Business partners inevitably run into conflicts. Disputes over money, employees you want to hire, products or services to offer, and numerous others are all part of the business landscape. When partners have a major dispute, it is not practical or cost effective to go to litigation. Legal action can cost thousands of dollars, and more importantly, going to court over an issue between the owners can do irreparable damage to the partnership.
A much better alternative that can help resolve conflicts between partners is mediation. Mediation is a voluntary process in which the partners meet with an experienced mediator to discuss the unresolved issues and work toward a win-win resolution. The process is facilitated by the mediator, but the partners are ultimately in control of whatever agreement gets worked out.
Can a Mediator Really help Resolve our Business Dispute?
This is a fair question, and one that is asked by many business partners. After all, if you have a dispute that has reached an impasse, you have probably already spent a lot of time discussing it and trying to figure out a solution. What can a mediator say or do that you have not already tried?
First off, a mediator brings an outside perspective to the situation that is neutral with no vested interest in the outcome of the dispute. This is a perspective that none of the owners have, and one that comes without judgment and without any preset agenda. Bottom line, the mediator will be able to see things from an objective point of view, allowing them to come up with ideas and potential solutions that you may not have considered.
Here are some other ways an experienced business mediator can help you with your dispute:
Allow the Partners to be Heard
A good mediator is a good listener, and this is very important when individuals are trying to work out a dispute. Oftentimes, business partners are so focused on defending their argument that they are not able to listen to what the other partners are saying. During mediation, everyone has a chance to voice their concerns without interruption. And when people feel like they are finally being heard, they tend to calm down and become more open minded to the points of view of others.
Encourage Open Communication between the Partners
Picking up on the previous point, the ability to speak freely and openly without judgment or interruption encourages much stronger communication between participants. This helps foster a friendlier and more cooperative environment; one in which partners often shift their mindset from defending their position toward wanting to help other partners get some of what they want. They may even start seeing value (that they had not seen previously) in what they were saying.
Help Establish an Agreement between Partners
One common issue that causes conflicts between business partners is the failure to put together a written agreement from the outset. It is understandable why this happens. Two or three individuals decide to start a business, and they spend 50, 60, even 80 hours a week in the beginning just to get the business off the ground. With so much going on, it is hard to find time for things like written operating agreements. But an operating agreement is essential for the success of the business, because it lays out, in writing, the important issues the partners decide between themselves regarding how the business will be run.
A business mediator can help partners put together an operating agreement before they begin operations, which is the ideal. But a mediator can help with this any time it is needed; and oftentimes, after dealing with a major dispute, partners begin to see first-hand the need for this type of agreement.
Improve your Business Operations
A good business mediator will most likely have a fair amount of experience in the business world themselves. And as an aside, this is an important attribute you should look for when deciding who should mediate your business partnership issue. During the course of mediation, the mediator can often provide ideas and solutions that have been proven to work in other organizations to help your business run more efficiently. And we all know that when a business is more successful, it significantly reduces the chances of conflicts down the road.
Give your Business a Proper Burial
There are some instances when the best thing for everyone involved is for the partners to go their separate ways. This is just reality. Some businesses are not meant to be, and some partners just cannot work successfully together. Once this has been decided, there are a lot of steps that must be taken to properly dissolve the business, or for partners to sell their interest in it. An experienced business mediator can help the parties negotiate the end of operations, so you can part peacefully and without any costly legal battles.