Conflict is an inevitable part of life – and work is no exception. Sometimes the conflicts are simple disagreements between employees. Other times they're so severe they can threaten the existence of a business. We speak to a leading expert about the dos and don'ts of conflict resolution for business managers.
It only takes a glance at the business headlines to see the kind of damage that conflict can do to a company. Last year, $130bn was wiped off Facebook’s value as struggles with regulators, politicians and journalists were compounded by internal strife that saw the departure of key members of staff, including Instagram founder Kevin Systrom. And, staying with the theme of American technology giants, Elon Musk’s public disagreements with short-sellers and Tesla critics were punctuated by a pair of $20m fines (one for him, one for his company) after the SEC alleged that he had issued ‘false and misleading claims’ about a deal to take the company private. (The fines were part of a settlement deal, which ensured that Musk neither had to admit or deny wrongdoing.)
When it all adds up
But it isn’t just Silicon Valley firms that should be wary of poorly resolved and expensive disputes. In her book, The 7 Principles of Conflict Resolution, Louisa Weinstein describes the way in which a conflict within a typical British company quickly led to mounting costs.
In the anonymised example, Weinstein adds up the cost of the time off taken by the parties involved (60 days at a cost of £15,600); the opportunity cost of the company functioning poorly (£20,000); the hours spent on managing the conflict by senior staff and directors (£24,000); the legal costs associated with an investigation and tribunal (£30,000); and, finally, the cash cost of the compromise agreement that was eventually reached (£30,000). The total sum is a hefty £119,000.
Weinstein, who is the founder of mediation firm The Conflict Resolution Centre, started her career as a private equity lawyer, but moved into conflict resolution after a spell volunteering in community mediation. ‘It was absolutely transformational,’ she says now. ‘I learned that the dynamics of people that I worked with in council estates were very similar to the dynamics between people at law firms and public sector organisations. In conflicts, the strength of feeling was the same and, often, so was the root of the solutions.’
Finding those solutions and establishing the processes that make them possible can be complicated. But, Weinstein says, one thing is usually key: ‘Understanding how the other person feels, or where they’re coming from. If you do that you get a much better picture of what is negotiable.’
In business, however, there is often an additional hurdle to overcome. The culture and processes that govern conflict in the corporate world aren’t necessarily conducive to finding solutions.
‘If a company has a disciplinary or grievance process, people know: I’m going to be disciplined or aggrieved. Told-off or pissed-off, in other words. So, I have to set myself up to show that I’m right and you’re wrong. That’s going to entrench the conflict. It’s only when we start looking at common interests and needs that things become easier.’
Dealing with difficult people
In a special report entitled ‘Effective Conflict Resolution Strategies to Avoid Litigation’ published by the Program on Negotiation at Harvard Law School, several of the strategies align with Weinstein’s approach. One exhorts readers to resolve conflicts with ‘difficult people’ by using the author William Ury’s approach of ‘building a golden bridge’.
‘Involve your opponent in finding a solution. It’s unlikely that a difficult person is going to accept your proposal fully, no matter how reasonable it is. Give him some choices: Would you prefer to meet at your office or mine? I could either pay a lump sum or make payments over time; which is better for you?’ says the report.
Find the compromise
Another uses the example of a conflict between the US Postal Service and an indie pop band, The Postal Service, to extoll the benefits of ‘exploring differences in preferences, priorities, and resources.’
The USPS had become concerned about the dilution of its name and issued a cease-and-desist letter to the band. Given their recent success, the band members were reluctant to change their name. Yet during negotiations, the band managed to turn the dispute into a synergistic opportunity by identifying the priorities and non-competing preferences of both sides.
The Postal Service (the band) agreed a host of measures, including promoting the use of mail to its young fans and performing at an annual USPS event. In exchange, the band was granted a free licence and permitted to retain its name.
Change for good
A proper risk analysis of legal proceedings will usually reveal that they are best avoided, not least because the outcome of such proceedings is difficult to predict. ‘No barrister I’ve ever met would ever give more than a 70% chance of success,’ says Weinstein. On the other hand, she adds, ‘it may be that you don’t want to set a precedent’. Gaining a reputation as an organisation that’s not to be trifled with can have advantages.
However, says Weinstein, there is one universal truth about conflict: ‘It always presents an opportunity for change. That’s why it’s so amazing. And, if we don’t change, then our conflicts keep on coming back – just with different people.’