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5 Ways Managers Can Enhance Their Mediating Skills Premium

The Mediator Mindset

Mehta, Kandarp; Ripol, Ignacio

Date: Third Quarter 2017

Tags: mediation, facilitator, evaluator, active listening, empathy

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In Mumbai, a conflict arose between the management of a major textile firm and the workers regarding overtime pay. Rather than take the matter to court, the management and the unions agreed to engage in a form of alternative dispute resolution known as mediation, bringing in an independent, third-party mediator to help both sides reach a negotiated settlement without resorting to costly, drawn-out litigation.

However, as negotiations entered their eighth day, the mediator was getting worried. The process had stalled. The atmosphere in the room could be cut with a knife. The managers remained adamant they would not pay more than 2.4 million rupees, while the union reps insisted on at least 3.6 million. The gulf between them was significant -- and widening.

The mediator decided to change tack. In a private meeting with the head of the company, he asked, "Aside from the numbers, what do you really care about?"

"Dignity and honor," the head replied. "I fear that if I give in too easily, I will lose both."

The mediator stressed there was more dignity and honor in finding an agreement than no agreement at all. And then he asked, "What is the most you would pay without compromising your dignity?"

"3.2 million," he replied. "Period."

For the mediator, this was something. But could he convince the union head, a tough negotiator in his 60s, to accept the offer?

Instead of proposing the figure off the bat, the mediator sat down with the union head and said, "I know you do not want to lose this battle. But we both know that, without an agreement, no one will win anything." He took out a notebook and pen: "Write your lowest final offer here, and I'll try to get the CEO to accept what you ask for. But bear in mind that, if he rejects it, the only option left will be to pursue this matter through the courts."

The union official considered this for a moment, then wrote a number down. "I give you this number because I trust you, and I trust you will not try to convince me to go any lower."

The mediator looked at the figure with a mixture of dread and hope, and was instantly relieved. The number was 2.95 million.

The next day, the three met in the mediator's office and closed the deal at 3.1 million. Both sides were happy: the company paid less than its top offer, and the union got more than its lowest. But more to the point, they left with their dignity, honor and pride intact. And that was what they both really valued above all.

"No progress was made until the word honor was mentioned," the mediator explained afterward. "When I began to speak in the language of dignity, honor and pride, it became easier to draw both sides to common ground."

"Deadlock is often a result of more than just money," he continued, highlighting one of the keys to resolving disputes of this nature: "You have to see beyond positions and numbers, to get at what really matters most."

Beyond Negotiation
Negotiating is a skill that every manager needs to master, not only because it can help to solve problems and create value, but because thwarted negotiations undermine value, sap morale, waste resources and even escalate into greater conflict. Many leaders believe they are expert negotiators simply because they have had a lot of practice at it. But negotiating a lot is not the same as negotiating well.

Some managers may view themselves as good negotiators for their fierce ability to defend their own interests and their strong track record of wearing the other side down until a "win" is achieved, usually in the form of forcing their opponent to accept something of lesser value. But as our previous example shows, there is more to it than that. When negotiations are combative -- predicated on win-lose rather than win-win -- they frequently break down.

As such, managers would do better emulating the skills of the mediator. Mediation is more about reconciling interests than it is about merely defending one's own. By reconceptualizing the terms of negotiation, managers are more likely to achieve a satisfactory outcome that pleases both sides.

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