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Tuesday, June 26, 2012

Managing Organizational Conflicts with ADR Systems

Public and private entities worldwide are increasingly using conflict management and dispute resolution procedures as a standard way of handling a wide variety of costly and disruptive conflicts, from legal or quasi-legal cases to workplace struggles to simple product and service complaints. Practical guidelines for designing and redesigning dispute resolution systems are increasingly necessary if organizations are to adapt effectively.
Broadly framed, the purpose of ADR system design is to develop effective processes to prevent, manage, and resolve claims, conflicts, and disputes. The challenging part in any system design is to determine what will be �effective' in any given situation. Much of what makes a system effective is its ability to satisfy the goals of the stakeholders who are using, administering and affected by the system. One of the key benefits in ADR (Alternative Dispute Resolution) system design is the ability to find effective ways to prevent dispute s and to minimize the severity and cost of the disputes that still occur.
One of the great dangers, particularly in the private sector, is that dispute resolution processes will be developed that reflect the mandate of the implementing organization but that ignore or minimize core goals/concerns of users and other stakeholders. This would be less of a concern if not for the fact that many private sector organizations can effectively impose their system, so they are not required to seek broad input. Modifying dispute systems without proper design processes, however, can create significant costs, tension, and pushback from stakeholders affected by the systems in question, and limit the usefulness of the system ultimately implemented. Customers using such systems are already in a conflict of some kind, and they become further frustrated with the organization in charge if they feel the system is biased against them. The cost of dealing with dissatisfied customers in an adv ersarial setting is high on both sides, with one of the primary costs to the organization being the lost time and stress.
ADR Systems come in various forms, each with its own challenges, including:
� Intra-Organizational Systems that apply to stakeholders within a single organization, and over which that organization has full control, such as an internal workplace grievance procedure at a single company.
� Extra-Organizational Systems that apply to stakeholders external to a single organization, but over which that single organization has full control, such as many governmental systems like workers compensation claims procedures. � Inter-Organizational Systems apply to two or more organizations, with no one organization having unilateral control. Examples include nation-to-nation treaties like NAFTA, or inter-corporate agreements like the CPR Banking Industry DR protocols.
� Trans-Organizational Systems are used by two or more organizations and apply not only to those organizations but to other external stakeholders as well, such as the IDAC system administered by ADR Chambers (e.g. all signatory companies handle client complaints through a single dispute resolution system).

Organizations around the world, both governmental and private sector, are actively incorporating alternative dispute resolution (ADR) processes like mediation, negotiation, coaching, arbitration etc. into their methods for handling claims, conflicts and disputes (Ury et al. 1988; Wildau et al. 1993; Moore 1994; Costantino and Merchant 1996; Stitt 1998; Rowe 1997; SPIDR 2000; Bingham and Pitts 2002; Bertschler 2004; Katz Jameson and Johnson 2004; Bingham et al. 2009).
Having worked on a broad range of system design projects (from legal, to workplace, to contractual issues, and both public and private sector), the Stitt Feld Handy Group has a wealth of experience on which to draw in helping guide organizations through the system design process. There are 5 broad phases of system design, which vary in complexity and importance from one project to another, but which should be part of any system design project. The five phases, which are described in more detail below, in clude:
� Phase I: Clarify Mandate
� Phase II: Diagnosis
� Phase III: Design
� Phase IV: Implementation
� Phase V: Evaluation, Monitoring and Improvement
This classification is task-based, and in actuality there may be loopbacks or overlaps between the phases. It is not unusual, for example, to be laying the groundwork for Implementation (by lining up possible monitoring processes and personnel) even before the Design is fully approved. An experienced system design professional can help identify what tasks are most appropriate to the system design project in question- which stakeholders to consult, what questions to ask, what design options to consider and why, etc.
In a world of expanding ADR processes, the future of such ADR system design projects involves organizations increasingly a) borrowing from other successful systems to put such processes in place; and b) in ADR mature organizations, refining the systems already in place by ongoing improvement after monitoring and evaluation. The importance of these changes in saving money and generating greater stakeholder satisfaction should not be underestimated. In one case, for example, the implementation of mediation into a grievance procedure saved millions of dollars in system costs by significantly reducing the number grievance arbitrations and related lost time from work. The earlier cases can be resolved, generally the less entrenched parties become in their views, and the more likely that relationships can be salvaged, which is a key factor in avoiding poisoned workplaces.
Flexibility in the system allows it to adjust to the range of conflicts faced. In another corporate example that SFHG worked on, the use of mediation and other interest-based processes was tailored to the company's circumstances by using HR staff as mediators (to save costs) but using HR staff from a different "neutral" location (to increase the appearance of neutrality and fairness), with the option for using external mediators in certain high sensitivity cases such as sexual harassment (when the need for neutrality was highest and justified the additional cost).
Understanding the underlying concerns of the stakeholders helps focus efforts on optimal strategies. In a third project, our consultation with the client revealed that arbitration decisions were both expensive and ultimately hard to enforce. The losing party would return to the workplace and flaunt the decision. Brainstorming ideas with the key stakeholders led to the design of a peer review process that was less costly, incorporated greater knowledge of the context, and had the added benefit of a built in enforcement mechanism (peer pressure when back at work).
With the growing use of ADR processes in a variety of sectors, public and private, comes the need for practical guidance on effective dispute resolution system design. While every system design project is different , a coherent model to approach the design process provides helpful guidance to administrators at organizations contemplating system changes. There is clearly value to be had in reducing the number, duration and severity of conflicts. The question is how to secure that value without creating further costs and challenges, and an experienced ADR system designer can help answer that question.

Feel free to contact me at if you have any questions about ADR system design.

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