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Small businesses have the unfortunate challenge of managing limited resources when facing significant conflicts. When a large business faces something like a broken contract, a non-paying customer, a problem with a partner, or conflicts regarding debt, they can basically throw money at the problem, hiring a legal team or relying on in-house lawyers to tackle the job. Small businesses can’t afford to do this; they may be able to fix the problem, but they’ll be faced with a new one—crushing debt.

Mediation presents a more cost-effective alternative, but how does it work?

What Is Mediation?

Legal mediation is used for a variety of conflicts, including divorce-related negotiations and business-related disputes. Essentially, a neutral party—the mediator—will guide the parties in conflict through a series of questions, structured conversations, and negotiations in an attempt to resolve the dispute as peaceably and mutually beneficially as possible. The end result is usually a compromise, discovered by the conflicting parties, with the mediator only serving as a guide when necessary.

The Advantages

There are many advantages to this model:

  • Cost-effectiveness. Duking out a legal dispute in court can be extremely costly (and risky) for both parties. Mediation usually costs far less, and can find a favorable solution to both parties. As long as both parties have something to lose in court, mediation will always be an attractive potential alternative.
  • A neutral setting. Mediation is also unique because it gives both parties a neutral setting where they can air their grievances, make their case, and confront one another safely. The mediator ensures the conversation doesn’t become hostile and doesn’t deviate from its main purpose.
  • Mediation is also valued for its ability to resolve disputes quickly. Depending on the severity and nature of your case, it could take months, or even years to resolve in the court system. A mediation could provide a resolution in the span of an afternoon—or at worst, a handful of sessions.
  • Mediation is also designed to ferret out a compromise between parties, which means both people involved end up walking away satisfied. Depending on the nature of the conflict, this could open the door to more favorable professional interactions with the other party in the future (and reduce your potential losses significantly).

How to Start the Mediation Process

So what can you do to start the mediation process?

  • Reach out to the parties involved. Mediation only works if both parties working with the mediator are willing and able to find a compromise. Otherwise, it could become a shouting match or a staunch impasse with no solution. First, reach out to the other party to determine if they’re open to mediation.
  • Find mutually agreeable mediator candidates. Next, work on developing a list of qualified mediator candidates that both parties might be able to agree on. Look for people with specifically defined expertise in mediation, and candidates that can give both of you an honest chance in finding a solution.
  • Come armed with research, requests, and goals. Finally, start doing your research. You’ll want to enter the mediation as prepared as possible, with all the facts in front of you (as well as a list of goals you’d like to accomplish during the process).

You can also improve mediation within your own organization by hiring the right people for your human resources department to handle internal crises. SAP’s talent management software can help you in every step of this process, from finding the right talent to join your team to making sure that team stays operant within the proper dynamics.

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