An abridged version of this article was printed in the Otago Daily Times on 11 April 2020: Click here
"We are all in this together” is the catch cry of how we New Zealanders are going to get through the Covid-19 crisis and the impending recession. Business people will need to collaborate and be transparent with each other if they are going to survive the uncertainty. But, the risk of misunderstandings escalating into disputes in such stressful times is high. The earlier they are resolved, the better for everyone - however the challenge lies in how to do that.
The government is doing its part to help businesses, from providing subsidies to temporary relaxations on rules against directors letting their companies trade while at risk of being insolvent (see changes to sections 135 and 136 of the Companies Act 1993). But, business people still must reach agreements. Will staff agree to take annual leave to help curb their boss’ wage bill even though they can’t be forced to? Will landlords drop rents enough so that their tenants don’t have to move out, while they still need to earn enough to repay their mortgages? Will the banks give everyone enough of a break? How do we achieve our common goal of making it through without businesses going under?
We are very connected in this economy and living in such a small place like Otago, means that you can’t be too much of a so-and-so to one person without ruining your reputation to all. We aren’t all as big and powerful as Harvey Norman who gave their landlords 24 hour’s notice that they would not pay rent during lockdown. Often businesses will seek the help of lawyers when they are in crisis mode, after a dispute has escalated. The dispute can be dealt with through the Courts at great cost, time and effort. Never mind the damage that process can cause to your business and the relationships between business people who were once friends.
To avoid this, being proactive and upfront with the people you do business with is key. They need to know what you need, plus understand why you need it. If solutions are reached by you merely compromising, the tone is set for your relationship and conflicts are likely to flare up again. To get past entrenched positions and find the root cause of disagreements, people need to appreciate each other’s drivers. If you work together with genuine concern for each other, you will preserve your relationships. Often, a neutral party can guide you through this.
It’s a bit like when I helped sort out my two girls having yet another tussle during lockdown. I hadn’t got to the supermarket and we were down to one orange. They were both arguing over who would get it – classic sibling rivalry. I sat them down, let them vent then asked why they wanted the orange. It turned out one wanted the rind for baking; the other one wanted to eat the fruit inside. Not only did they both get what they wanted out of that orange, the baker shared her slice with the fruiteater and the fruiteater helped the baker do dishes. I got some peace (and some slice and a slightly cleaner kitchen).
What helped that situation was me coming in as an independent party – no judgment, an outsider’s perspective, a cool head. If I hadn’t jumped in when I did, I bet that orange would have been thrown by one girl at the other, or by me into the bin. Postponing intervention until after a relationship has been undermined by conflict substantially reduces the possibility it will be restored as parties become entrenched in their positions. The worst possible outcome is that they end up in Court, resulting in only one winner, wasted energy and resources for both sides. A decision is made by a judge, not by the parties with the help of a facilitator or mediator.
Get Together Early
Timing is everything. The process of resolving disputes is like a funnel – at the start people are more collaborative than when all the “juice” (goodwill) has been squeezed out of them as they are pushed through the funnel towards going to court. The common types of dispute resolution sit along a spectrum shown in this diagram:
Collaboration will be encouraged in negotiation, facilitation or mediation, compared to litigation (court) where people are pitted against each other in a fight for a judge to decide who is right. Court is more formal and less flexible than these collaborative approaches. Collaboration involves more participation from the people involved so more innovative solutions can be realised. Businesses can be more satisfied with the outcome.
Tips on Collaboration
Ideally, you want to reach agreements directly with all the people you need to do business with. If you are finding tension is rising between you and others try these tips:
If the person you are trying to arrange a meeting with is not answering your calls, keep a record of your attempts to contact them. This may be useful if they do start acting unreasonably and you need to use a lawyer.
If you are in contact with them but you are finding it hard to come to a resolution, or you are feeling like you cannot deal with them by yourself, consider getting an independent person to help you navigate your way through in a collaborative manner. This could be a trusted friend or business coach. If there is potential for a dispute that is crucial to the survival of your business, I recommend getting in touch with someone who has specialist training in collaborative dispute resolution approaches like a mediator or facilitator. There are two professional membership associations where you can find them - the Resolution Institute and the Arbitrators’ and Mediators’ Institute of New Zealand. Please use them like a fence at the top of the cliff, rather than an ambulance waiting for you at the bottom after you and your business have fallen off.
 As much as I rate my skills at enabling collaboration, it doesn’t always work when I am parenting. It helped that our common goal was my favourite citrus slice. Even better, no flour was needed!