When a negotiation escalates into a dispute, most managers understand the value of seeking out a mediator for professional assistance with the matter. The question of whom to hire, however, is less clear-cut. What type of expertise should your mediator have, and where should you look for her?
To illustrate this dilemma, imagine that you’re the vice president of research and development for Aladdin, a small pharmaceutical firm specializing in product development for the cosmetics industry.
Recently, Aladdin made its first sale to Reauget, a large, successful cosmetics company. Reauget planned to market the beauty product Aladdin developed, a cream for counteracting the effect of pollution on the skin. Shortly after the initial production run, however, Reauget discovered that the product underwent significant chemical changes while in the bottle, taking on an unpleasant odor that made it difficult to sell.
Reauget blames your company for the problem, asserting that the product was improperly developed and tested. Your position is that Reauget failed to exercise adequate care in bottling the product. Although the disagreement has not gone public, Reauget has refused to pay Aladdin the $250,000 contract price for the license to market your product. In addition, Reauget has threatened to sue Aladdin for $250,000, the amount it spent on production and its unreleased advertising campaign.
You and your counterparts at Reauget have been trying to reach a solution before the dispute degenerates into a messy and expensive lawsuit. The financial implications for Aladdin are great, and a public dispute could irreparably tarnish your company’s reputation.
One of your colleagues suggests that you engage a mediator to resolve the dispute. She explains that a mediator, unlike a judge or an arbitrator, has no power to issue a decision that disputants must obey but, rather, works with them to negotiate a voluntary resolution. According to your colleague, both parties to the dispute should jointly select a mediator. You find this idea appealing but don’t know where to begin.
In this article, we will walk you through the processes of finding the right mediator – someone who will be satisfactory to both sides – to settle your disputes.
Since your dispute involves alleged chemical changes in an Aladdin product, your colleague advises you to contact the local university’s chemistry department. You end up speaking with Professor A. This expert chemist has never served as a mediator but has worked in the cosmetics industry and is certain that he can help you and Reauget resolve your dispute by determining which company is to blame for the product’s breakdown.
You also learn of a local dispute-resolution firm that provides expert professional mediators. The president of this firm tells you that none of her mediators has ever handled a dispute involving a product’s chemical properties.
Whom should you propose to Reauget as a mediator? Professor A, the expert chemist and novice mediator, or an expert mediator with no experience in chemistry or cosmetics?
You can be forgiven for thinking that, when it comes to dispute resolution, technical expertise trumps mediation expertise. This reasoning is faulty.
Suppose that you went ahead and hired Professor A to resolve your dispute. If Professor A blames Reauget for the product breakdown, Reauget is likely to conclude that Professor A isn’t as able a chemist as he is supposed to be.
If Professor A tells Aladdin that it is at fault, Aladdin will probably come to the same conclusion. Since a mediator’s opinion is not binding, the two companies will be back to where they started – each convinced that it is right and that the other is wrong.
It’s often the case that when two people or organizations try to resolve a dispute by determining who is right, they get stuck. That’s why so many disputes end up in litigation.
Adapted from “Beyond Blame: Choosing A Mediator” by Stephen Goldberg for the January 2006 issue of the Negotiation newsletter.