Making Conflict Management a Strategic Advantage | White Paper

management a strategic priority in their organizations? The reason is that conflict has key effects on productivity, decision making, and retention. With respect to productivity, consider the amount of time spent on conflict. Several years ago, Warren Schmidt and I conducted a survey on conflict management for the American Management Association. Managers reported spending 18% to 26% of their time dealing with conflicts, depending on their organizational level. That is a huge investment of time—the equivalent of many millions of dollars of payroll in moderate-sized to large organizations. Any significant improvement in the efficiency of conflict management—by surfacing conflicts quickly and directly and settling them cleanly— will produce productivity gains that far outweigh the cost of most conflict management programs. But conflict management is about more than just saving time. Most organizational conflicts involve disagreements over task-related matters, with people bringing diverse perspectives, information, and expertise to bear on an issue. Too often, some key input is suppressed or ignored, or the conflict leads to deadlock and inaction. When conflicts are handled constructively, in contrast, these diverse inputs are likely to be considered on their merits and incorporated into better, more innovative decisions. Also, decision makers are likely to get accurate feedback on the results of decisions—in time to take corrective action. These decision-making benefits can be important for any organization on important, nonroutine issues. They are especially vital for organizations that aspire to be learning organizations or to compete on the basis of rapid adaptation and innovation. In such cases, it may take only one good decision on an important issue to justify the cost of a conflict management program. Finally, consider the effects of conflict on retention and turnover. Poorly managed task-related conflicts can easily become personal—generating resentment, antagonism, and hostility. These “emotional” conflicts interfere with work relationships, create stress, polarize teams, and are a major factor in absenteeism and voluntary turnover. Occasionally, they lead to grievances and legal actions. When conflicts are managed constructively, on the other hand, people are likely to feel that they are listened to and treated fairly, which reduces personalization of conflict, absenteeism, turnover, and formal complaints. Here again, the financial savings from reduced turnover and absenteeism alone—not to mention the benefits of stable working relationships, organizational loyalty, and the retained knowledge of experienced workers and managers—may justify the cost of a conflict management program. How, then, can an organization realize the benefits of effective conflict management? This paper explores five key elements of a strategy for making conflict management a core competency in an organization: developing conflict literacy, measuring conflict styles, building conflict management skills, involving top management, and using conflict-focused team building and interventions. Making Conflict Management a Strategic Advantage W H I T E P A P E R / P A G E 1