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Reward

Corporate conflict management decisions and actions should be aligned with expected reward.

In my previous blog post I addressed risk, the first of four elements I suggest considering when developing or fine-tuning one’s corporate conflict management practices. This blog post addresses the second element – reward.

When you think of a conflict – of any kind – reward is not the first thing that comes to your mind, right? Risk for sure. Irritation, anger, cost, fatigue or frustration maybe – but not reward.

Yet, when making decisions on corporate conflict management, one should be thinking of reward – the best outcome one can reasonably expect for a specific corporate conflict management challenge.

Challenges differ and so do expectations. If you have a conflict management task, the reward can e.g. be a fast and efficient closure of a conflict or additional time to prepare for unavoidable negative consequences. If you are trying to mitigate conflict exposure through avoidance, the reward can e.g. be an actual decrease in the number of future conflicts. In case management, the reward can e.g. be money in your pocket after a clear-cut win or a competitive advantage achieved by imposing a significant procedural burden on a competitor’s business (for explanation of sub-concepts please refer here).

High-quality corporate conflict management is reward-oriented.

There is a gain to be pursued in practically every corporate conflict management situation. The expected gain can be big, small or something that falls in the middle. The gain can be difficult to see and understand – in particular, if one does not have a clear understanding of the risks involved. More often, however, one can detect various alternative courses of action to choose from – each accompanied with a different kind of potential gain. So, how to make the choice? How to choose the path forward?

The answer lies with the expected reward. The reward should be the backbone for decisions and actions. If we choose to act like this, are we moving closer to the reward or further away from the reward? Gains that are misaligned with the expected reward should not be the ones you follow.

Self-evident, right? In theory, yes. In practice, it doesn’t seem to be so.

When you make corporate conflict management choices, you will eventually find yourself either better off, worse off, or more or less stagnant in your current position.

Better off is naturally better than worse off, but any one of these three outcomes may, in fact, represent a gain in the pursuit of a reward. Being better off does not, on the other hand, necessarily suggest that you have succeeded with your efforts. Maybe there was something more to achieve in a specific situation?

Everybody, of course, wishes to end up better off. Nobody wants to do a bad job. But, in general, is it possible to know (or at least have a hunch) in advance of the odds one is up against when addressing corporate conflict management challenges? What is the corporate conflict management environment like? Should one expect tailwind or headwind?

By default, the likelihood of ending up either better off, worse off or “nowhere” as a result of one’s corporate conflict management choices differs depending on which sub-concept of corporate conflict management (avoidance, conflict management or case management) one is dealing with.

Under avoidance (all measures, practices and processes intended to reduce general conflict exposure), the likelihood of not achieving (lasting) positive results with your measures is high. If your corporation (or some business area within) is burdened by recurrent conflicts, the challenges are, almost without exception, complex. Potential fixes are likely to require a tailored approach. Expect a lot of work since underperformance (most often resulting from plain under-investing) tends to lead you nowhere. You can easily end up achieving no results. The positive thing is, however, that it is unlikely that your efforts (whatever they are) will lead to a negative outcome (in terms of exposure).

In conflict management (conflict-specific measures and pre-designed processes aiming at resolving actual conflicts as efficiently as possible), expectations are quite different. Neutral conflict management choices are rare – you likely either improve or weaken your position in a conflict. Thus, expect your every action (including passivity) to have an effect, either negative or positive.

Underperformance in conflict management leads to a loss of control. Instead of being the driver, an average conflict manager easily ends up as a passenger – and the ride is not pleasant.

In case management (measures and pre-designed processes aiming at resolving a court or arbitration case as efficiently as possible), skilled representation (read attorneys) acts as a filter for case management and insures that measures are always improving one’s conflict position and not the other way around. Thus, by default, the likelihood for measures weakening your position is lower in case management than it is in conflict management.

On the other hand, the likelihood of losing sight of the reward seems to be somewhat higher. When representation is involved, case management is supposed to supervise – but it is actually rather far away from the hot spot. Underperforming case management easily fails the task of being a filter for the decisions of representation.

The only way to fight against the odds and succeed with one’s corporate conflict management choices is to be reward-oriented – consistently.

But, when I suggest reward-orientation, is it the same thing as being goal-oriented?

Up to a point, the difference is, of course, semantic. It depends on how you conceptualize and define things. But for the present context and my use of the term, the answer is no – unless the set goal equals the reward.

If a corporation has a dispute with another corporation, typically the goal in a legal proceeding is to win the case. The team handling the matter may later succeed perfectly with every step in pursuing the goal and achieve a favorable judgement. If this is the case, the team has then undoubtedly experienced success in being goal-oriented.

At the same time, however, the team may have failed miserably in being reward-oriented. Did anyone check whether the opponent has funds to pay? Or assets a bailiff can reach?

You may also invest heavily in contract training for employees. Your employees surely master contracts better after the training, right? But does that really address the root cause triggering conflicts in your business? Or is the training a match timewise? How long will your employees remember the learnings?

So, how to be reward-oriented?

First, when you are addressing a corporate conflict management challenge, consider risks involved. Second, after considering the risks, figure out the reward you can reasonably expect. Third, consistently compare your corporate conflict management decisions and actions against the expected reward. And fourth, keep your eyes open for new information and adjust the reward if need be.

In my next blog post, I will address the third element, resource.

Contact

Harri Jussila

Founder, Attorney at law, EMBA

+358 50 577 4088

harri.jussila@iquja.com

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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