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How Workplace Conflict Is Killing Your Bottom Line

Failure to speak up about concerns, or inability to properly deal with conflict, can have real financial consequences. Encouraging candid dialogue can reduce tensions and boost productivity.

November 9, 2012
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KEYWORDS conflict
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Some conflicts are hot, simmering with hurt feelings, suspicion and verbal sparring. However, most workplace conflict is cold. Resentments are clutched close to the vest, disagreements are quietly acted out rather than talked out, and mistrust is passed in whispers to third parties rather than confronted face to face.

Research by corporate training and organizational performance company VitalSmarts shows that 95 percent of the workforce struggles to confront colleagues and managers about concerns and frustrations. As a result, workers engage in resource-sapping avoidance tactics including ruminating excessively about crucial issues, complaining to others, getting angry, doing extra or unnecessary work and avoiding the other person altogether.

For example, VitalSmarts asked managers at a nonprofit firm with offices across Central America this question: “If you could say anything to your headquarters’ leaders without fear of reprisal, what would you say?”

One Nicaraguan manager’s response illustrates the cost of silence in organizations. “I would tell them to stop making us offer training to all of our clients,” he said. “These working poor can’t afford to waste time, but we force them to endure six weeks of training that makes no difference in helping them improve their incomes.”

If true, this manager was saying his staff wastes about 30 percent of their time and budget on a failed activity. Worse, they undermine their customers and mission at the same time.

While this example is extreme, research shows these kinds of conflicts are common. In its 2010 “Cost of Conflict Avoidance” study, VitalSmarts found employees waste an average of $1,500 and an eight-hour workday for every crucial conversation they avoid. In extreme cases of avoidance, an organization’s bottom line can be hit especially hard. The study found that 8 percent of employees estimate their inability to deal with an uncomfortable issue costs their organization more than $10,000. Further, one in 20 estimate that during the course of a drawn-out silent conflict, they waste time ruminating about the problem for more than six months.

In a 2012 study on high-performance cultural operating systems, VitalSmarts studied more than 7,000 managers and found the cumulative effect of silence on organizations is significant. Organizations with a culture of silence — where people fail to address crucial concerns — pay an across-the-board tax of 27 percent on their ability to execute and a tax of 30 percent on their capacity to innovate.

The picture isn’t completely bleak, however. Although an absence of candid dialogue generates quantifiable costs, its presence yields some advantages. Organizations that develop a culture where candid dialogue is encouraged experience a corresponding bonus in their ability to innovate and execute. For example, Mike Miller, a former IT director at Sprint Nextel, reported that undiscussed conflicts between the marketing and IT departments consumed roughly 20 percent of his time and attention during a period of many months. As the organization developed cultural competence at these crucial moments, performance improved markedly.

Miller said he experienced improvements firsthand. He sat down and effectively addressed his basic concerns with his marketing counterpart, and said, “I literally got my life back. Hours in each day that had been filled with damage control and political maneuvering were suddenly returned to me.”

There are a few individuals who know how to speak up and skillfully address emotionally and politically risky issues with their colleagues. VitalSmarts’ research confirms this skilled minority wastes less time complaining, feeling sorry for themselves, avoiding problems and getting angry. As a result, these people are more productive and influential. When everyone in an organization can do what ordinarily only these few seem to be able to do, the organization benefits. The capacity to execute on strategy improves by 19 percent while collective ability to innovate climbs by 27 percent.

It’s About Competence, Not Character
Many talent leaders understand that silence creates a profound drag on corporate capability. That’s why corporate values statements are festooned with calls to create openness and candor. Most of these value statements get it wrong. Leaders attempt to provoke dialogue by calling for “courage,” “confidence” and “accountability.” However, corporate candor is less a condition of basic character and more about competence. What people often lack is not the will to speak up, but the skill.

For example, VitalSmarts did an experiment years ago where actors cut in line in front of others in public queues to see if others would speak up when someone so obviously disadvantaged them. Almost no one did. Next they had line-cutters do the same thing, but this time they cut in front of another actor who would speak up. They said, “Pardon me, the rest of us have been waiting here for a few minutes. Would you kindly join the end of the line as we did?” At this point, the line-cutter would exit the line and move to the end. The experiment tested whether real line members who had watched a skillful, successful intervention would behave differently when challenged by a new line-cutter.

Next, a new person was sent to cut in line in front of those who witnessed the previous intervention. When the person did, the reaction was almost immediate. Subjects not only spoke up, but they also used almost precisely the same words the actor had used earlier.

What employees usually lack when they suffer in silence is not integrity, but a script. Most people struggle for words when facing emotionally and politically risky parleys. If they had greater confidence that they could muster a sentence that would get their point across without creating even more conflict, they’d speak up more often than they presently do.

The good news is that speaking up and resolving conflicts are skills anyone can learn and master. VitalSmarts researchers have spent the last 30 years identifying the high-leverage behaviors demonstrated by the most skilled communicators who know how to speak up in way that is completely honest and respectful. As a result, they resolve concerns and solve problems without damaging their relationships.

For example, the handful who speak up effectively tend to do a few things better than their peers. Among other things they:

Confront the right problem. The biggest mistake people make is to confront the most painful or immediate issue and not the one that gets them the results they really need. Before speaking up, stop and ask, “What do I really want here? What problem do I want to resolve?”

Rein in emotions. People often tell themselves a story about others’ real intent. These stories determine their emotional response. Master communicators manage their emotions by examining, questioning and rewriting their stories before speaking.

Master the first 30 seconds. Most people do everything wrong in the first half-minute of a conversation, such as diving into the content and attacking the other person. Instead, show respect for the other person and his or her interests to disarm defensiveness and open up dialogue.

Reveal natural consequences. The best way to get someone’s attention is to change his or her perspective. In a safe and non-threatening manner, give the other person a complete view of the consequences of his or her behavior.

There are two keys to changing a culture of silence into one of candor: skills and models. When people see respected leaders use new skills in ways that appear to work, they are emboldened in their attempts to do likewise. The key to dramatic changes in corporate candor is to combine these two keys into a single intervention. Have leaders teach the skills. Rapid and measurable improvements in openness are often the result when leaders are regularly engaged in training and modeling new cultural norms to employees across the enterprise. For example, after Sprint Nextel trained its IT workforce in how to better conduct crucial conversations, the division saw a 93 percent improvement in productivity and a 10 to 15 percent improvement in quality, time and cost metrics.

Workplace silence is the most pernicious and curable cultural ailment organizations suffer today. If HR leaders and executives invest in modeling and training skills to alter this costly norm, not only do individuals perform far better, organizations gain great advantage in their ability to execute flawlessly on today’s strategy and innovate consistently to produce tomorrow’s.

Joseph Grenny is the co-founder of VitalSmarts, a corporate training and organizational performance company, and co-author of Crucial Conversations. He can be reached at editor@talentmgt.com.

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