7 Keys: Usage—Expand the value of mediation into deal making

Mediation takes many forms and has many facets. It is a malleable process that parties and neutrals adapt to different areas of practice, cultures, and practitioner demands. This flexibility derives from the broad range of skills that neutrals draw upon.

Mediation is Negotiation

Negotiation is a primary skill of any mediator since mediation is a facilitated negotiation and the mediator the process specialist.  At a minimum, mediators must understand and be fully competent in all aspects of negotiation. This includes an understanding of negotiation theory such as asking the right questions, framing statements, separating people from problems, identifying and addressing underlying interests, generating creative options for mutual gain, and applying objective criteria, ATNAs and ZOPAs as well as managing conflicting negotiation styles.

Today’s skilled mediator ideally has a much fuller tool chest, encompassing a much broader set of interpersonal, psychological, and communication skills. As research and scholarship in the human sciences has been adapted to mediation, the value of the mediator has increased. This broader toolkit and the wisdom to use it appropriately, equips the modern mediator for all challenges. The modern skilled mediator is capable of so much more than settling disputes.

The mediator’s value now includes highly attuned and elevated communication skills including empathic and active listening as well as non-verbal understanding and behavioral fluency. It also includes an understanding of neuroscience and behavioral economics as well as cultural competency, preparation management, process design and subject matter expertise. In short, the mediator’s skill set continues to expand and as it does so, the value of the mediator similarly grows.

This wide range of interpersonal and communication skills enables the mediator to identify sources of potential opportunity and conflict even when they are not fully understood by the parties. The mediator uses their deeper understanding to interact earlier and help parties fashion more creative solutions.

Mediation’s value beyond the resolution of conflicts

The power of mediation skills can be valuable well beyond traditional mediation. For example, a mediator can be used to manage process and help parties reach agreement in complex and challenging negotiations such as those between multiple parties of different cultures, countries, languages and expectations in complex joint ventures.

Mediators can add steerage value in anticipation of friction or disagreement between businesses, whether competitors or customers or even colleagues. They can surface and listen to underlying interests to identify sources of agreement and disagreement. As mediation matures and our appreciation of its value grows, we can think more broadly about its application.

So why should experienced negotiators call upon a mediator to assist them with deal making? What value can a mediator bring to proficient negotiators?  The answer lies in the unique value of a skilled mediator that transcends that of any negotiator. There is a difference between closing a deal and building a long-lasting partnership. Often negotiators concentrate on the mechanics of securing the best deal today. They often focus less on sustaining business interests. Deals are more tangible and static, but circumstances change and what seemed fair at the conclusion of the deal might no longer be perceived so by everyone over time. This leads to conflicts, court battles, increased transaction costs and loss of value.

Trust, Transparency & Compatibility

Researchers have studied successful performance-based collaborative business relationships. They found that they had in common a bedrock of trust, transparency and compatibility[iii]. Instead of negotiating a deal, parties to collaborative relationships negotiate the basis of the business relationship.  It requires expanding the focus beyond individual and common interests to the interests of the relationship as its own entity. Using a mediator can be particularly valuable as mediators can steer the conversation to the best interests of the relationship and help the parties establish a relationship of trust and transparency. In that sense, the mediator is, as Professor Jeswald Salacuse has suggested, a kind of Counsel to the Deal[iv].

Building trust requires talking about trust. It can be challenging for a party to a negotiation to address the issue of trust without putting the other on the defensive. The mediator is ideally positioned to broach the subject of trust. For example, a mediator can ask each party to assess their own trustworthiness and their perception of the other’s trustworthiness. By helping them confront and discuss their doubts and fears about trustworthiness and the actions that can foster or impede it, the mediator can help the parties arrive at a common understanding of trustworthiness and its implications in the deal.

Transparency fosters trust and vice-versa. Highly collaborative relationships demand a degree of transparency that transcends the information that is typically shared in business relationships. An experienced mediator can educate the parties about the importance of sharing information and guide them in deciding why, what and how information could be shared. Mediators can also help parties frame and disclose more personal information such as concerns, motivations, needs and goals, which lead to more efficient problem-solving and better decision-making.

Compatibility also contributes to highly collaborative relationships. Compatibility refers to organizational cultural fit. Mediators can help the parties explore compatibility by asking about their values, commitments to corporate social responsibility, reputation, risk tolerance, flexibility, views, innovation, etc.  Poor compatibility can impede success. Just the act of discussing differences with a mediator can foster greater mutual understanding and help remove blockages.

Going further

Skilled mediators can help deal making parties anticipate and avoid conflict and lay the foundational principles that will allow them to work successfully together in a dynamic environment characterized by constant risks, changes and unchartered opportunities, and sustain a mutually competitive advantage long after the deal is signed. Users need to better appreciate the value that mediators can add to deal making. Mediators need to market their value beyond dispute resolution.

Véronique Fraser[i] & Joan Stearns Johnsen[ii]

[i] [i] Véronique Fraser, Ph.D. is Vice-Dean in Strategic Development and Professor at the Faculty of Law of the Unviersity of Sherbrooke, Canada. She is a lawyer called to the bars of Québec and Ontario and a certified mediator. She teaches and has published works in the area of dispute prevention and cross-cultural dispute resolution.

[ii] Joan Stearns Johnsen teaches arbitration and mediation at the University of Florida Levin College of Law in Gainesville, Florida. She is also a practicing mediator and arbitrator with the American Arbitration Association. She is IMI Certified and a Fellow of Chartered Institute.

[iii] See: Getting To We: Negotiating Agreements for Highly Collaborative Relationships (2013) by Nyden, Vitasek and Frydlinger

[iv] See: The Global Negotiator: Making, Managing and Mending Deals Around the World in the Twenty-First Century (2003) by Jeswald W. Salacuse.

Originally published via Mediate.com on July 17 2020. Republished with permission.