Designing a Dispute Resolution Program for Managing Conflict

by William A. Zucker, Senior Consultant, Cutter Consortium

The best way to minimize risk is to nip conflict in the bud and to turn it to an organization's advantage.

What is fundamentally important to consensus building or constructive controversy is to create a vehicle for a meaningful dialogue, without concern that what is said will later be used against you in some later positioning or adversarial process. An agreement about confidentiality is therefore important. When was the last time you saw an agreement about confidentiality in any dispute resolution provision? I'll venture that the answer is never. What is meant by confidentiality does not shelter the facts but the discussion that is part of working through a conflict.

The second part of creating a dispute resolution program is to avoid the boilerplate at all costs. Instead, the program starts with a dialogue about what should be in the program. As one thinks about the process of designing an appropriate program, here are some questions to bear in mind:

• What are going to be the points of contact and discussion during the relation?

• Are there likely to be interpersonal issues?

• How does each organization currently resolve such issues?

• What is the culture or system for internal dispute resolutions for each organization? Can they be applied?

• Is there a vehicle for working out wrinkles from the ground up?

• How can one avoid surprises or unannounced changes in direction?

• Is it likely that there will be factual disputes?

• Should one build in some fact-finder process to make recommendations based on a neutral assessment of the facts?

• What will be the triggering event for conflict management?

• Is there a way in which triggering events can be managed so as to reduce invoking any formal aspects of the process?

• How necessary is a quick resolution?

• Is precedent important?

• What are the potential rewards for resolution, such as establishing payments from a sinking fund for avoiding any formal breakdowns in the relationship?

• Should there be any binding nature to the dispute resolution process, even if it is a consensual one?

• Is the assistance of a neutral party likely to be necessary?

• Is neutrality important?

• What kind of communication and dialogue are likely to be important to building a working relationship?

• What is the current degree of trust and respect?

• Do any of the participants bring with them some knowledge of dispute resolution?

• What is the level of existing commitment and processes to collaboration?

• Who should help shape the system?

• How can the system assist in issues of leadership, change management, team building, meeting skills, and working through cultural and communication differences?

Answering these questions and determining organizational interests is critical to designing a program that will advance the business goals of all participants. The process of diagnosis and design is important to get all participants to "buy into" the system and accept the ultimate outcome of the process as a fair mechanism for dispute resolution. The result of thinking about and investigating these issues may surprise all of the participants. It takes a knowledgeable person in alternative dispute resolution to lead the discussion and propose options, much like choices on a Chinese menu. One thing is for sure -- it will not result in a boilerplate provision stuck at the end of the contract that no one has really considered until it is too late.

I welcome your comments on this issue of the Cutter Edge and encourage you to send your insights on the market in general to me at wzucker@cutter.com.

-- William A. Zucker, Senior Consultant, Cutter Consortium