Sunday, June 3, 2007

It's Not About "Show Me the Money!"

So many disputes and conflicts, especially in the business world, seem to be about money. If a debt is owed, then it probably is about the money. In just about every other dispute, money may be important, but it is not driving the conflict.

Last week, I mediated a case that demonstrated this in a classic way. John (not his real name) claimed he was owed $48,000 on a contract. Bill (not his real name either), said , "No way!" They had a written contract with an attorney's fee clause. In California, that means that if you win, you have the right to ask a judge to award you your attorney's fees. By the time the case came to me for mediation, John had spent $38,000 in attorney's fees and Bill had spent $55,000 in attorney's fees. The combined fees nearly doubled the amount they were fighting over!

John demanded his full contract amount plus his attorney's fees. He was not going to "rollover" for Bill. He was owed the money fair and square, and by God, he was going to fight for every last dime. Bill, of course, believed that he didn't owe John anything and had many technical defenses to John's lawsuit. Bill wanted to be paid his attorney's fees to settle the case.

This one didn't settle. Both men were more interested in protecting their own sense of self-esteem than about the money. On a cognitive rational level, they each knew they would spend far more money with their lawyers than they would ever recover. On an emotional level, however, conceding to the other guy's demand would be an unacceptable blow to ego. Since emotions are far more powerful than cognitive rational processing, the fight was not about the money. It was about the need to be right and prove the other guy wrong.

This is a classic conflict pattern found in family disputes as well as in international conflicts. The need to protect face and boost self-esteem is fundamental in all of us. I have observed that people with a strong sense of identity and self-esteem tend not to be enmeshed in conflicts as much as others. On the other hand, those with a lesser sense of identity and lower self-esteem fight when they feel their identities are being threated.

What's really interesting is that giving someone respect costs nothing financially. Yet that can be the hardest thing to do when you feel like you are being disrespected.

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