14 Feb 2017
Working with bumps in the road: The emerging trends in organisational conflict management
This article was initially published by the Union Internationale des Avocats (UIA) for the 23rd World Forum of Mediation Centres.
Authors Andrew Fiddy and Joachim Muller
Conflict is ubiquitous, a normal part of any organisation’s life. Sometimes described as disagreements, difference, disputes, or difficulty, it is usually regarded with resignation and in many cases dread. However it does not have to be seen this way. If conflict is anticipated, prepared for, and appropriately managed, it can have positive consequences and give an organisation a competitive advantage. Based on CEDR’s 26 years of experience as Europe’s largest independent Alternative Dispute Resolution (ADR) provider and having consulting with hundreds of clients on conflict management solutions, this article will outline four trends that we have observed in the past few years.
Trend 1 - Managing the traffic: The growing use of mediation in organisational conflict management
The utilisation of using the full spectrum of ADR to resolve business disputes has been steadily growing in popularity. The growth has been driven by many external and need driven factors including the acceptance that risk should be minimised, internal resource well-utilised, exposure managed, relationships preserved, and costs associated with lengthy litigation avoided.
According to the July 2008 report “Fight, flight or face it”, published by OPP in association with the Chartered Institute of Personnel and Development, “poorly managed conflicts in the workplace are crippling British business. The average UK employee spends over two hours a week dealing with conflict, which means in total more than 370 million working days were lost last year at a cost to British employers of more than £24 billion” ('Fight, Flight or face it' 2008, OPP and CIPD). And this number has continued to rise ever since. CEDR’s own research has shown that a single dispute with a management level employee resulting in tribunal proceedings can take as much as 49 days of senior management time – time not spent managing the business.
With increasingly aware organisations, the first, and oldest trend in employment and workplace mediation, is embedding this collaboration-based practice within existing processes to, on one side, save money in legal fees and lost management time, and on the other develop the quality of organisational culture to enhance staff satisfaction.
Trend 2 - Advanced drivers: Moving towards conflict competent leadership and conflict conscious cultures
Organisational culture has strong effects on a company’s employees, business practices, management styles, the meaning and value people give to their work, and their ultimate success. While culture is notoriously difficult to define (and even more difficult to change) it reflects a set of attitudes, beliefs, values, and norms of the people forming the organisation; the experiences and history of the company and its leaders; and the stories told within and about the group. Put colloquially, many understand organisational culture to be “the way we do things around here” and, as such, has consequences that echo at all levels of the organisation including facilitating or limiting collaboration, employee productivity, the quality of their outputs and their well-being.
The strongest influence on a company’s culture generally comes from those who are called on to act as leaders and managers. They strongly influence the “company culture” because they are the ones appointed to determine and manage delivery of its objectives, set the tone for the desired behaviours in how employees work together, and as such are the ones defining the purpose of the group, setting rules, making the tough decisions. Despite the plethora of management and leadership material on how todefine what the attributes of a good manager or leader are, very little is said about how leaders manage negotiations and conflicts within and outside their organisation. Likewise very little is said about how leaders nurture a conflict conscious culture that has the potential to create greater engagement and effective outcomes for the organisation. Despite this apparent lack of literature, based on our work with clients from across sectors in approximately 20 countries each year, we believe that there is an emerging business-driven trend towards utilising mediation and negotiation skills as just one of many tools to help to assist in managing conflict, improve communication and enhance collaboration amongst employees, business partners and suppliers, and social stakeholders.
Trend 3 - Varying the speed limits: From reactive dispute management to proactive conflict management
Managing conflict or resolving disputes?
Part and parcel of the growing use of mediation in organisational disputes is the trend away from reactive approaches to dispute management to a more proactive approach to conflict management. The distinction between “dispute” and “conflict” is a subtle one. In organisational life, conflict can be seen as any friction between colleagues and does not always lead to disputes. The reality is that many conflicts are ignored, denied, suppressed, or perhaps worst of all, accommodated. Disputes on the other hand, which are differences based on a question of legal rights, require resolution. (Lipsky, D., Seeber, R. - 2004)
The management of disputes is an altogether easier issue to manage as it only represents the most escalated forms of conflict requiring the organisation to manage the grievance process while assessing which procedure is most likely to resolve the issue in a cost effective and time sensitive way or simply will result in a better outcome. Many unionised and non-unionised, medium to large-sized organisations have rights-based grievance processes with many now also including mediation.
The trend that has been observed over the last few decades, and we think set to continue, is towards the next phase of integrated conflict management, designed to channel conflict into productive directions not just to overseeing their resolution. The hope is that conflict is identified and actively managed before it becomes a dispute.
CEDR’s own research shows that achieving earlier resolution of cases that would have otherwise have proceeded though litigation, saves British business around £2.4 billion a year in wasted management time, damaged relations, lost productivity and legal fees. (The Seventh Mediation Audit, 2016 - CEDR)
One of the seminal pieces of research in the area was from the American Arbitration Association. In 2003, they conducted a study into the attitudes and experiences associated with using non-judicial dispute resolution. Their sample group of 254 businesses included a wide range of organisations including Fortune 1000 companies to mid-sized public companies and privately-held businesses. Their study found that these companies had systems for resolving disputes and that ADR was utilised, they also perhaps unsurprisingly found that as a result legal expenditure was dramatically reduced. The study also found that there were common characteristics of dispute-wise business management practices which economically and non-economically benefitted the organisation. Specifically they found that dispute wise companies placed emphasis on building and preserving relationships with their employees, suppliers, customers and business partners and enjoyed high shareholder confidence. (Dispute-Wise Business Management, 2003 - American Arbitration Association)
A second study by Cornell University in 2011, suggested that an increasing proportion of organisations are moving beyond the occasional and pragmatic use of ADR mechanisms and adopting more strategic and pro-active approaches to managing conflict. Overall one-third of the corporations in the sample had adopted features associated with conflict management systems (Lipsky et al., 2012). In addition, whilst mediation and arbitration remained the most widely used, new forms have also emerged such as ‘early case assessment’ and ‘peer review’ (a process by which disputes are adjudicated by a panel of co-workers).
This research support the view of many of our clients, that proactive conflict management strategies can assist in identifying and constructively managing the sources of conflict rather than merely focusing on the symptoms. However, despite this recognition, there is a hesitation by many about how to implement proactive methods of managing conflict throughout the organisation, with many used to referring it to HR or legal teams.
Trend 4 - Clearer road signage: Recognition of the value of mediation skills throughout the organisation
While there is not a one-size-fits-all approach when building a conflict competent culture to effectively embed any proactive conflict management strategy, organisations should develop the skillsets of mediation for their employees. Recognition of the value of training managers in mediation skills throughout the organisation has been widely acknowledged. In 2015, the CIPD conducted a survey of over 500 HR professionals, with half of all respondents suggesting managers must develop the right skill-sets to manage conflict effectively. (Conflict Management: A Shift In Direction, 2015 - CIPD) However, despite there being a growing trend towards the recognition in the value of mediation as a core management skill, there also exists a risk for organisations to delay such training in their organisations.
In a report commissioned by MacDonald’s entitled Backing Soft Skills, they found that by 2020 over half a million UK workers would be held back by a lack of soft skills. Yet as a core management skill, mediation could assist leaders to enhance communication skills, manage difficult conversations, and to proactively manage conflict and prevent its resurgence. This ultimately leads to improved quality of life-at-work and employee satisfaction and performance.
We have observed a strong need from organisations to learn about what is working, what is not working, why it is or not and what can be done about it. This is only discovered by observing, listening, discussing, and maybe debating, with parties who are conflicting. If conflict is referred directly to in-house legal or HR teams then this information runs the risk of being lost and not informing for future prevention of conflicts, and although the case may have been settled, the organisation is not armed to prevent it from reappearing. On the other hand, having a well-trained in-house team of mediation skills proficient lawyers, HR personnel, managers and leaders, can lead to an increased ability to analyse potentially conflictual situations and therefore intelligently use passed experiences to constantly improve the company’s culture and processes.
Most organisations CEDR has trained in Conflict Management, after seeing the great benefits of these new skills, have asked us to train individuals or teams, often from their legal and HR departments, to become accredited mediators and gain the ability to resolve, prevent and analyse conflict internally. The benefits of this training was immediate in reducing the cost of conflict and improving employee satisfaction by providing them with an easily accessible, confidential and without-prejudice forum to express their difficulties and resolve their conflicts without having to go through a difficult and sometimes harmful grievance process. And even though not all conflict can be resolved internally, these in-house mediators are educated and aware of various dispute resolution options, and are able to do a quick triage between cases that should be mediated, internally or externally, those that should go through the longer grievance processes, and those that should go to the employment tribunal when necessary. This has proved to be an immense time-saver for everyone, and drastically improve employee retention and peaceful resolution of disputes.
Despite this recognition, however, we would support recent research that suggests that many managers and leaders are hesitant and lack the confidence in developing informal approaches to conflict.
Conclusion – The way forward
Organisations who have embedded ADR into their policies are now more inclined to take a global view of the full spectrum of conflicts and disputes with each one being addressed in relation to minimising risk, cost, managerial time, and resources expended while attempting to preserve professional relationships. Organisations are also more likely to effectively utilise mediation, which encouraged a positive reappraisal of the value of ADR techniques when disputes arise, even in situations where favourable court-based outcomes were seen as likely. Far from being a “fluffy” alternative, the redefinition of “winning” through communication-based processes, such as mediation, was made from a commercial and economic reality: The costs associated with burning relationships with employees, suppliers and customers through litigation was something to be avoided. Consequently, the four trends that CEDR has observed in its practice, seem to reinforce the suggestion that mediation is not a short-lived fad, but an economic reality that can enhance organisational performance.
CEDR’s Model Mediation Clauses and Mediation in Employment Policies guidelines: https://www.cedr.com/about_us/modeldocs/?id=19
CEDR’s Mediation Skills Training: https://www.cedr.com/skills/mediation-training/
CEDR’s 2016 Mediation Audit: https://www.cedr.com/docslib/The_Seventh_Mediation_Audit_(2016).pdf