalf of their client. Why is there a tension between the principal and their agent? Because agents have interests of their own, and it is difficult to perfectly align the interests of the agent with those of the principal.
This creates the possibility of many tensions and having someone who can understand where the tension lies, and how to deal with it, can make all the difference to the resolution of the dispute.
For example, it could happen that the relationship between the two agents is bad, whereas the relationship between the principals is good, and the mediator needs to find a way of capitalising on that relationship to bring a resolution to the dispute. It could also happen that the one of the agents has a difficult relationship with their principal and is unable to communicate with them the true risks involved in the deal.
A good mediator can help manage these relationships, in all their complexity, and can thereby assist in bringing the mediation to a successful conclusion – where both parties go home satisfied.
To learn more about boardroom mediation visit our resources page or if you wish to discuss a specific issue please don’t hesitate to get in touch – we’re he to help.