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How Much is Workplace Conflict Costing Your Company?

Aug 17, 2007
Over the years I have come across several tools that will put a dollars and sense value on the matter of workplace conflict and the importance of its resolution. There are several assumptions in each of them, based on academic studies as well as national, international, and industry averages. They calculate the cost of replacing person "causing" the conflict, the number of times you must do so each year, and many other relevant factors.

In the end you can come up with an amount of money, the ACTUAL HARD DOLLAR COST of workplace conflict in your organization, that is overwhelming. So overwhelming in fact that many business owners will decide not to believe the numbers.

Instead, they end up taking the attitude that it is easier to deal with the miserable situation they're in than it is to figure a way out of the cycle of conflict that surrounds them.

Or, and this is the case with most family businesses, they can't get rid of the trouble makers anyway - because they're your kids, nieces, nephews, uncles, aunts, etc. so it's better not to even undertake the exercise in the first place.

We live in such a microwave environment that we have come to feel, in most situations, that if we can't see how the problem - whatever it is, can't be fixed instantly, then its not worth the trouble. And since you know you can't "straighten out" your nephew immediately you just shrug and try to deal with him as best you can.

We fail to remember that it took years, decades sometimes, to get in the situation we're in - so it follows that it will take time and effort to get out of it.

Instead of giving up and living with the conflict, even if it is just the nagging continual low grade stress caused by continual friction - stop and consider that you and everyone around you will be living the rest of their lives in the future you are creating today.

If you won't confront the matter now, you will spend the rest of your life trying to "manage" it.

In my experience the folks who are causing all the problems are not necessarily bad people. Ok, some of them are and since they were dropped on you because you're their uncle or something - you will have to do the best you can even when they are worthless jerks. It's not like they're going away or anything.

So, what can you do? In most cases it's a simple process. Simple because it is pretty straightforward and something you can often do for yourself. But it may be far from easy, especially if the individual(s) causing the problems have become so isolated as the problem themselves that they feel an obligation to keep stirring things up. Crazy isn't it?

One time I was meeting with just such a person. I told him that based on my experience with people like his uncles that if he did not get on board and work with them to design a future they could all live together in, that it would bring down the business.

His response, "I know what you're saying Wayne" told me the future of their enterprise. He understood my words, he was a bright guy after all, but he was not going to change. Six months later his aunt send me a clipping from their local newspaper announcing the sale of this seventy year old otherwise successful business. It was tragic for everybody.

What about your company, what is the cost of workplace conflict there? It's possible to detail the dollars and sense cost, but that may not be enough to get you to take action no matter how much it is. You may be saying to yourself that even with these costs we're still doing fine financially so why rock the boat anymore than it already is?

What about the quality of life costs to everyone involved? What about the psychic and emotional cost of wasting time dealing with the results of the conflict? What about the lowered job motivation and reduced productivity created by the conflict and its effect on everyone touched by it?

What about the cost in terms of production and performance when people take sick days when they are not sick, just in conflict. The resulting loss of productivity is the same whether or not the person missing work is the one causing the conflict or the one effected by it.

Have you done this, restructured the business around the problems or the people "causing" them? This is a frequent tactic with family businesses when the offender can't be fired. The result is a sub-optimized organization with extra steps being added to the process, making it all the more difficult to sustain growth and profitability.

No matter how you try to remove them from the loop, they still figure out how to insinuate themselves into the situation in ways that cause problems. And if you are still able to be successful, they end up taking the credit for it.

Now if these are not enough reasons to get up and do something about the workplace conflict at your place, perhaps this will.

Often the most devastating cost of conflict comes from the degraded decisions that are being made, by the person "causing" the conflict as well as the innocent bystander. People who make the decisions in your business must have all the honest well considered input possible, in order to weigh the options, consider legitimate alternatives, and come to a conclusion.

If the process is being sabotaged with faulty input on purpose the decisions will be flawed. If the person making the decisions has a hidden agenda even though the input is accurate they can still make bad choices for the business.

Imagine the results if a decision inflates your overhead by twenty percent? Or if your profit margin is reduced by ten percent? In every business there are key decisions being made routinely that dramatically impact the future of the business. Normally we believe that they are being made honestly based on the relevant information. What if that's not the case? What if someone feels that this is there chance to get back at you?

Are you motivated to do something now? Ok, let me tell you how I work, because in most cases you can do it yourself.

The first thing I do is talk to everyone - individually, confidentially, and in private. And that included the spouses. What I am looking for is to uncover what is really important to each of them? What they want the future to be for them and their family. This is pretty simple but sometimes very hard to do because they may never have thought of things in these terms.

However when enough effort is put into figuring out and articulating what's important, people often begin to see that since the business is the vehicle for them to achieve their objectives, the conflict and disagreements that negatively impact it - hurt them too.

In the process of isolating what's important I look for their opinion of the situation currently. As they talk about the way things are now, in light of their own future goals and objectives, they may begin to see the reasoning and importance of the way things are being done. Or not. Either is Ok, as long as we get it out in the open.

Parenthetically, most workplace conflicts center around "how" things are being done rather than "what" is being done, so when people align their thinking around where they want the business to take them, they often become less hung up on doing it (whatever 'it' is) "their" way. It really does become them as a group against the problems and challenges in their way - versus carping about each other's styles and techniques.

Once each individual has had their say it's time to put together a picture of what everyone says they want the future to look like - considered as a group. In my three decades of experience helping family businesses through this process I find that at this point there is far more agreement than disagreement.

Following this round of individual meetings a group meeting is held. This is often a tough one because even though each person has bought into the idea of looking forward together, there will be attempts to bring up past perceived slights and justification for previous behavior. It's important that whoever is facilitating this meeting keep it focused on the future rather than the past.

At this point it's time to determine what's possible based on the goals of everyone. This is where I typically want their traditional advisors, attorney, accountant, life insurance agent, involved. These are the people who will create the documents that will guarantee that the desires of the family are achieved.

If you bring them into the discussion too soon their recommendations may reflect the wishes of one party or another - thus the conflict continues. Also they will not have the benefit of having each person's desires clearly stated - so they can weave the wishes of everyone together to create a result everyone can get behind.

Once the documents are in place to guarantee the commitments everyone has made about the future, the conflicts of the past can be forgotten and the conflicts of the present and the future can be eliminated.

When everyone is in the boat together and everyone is depending on everyone else to keep rowing toward a common destination - how you (or they) are holding your ores just won't matter.
About the Author
Wayne Messick is the publisher of articles to help you grow your business at www.iBizResources.com/article_directory/ If you are a business owner wanting to leverage what you are already doing right visit the Peer Groups area of our website.
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