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Resources

The success of corporate conflict management is dependent on the quality of how one uses resources. Appropriate practices help you make the right choices.

In my previous blog posts, I addressed risk and reward, the first two elements I suggest considering when developing or fine-tuning one’s corporate conflict management practices. This post addresses the third one, resources.

When you have assessed the risks and figured out a reward to pursue, your next corporate conflict management consideration should be resources.

Resource considerations should always precede a decision on response. Yet, hands up, who has participated in a meeting dealing with a conflict where after a discussion one decides that “ok, let’s go forward with this” and only then someone really asks “so, what do we need?” Resource considerations, unfortunately, too often succeed decisions on response.

Resource requirements should, furthermore, not come as a surprise. Yet, once again, please raise your hand if you have been involved in a conflict where, all of a sudden, the costs turn out to be way more than expected? Or the effort has consumed much more time than anyone imagined? Resource requirements quite regularly seem to emerge to one’s astonishment.

When you address corporate conflict management resources, there are basically three topics to cover – three questions to ask. I will run through these in the following.

The first question:

What kind of resources are relevant in the context of corporate conflict management?

Resources can be categorized in a multitude of ways but I have used the following illustration:

Resources

One has, in theory, access to five types of resources: human resources, relevant property, authority access, partners and CCM practices.

Human resources can be divided into internal and external resources.

Your most important resource, by far, is your internal management resources (making all the decisions that matter). In addition to management services, internal human resources typically provide corporations with knowledge, a different kind of expertise and muscle. By the last one, I refer to individuals conducting (often routine) tasks that may consume a lot of time but, nevertheless, have to be done.

External human resources can be divided into three types – hired guns, experts and wild cards.

As part of your case management measures, you most often face the need to engage external legal counsel – an attorney or an attorney team. In order to solve a corporate conflict management challenge, you may, however, need to engage a long list of other professionals as well – accounting experts, finance experts, M&A experts, crisis communications experts, engineering experts, law professors, etc.

The division by and between hired guns and experts is not clear-cut. Hired guns do what you pay them to do (within the boundaries of their professional conduct rules). With experts, your power is often limited to asking whether the expert is available and (after hearing their opinion) to then deciding whether you use this person as your expert or not.

Wild cards are individuals who are not (or are no longer) on your corporation’s payroll but can e.g. give you information (and provide you with evidence) on events and circumstances relevant to your corporate conflict management challenge. Your ability to influence wild cards is limited at best.

Relevant property can be divided into money and other property. Money can further be divided into your own financial resources (e.g. money in your pocket or credit facilities) and external financial resources (e.g. insurance and litigation funding).

Other property can be divided in a myriad ways. For resource considerations, it is however only necessary to bear in mind that your corporation often has property items (both tangible and intangible) that can help you with your corporate conflict management challenge.

Authority access refers to your right to get your conflict addressed and judged before a competent court or arbitral tribunal. It also refers to your right to turn to a bailiff in order to enforce a favorable judgement. Authority access is one of the key characteristics of modern dispute resolution, a guarantor of its efficiency.

Sometimes you have partners to respond to your corporate conflict management challenge. The partner may be e.g. a sub-contractor with whom you handle a customer claim or a competitor who, for joint industry benefit, sees that it fits to support you in your quarrel with the authorities. Partners can provide you with resources and credibility.

The fifth resource, CCM practices, I will address in connection with the third question further below.

The second question:

How should one evaluate a resource?

In corporate conflict management, most of the resources must be evaluated six-dimensionally (as illustrated in the above picture with a hexagon).

The first dimension (first side of the hexagon) is availability. Is the resource available? How long will it be available? How can I make sure that the resource will remain available?

The second dimension is quality. Is this a resource we can trust? Is it a resource with external credibility? How can I find the best resource? How can I get a resource to deliver its best?

The third dimension is cost. What is the cost? What are my chances of narrowing down the cost? Resources always come attached with a cost. The cost is more visible when buying something from external service providers. Internal resources, however, bear a cost as well (direct salary cost, opportunity cost, etc).

The fourth dimension is influence. Do you have the means to direct, instruct, guide or otherwise influence the resource to comply with your wishes? Or does the resource operate by its own set of rules – like courts and arbitral tribunals?

The fifth dimension is timing. When can I use this resource? When should I use this resource?

The sixth and last dimension is change. Things would be a lot easier if corporate conflict management challenges remained the same throughout their life span. Unfortunately, that is rarely the case.

Corporate conflict management challenges are subject to constant change. Some changes are subjective. You learn as time goes by and simply understanding the challenge better makes it seem like the challenge has changed. Other changes are objective. You observe that one day the challenge is this, the next, something else. There are several potential drivers of objective change – e.g. your opponent. Opponents make decisions that quite regularly have an effect on your challenge.

The third question:

How should one use resources?

Before suggesting an answer to the third question, let’s consider for a bit the current reality. How do corporations in practice decide on the use of resources for their corporate conflict management challenges? I’d say that corporations on average just tend to choose someone 1) to manage the corporate conflict management challenge and 2) to decide how to use resources (with some monetary and other boundaries).

If this is the process in your organization, then you already have two important elements (of how one should use resources) in place. You have someone in charge and that someone has been vested with the power to make decisions.

But what then are the key characteristics of a good corporate conflict manager – your key resource?

I would say that an ideal candidate is consistently analytical, highly experienced in handling corporate conflict management challenges, a fast decision maker, completely at ease with changing course if need be, an excellent internal and external communicator, highly efficient in driving results and generally has a nice outgoing personality with all the time in the world (door always open).

I’m guessing that few of us can name a person fitting that description. And despite all the recent trending, it seems that it will still take quite a long time for AI and robotics to successfully assume this role. Thus, in the meantime, I would suggest going for someone who is analytical, smart and good with people. And, if you can find someone with conflict experience – perfect!

The task for a corporate conflict manager is far from easy. When you have chosen someone for the role, you should bear in mind that the person you have chosen is likely to lack some of the characteristics of the ideal candidate.

When corporations face conflicts, quite often the discussion and thought process on both sides concentrates on the question of who is right and who is wrong (with more or less incomplete understanding of the relevant facts and circumstances). The “right or wrong” debate is often unique for every conflict.

In all corporate conflict management challenges, the sphere of issues to cover is, however, much wider than just this “right or wrong” debate (which actually sometimes is utterly futile). The other issues to be addressed around “right or wrong” debates aren’t usually unique for a conflict but are, more or less, the same, irrespective of the conflict specifics.

The key to corporate conflict management success is to address all relevant issues, not just a random fraction of them. And the one thing that can help corporate conflict management in covering all relevant issues, is the fifth resource – CCM (corporate conflict management) practices.

Corporations typically have certain practices in place for e.g. choosing an external legal counsel or defining which conflicts should end up on the desk of the legal department. Legal departments may further e.g. have a preference over mediation, arbitration or litigation and contract templates to reflect such policies. In larger companies, someone may have been nominated as the “head of disputes” with the idea of gathering knowledge and experience in one place.

Although in a broad sense such practices undoubtedly fall under the concept of the CCM practices, here I’m referring more concretely to checklists and questionnaires on what to address and what to cover when managing a corporate conflict management challenge.

So, the answer to the third question is: establish appropriate CCM practices, choose your corporate conflict manager wisely and give them the power to decide.

Of course, that leaves the question of how can a corporation establish appropriate CCM practices?

For the past 20 months we have been developing and testing frameworks, models, checklists and questionnaires for this purpose. More information on the service launch will follow in a few weeks’ time.

My next blog post (concluding a series of four) will address response.

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Contact

Harri Jussila

Founder, Attorney at law, EMBA

+358 50 577 4088

harri.jussila@iquja.com

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Business ID, VAT code

2801483-4 / FI28014834

E-Invoicing address

EDI-Code: 003728014834

Operator ID: 003721291126