It’s odd to me that New England’s Pilgrims are more widely known for their buckle-festooned hats than their use of ADR tools, such as mediation and arbitration. I suppose hats are more interesting to most people. I bring this up as a way of saying that dispute resolution has been around for a long time in the (pre-) U.S.
Due to a long history and demonstrated value, ADR (or Alternative Dispute Resolution) has name recognition and accepted value. Dispute resolution can offer real cost and performance value to your business or team. But, can you get more?
In the beginning, ADR was all about the courts (or whatever iteration of justice a community used). After all, the A is for Alternative…to formal court proceedings. Then there’s the Dispute Resolution part. This, too, highlights ADR’s connection to the courtroom. Whether it’s business dissolution, child custody, or collective bargaining, ADR can be a valuable tool to both the issue at hand and the courtroom that’s got a backlog of cases. In these cases there’s a specific problem that needs to be solved. But, as it turns out, not all disputes or conflict should be resolved. In fact, some conflict should encouraged. In your team, unlike a courtroom, you need more than dispute resolution.
Businesses understand that conflict is expensive in financial, human, and opportunity costs. In financial costs, U.S. companies spend over $350 billion every year dealing with conflict. In human costs, conflict impacts morale, sick time, absenteeism, and staff turnover. In opportunity costs, unmanaged conflict results in lost time, productivity, and innovation. Everyone gets that—conflict is costly. And, because we all know about ADR and dispute resolution, it’s natural that businesses have called in the ADR specialists to resolve their team’s conflict. In a 2011 study of Fortune 1000 companies, 98% reported using mediation.
So, businesses have learned what courts know—ADR works like a charm…except when you need more. Courts need disputes to be resolved. Teams and businesses need productivity and performance and innovation and teamwork and long-term relationships.
In courtrooms conflict is understood to be inherently negative. In your team, the outcomes of conflict can be either negative or positive. We know about the negative outcomes…all those avoidable costs. But, the positive outcomes? Managed productively, conflict can increase innovation, creativity, and performance. By helping teams communicate in ways that attack a problem, rather than each other, more ideas emerge, more individuals can engage in problem-solving, and a greater sense of team can support operations all around.
Additionally, the fact is, conflict’s natural; it happens all the time; and it’s not going away. So, instead of burying our heads and avoiding or just trying to resolve all conflict, we need to be proactive and manage conflict in all its forms (positive and negative) and at all it’s stages (foreseeable negative conflict that can and should be prevented, conflict that should be encouraged and used for positive results, and conflict that has become toxic and needs to be resolved). This is conflict management. It’s proactive and on-going, instead of reactive and ad hoc.
Dispute resolution misses, then, two critical components that conflict management handles. Dispute resolution lacks proactive prevention and doesn’t harness the beneficial power of conflict.
While ADR has proven to be a valuable tool for courts and other systems where the need is to resolve disputes, in organizations, where relationships and interactivity are long-term and on-going, conflict is more complex. And so for those of you not part of a courtroom, but instead are part of a team, upgrade your dispute resolution system with conflict management.
(1) Stipanowich, Thomas and Lamare, J. Ryan, Living with 'ADR': Evolving Perceptions and Use of Mediation, Arbitration and Conflict Management in Fortune 1,000 Corporations (2013). 19 Harvard Negotiation Law Review 1; Pepperdine University Legal Studies Research Paper No. 2013/16. Available at SSRN: http://ssrn.com/abstract=2221471 or http://dx.doi.org/10.2139/ssrn.2221471