Deal Mediation

When most people think of mediation, they think about lawsuits or divorces. Yet mediation can be used in all types of contexts.  One area of mediation which is very underutilized is “deal mediation.”  When two or more parties are trying to construct a deal and reach an impasse, mediation can be useful to help the parties beyond that impasse.  Deal negotiations reach an impasse for all types of reasons: price, quality, quality, terms, contracts, etc.  The goal of deal mediation is to overcome the impasse and get the relationship started (or to continue an existing one).

Most parties in a negotiation deliberately keep information secret.  The non-divulged information may be viewed as a weakness, an embarrassment or an impediment.  When more than one side does that — which is typical — problems are created.

A skilled mediator can use his/her skills to search out each party’s interests and work with them to overcome the impasse — not unlike resolving a lawsuit, though with a different focus.  The mediator helps formulate solutions using the confidential information each party has while still keeping that information secret.  The stereotypical example is given in the classic negotiating book Getting to Yes.  Two brothers are fighting over the one orange in the house.  The mother takes a “solomonic” approach and cuts the orange in half giving one to each brother.  Problem solved, right?  Not exactly.  If she had turned into a mediator and privately asked each brother why they wanted the orange, she would have discovered that one wanted it to make juice while the other wanted the zest to bake a cake.  By cutting the orange in half, she did not fully satisfy either brother’s interest.  Even though they received some of what they wanted, neither is completely satisfied and resentment likely lingers.

A deal mediator might explore profits, capacity, complements, risks of the deal falling apart, goals of the parties, and other topics the parties feel is important.  By discussing and exploring these issues, parties are usually more open to exploring avenues to overcome the impasse.