Mediator Participation during Interactive Planning
Interactive planning is a management tool where an organization en- visions an idealized design for the future and devises actions to ap- proach that idealized design. Integrated bargaining — a technique familiar to mediators — is needed during the ideal design phase of interactive planning. Integrated bargaining is a negotiation method used to resolve conflict or reach an agreement based on the stakehold- ers’ underlying interests instead of their relative positions on the issue.
During a merger, acquisition, or a spin-off, the companies using the best managerial practices typically form a management team to plan the result- ing entity. The team is charged with producing an “idealized design” of the future entity. The idealized design is used to design the merged com- pany before the merger takes effect. Essentially, the idealized design proj- ect is a mediation of stakeholders and an opportunity for a neutral to assist and ply their trade. All the stakeholders or representatives that they select, who are principally affected by the design, are included in the design team. A mediator is appropriate and best suited to moderate such a diverse group.
The group’s goal is to produce a design of desired organizational de- tail. For example, the design team proposes details such as the prod- ucts to be produced, where they will be produced, which plants will be closed or opened, which distributors or wholesalers will be elimi- nated or retained, where the entity will incorporate, and what the trade name will be. The “idealized design” concept embodies the question, “What would you get if you could get anything that you wanted?”
Mediation with the third party neutral is the best setting for idealized design. An offsite setting provides an uninterrupted and moderated process with focus. The mediator can regulate cell phones and/or outside communication if needed. Some design teams prefer a lo- cation where the people have to stay overnight. This allows people to interact socially after-hours, which fosters good communication as the participants get acquainted with one other. On average, the entire process takes six months. Meetings take place every two months and each last about a week.
Mediators Help Cure Organizational Weaknesses
It should be cautioned that an idealized design group only works well if all the stakeholders are present and participate fully in the process. All the stakeholders are essential. Cooperation and full participation in the process is critical. Again this is a component that the mediator can moderate. The stakeholders will not implement an ideal design in which they did not participate. The stakeholders discover what they want during the process of design. The ideal design will fail when put into action if it is sabotaged by those who are forced to implement a design they did not participate in or do not understand. Therefore, participation by all the stakeholders in the ideal design helps remove constraints an excluded stakeholder might otherwise impose.
Mediators Foster Creative Thinking: Alternatives, Concepts, and Perceptions
Creativity is the recognition of constraining assumptions and removing them. When the stakeholders have identified and revealed their under- lying interests to each other, then a process of developing the ideas and fashioning creative options can take place. When each side’s interests are determined, the mediator facilitates the synthesis of these interests into the ideal design. The overall goal of brainstorming is to gain in- sight in the interrelation of the parties interests and discover solutions that are not readily apparent to the stakeholders.
The mediator can assist the stakeholders to raise all options without evaluation. The mediator will direct the evaluation stage later after the stakeholders have exhausted their creative suggestions and after as many solutions as possible are presented. Premature evaluation of suggestions presented during brainstorming sessions might stifle the communications and short circuit the process. When a suggestion is disregarded too soon, the suggesting stakeholder may become hesitant to speak again and become withdrawn from the process. The brain- storming stage should place as many solutions in play as possible.
Using integrated bargaining techniques, a mediator is best suited to facilitate creative thinking, producing alternative concepts and percep- tions. Mediation facilitates the optimal performance of the design be- cause the mediator is able to help the participants look beyond their constraints, preconceived notions, and beliefs. For example, the me- diator could suggest transfers of ownership interests as an alternative to cash payments. A mediator can provide benefit and value when the team is deciding how to consolidate systems. In the case of interna- tional mergers and acquisitions, the choice of an accounting system that satisfies the national requirements of the participant countries as well as the financial and managerial reporting needs of the company itself is an example of the organizational structural details to which a mediated design would be appropriate.
Mediators Provide Value and Benefit
The stakeholders begin the integrative bargaining process by identify- ing their individual interests. Often, the stakeholders have numerous interestsunderlyingasingleposition. Theinterestsarewhattheyneed or what they fear or what they are concerned with. The stakeholders’ interests are formed by their individual perceptions, beliefs, needs, and aspirations. The stakeholders may be splitting over a position on a single issue, even though each party has a separate and distinct reason for such a position. The stakeholders should determine why they hold certain positions and the reason behind the issues.
A mediator can help the stakeholders focus on satisfying their indi- vidual interests instead of their positions. Questioning their motiva- tions, a mediator can help reveal the stakeholders’ underlying desires and needs that are relative to their positions. With the assistance of a mediator, the group may reach agreement on an ideal design that is mu- tually beneficial and durable because it is the best system as a whole.
With only one of six mergers, acquisitions, or spin offs truly succeed- ing, companies should consider employing a mediator to assist in the development of the idealized design for merging organizational struc- tures. Mediators help cure organizational weaknesses by getting all stakeholders to become proponents of the design they helped create and will ultimately have to implement. Mediators help foster cre- ative thinking by employing techniques to help the stakeholders ex- plore alternate concepts and perceptions. Mediators also provide value and benefit by helping the stakeholders understand positions versus interests to help find common ground. By employing an interactive planning model, with an effective mediator, the chance of a successful merger is significantly increased.
The ideas expressed in this article are based on the work of Russell Ackoff. Russell Ackoff (1919 – 2009) was an American organizational theorist, consultant, and Anheuser-Busch Professor Emeritus of Management Science at the Wharton School, University of Pennsylvania. He authored Ackoff’s Best: His Classic Writing on Management published by John Wiley & Sons, Inc. in 1999. Ackoff was a pioneer in the field of operations research, systems thinking and management science.