Knowledge Source

SDI Ensures a Successful Mediation and Substantial Cost Savings

The Sales Division of a construction service organisation was impacted by a serious conflict between the Director and his Sales Manager.

The Sales Manager, a 25 year veteran of the company, was asked by the Director to support and introduce their new Sales Performance System to his Sales department. Although the Manager understood the business necessity for the change, he also believed this new system would not be well received by his Sales team. As a result, he communicated the changes to his team in a way that, from the Director’s viewpoint, clearly undermined his authority. As a result, a serious breakdown developed in what had previously been an effective working relationship. The conflict escalated to the point where the relationship was further damaged. The Director was planning the Manager’s termination and the Manager, in turn, was evaluating new career opportunities in the market.

As a last resort, the Director and Manager both reluctantly agreed to participate in a one day mediation process. The SDI played a key role in the mediation, helping both parties understand their individual and joint interests. Each began to better understand their individual styles of relating, and how to communicate in ways that would sustain a more effective ongoing work relationship. A key result was their understanding that it was their perceptions of each other that created some of the difficulties they were experiencing. Learning the reasons behind their perceived behaviours was a critical success factor.

The session contributed to a much improved work relationship. The Sales Performance system was introduced on time and on budget. Of greater importance was the potential cost savings gained by preventing further escalation of the conflict and the loss of a long service employee.

Termination costs: 2 year severance payment of $200,000
Career Transition Support Services: $10,000
Replacement Costs: $20,000

Mediation Costs: $3,000
Potential Cost Savings: $235,000+