Charlie Woods and John Sturrock look at resolving conflict
In tough economic times, there are difficult decisions to be taken. Inevitably, conflicts will arise in allocating resources and addressing competing interests
Conflict is an inevitable part of all aspects of human endeavour. In some cases, it provides creative tension to help generate innovative thinking. Often, however, it can escalate into a vicious cycle of antagonism and destruction as parties cling to and defend positions and lose sight of their real interests or original objectives.
The costs of conflict can be extremely high – an estimated annual £33bn to UK business, taking up 20 per cent of leadership time and resulting in 370 million working days lost.
Recent research by the Centre for Effective Dispute Resolution also shows that failing to resolve disputes effectively could hamper the UK's economic recovery. Almost nine in ten participants in a recent UK-wide survey agreed that the cost of conflict is damaging to the UK economy, with more than 60 per cent feeling their business was poor at tackling challenging issues.
This supports earlier findings that 20 per cent of management time is taken up with unresolved conflict and that the effect on staff morale and business productivity is adverse.
In the private sector these costs can have a hugely detrimental impact on business performance and company valuation. In a public sector environment they can lead to wasted money, poorer outcomes and political disillusionment.
The causes of conflict are as many and varied as the costs. Poor communication is usually at the heart of the issue but this is compounded by personalisation of the problem, win/lose approaches, positional language, fault and blame, fear, ego and loss of trust. The multi-faceted nature of the problem often requires a dedicated approach to addressing it.
The evidence suggests that mediation provides a tried and tested method of handling difficult situations and decision-making. Mediation is a collaborative process in which an independent facilitator helps those with a difference or dispute collectively to address the problem by focusing on their real interests, objectives and needs. It is flexible and confidential, designed to identify the real issues, ensure everyone is heard and help to evaluate options for resolving differences in a safe environment. The parties are in control of the decision-making and not bound unless they wish to agree.
Mediation has been developed over 25 years in many contexts from family disputes to neighbourhood conflict and from the workplace to commercial settings. It is used in many countries, including England, the US, Australia and New Zealand and has a very significant success rate.
In Scotland, mediation’s use has grown considerably in the public and private sectors in both litigious and non-litigious matters. The Scottish Government is piloting the use of mediation in planning – after research estimated that its use in the system could release over £3bn of investment into the economy more than 40 weeks earlier than if other routes to dispute resolution were used.
In addition to helping resolve conflicts which have spiralled, or are threatening to spiral, out of control, mediators can also play a valuable role in improving the success rate of proposed joint ventures or other partnerships or alliances. By using their experience of why things go wrong, they can help reverse-engineer more effective working arrangements, prevent unnecessary antagonism and develop protocols to deal with conflict and competing interests when these occur.
Mediation is useful because it is a flexible, creative, private process that is more likely to allow the relationship between the parties to continue and develop. This may be particularly important for public sector organisations – or those in a public private partnership - which are relying on one another in a supply chain where each has to continue to do business with the other.
In the public and private sectors, where collaborative working is becoming – and will need to be - ever more common, this approach could help significantly to reduce waste and improve productivity and outcomes. It will help in the allocation of scarce resources and indeed in the performance of the economy as a whole. More effective advance planning and assessment of major projects will reduce the risk of excessive spend and unresolved conflicts.
The benefits of mediation can be significant for the economy as a whole. It has been estimated that £1.4bn a year is saved in the UK economy by using mediation, achieving better outcomes, more quickly and at lower cost. Investment in mediation is thus a good example of preventative spending. It is a process which can help all sectors respond intelligently to difficult budgetary choices and help build a culture of more collaborative problem solving. This in turn could have further wide benefits by improving overall economic performance.
A country which builds a reputation as a place where projects are well managed and disputes are minimised and resolved quickly, creatively and cheaply is going to be a more attractive place to work and invest in. This represents a real opportunity for Scotland.
Charlie Woods is an associate of Core Solutions and a former senior director of Scottish Enterprise. John Sturrock is chief executive of Core Solutions.