One of my favourite television adverts was the genius O2 campaign “Be More Dog”. You might remember it follows a day in the life of a cat – “I used to be a cat, aloof till lunch then coldly indifferent after”. Suddenly the cat realises its tedious existence could be exciting and fun if only it could “be more dog”. Cue the cat, now a cat’s head on a dog’s body, launching out the cat flap to Queen’s Flash, chasing a ball, catching a frisbee and digging holes (“running…amazing, chasing cars…amazing, sticks…amazing!”). In a comical way, the cat epitomised what can be achieved by total commitment to a change of mindset. Never more pertinent in these unprecedented times of social distancing and economic freefall. So how should businesses be dealing with differences and disputes?

Be more cat. Commit to a change of mindset and embrace new ways of working and doing business. Get into a routine for working from home. Social distancing does not mean that business must grind to a halt. Video conferencing and phone are effective ways of keeping in touch, conducting business, negotiating deals or mediating disputes.   

Be proactive. Plan ahead by assessing where you might be at risk of disputes. Proactively contact the parties you do business with, such as your clients or landlord to keep the relationship strong. Where you anticipate a problem (such as “keep open” clauses in a lease or the need for extensions to credit), address it as soon as possible. Being proactive means that issues have the potential to be dealt with before matters escalate into a dispute.

Negotiate, negotiate, negotiate. Suppliers, contractors, lenders, debtors, creditors, landlords and tenants can all be approached to explore ways of finding solutions that are mutually beneficial to all parties. Accept that difficult conversations will need to be had. Plan how you are going to conduct those conversations and negotiations to maximise the opportunity of better outcomes for your business (and theirs).

Put empathy at the heart of your business. Research shows that businesses which understand their emotional impact on others and make changes as a result retain the best people, create environments where diverse teams collaborate and thrive, improve growth and reap the greatest financial rewards. Empathy (to be contrasted with sympathy) is the ability to truly understand a situation from another’s perspective. It is achieved by actively listening and asking questions to understand that person’s interests, concerns and fears. By being empathetic you increase your ability to influence. By properly labelling those interests, concerns and fears (“it seems like…it sounds like…it looks like…”) to validate the emotions of the other person, you are one step closer to getting the outcome you need.

Be honest and fair. The notion of fairness in negotiation is interesting. Accusations of unfairness can be a tactic to manipulate and trigger irrational concessions. Be aware of those and plan how you are going to deal with them. More positively, set the tone for honest and empathetic conversations and negotiations by addressing fairness at the beginning of discussions. By making it known to the other person that you sincerely want them to feel like they are being treated fairly at all times, and giving them the opportunity to stop the discussions at any time to address any perceived unfairness, you are setting yourself up as a fair and honest broker, which will also bolster your reputation for future business dealings and negotiations.  

Don’t compromise. There is a big difference between collaboration and compromise. If you have completed a piece of work and you are due to be paid, compromising and splitting the difference is not an option. Why should you accept £10,000 if it was agreed you would be paid £20,000. Be prepared to deal with hard bargaining tactics aimed at getting half the pie. Don’t compromise on your goals and your business, particularly in times of economic uncertainty.

Squaring Circles advises clients on devising and implementing negotiation strategies. Please email [email protected] if your business needs advice to negotiate or resolve a difference or dispute. 

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

As handshakes are replaced with head nods and the economic impact of the COVID19 pandemic begins to take hold in the UK, businesses need to be more innovative now than ever before. It is difficult to comprehend how quickly things have moved on in the last two weeks, and the speed with which UK businesses are going to need to react to make the best of whatever economic position we find ourselves in.

Whilst the UK is not yet in official lockdown, businesses have already been urged to implement social distancing by ordering employees to work from home. And further social distancing measures are only going to increase in the weeks to come. 

Dispute resolution will be a vital part of propping up the Scottish and UK economy whilst we ride the curve, and it will be crucial to economic recovery when the curve peaks and begins to flatten. Unresolved conflict is bad for businesses, economic development and recovery. As economic conditions remain uncertain, many businesses are already considering ways to cut costs, additional funding needs or implementing restructuring advice. Differences and disputes need to be resolved efficiently and cost effectively. Online negotiation and mediation are viable options. 

We can all agree that in a perfect world face to face negotiations and mediations are the ideal scenario. But online negotiations and mediations also have their benefits. Increased convenience through virtual meetings. Increased opportunities to create space in communications. Reduced travel and hosting costs, carbon emissions and travel time. And, significantly, no risk of spreading infectious diseases. 

Zoom, Skype and other virtual communication platforms are used daily by businesses across the globe. Many CEOs, executives, mediators and negotiators advocate that such technologies facilitate successful rapport building, despite participants not being in the same room. Adobe Sign and similar packages provide secure e-signature capabilities and documents can be shared in online portals or via email. Like anything, it can be difficult to embrace change. Of course, we may soon have no choice.

From 23 March 2020, Squaring Circles will be offering a new Online Mediation service, including telephone mediation for certain cases. Please email [email protected] for more information about these services.

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

Yesterday’s statement from the Duke and Duchess of Sussex, that they will be stepping back from the Royal Family and work, sent shock waves through the media and the nation. It quickly transpired that the announcement was made without consulting the Queen or Prince Charles, leading the press to describe the unprecedented move as a “bombshell” which “blindsided” the Royal Family. The official Palace response made it very clear that Harry and Meghan’s desire for a “progressive new role” was far from being agreed. Oh, to be a fly on the decadent walls of the Palace!  

Today, whilst journalists across the country are digging for the dirt, negotiators and mediators will be pondering the complex and delicate situation the Queen and the Royal Family finds itself in.  

The Royal Family, as a collective institution and the individual members affected, have much to lose if this situation is not handled appropriately (and much to gain if it is). This latest rift is hot on the heels of Prince Andrew being stripped of his Royal duties following the Epstein Affair. But the issues run much deeper. The competing interests are divisive, and the protagonists of this Royal Drama have much work to do. This would seem like a good time to appoint a Royal mediator to facilitate discussions and assist with understanding and balancing the competing interests at stake.

Whilst the Queen’s ultimate interest is in protecting the reputation of the monarchy and its future, Harry and Meghan clearly have other needs indicating that they intend to live a life independent of the traditions which accompany royal life yet continuing to support the Queen. The Queen needs to ensure the negotiations for Harry and Meghan’s departure – whatever that becomes – are conducted constructively and with integrity. This is particularly important now that the “breath taking” division within the Family is being played out in public, with negotiations in relation to use of tax-payers funds likely to be under public scrutiny.  

As siblings once very close, it is of paramount importance for Harry and Prince William to repair the previously unbreakable bond seen between them for many years. But repairing this relationship would also greatly serve the wider interests of the Queen and the Royal Family. The Princes’ relationship is the most important in building bridges between the Royal Family and Harry and Meghan and could be pivotal in finding a way to move forward. The Duchess of Cambridge, at one time a close friend of Harry’s, could play a crucial role in bringing the Princes together. 

Understandably, emotions are running high. The Palace is said to be “hurt”, “disappointed” and “very upset”. Prince Charles is likely reeling with Harry’s decision to go public without consulting the Palace and before full details of any arrangement had been agreed, airing the Royal’s dirty laundry in public and deepening divisions within the Family. Prince William is likely saddened by his younger brother’s haste in releasing a personal statement and not being in a position to have provided him with guidance. Harry and Meghan have made no secret of their feelings towards certain aspects of royal life and were visibly emotional when discussing the intense media attention in the ITV interview which aired last year.

Then there is the issue of what the “progressive new role” will look like. There is likely to be a lengthy negotiation to thrash out how this is all going to work. Are Harry and Meghan abandoning royal life? What royal duties, if any, will they continue to carry out? Will they keep their titles? Will they be free to earn an income? Will they continue to live in royal accommodation? Will they continue to receive publicly funded services such as security or other royal privileges? Which also brings into sharp focus whether the public have an interest in the negotiations. 

So, as head of the monarchy, the Queen has an important role to play as the “Third Side” not only in negotiations between Harry and Meghan and the Palace, but also in attempting to reconcile the relationship between Harry and Prince William, reported to be a major trigger in the souring of Harry’s relationship with the Royal Family; and in managing public opinion in the weeks and month ahead. 

The Third Side is a creative approach to managing conflict. It was developed by William Ury, one of the world’s leading negotiation experts, and is best explained in his 2010 TEDx Talk when he tells a story from the Middle East about a father who dies and leaves his 17 camels to his three sons. One half of the camels are to go to his eldest son, one third to his middle son and one ninth to his youngest son. But problems arise when the brothers start to negotiate the division of the camels and realise that 17 does not divide by 2 or 3 or 9. The brothers consult a wise old woman who questions her ability to help but instead offers the brothers her camel so that there are 18 camels. The eldest brother takes his one half share – 9 camels. The second brother takes his one third share – 6 camels. The youngest brother takes his one ninth share – 2 camels, which totals 17 camels, and allowing the 18th camel to be returned to the wise old women. The story is a masterful expression of what it means to be a “third-sider” and a mediator: seeking to understand both sides of the disagreement; viewing matters from the perspective of finding common ground; encouraging cooperative negotiation; and striving for a resolution that satisfies the legitimate needs of the parties and the wider community – in this case, the Royal Family and perhaps also the public. 

It is now imperative for the Queen, Prince Charles, Prince William and their aides and representatives to adopt effective negotiation, mediation and conflict management techniques to attempt to find a workable solution. They will need to develop an understanding of the real drivers behind yesterday’s announcement. Equally Harry and Meghan will need to work hard to restore trust and mutual respect, acknowledging the consequences of their statement. They will all need to focus on the five core concerns (referred to in one of my earlier blogs) to generate positive emotions to enable creative solutions to be explored. The reputation of the “progressive” Royals and the Royal Family as a whole depends on it. 

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

Tomorrow we take to the polls in what has been, latterly, a roller-coaster campaign trail. Only two weeks ago pollsters YouGov predicted a Conservative landslide with a 68 seat majority. Today its new projection is that Boris Johnson is on course for a majority of only 28 seats. Due to the margin of error in the forecasting model, this latest and final YouGov poll ahead of election day, throws into focus the very real possibility of a hung parliament and a return to coalition politics.

The last coalition was forged through negotiation and the skilful management of competing interests to find workable solutions to deliver a stable government. A hung parliament and a shift from bipartisan political support presents a very real opportunity to better meet the needs of the UK electorate. Working collaboratively and cooperatively to dissect manifesto promises presents an opportunity for more creative thinking to deliver innovative “non-binary” solutions, going beyond what one party could achieve alone.

We have already seen collaborative politics in action on the campaign trail in relation to Brexit. Nigel Farage’s “country before party” initiative will see no Brexit Party candidates standing in Conservative held seats to protect the pro-Leave vote. Similarly, the Liberal Democrats, the Green Party (of England and Wales) and Plaid Cymru have entered into a “remain alliance” agreeing not to stand against each other to protect the anti-Brexit vote.

But a hung parliament and an increase in collaborative politics is not going to be enough to diversify the political leadership of our nation. For that, we need (at least) two things to happen. Firstly, we need to replace the first past the post voting system with a form of proportional representation (“PR”). It is well known that most stable democracies in the world use PR as a means of maximising the voice of the electorate. The UK is in the minority, with Spain and Belarus being the only other European countries to adopt a single-winner voting system. Outside of Europe the US, Australia and Canada are the only other developed countries not using PR.

Secondly, and more importantly, we need a courageous electorate who recognises the real need for change and a willingness to challenge the status quo. Popular culture frequently tells us there is no credible alternative to the Conservatives: no-one else is capable of running our country; or that voting for the SNP dictates a preference for an independent Scotland. I for one do not accept such positions.

If you need proof of how taking a chance can change things for the better take a look at New Zealand. Jacinda Ardern was elected into office less than three months after becoming leader of the Labour Party in 2017. At that time she was also the youngest female head of government at 37 years old (with that accolade recently passing to Sanna Marin, the 34 year old PM of Finland who took office yesterday). Ms Ardern was only elected to Parliament personally (rather than as being a List MP) five months before that. Unknown quantities don’t come much bigger. Yet, she has been lauded as the one of world’s most effective leaders.

So, it is my hope that we can all be courageous like the Kiwis when we enter the voting booth tomorrow. Our fast, emotional and intuitive minds (the first system of our brain referred to in my last blog) is very effective at causing us to instinctively reduce uncertainty by choosing what our brains believe to be a familiar and safe path (“better the devil you know”). Instead, we need to mobilise our slow, deliberate and logical minds (the second system) to challenge those cognitive biases and ask ourselves, do we genuinely believe that the current political situation is one we want to continue?

And, in the event of a hung parliament, as officials work late into the night and the weekend to thrash out deals behind closed doors, the spotlight will shine on negotiation, cooperation and collaboration – the true essence of politics in liberal democracy and a fundamental skill used by dispute resolution specialists across the country. It will be those skilled negotiators at the table who, through effective negotiation, mediation and conflict management techniques, will come out winners next week. 

I have lost count of the number of times a lawyer sitting across from me, or a client, has told me the dispute is “only about the money”. In the world of commercial disputes, “emotion” is an uncomfortable word. Ironically, for some, it seems considering the psychological aspects of a dispute causes fear of perceived weakness. For others, ignoring emotion seems to be part of a misguided strategy in the hope of yielding a competitive advantage to “win”.

The taboo of talking about the role of emotion in commercial disputes has always baffled me. For the past four decades, professors at Harvard and other top universities and business schools in North America and the UK have researched every aspect of negotiation theory and practice. The research is clear. Emotion is always present. Why? Because negotiation and disputes, including those that are commercial and allegedly “all about the money”, always involve dealing with people. And we cannot switch off our emotions just as we cannot stop our brains from dreaming. 

We’ve all heard colourful accounts of board room bust ups and marital meltdowns; the occasional throwing of house keys (or punches) and the ceremonial ripping up of cheques. The display of emotion in a commercial dispute is usually more subtle. Take the liquidator, anxious to be perceived to be acting fairly and in the best interests of all creditors. The insurer worried about justifying the settlement sum to his superiors. The partner angry about losing her capital investment. The banker ashamed of his lending decision and regretful of his choice of valuer. The engineer, architect or valuer fearful of losing their job. The administrator’s guilt of pursuing non-executive directors or evicting a debtor. The financier humiliated by the directors and brokers he had done business with for years. The director intimidated and undermined by her board. The accountant embarrassed by his lack of due diligence. The business owner fearful of his customers moving to a competitor. The outraged landlord. The resentful employee. The disgruntled neighbour. The list goes on.

When it comes to exploring resolution, in my experience, dealing with the “people problem” – when the substantive issues become entangled with psychological issues – is more important than the law. That might sound controversial but it’s true. Relying on the law alone; asserting your legal rights; and attacking and defending your “position”, is highly unlikely to bring about a resolution. The best that can be achieved with that strategy is a lengthy and costly battle of wills played out in court.

It is only in the last ten to fifteen years that negotiation theory has developed with breakthroughs in neuroscience and psychology. In the international bestselling Thinking, Fast and Slow, psychologist Daniel Kahneman writes that we all suffer from unconscious and irrational “cognitive bias” where our brain processes shape how we see the world. We have two systems of thought: the first is fast, instinctive and emotional; the second is slow, deliberate and logical. The fast emotional system is more influential so that our reactions and instincts shape our slow rational thoughts. As former lead FBI hostage negotiator Chris Voss observes in Never Split the Difference “conducting negotiations based on [first system] concepts without the tools to read, understand and manipulate [second system] emotional underpinning was like trying to make an omelette without first knowing how to crack an egg.”

Perhaps surprisingly, the evidence as to whether there is a correlation between emotionally intelligent people and better outcomes in negotiation is mixed. What is now well documented in research and anecdotally is that emotion plays a positive role in decision making, creativity and relationship building; all of which are key factors in negotiating an agreement.  

So why is emotion largely dismissed, misunderstood or ignored in commercial disputes? Is the negotiator fearful of being responsible for the result? Anxious about being taken advantage of or leaving too much unclaimed value on the table? Or is there a concern that getting into the non-legal issues is just too messy and time-consuming?

What we can do to understand and use emotions as we negotiate was an enlightening part of last month’s Negotiation and Leadership Executive Education Course at Harvard. Drawing on his personal learning and research, Daniel Shapiro, the co-author of Beyond Reason, passionately delivered a proven strategy for dealing with emotion on both (or all) sides of the table. Reassuringly, his method is not to attempt to deal with the emotion in the negotiation head on. Instead, the focus should be on the five “core concerns” – appreciation, affiliation, autonomy, status and role – which affect all people in all negotiations. The effective management of these core concerns generates positive emotions and lowers the risk of the negotiation being sidetracked by negative emotions. Why is this important? Because the research shows that if we are appreciated and respected, we feel understood, valued and heard. We become more open to listening, we are more receptive to reciprocating, and more motivated to see the difference or dispute as a joint problem to be resolved together. If we are attacked, we defend. We stop listening in the true sense of the word. Once we have closed our ears, communication has broken down. Resolution becomes impossible.

Emotional intelligence is not a silver bullet. Negotiation is unpredictable. But by implementing best practice and understanding and acknowledging the impact of emotion, the “people-problem” is more effectively managed and better outcomes are achieved. If you think about the last “it’s only about the money” dispute or disagreement that you were involved in, what core concerns – theirs and yours – might have been overlooked? What might have happened if the other person had truly listened, sincerely expressed merit in your view and acknowledged your thoughts or actions? If you had tried to look for ways to connect or to find common ground rather than treating them as an untrustworthy adversary? If they had shown respect for your experience and expertise? These moments of reflection will be the catalyst for bringing about the step change needed for more effective commercial dispute resolution in Scotland.

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.

Hollywood has a great way of glamorising lawyers as hard-bitten and combative – and few lines of dialogue guarantee the same on-screen drama as the classic: “I’ll see you in court!”.

Off-screen, in the real world, disputes are (usually) less dramatic. However, ‘positional bargaining’ – “I won’t go lower than £100,000” or “I demand you stop building on the boundary of our properties” – is practised by business leaders and lawyers alike. Before you know it, the courts have become your battle ground and the dispute has become as much about the lawyers as the clients they represent – not least because of the costs racking up. Litigation has a way of creating that dynamic, and while “I’ll not see you in court” doesn’t carry the same potency, early intervention through conflict management and negotiation is almost always a more constructive route for those involved in a dispute.

Even Suits star, Harvey Specter – the egotistical (“sorry I can’t hear you over the sound of how awesome I am”), self-proclaimed “best closer in the City”, who is never one to shy away from a challenge (“have goals so big you get uncomfortable telling small minded people”), will take negotiation over litigation any day of the week. Whilst he and his new sidekick, Samantha Wheeler, like to street fight in the ring, when it comes to getting their clients out of a jam, they adopt a poker-game strategy every time.

Knowing your opponent, paying attention to the cards and what’s going on at the table, is the key to negotiating better outcomes. This type of ‘interest-based’ negotiation – “This is why I need you to stop building on the boundary of our properties” – is the foundation of any day to day business transaction; whether that be the sale of your company, hiring a new managing director or negotiating a new distribution agreement. An open dialogue about interests gets to the centre of the issue (or conflict) and leads to creative thinking (in the words of Mr Specter “when you’re backed against the wall, break the goddamn thing down”) and a collaborative approach to developing mutually beneficial solutions. Yet, when it comes to disputes, ‘positional’ demands based only on legal rights is often the default negotiation strategy.

A key theme at last weeks’ Law Society of Scotland “Future of Commercial Dispute Resolution” conference was that the Scottish legal profession needs to do more to play a constructive role in resolving disputes. As one panel member put it “are we in the business of selling conflict or are we in the business of selling solutions?”. For years the RICS has been critical of dispute resolution procedures being employed too late, once legal costs have racked up, commercial relationships have been damaged and positions have become deeply entrenched. As a result, the RICS developed a “conflict avoidance pledge” which encourages dispute avoidance and early engagement to find solutions and keep commercial relationships intact. Lawyers need to be more innovative than ever to keep up and best serve the interests of the business community and the legacy of their businesses and firms.

There are already many lawyers out there who are passionate about resolving disputes through the promotion of early engagement, conflict avoidance, interest-based negotiation and mediation (before litigating). We know the requirement to act in your best interests is not served by promoting and encouraging entrenched positions. We understand the commercial interests and objectives of your business and the cost to you of a pyrrhic victory. We deliver a poker-game strategy. It’s time the rest follow Suits (pun intended). Until then, there is an opportunity for business leaders to demand more than just a street fighter.

Squaring Circles is the trading name of Squaring Circles Dispute Management Limited, registered in Scotland. Registration number SC641319. Registered office at Caledonian Exchange, 19A Canning Street, Edinburgh EH3 8HE.