When Money is the Main Issue

Mediations can be about many things: misunderstanding, respect, hurt feelings, and more. But some mediations, especially in the world of business, often come down to one key issue: money.

A pie of fixed size sits before the two parties, and the goal of each side is to obtain as large a percentage of it as possible. A zero-sum game. The more, presumably the better. As actor Cuba Gooding, Jr., famously tells his agent, played by Tom Cruise, in the film, Jerry Maguire: "Show me the money!"

So what is a mediator to do, sitting between the two parties and their resolute goal of obtaining the maximum possible? How can the mediator lead the two sides to a single, agreed-upon number? One that will satisfy both of them?

Thankfully, the field of conflict resolution has come up with some helpful strategies! Below are a few of them that mediators can use with the parties to help advance the process. Let's review them:

  1. Don’t Rush – Mediators would do well to initially avoid any talk of money and numbers. Instead, they should spend time first gathering information from each side, learning about their hopes and concerns, establishing a rapport, and in general giving them space to ease into the process.

  2. Explore the ZOPA – When it comes time to talk about money, rather than have each party put forward a single number, explore with them a range: the maximum they hope to obtain as well as the minimum they would possibly consider. This is confidential. The mediator does not share this with the other side. However, it allows the mediator to see if there is hopefully a zone of overlap between the two ranges, known as the ZOPA (zone of possible agreement).

  3. Consider the BATNA -- As unpleasant or challenging as negotiations can be, the alternative for a party if they leave the room could be worse! Ask each party to consider what is their BATNA (best alternative to a negotiated agreement). Essentially: What is the best they might do if they were to leave the bargaining table? Often, that alternative might not look so great, a realization that could help them to keep at it.

  4. Ponder the WATNA – A close relative of the BATNA is the WATNA. You guessed it: this stands for worst alternative to a negotiated agreement. Again, the realization of how much worse it could potentially be were they to leave the negotiating table may also help each party to make the most of their negotiation.

  5. Don’t Forget the WAP – As motivated as each party might be to stay and negotiate, each party does have a minimum threshold, and it’s useful for them to know what that might be. This is known as the WAP (or walk-away price).

Finally, the parties should remember that each number they propose to the other side is more than a digit. As master mediator Dina Jansenson likes to point out: a number is also a message. What message is that number going to send to the other party? Are they going to consider it realistic? Unrealistic? Could it even cause them to walk out?

These are all worthwhile questions a good mediator may pose to the parties to help them avoid missteps and instead move along the most productive path possible.

What do you think?

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Joshua de Sola Mendes