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Healthy collaboration prevents disputes and strengthens business relationships before conflicts arise. Denver Post via Getty Images Every October, Mediation Settlement Day highlights the power of mediation to resolve conflicts. It’s worthy of celebration when you consider an independent study by the Department of Justice found that 78% of cases settle on the day of mediation. The report noted that mediation costs far less than arbitration, takes less time and is regarded by participants as a more satisfactory process than arbitration or litigation. While the data from the report clearly outlines the benefits of using mediation to resolve disputes, I’d submit that organizations are approaching disputes from the wrong end of the problem. The Collaboration Imperative Traditional thinking focuses on dispute resolution, which is how to resolve a dispute once parties disagree. While there are a variety of dispute-resolution tactics, the most prominent are mediation, arbitration and — if needed — litigation as the last resort. Progressive organizations are shifting to prevent disputes before they begin by using collaborative approaches that build healthy working relationships. Think of it this way: Mediation is emergency-room medicine for relationships. It’s valuable and necessary when things go wrong, but wouldn't preventive care be better? Collaborative agreements and frameworks act as a type of “preventive medicine,” creating aligned incentives, shared goals and clear communication channels that keep partners working together, rather than against each other. MORE FOR YOU Building Collaborative Frameworks So, how do organizations make the shift? It starts with intentional design. Progressive organizations are adopting a variety of collaborative approaches that foster collaboration and align interests. For example, one trend is for organizations to use relational contracting. A Bloomberg Law article defines a formal relational contract as a “legally enforceable written contract establishing a commercial partnership within a flexible contractual framework based on social norms and jointly defined objectives, prioritizing a relationship with continuous alignment of interests before the commercial transactions.” Other organizations, such as GE, are making the shift to use plain-language contracting as a way to make it easy for their trading partners to understand the intent and responsibilities in their contracts. A third approach that has proven effective for preventing adversarial relationships is for business partners to actively monitor their relationship health. For example, when Island Health Authority and the South Island Hospitalists first measured their relationship health using a Compatibility and Trust Assessment, the relationship scored as “very unhealthy.” As part of the assessment, teams were asked to use adjectives to describe their relationship, and a whopping 84% used negative words such as “adversarial,” “opaque,” “distrustful” and even “toxic.” After taking the pulse of the relationship, the parties committed to improving their relationship health. Less than two years later, the results showed a drastic turnaround with team members using positive adjectives 86% of the time. The Path Forward As we observe National Mediation Settlement Day, let’s broaden our perspective. Yes, mediation provides invaluable tools for resolving disputes when they occur. But the ultimate goal should be creating business relationships so healthy and collaborative that mediation becomes unnecessary. The question isn’t whether your organization can afford to invest in collaboration. Given that workplace conflict costs the average organization with 500 employees over $1.6 million annually, the real question is: Can you afford not to? This National Mediation Settlement Day, celebrate the dispute-resolvers — we need them. But commit to building something better — partnerships so fundamentally collaborative that, next year, you'll have far fewer disputes requiring resolution in the first place. Editorial StandardsReprints & Permissions
