Mediation offers a powerful, synergistic approach to coaching family-owned enterprises to resolve wealth-related disputes and achieve harmony. Felicia Heng reports.
Background
Mediation is a confidential process where conflicting parties collaborate with a neutral third party to resolve disputes amicably. With ancient roots, it’s been influenced by religious, legal, and societal developments, evolving into a globally recognised dispute resolution method with high success rates.
While mediation and coaching have been seen as traditionally independent approaches, there’s increasing evidence that synergising mediation principles with family business coaching better facilitates constructive dialogue, helps preserve familial relationships while effectively resolving disagreements creatively, and prevents future conflict.
Among family businesses, peculiar conflicts often arise from disagreements over succession planning, ownership and control, financial management, estate planning, dividend distribution, compensation, and strategic direction. Synergising both mediation and coaching approaches are especially helpful in this area.
How it works
Originally adapted from The Harvard Negotiation Project, mediation complements family business coaching, fostering mutually agreed, creative, and practical outcomes. This blend transforms coaching sessions in various ways:
- Encouraging a systemic perspective
Coaching typically focuses on an individual’s inner world, but incorporating mediation involves multiple parties. Collaboration addresses various viewpoints and interests, leading to deeper and more sustainable resolutions.
- Shifting focus to underlying motivations
Parties identify underlying interests, needs, and priorities. Coaches facilitate clearer articulation of goals and interests, distinguishing personal emotions and relationships from underlying issues. They aid in recognising biases, assumptions, and emotional triggers, fostering self-awareness and emotional intelligence.
- Emphasising creative alternatives
Coaches facilitate creative sessions to generate innovative options for mutually beneficial agreements. Parties expand their problem-solving toolkit and consider solutions, satisfying various interests.
- Facing reality squarely
Coaches assist in identifying objective criteria and benchmarks for evaluating agreements, thus enhancing informed decision-making with standards, precedents, and data.
- Acknowledging power dynamics through BATNA and WATNA focus
Coaches help clients assess their Best Alternative To a Negotiated Agreement (BATNA), ie, the best alternative if discussions fail. This involves exploring alternatives to reach satisfactory agreements. On the other hand, the Worst Alternative to a Negotiated Agreement (WATNA) represents the least favourable outcome. Identifying WATNA helps set realistic goals, evaluate bargaining positions, and recognise consequences to leverage alternatives for favourable outcomes.
- Enabling back-up comprehensive planning by assessing WATNA
Identifying the WATNA – the least favourable outcome – helps set realistic goals and evaluate bargaining positions. Recognising consequences enables leveraging alternatives for favourable outcomes.
- Preventing future disagreements
Coaches apply principled facilitation principles like fairness and mutual gain. Adhering to ethical standards and collaborative problem-solving build trust, credibility, and long-term relationships.
Mediation in a coaching session
In a single coaching session, mediation techniques can be applied in several sequential and iterative steps:
1. Preparation
The coach conducts a conflict assessment to understand each party’s perspective, utilising coaching techniques such as powerful questioning to uncover underlying interests. This ensures an understanding of their concerns and interests, as well as identifying their BATNA and WATNA. Additionally, objective criteria are established to serve as benchmarks for evaluating potential agreements.
2. Opening statements
The coach establishes a safe space for dialogue, emphasising confidentiality and the coaching agreement’s principles. Using coaching skills like active listening and reframing, they encourage parties to express their thoughts and feelings freely, distinguishing between their stated positions and underlying interests.
3. Active listening
The coach fosters empathetic listening, acknowledging and validating each party’s emotions and perspectives. Through reflective techniques like mirroring and summarising, they help parties explore their core values and motivations, focusing on uncovering shared interests and values rather than entrenched positions.
4. Identifying issues
Using coaching tools like the Wheel of Life or the GROW model, the coach assists parties in clarifying their goals and priorities. They facilitate a deeper exploration of underlying needs and concerns, encouraging parties to consider how their values and beliefs influence their positions on the conflict.
5. Generating options
Employing creative coaching techniques such as brainstorming or mind mapping, parties explore various possibilities for resolution. The coach encourages them to think outside the box and consider innovative solutions that align with their values and objectives, referencing their BATNA, WATNA, and objective criteria.
6. Facilitated negotiation
Drawing on coaching skills like reframing and perspective-taking, the coach guides parties through constructive dialogue and negotiation. They facilitate a collaborative process focused on finding win-win solutions, encouraging parties to explore how they can meet each other’s needs
while staying true to their values and objectives.
7. Agreement
Using coaching tools like SMART goals or action planning, parties co-create a concrete plan for implementing the agreed-upon solutions. The coach ensures that the terms are documented clearly and that parties understand their roles and responsibilities, addressing any remaining concerns or uncertainties.
8. Follow-up
The coach provides ongoing support and accountability, checking in with parties to monitor progress and address any challenges that arise. Through coaching conversations and reflection exercises, they help parties stay focused on their goals and maintain momentum towards resolution, considering their BATNA, WATNA, and objective criteria.
When it works best
Mediation-infused coaching is particularly beneficial in family business wealth coaching due to:
- Restorative justice and face-saving
Mediation addresses reputational damage and restores dignity, crucial for Asian business families where ‘face-saving’ is paramount. Restorative justice involves broader community involvement and dialogue between affected parties, beyond coaching.
- Preservation of family and partnership ties
Mediation provides a non-confrontational environment to work towards mutually acceptable solutions while maintaining goodwill. For business families, preserving relationships and preventing strain on the family system is essential.
- Resolving complex interests and emotions
Mediation resolves disputes involving intricate interests, emotions, and interpersonal dynamics. While coaching supports individual growth, it may not directly address underlying issues or dynamics between multiple parties.
- Cost and time efficiency
Mediation’s outcome-focused nature makes it more cost-effective and time-efficient than traditional coaching or other dispute settlement methods. By avoiding lengthy discovery processes and legal fees, parties can save resources and achieve timely resolutions. Integrating mediation into coaching streamlines the process.
Client breakthroughs
In three distinct scenarios, mediation-infused coaching led to significant breakthroughs for family-owned entities facing challenges:
- Family-owned enterprise: succession and ownership disagreement
A multigenerational manufacturing business faced ownership and succession disputes. Utilising a professional coach skilled in mediation, the family developed a comprehensive succession plan. Through facilitated dialogue, they identified shared interests, negotiated ownership shares, and rebuilt trust. This resolution not only addressed immediate conflicts but also strengthened familial bonds, ensuring the business’s long-term viability and preserving its legacy.
- Board of directors: strategic direction misalignment
Conflicts arose among the board of directors managing a large family foundation due to strategic direction disputes. With a coach proficient in mediation, the board engaged in structured dialogue, evaluating their BATNA, WATNA, and objective criteria. Collaboratively, they crafted a roadmap balancing stakeholder considerations with growth objectives. This process established transparent communication channels, fostering harmony and robust decision-making mechanisms, thus bolstering trust among stakeholders.
- C-Suite leaders: tensions in navigating the future
C-suite executives of a family-owned pooled fund had differing views on strategic elements, jeopardising alignment and decision-making processes. Enlisting a coach adept in mediation techniques, they integrated mediation into coaching sessions. Through structured discussions considering BATNA, WATNA, and objective criteria, leaders aligned their perspectives on investment strategies and risk management approaches. This transformative process addressed immediate conflicts and fostered a culture of collaboration and strategic coherence crucial for navigating the complexities of the financial landscape.
Conclusion
Coaching incorporating mediation approaches addresses unique dynamics, fostering understanding among stakeholders, aligning values with objectives, and promoting collaboration. By integrating family business coaching with mediation, it ensures long-term success, sustainability, and legacy preservation, facilitating informed decisions and stronger relationships among family members, shareholders, and stakeholders.
About the author
- Felicia Heng is founder and managing director of Wise Purpose Group, a boutique consulting firm specialising in family wealth advisory, mediation for wealth dispute resolution, C-suite leadership coaching, next generation succession and board facilitation. She works internationally with family office principals, business families, board directors and leading consultancies.
- linkedin.com/in/felicia-heng-wisepurpose
References
- History of the Harvard Negotiation Project. (2021). PON – Program on Negotiation at Harvard Law School: https://bit.ly/4750Dj2
- Fisher, R., & Ury, W. (2012). Getting to Yes: Negotiating an agreement without giving In. Random House Business Books.
- Herrmann, J. (2012). A Comparison of Conflict Coaching and Mediation as Conflict Resolution Processes in the Workplace. 1 Jan, 2012.