A novel approach to conflict resolution is helping drive one of Australia’s biggest soccer clubs to the top, writes Malcolm Schmidtke

There's almost no chance the management guru Stephen R. Covey has heard of Sydney FC, the A-League soccer outfit now trying to make itself an all-round leader, not just on the field. But you can be sure at the club right now they are already hearing a lot about Covey and his son Stephen M. That's because Sydney FC, which a Sydney sports writer described earlier this year as a "club mired in mediocrity", hired a big Covey fan as its chief executive.

Dirk Melton, who has a chemical engineering degree and an MBA from the Australian Graduate School of Management, is intent on using some Covey thinking in his three-year plan to rebuild Sydney FC.

Doubtless he will be taking a few points from Covey senior's latest offering, The 3rd Alternative: Solving Life's Most Difficult Problems, in which the American thinker says conflicts – whether over compensation, promotions, resource allocation, strategy and even issues of vanity such as who gets credit – do not need to be resolved via concessions but rather in ways that benefit both sides.

Melton describes the Coveys as values-driven, which he sees as critical to the way he manages.

"So much of decision making is driven by pride and ego and that obviously then drives into greed and those three together … can lead negotiations to being unsavoury and obviously not mutual," he said.

"I am very forceful (with my people) in saying, 'Guys, I demand win-win and empathy'.

"A shared benefit will endure."

Melton is not alone in his admiration. Covey's best known book, The Seven Habits of Highly Effective People, which was published in 1989, has now sold more than 15 million copies and, together with a shelf of other books and instructional material, was presumably behind him being named by Time Magazine as one of its 25 most influential Americans.

His testimonials come from top 500 business giants, the microcredit pioneer Muhammad Yunus and from the peacemaker Desmond Tutu but also from thousands who occupy much lower heights such as a guy called John Stewart who runs the schools in Pinellas County, Florida, and apparently always approaches solving his big problems with a favourite line from The Seven Habits: "Seek first to understand before you are understood."

Covey displays the same compelling turn of phrase in The 3rd Alternative, which he says is a book that contains nothing that isn't global and (his emphasis) personal. He offers "a revolutionary new principle" that "applies equally well to a single mother trying her hardest to raise a restless teenager as to a head of state trying to stop a war", which is obviously quite a claim.

It all has to do with "synergising" the normal two-sided nature of almost all conflict, that is, my way and your way – the first and second alternatives – and going on to find a higher and better way to resolve the conflict, hence a third alternative. Covey told Mt in an email exchange that the power of third-alternative thinking doesn't just resolve a conflict but transforms the conflict.

"It's not about patching up the old reality, it's about creating a new reality. With a compromise we all lose something, but with a third alternative we all win."

"Win-win" is essentially Coveyism, so, as you would expect, he is still quick to pounce on the notion that without losers there can be no winners.

"In certain tightly competitive situations, like an auto race, people 'lose'," he said. "But life is not a race. If you want to build a great family or marriage or friendship or even a great company, it makes no sense to think in terms of winning and losing. Do you want your children to 'lose' so you can 'win'? Of course not!''

In his book, in recent interviews and in a video published on YouTube, Covey places the message of The 3rd Alternative squarely in the context of contemporary political and social strife.

"Problems grow in political complexity and intensity,'' he said in the video. "Many of us feel that the problems of poverty, war, environmental decay, violence, lack of healthcare or education are problems too big or too contentious to solve, especially in a political climate that grows more and more polarised."

In response to a suggestion from Mt that much of what might be seen as conflict, particularly in the world of politics and public policy, could be seen as a conflict of ideas and essentially positive, he declares: "Getting to third alternatives requires a vigorous competition of ideas. But the contention and disrespect that so often accompanies that competition is totally unnecessary and actually hampers problem solving."

Other practitioners in the field welcome Covey's latest foray, even if some of them might place the revolutionary moment somewhere else.

Simon Dowling is chief executive officer of CMA Learning Group Ltd, a Melbourne-based consultancy that provides training courses in negotiation, influence and conflict management including teaching both undergraduate and postgraduate courses in negotiation and mediation at Monash Law School.

While he is yet to read the Covey book, he said any proponent of a mutual-gains approach to disputes and conflict would welcome any spreading of the message. He said CMA's approach is based on the Harvard Negotiation Project and the book it generated, Getting to Yes: Negotiating Agreements Without Giving In, also a bestseller, written by Roger Fisher and William Ury and first published in 1981.

The core idea of the Getting to Yes approach is a focus in negotiations on interests, not positions, a mutual-gains approach, which Dowling describes as "a revolutionary piece of advice" that has permeated every piece of writing and teaching on negotiation since its publication.

He points out that it, too, was born of a singular time of conflict – the negotiations over security issues between Israel and Egypt that led to the Sinai Accords – but he believes the brinkmanship on display in the political world today is not mirrored in business.

"I would say the opposite," he said. "There has been a gradual and continuing take-up of finding ways to do business that are community-driven, relationship driven but without being the soft touch."

James Sarros, professor of management at Monash University, is well aware of Covey and his positive role in providing strategies for life as much as for business, but he is uncertain about the notion that we live in especially conflicted times. Particularly within organisations, he prefers to see evidence of increased competition in what others might see as conflict and to see that as largely positive. One of his key areas of interest is strategy implementation of organisations and he said that what his work shows is that to be successful in the execution of strategy you need a culture of teamwork and co-operation as well as competition.

"You have got to be always on the edge," Professor Sarros said. "So there is always a little bit of tension and you have to constantly communicate and engage with employees and that takes a lot of effort. There is always going to be a little bit of competition as well as conflict in that process.

"If we all cooperate all the time it may be all very warm and fuzzy in an organisation but are we all really going to progress that much?"

Now in his 80th year, Stephen R. Covey wants The 3rd Alternative to be the book he is remembered for. But that does not mean he is folding his tent. He tells Mt those of us who think we've arrived at the "ultimate meaning" of anything are intellectually dead. Clearly, he's far from that, whatever you might think of his ideas.

Thinking outside the Lego block

One of the great things about our high-tech century is that complementary teams know no boundaries.

A wonderful example is Lego, the Danish toymaker that is often called the most trusted company in the world. Lego counts its millions of customers as an active part of a complementary team.

How would you react if customers secretly began hacking into your company's computers? Call the police, right? When this happened to Lego they reacted with dismay, just as anyone would. But then they asked themselves, "Why would customers do this?" And being the Lego company, they became fascinated with the question and tried Talking Stick communication (a 3rd Alternative tool) with the culprits.

When they talked to the hackers, they found they were Lego fans who wanted to build their own creations. The hackers had broken in so they could go around the company's inventory system and order individual parts that normally came packaged with other parts. Tormod Askildsen, Lego's director of community development remembers: "Our lawyers were ready to go after these consumers and say, 'You can't do that.'

"But we also realised that there was a lot of talent and a lot of very great skills out there in the community. Yes, they are tinkering with our product, but they are improving it," Askildsen said.

"So what happened was that we basically let consumers hack this, and that is the amazing thing. If you trust your consumers, then they may do something that is actually a benefit. "

So the toy company developed software that would allow fans to create new Lego designs and to encourage them to share their designs with other customers. The response has been hundreds of thousands of ideas for new products that the Lego firm never has to develop.

Extract from The 3rd Alternative: Solving Life's Most Difficult Problems by Stephen R. Covey, published by Simon & Schuster. On bookshelves now.