TOC experience in conflict
solving (mediation)
Alexander MerenkovInsurance company Severnaya Kazna Russia 2013October 2013
26-27 October 2013, Moscow
www.tocpractice.com
8th International Conference of the
TOC Practitioners Alliance - TOCPA
Aleksander Merenkov
8 TOCPA
General Director of Insurance Company Severnaya Kazna
Russia, since 1996
Chairman of the Mediation Center of the Ural Chamber of
Commerce, mediator, trainer
Associate Professor of General Economic Theory
Department of the Ural Federal University.
Consultant in strategy, negotiations and sales
since 1998.
Insurance experience since 1994
Experience in publishing, commercial, medical
and telecommunication business.
Publications in electronic and printed media
Yekaterinburg 190, Soni Morozovoy StreetOffice phone: +7(343) 262-3-316Mobile phone: +7(909) 007-3-999E-mail:[email protected]/aleksandr.merenkovSkype: guruskwww.kazna.com
8 TOCPA
Fact
Interpretation
Emotion
Conflict
Information processing
Conflict-Solving Method
Military activities FORCE
Use of physical force- FORCE
Threatening and Intimidation - FORCE
Judicial and arbitration lawsuits RIGHTS
Negotiations INTERESTS
Mediation ( and other effective methods to
solve conflicts) - INTERESTS
It is a square
It is a triangle
It is a rectangle
The core of the conflict
Interest vs. Interest
Position vs. Position
The core of the conflict
Solution sequence
Let talk
Understand views of the parties
Understand the core of the conflict
Come to the interests of the parties
Find mutually acceptable solution
Check for feasibility
Compose an agreement
Evaluate the satisfaction of the parties
Mediation and TOC
Position 1 + Position 2 = Conflict
Conflict = CLOUD
CLOUD = assumptions identification
Assumptions = Interests
Injections = conflict solving
Mediation and TOC
Injection workup with the parties on 6 layers
of resistance on
Action Plan Agreement = map of injections
Check for feasibility = Legitimate Reservations
Assessment of the result
Procedure
Result
Emotional
Example
Conflict between two business owners
Solution come to an agreement
Sequence of work see above
Short and emotionless description of the conflict from the perspective of Party 1
Petrov owns 50% of Autotrade, LLC with Sidorov (other 50%). They started their joint business in 2005 selling tires. Then, they decided to construct a building, where car dealership, including a service center, will be located. They raised a loan at Sberbank for the sum of RUB 30 mln. And then the crisis struck (2008). There were difficulties with builders, the city administration was procrastinating with the documents approval. Petrov solved these issues himself, Sidorov did not help. The building was constructed, but due to the overdue loan, it was not commissioned. Sidorov took a floor under a rent agreement and promised to share 50% of profit. Petrov found around two years ago that Sidorov understates the income in order to decrease Petrovs share of profits. He filed a lawsuit to recover the rent fee. He won the litigations.
Step 1 What the parties came to the mediation with
Short and emotionless description of the conflict from the perspective of Party 2Sidorov owns 50% of Autotrade, LLC with Petrov (other 50%). They started their joint business in 2005 selling tyres..Then they decided to construct a building to host a dealership and service center. They raised a loan at Sberbank for the sum of RUB 30 mln. And then the crisis struck (2008). There were difficulties with builders, the city administration was procrastinating with the documents approval. Petrov was solving these issues, Sidorov was financing, but as they were friends did not take the documents proving the payment. The building was constructed, but due to the overdue loan, it was not commissioned. Sidorov took a floor under a rent agreement with a condition to share 50% of profit. Sidorov honestly shared the income paying part for the rent fee, and part to pay the bills of Autotrade, LLC, but did it on the pledge of the word of Petrov. Two years ago Petrov demanded that the premises are freed for a minimum termination fee. Sidorov refused. Litigations followed.
Step 1 What the parties came to the mediation with
Step 2 Describe the expectations of the parties position 1
What Party 1 ultimately wants
Sidorov should withdraw from the business
and leave the building to him.
Step 2 Describe the expectations of the parties position 2
What Party 2 ultimately wants
Get half of the premises value
AB D
DC
Recover the money invested by Party 2
to construction
Common goal reached through and
1
2
5
3
4Want of Party 1
Want of Party 2
NeedMotivation of Party 1?
NeedMotivation of Party 2?
CONFLICT!
Step 3 Build a Cloud for each conflict(or several)
Create a cloud following the specified sequence of entities
Receive half of
the premises
value
Recover time and
moral efforts 1,
contributed by Party 1
to construction
Receive income
from the building
Keep the premises
and not pay any
compensation
Where assumptions can be
unsurfaced
Expectations of others (they expect me to)
Assessment by others by certain criteria
Area of responsibility (I have no choice)
Authority (I have the right)
Generally accepted practice in this field
(people do not fly)
AB D
DC
BBBB----D 1:D 1:D 1:D 1:Only thanks to my efforts and connections the building was finally constructedBBBB----D 2:D 2:D 2:D 2: People who trust me and help me want to work in these premisesBBBB----D 3:D 3:D 3:D 3: I did not receive any compensation in the course of construction
In order to [B]I must [D],Because
Step 4 Identify B-D assumptions
Formulated B-D assumptions. Check if the wording meet the above criteria forassumptions.
Receive half of
the premises
value
Recover time and
moral efforts 1,
contributed by Party 1
to construction
Recover the money invested by Party 2
to construction
Receive income
from the
building
Keep the premises
and not pay any
compensation
AB D
DC
In order to [C]I must [D],because
CCCC----D 1:D 1:D 1:D 1:I always recover my investmentsCCCC----D 2:D 2:D 2:D 2: I diverted the investment from another businessCCCC----D :D :D :D :I did not gain any income in the course of the whole construction
Step 5 Identify C-D assumptions
Formulate C-D assumptions. Check if the wording meet the above criteria forassumptions.
Receive half of
the premises
value
Recover time and
moral efforts 1,
contributed by Party 1
to construction
Recover the money invested by Party 2
to construction
Receive income
from the
building
Keep the premises
and not pay any
compensation
Scrutinizing the assumptions
Check the offered assumptions against three first rules for the direct arrows:
Rule 1: The Assumption should contain words directly related to both statements.
Rule 2: Explain the connection, not the statement. Check if the assumption is a repetition or elaboration (explanation)of or D? We want not to see the repetition of the statement, but we want the connection between and Dexplained.
Rule 3: If we want and if, then (read the connection from the left to right)
Rule 4: What is current prevailing mechanism by which the party achieves [] by [D]?
D-D 1: The parties do not trust each other and do not want to cooperate
D-D 2: The parties do not see a way out that would satisfy both
A
DB
C D
[D] and [D] are in conflict,because
Step 6 Identify D-D assomptions
Formulate D-D assumptions. Check if the wording meet the above criteria forassumptions D-D.
Receive half of
the premises
value
Recover time and
moral efforts 1,
contributed by Party 1
to construction
Recover the money invested by Party 2
to construction
Receive income
from the
building
Keep the premises
and not pay any
compensation
Step 7 Create a table of assumptions
Enter 2 strongest assumptions B-D, C-D, D-D into the table
Assumptions:B - D
C - D
1. Only thanks to my efforts and connections the building was finally constructed
2. I did not receive any compensation in the course of construction
1. I diverted the investment from another business2. I did not gain any income in the course of the whole construction
D - D
1. The parties do not trust each other and do not want to cooperate
2. The parties do not see a way out that would satisfy both
B - DSolution Injections:
C - D
B - D
C - D
1. Evaluate the contribution into construction by efforts and connections
2. Evaluate the size of compensation3. Identify the process of receipt
1. Evaluate the diverted investments2. Evaluate lost income3. Identify the process of receipt
Step 8 Find and write the Injections to attack the assumptions
D - D
1. Use an independent valuator2. Continue mediation to reach agreement on the order of the receipt of the income
C - D
Assumptions:
1. Only thanks to my efforts and connections the building was finally constructed
2. I did not receive any compensation in the course of construction
1. I diverted the investment from another business2. I did not gain any income in the course of the whole construction
1. The parties do not trust each other and do not want to cooperate
2. The parties do not see a way out that would satisfy both
AB
C
Injection
Because....
Because....
Step 9 Select the most preferable Injection and check if it satisfies and
1. Evaluate the size of
compensation of the
efforts and investments
of the parties
2. Evaluate the size of
income short-received
3. Identify the procedure
for indemnification
4. Receive indemnification
Recover time and
moral efforts 1,
contributed by Party 1
to construction
Recover the money invested by Party 2
to construction
Receive income
from the
building
Step 10. Write the list of possible actions in this situation.Step 11. Note desired or forced actions for each party.
Possible actions Party1
Party 2
D F D F
Continue joint business receiving half of the income V VHire an independent director and receive half of the income V VGive the business under a management of a professional MC and receive half of the income
V V
Withdraw from a business with a compensation of 50% of the premises value
V V
Sell the business and share the income equally V V
Steps 10-11 Possible solutions andwhat the parties think of them
6 layers of resistance
Disagree about the problem = came to the mediator
Disagree about the direction of the solution=injections
Do not see benefits = how the injections lead to the interests
satisfaction
Negative consequences = negative branches = auxiliary
injections=map of injections
Obstacles = auxiliary injections = map of injections
Say yes, but do nothing = check the plan for feasibility =
auxiliary injections
Step 12. Injection (benefits)
Evaluate monetary value of mutual claims
Select the variant to meet them
Stop court litigations
Receive money for the building
Keep the relationships
Step 13. Injection (negative
ramifications)
Will not be able to continue joint business
Will be unhappy about the outcomes
Image of both parties may be damaged
Step 14.Injection (obstacles)
Will not be able to agree upon the value and
compensation procedure
Will not find a trustworthy valuator
Emotional claims will constantly arise
Step 15. Sequence of injections
Identify the mediator
Identify the independent valuator
Conduct independent valuation
Agree upon the valuation for the purpose of the
indemnification
Agree upon the indemnification procedure (chose
from previously identified alternatives)
Align the PR of the transaction to retain the image
Identify sanctions for breaching the agreements
Step 16.Feasibility check (legitimate
reservations)
In this process we check if:
1. Clarity is there
2. This exists
3. There is a cause and effect relationship
4. Cause sufficiency
5. There is another cause
6. Fire in the house
7. There are any predicted effects
Step 17 Check satisfaction of both
parties
Procedure 0-10 = clear understanding of the
procedure
Outcome 0-10 = result=map of injections
corresponds to the interests = assumptions
Emotion 0-10 = logical procedure eliminating
conflict
Conclusions
provides a clear logic for the mediation
procedure
The parties and the mediator clearly see the
conflict map
Benefits-obstacles-negative ramifications are
elaborated
Clear logic solves the task without emotion
Final solutions meet the interests-assumptions
helps to come to terms