14 Feb 2017
The European Bank for Reconstruction and Development: Our Story
This article was initially published by the Union Internationale des Avocats (UIA) for the 23rd World Forum of Mediation Centres.
Authors: Julie Southcombe (Head of Employee Relations and Mediator at EBRD) and Andrew Fiddy (Organisational Consultant and Mediator at CEDR)
About the EBRD
The European Bank for Reconstruction and Development (EBRD) was originally set up in the beginning of the 1990s to foster economic transition and change, and is committed to furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative’. Its original focus was in the countries of central and eastern Europe but its operations now extend to Central Asia, the Western Balkans, Turkey and the southern and eastern Mediterranean. The EBRD is currently active in 36 countries with shareholders from 65 countries from five continents plus the European Union and the European Investment Bank. Poland was one of EBRD’s founder members: the country joined in March 1991 when the Bank formally began its operations and to date has partnered with the EBRD in over 375 projects.
We have a network of offices within these 36 countries supported by approximately 2,000 staff. Due to its geographical coverage and multicultural staff base, the EBRD, as in any organisation faces unique challenges in creating efficient internal management systems and a consistent organisational culture.
1. Our Story: Implementing mediation in the Bank
Our business case for mediation
- People Strategy: We take our people strategies seriously within the Bank because we recognise that people are our most critical business investment. With this in mind, in 2008/9 we wanted to explore how to enhance our organisational culture, employee engagement, and performance. So who better to ask than our people?
- People Survey: The Bank-wide survey yielded various interesting results. The survey indicated that a challenge for many was having difficult or courageous conversations with fellow colleagues or their managers. To many of you who may have worked in large matrixed organisations, this result may not seem particularly surprising. But in 2007 we were a little surprised and wondered if this was common, so we spoke to CEDR.
- Wider impact: CEDR assured us that it was perfectly normal and that many organisations were increasingly facing challenges in managing organisational-based conflict.
- Training needs analysis: In order to understand what the issues were beneath the initial survey, we selected (with CEDR) a number of individuals from across the Bank to participate in a focus group and series of interviews. These participants held various positions including Heads of Department, Corporate Directors and Counsel, but importantly they were from across departments and countries. The needs analysis revealed various things:
- Firstly, courageous conversations were very important but very hard to do in practice.
- Secondly, having courageous conversations was widely expected of ‘people’ managers, however few, if any, had ever had any training on how to have them.
- Thirdly, because these conversations were hard to do and training was not in place at the time, many managers resorted to their natural styles, which tended to be quite competitive, avoided having them altogether or in some cases providing more positive feedback to avoid creating tensions by giving the more realistic feedback required.
- Fourthly, the effects of not having, or poorly conducting, courageous conversations were varied but it was agreed that it negatively impacted on individual, team and business well-being, as well as performance.
- Business case: Due to these results, we asked ourselves “how can we begin to quantify the cost of conflict in our organisation?”, in order to fully understand the scale of the intervention required. Assuming that at some point the conflict would escalate, we began quantifying how much a typical employment dispute cost us. CEDR’s research revealed that a typical employment dispute costs £277,000 (€327,000) in management time and legal fees, which is a lot of money .
- In order to benchmark ourselves we conducted further research and advice: it was clear from this that other international organisations had begun to encourage mediation through formal and informal channels. Some European governments have also been promoting mediation, such as the UK through the Gibbons Review of Employment Dispute Resolution (2007) and the Employment Act 2008, or in France in 2015 with the Macron Law Encouraging and Facilitating the Use of ADR Processes for Employment Disputes.
- This research demonstrated that 44 per cent of respondents have to manage disputes at work frequently or continually and are spending between 3-4 hours per week managing conflict. Moreover, two-thirds of respondents reported that, as conflict escalated, this had resulted in the absence from work of one of the parties involved. Of the respondents surveyed, 28 per cent had admitted to staff leaving a job as a result of conflict at work. Some 49.4 per cent of respondents also reported that between 2008 and 2010 their organisation had increased its use of mediation and the number of line managers trained in the handling of courageous conversations had increased by 61.5 per cent.
- The report also indicated that in addition to the core benefits of mediation i.e. eliminating stress and reducing costs, other benefits included the:
- Improvement of relationships between employees (80.5 per cent)
- Reduction or elimination of the stress involved in more formal processes (63.6 per cent)
- Reduction of the number of formal grievances raised (51.7 per cent)
- Development of an organisational culture which focussed on the management and development of people (38.1 per cent)
- Reduction of absence through sickness (38.1 per cent)
- Maintenance of confidentiality (27.1 per cent)
- As time went by, our research was supported by the results of the Chartered Institute of Personnel and Development (CIPD) (2011) survey which showed that although workplace conflict had significantly increased, the development of mediation skills and training in conducting courageous conversations has brought about a new era of appeased social interaction
- Conclusions and next steps: These research findings became the foundation for the business case and contributed to our conclusion, i.e. that we needed to be strategic in our approach towards conflict management. Our prime objective was to promote dialogue and collaboration between individuals throughout the organisation and to integrate mediation skills into the fabric of the organisation. I will now outline how we attempted to do this.
Implementation of mediation within the EBRD
- Buy-in: As previously mentioned, we wrote a business case on the basis of our research in quantifying the cost of conflict, and submitted it for review. Fortunately, we received wholehearted support from the Bank’s management to begin introducing mediation into the Bank’s processes and procedures and extending mediation skills to our people. My experience of buy-in, however, especially in periods of change or longer culture change projects, is that stakeholder dialogue needs to be actively managed otherwise your project runs the risk of being kicked into the long grass!
- Project design:
- In coordination with the Bank’s Employee Relations and Talent Development teams, CEDR consultants designed a multi-staged training programme with the objective of enabling employees and managers to hold courageous conversations in order to prevent, manage and resolve conflict when it occurred.
- The Employee Relations team, who had been mediating disputes for a while, agreed to review key policies and procedures in relation to where the use of mediation could be enhanced to assist in the resolution of conflict at the lowest level and reduce the chances of escalation. Further training through CEDR’s Mediation Skills Training was undertaken by the Employee Relations team to reinforce the value of these skill-sets.
- Programme roll-out:
- Employee Relations and Talent Development implemented a training programme across the EBRD called Managing Difficult Conversations (which has now been renamed ‘Courageous Conversations’). To-date we have held over 30 sessions with approximately 350 employees (approximately a third of whom have been line managers). The training has been deliberately designed with a high trainer-to-participant ratio to enable coaching and feedback to support behavioural change. Topics generally include a process model of how to have a courageous conversation, followed by an introduction and practice of key mediation skill-sets including verbal and non-verbal communication techniques. Feedback has been overwhelmingly positive: 92 per cent of participants rated the training as ‘excellent’ or ‘good’. We have also seen some real benefits within the Bank and, as a result, this course is now one of the focuses of a new Manager Development Training Programme that is being implemented in 2017. To support this development programme a web-based portal will also be launched to assist with easier administration and training evaluation.
- With regard to the embedding of mediation into the Bank’s processes, we have for a long time sponsored this type of approach, purely because of the many benefits it affords disputants. Simply put, I believe that mediation will always increase the chance of settling any dispute. This is especially the case for those disputes which are still at an early stage before the parties have become polarised. However, mediation can be effective at any stage of the process. Effective mediation will generally save time and money, reduce hurt and stress, and solve problems through dialogue rather than litigation.
- Seeing the value of the mediation skills in action, the EBRD has also sponsored a number of its HR Business Partners to undertake CEDR’s rigorous 5-day Mediation Skills Training. Such training has proved immediately beneficial to them, as the techniques learnt are regularly used (see case example) and assist the HR Business Partners to assist line managers and their teams to navigate change and deal with difficult situations. Such training has also enabled the EBRD to ensure that the skills from the Courageous Conversations’ workshops begin to become embedded within the culture of the Bank. However, as with any cultural change initiative, it takes time.
We were pleased to see that this type of initiative has provided and continues to provide a healthier workplace culture and has contributed to reducing the cost of conflict. However, there are a number of lessons learnt from this change initiative:
- Firstly, undertake a diagnosis and attempt to benchmark and define the outcomes and benefits you want to achieve. Try and establish, if possible with relevant data, where your organisation is now as that will be useful when establishing a marker for stakeholder engagement and subsequent programme evaluation.
- Secondly, culture change requires the involvement and engagement of employees. While conversations should be held with stakeholders throughout the entire organisation, achieving buy-in from senior management, in addition to staff associations, work councils and trade unions is critical to the future success of the initiative. Any initiative should be aligned with business strategy and/or people strategies to harmonise and support business objectives and workforce policies. This enables you to have an integrated and mutually reinforcing change programme with senior stakeholders and minimises the threat of potential blockers. If the change process is not externally facilitated, It is important to consider how to champion change and manage internal dialogue.
- Thirdly, role modelling is important. This is why we encouraged senior individuals to attend the training and have sponsored many HR specialists to undertake CEDR Mediation Training.
- Fourthly, patience is key! Positive change takes time. Like any other project, one has to be prepared for incremental change.
2. Case Study: Mediation as a key tool in workplace disputes
The EBRD has had a number of successful experiences with mediation. An example of how Employee Relations effectively used mediation as a tool to resolve conflict in the workplace is set out below.
A Manager and an Executive Assistant (EA) worked together for a number of years and appeared to have a relatively harmonious relationship. While the two were known at times for engaging in loud verbal exchanges, most perceived this as the result of a longstanding working relationship.
The EA went on a period of maternity leave. During this time a temporary EA worked in the role to a standard that was well received by the Manager and others in the team. When the EA returned after her leave, tensions began to escalate between her and her Manager, with both being very critical of each other, including in front of other staff members in meetings.
Due to the interpersonal conflicts that became evident to many working near them, HR suggested that formal mediation might help to mend the working relationship. The confidential nature of mediation provided a forum where both could speak openly and honestly within a safe space with a neutral mediator present. Shortly after the mediation session began it became clear that the Manager had felt he was being undermined by the EA and that she was purposely making errors around scheduling his agenda. To him, she didn’t seem as interested in her work as before. The EA felt unappreciated: she felt that the Manager begrudged her leave and did not appreciate that as she now had a child she could not provide the ‘out of hours’ time commitment as before.
The cultural differences of these two individuals was also clear: their backgrounds obviously affected their views on work practice and ways of communicating.
Through mediation both parties were able to air their frustrations, some of which were quite surprising to the other. After both sides were given an opportunity to ‘vent’, the Mediator was able to start working with them to define practical ways of working together. By the end of the session both individuals had committed to holding weekly one-on-one meetings for an early resolution of specific issues. In addition, they drew up an agreement that included a future date when they could review if and how the agreement was working.
This is just one example of many we have at the EBRD that demonstrate the benefits of workplace mediation and collaborative culture in an organisation. Conflict is a fact of organisational life and goes by many names – disagreement, disharmony, dispute, difficulty, difference, but the results are the same, from decreased personal well-being resulting in poorer performance, to managerial distraction in dealing with the issue, and at worst, threatening key projects and other colleagues.
A well-trained and informed Human Resources department can quickly identify the need for mediation. This allows for prompt resolution of the conflict before it escalates, rescuing the organisation and its staff from its negative consequences. Mediation breaks down barriers and offers a confidential and safe space where all differences can be addressed. Individuals can be honest and open with each other. Together, this allows them to find a solution to their dispute which strengthens their sense of responsibility in their life at work. It also makes the agreement more viable as it is theirs – rather than an imposed solution. Moreover, the mediation process allows the parties involved to see the flaws and areas of tension in the relationship, improving future collaboration and the ability to prevent potential conflicts by having courageous conversations rather than allowing frustration and underlying tensions to continue / to simmer.