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Response

Corporate conflict management’s main job is to make sure that time is invested wisely when responding to a conflict or multiple conflicts. Corporations need to pay attention to three items: lead time, content and consistency.

In my prior blog posts I have addressed risk, reward and resource, the first three elements I suggest considering when aiming to improve and enhance corporate conflict management. This blog post addresses the fourth and last one – response.

Whenever a conflict emerges in a corporation’s business, sooner or later, a response is required. And how one responds is far from irrelevant.

So, how should a corporation respond to conflicts?

My suggestion as the answer is – efficiently and consistently. But what does that actually mean? How can a corporation respond to conflicts in an efficient and consistent manner?

I can suggest the first step.

Extremities are rarely the answer

As background, let’s consider first the theoretical extremities of a possible response – from not backing up one bit to surrendering unconditionally.

When does it make sense for your corporation to go to court or arbitration, in order to acquire a judgment or an award to solve a conflict?

Although I don’t know your corporation or your corporation’s business, I guess there may sometimes be strategical or tactical business reasons to either pursue an enforceable decision or just make it seem like you are willing to pursue one. I can further guess that sometimes there exists a good business reason to seek an authoritative decision to solve a problem that more or less regularly pays visit to some area of your corporation’s business.

That said, I would, however, suggest that in general, the answer to the question is – almost never. Conflicts rarely support your corporation’s business.

What about the other extremity then? Does the above mean that a corporation should (practically) always settle conflicts and never let them drift into a lengthy dispute?

Well, sometimes it’s smart to “pay a little extra” to get rid of a conflict. The important question, however, is: would this happen in the best interest of the corporation or in the best interest of someone else? A question not that easy to answer – for a variety of reasons.

A settlement is often a better alternative than a lengthy dispute but commercial settlements should never be blind settlements without proper justification. You should not have an open wallet.

Learn faster

If one studies a random sample of 100 pending real-life cases from courts and arbitrations, how many of these cases have strategical, tactical or experimental value to one or more of the parties involved?

I’m not aware of any scholarly studies revealing the actual answer or even examining the issue. However, my educated guess is – only a few. Corporations tend to drift into lengthy proceedings that do not find justification from the parties’ strategical, tactical or experimental ambitions.

In one of my earlier blog posts, I mentioned that in commercial disputes, the merit curve (expectation on how well a corporation will do in a case) tends to decline along with the progress of the case – for both (or all of the) parties involved.

Sometimes, a well-identified risk materializes leading to a decline in the merit curve. Most often, however, a decline reflects a simple learning process. Seemingly black and white cases turn into different shades of grey – as corporations gradually learn.

And does that have to be the case? Can’t the corporations learn faster in connection with conflicts?

I think corporations can learn significantly faster. I also think that they should.

To learn faster, corporations need to pay attention to three items: lead time, content and consistency.

Shorter lead time

In the life cycle of a conflict, lead time refers to the period of time starting at the emergence of a conflict and ending when proper conflict management takes over. Lead times are often too long to enable the best possible conflict response.

Most of the time, conflicts emerge unexpectedly. The first employee to become aware of a conflict item is often someone at the operative level of a corporation – and quite often a person whom the corporation would not choose as the conflict manager. To address this dilemma, corporations (especially larger ones) maintain claims policies or legal policies to dictate what employees should do and whom they should inform when a conflict emerges.

Having a policy in place is, however, not enough. The policy has to be clear and relevant employees have to know it exists (and be willing to comply with it). This may sound self-evident but, in practice, corporations seem to struggle with such policies.

Relevant learning starts after the lead time – when conflict management takes over. Not before.

More questions, more content

If we think of a corporation’s response to a single conflict, multiple conflicts or conflict exposure in general – what is the one thing that improves the quality of a response?

Having more information.

And how does one acquire more information?

By asking more questions.

Asking more questions does not automatically mean that you have more answers. But, by asking more questions, you know considerably more of what you don’t know. You end up having more content to base your decisions on and that makes all the difference for the development of the merit curve.

Consistency

Let’s say you have two in-house lawyers A and B to choose from as your designated conflict managers for a recently emerged conflict.

If you were to give the task to A today, do you know how many questions and which questions A will ask? Or if you instead give the task to B, will B ask the same questions as A would? Or if B quits after a while and you have to reassign the task to A, will you or will A know which questions B has asked before?

I believe that in a clear majority of corporations, the answer to every one of the questions above is no. Corporations lack consistency in their efforts to respond to conflicts.

In the below picture, the odd dotted line defines an area covering, from the management perspective, the theoretical pool of all relevant questions in a conflict. It’s rather common to start with a set of more or less random questions like this…

Shows an area defined by a dotted line and within that area different smaller chosen areas

… and then end up noticing that one should have asked something else as well or instead.

The same area defined with a dotted line but other areas chosen within in red colour

I’m of the opinion that if a conflict is not resolved at a very early stage, a corporation should build a response on a pre-defined question portfolio like this:

The same area defined with a dotted line but now showing a bigger oval area covered within

To secure consistency, the question portfolio should be the same irrespective of the conflict, who manages the conflict and when.

But what is the area in the middle with the text “R or W?”?

“R or W?” covers argumentation level questions that try to define whether you are right or wrong in a conflict. These questions are mostly conflict-specific and, thus, difficult to address with the suggested general pre-defined question portfolio.

However, in conflicts, there are always plenty of other questions to ask as well. Questions that are not conflict-specific and that, thus, can be addressed with a pre-defined question portfolio. Questions that add the brain to your management efforts.

There is a big difference in believing that you are right (R or W?) and being able to prove that you are right. But even if you manage to prove that you are right, will that be of any value to you?

The first step

To secure that your corporation responds appropriately to every conflict, your corporation needs to be faster to gather relevant information. I would suggest a claims/disputes policy to govern the lead time and a question portfolio or checklist to govern content and consistency.

During phase 3 of Project Iquja, we touched lightly on the surface of what corporations already have in place. Corporations seem to have varying tools to govern the lead time but not necessarily anything concrete to govern content and consistency.

For phase 4 of Project Iquja, we have developed a question portfolio (Iquja checklist) and a complementing training package. Available for legal departments of corporations headquartered in Finland, we are eager to see whether this fairly straightforward instrument can make a positive difference and guide corporations towards more realistic conflict assessments.

The tools are admittedly only the first step in building up an ideal conflict response – and by no means a guarantee that a corporation responds to future conflicts in a smarter manner. But, I’m optimistic. If you provide individuals, who are capable of rational thinking, with more information, I believe that you can expect better results.

Motivation

One may wonder whether it would be worth the effort to rethink one’s conflict response. Sounds like more work, right? Your corporation does not necessarily encounter that many conflicts and your team is burdened with other pressing matters. In fact, should you even be reading this blog post?

I guess the important question to ask is – more work compared to what?

I have corporate conflict management high on my preaching agenda. Corporations should manage conflicts better. But what am I primarily selling?

If a corporation avoids an unnecessary conflict or breaks one short, it saves money – sometimes a lot of money. So, money should be a motivation for corporations to manage conflicts better – to respond better.

Further, if one manages a conflict better, one has far better chances of spotting the essential early and doing well overall in a conflict – even if it progresses into full-scale litigation. So, this should also motivate corporations to manage conflicts better.

Thus, I’m definitely selling opportunities for savings as well as better ammo. But, my primary sales article is something else. The one thing no one can get back – time.

The value of corporate conflict management lies in its ability to save time. In fact, corporate conflict management’s main job is to make sure that time is invested wisely when responding to a conflict or multiple conflicts.

If you manage a conflict poorly, you waste somebody’s time. If your organization misses an essential question early on in a conflict, how many hours will be wasted altogether?

Contact

Harri Jussila

Founder, Attorney at law, EMBA

+358 50 577 4088

harri.jussila@iquja.com

Address

Huopalahdentie 24
00350 Helsinki
Tel. +358 50 577 4088

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Iquja’s office is located at Menuetto Business Center in Munkkivuori, Helsinki (20 minutes from the Helsinki Airport [HEL/EFHK]).

Business ID, VAT code

2801483-4 / FI28014834

E-Invoicing address

EDI-Code: 003728014834

Operator ID: 003721291126