Where to Invest Compliance Dollars for ROI? Try Conflict Management

One of the biggest challenges for senior leaders is to prioritize their investment in compliance. According to a recent Stanford Business School Executive Coaching survey, senior leaders say conflict management is their skill area in greatest need of improvement.1 This skill far outweighed other executive leadership skills such as sharing leadership/delegation, planning, mentoring, listening, communicating, and team building.

Senior leaders are wise to make conflict management their highest coaching priority. Asked to explain this result, the survey authors said conflict management is critical in the CEO role because most decisions have an element of pleasing someone and making someone else unhappy. They noted that when the CEO avoids conflict, it can:

  • Shut down the whole organization because
  • Decisions are not made and problems fester
  • Creating a domino effect of unproductive behaviors down the ladder

By contrast, a CEO who can manage and channel conflict in a constructive way can

  • Get to the root of issues
  • Apply rigor to the team’s thinking, and, ultimately
  • Drive the best outcomes.2

Executives aren’t alone – fear of conflict is ubiquitous in the workplace and is universally acknowledged in the business literature as a primary hurdle to business success.3 Yet most executives and managers at all levels never receive any guidance in this area.

Investing in the development of conflict management capacity has the duel effect of improving business outcomes and directly reducing your exposure to employment law claims and judgments.

Consensus in Business Literature: Promoting Open Debate Improves Decisions, Buy-in, and Relationships

Conflict management is really about decision making. As Jim Collins says in his classic, Good to Great, “You need executives, on the one hand, who argue and debate – sometimes violently – in pursuit of the best answers, yet, on the other hand, who unify fully behind a decision, regardless of parochial interests.”4 Patrick Lencioni, an expert on building high performing teams, agrees: “Teams that engage in unfiltered conflict are able to achieve genuine buy-in around important decisions, even when various members of the team disagree.”5

Collins found the best companies are those in which executives lead with questions, not answers; engage in dialogue and debate to enlist people in the search for the best answers; and, conduct autopsies without blame. Others state it this way: leaders should use “their positional power not to dominate but rather to drive the decision making process. The more collaborative and apolitical that process is, the less isolated the leader, and the greater the likelihood that the business strategy will be grounded in reality.”6

Fostering skills in promoting open debate and dissent across your organization reaps huge business benefits and shifts your risk position decisively in the right direction. This is the tone at the top and in the middle that you want.

Regardless of the level at which decisions are made, conflict management is a core component of leading effective teams. “Dissent is at the heart of why you’ve created a team in the first place. Consulting a variety of data sources and examining conflicting ideas will lead to better decisions. If everyone prefers to work with Vendor A, then you won’t explore other options, which could include a cheaper supplier with a better track record. If you all agree right away on what the data indicates then you won’t conduct further analysis, which might have revealed serious breaches in collection integrity.”7

“Dissent infuses problem solving with energy and creativity. It also promotes

  • Closer relationships (as members grow to appreciate one another’s contributions)
  • Greater social competence (as people learn how to persuade, advocate, and challenge constructively), and
  • Psychological well-being (as individuals recognize the value they add in the exchange of ideas).”8

When you are the decision maker, the persuasive effect of open debate on participants is hard to overstate. As Jay Conger says in “The Necessary Art of Persuasion,” “[W]hen colleagues see that a persuader is eager to hear their views and willing to make changes in response to their needs and concerns, they respond very positively. They trust the persuader more and listen more attentively. They don’t fear being bowled over or manipulated. They see the persuader as flexible and are thus more willing to make sacrifices themselves.”9

So why is conflict to hard?

“When they’re in decision-making mode, the conversation has a task component (evaluating the information) and a people component (maintaining the relationships). Destructive conflict can ensue if dissent starts to feel personal. When someone questions your thinking in a meeting, you might wonder, ‘Is he trying to make me look bad?’ That kind of dissent hurts relationships. Not surprisingly, many teams attempt to ward off interpersonal conflict by suppressing dissent.”10

The price paid by dissent can be high

Despite its obvious value to decision making and business strategy, as we all know, under some leaders, being a “dissenter” often brings real costs. Some leaders interpret disagreement as a challenge to their competency or authority.11

“[O]ften the deviant veers from the norm at great personal cost. . . it really is extraordinarily courageous for somebody to stand up and say, ‘We’ve got to pause and probably change direction.’ Nobody on the team wants to hear that, which is precisely why many team leaders crack down on deviants and try to get them to stop asking difficult questions, maybe even knock them off the team.”12

Strategies for Enhancing Open Debate, Dissent, and Productive Conflict

Clearly, it is the job of the person with positional power to eliminate the price of dissent by creating the conditions for open debate. There are basically two approaches to managing conflict successfully: what I call the macro or structural approaches, and the micro or small group-based methods. Both are important.

A. Structural Approaches to Conflict Management

Collins’ research elicited colorful stories of how “great companies” establish structures for conflict:

“Pitney’s . . . sales meetings were quite different from the ‘aren’t we great’ rah-rah sales conferences typical at most companies. The entire management team would lay itself open to searing questions and challenges from salespeople who dealt directly with customers. The company created a long-standing tradition of forums where people could stand up and tell senior executives what the company was doing wrong . . . and saying, ‘Look! You’d better pay attention to this.’ . . . ”13

Continuous Improvement Meetings: Stop, Start, Continue?

One method of engaging a group in the ongoing process of open debate and conducting periodic autopsies without blame is to establish Continuous Improvement Meetings where nothing is off limits. Leaders can set the tone by starting with some self-critique.

  1. What should we stop?
  2. What should we start?
  3. What should we continue?
  4. What are some of our greatest achievements so far, and what factors have contributed to those successes?
  5. What have been our greatest challenges, and how might we overcome them in the future?”

Having these meetings regularly will build members’ feedback skills and trust within the group.14

Dividing the Decision Item into Parts and Using Devil’s Advocates

All of the authors cited in this article endorsed using devil’s advocates as a decision aid and to mitigate the cost of being a dissenter. “Use advocacy groups. After identifying a few main options, assign each alternative to an advocacy group within the team. Task those groups with developing ‘best cases’ for their assigned options and presenting their positions to the whole team. Once all the groups have presented their cases, they can challenge one another’s information, rationales, and conclusions. The outcome is a clearer understanding of the strengths and weaknesses of each position.”15

Bob Frisch suggests:

“By braking the false binary of a business case into several explicit and implicit alternatives and assigning a devil’s advocate to critique each option, you can depersonalize the discussion, making thorough and dispassionate counterarguments an expected part of strategic deliberations. This approach is especially valuable when the preferences of the CEO or other powerful members of the team are well known.”16

Frisch also suggests breaking up decision-making discussions into several meetings to permit participants to conduct research, analysis, and reconsider decisions over time. This option has the benefit of enabling “slow percolators” to have a greater role in deciding.

Confidentiality to Save Face

One of the Frisch’s more innovative ideas is to have decision participants agree to confidentiality so that those whose priorities don’t prevail can save face when the meeting is over. This could be difficult to enforce in a strict sense. But so long as participants understand that they are to avoid discussing winners and losers with others once the decision is made, it could be effective.

B. Individualized Small Group Approaches to Conflict Management

Conflict Profiling, Norming, and Mining

Lencioni delves deeply into “mastering conflict” at the individual and team level. He endorses a simple but profoundly useful process of

  1. Identifying the “conflict profile” of each person in the group
  2. Agreeing on group norms for engaging in productive conflict and debate in decision making; and
  3. Assigning the leader the explicit role of mining for conflict, i.e., requiring that everyone participate and eliciting different points of view.17

Of particular importance is his “conflict profiling” exercise, which recognizes that people have wildly divergent attitudes about and comfort levels with directly refuting another’s opinion. Conflict profiles can be a function of birth order, family tradition, temperament, personal experience, cultural origin, and even geographic area of origin within the U.S. When a group understands each individual’s conflict profile, it becomes far easier for everyone to contribute without fearing adverse consequences. When the group then agrees on norms for open dialogue, it can make conflict management easier for everyone. I have found these exercises to be extremely useful.

What is the connection between conflict management and employer liability?

Employees who feel heard, respected, and valued are far less likely to file internal complaints, EEOC charges, and lawsuits. Organizations that promote open debate and productive conflict among peers and subordinates foster collaboration, build trust, and empower their teams. By design, everyone is a contributor. These firms have the look and feel of a meritocracy with an even playing field rather than one driven by favoritism (which is a form of disparate treatment, whether unlawful or not).

After fifteen years adjudicating and mediating employment disputes, I can attest that two of the biggest drivers of employment law litigation are unresolved conflict and intolerance of dissent.18

1. A Culture of Debate Mitigates Retaliation Claims

Leaders who penalize those perceived as critics are the most likely to spawn litigation, particularly retaliation claims. Take the scenario provided above of the individual being excluded from a work group by a leader who does not abide opposing views. Then consider the “adverse actions” that can form the basis for a retaliation claim under Title VII of the 1964 Civil Rights Act: “excluding an employee from a weekly training lunch that contributes significantly to the employee’s professional advancement,” and “reassignment of duties to less desirable and more arduous tasks,” even within the same job description, are both considered to be actionable.19

Managers who silence their critics by means they deem a matter of convenience may be committing actionable civil rights violations, depending upon the circumstances.

Leaders that punish others who challenge them are also the most likely to retaliate against an individual who opposes discriminatory or unfair treatment (including talking to an investigator). In fact, my experience with retaliation cases as a judge is that even when the underlying conduct complained of may not be serious or prohibited under law, the retaliation that follows is swift and sure because of the leader’s generalized intolerance of dissent. Retaliation claims are the most common of EEOC filings at 42%. Importantly, once a claim is filed, the court will examine the entire history of hostile treatment by the intolerant manager towards that employee.

Executive leadership can mitigate the risk of retaliation claims for the entire organization by eliminating the price paid for dissent. Requiring all leaders, managers, and supervisors to learn and utilize conflict management skills as a routine business practice, and doing so in the context of compliance training, will cultivate a culture of open debate that is explicitly linked with risk management. Without training and education, managers do not understand how their actions with peers and subordinates can create liability.

2. Conflict Management Mitigates Disparate Treatment and Hostile Work Environment Claims

Subordinates and peers who experience being silenced and ostracized often feel over time that they work in a hostile environment and/or are being subject to disparate treatment. Although disparate treatment and harassment claims must be based on conduct related to protected class, when a poorly treated employee makes an internal complaint or files a claim, lack of legal merit does not stop them from doing so. And, as practitioners know, it is not uncommon for EEOC charges to have legs once an experienced employment attorney becomes involved.

Returning to retaliation, once an internal complaint or claim is filed against a manager who leads by intimidation or fiat, he or she is far more likely to impose adverse action against the complaining employee. At this point, a legitimate retaliation claim may lie.20

Infusing your work culture with open debate and dissent also has the ancillary effect of driving out managers who can’t work in that manner. Hiring (and firing) for conflict management skills can be a key component of risk management.

3. You Want to Hear About It First: A Culture Where Dissent is Valued Promotes Early Reporting of Illegal and Unethical Conduct

It is part of the human condition for employees to make errors in judgment, some more serious than others. Therefore, consider it a given that someone in your organization will engage in unethical or illegal conduct at some time in the future. The broader compliance landscape for American corporations has become far more complex: Sarbanes-Oxley, Dodd Frank, Fraudulent Claims Act, Foreign Corrupt Practices Act, etc.

The more open the corporate culture, the more likely your employees will come forward to report misconduct in-house before going to a regulatory agency. The venue of the initial report, the organization’s response to it, and the degree of training you have provided, determine legal and financial exposure.

Without the right tone at the top and in the middle, employees will not report because they fear retaliation. It’s that simple. Even the best Code of Conduct in the world is nothing more than a piece of paper without the right entrenched business practices to back it up. Therefore, as you build conflict management capacity and foster a climate of open debate and dissent in your organization, you will also want to educate leaders about how to respond to reports of illegal and unethical conduct and to strictly avoid retaliation.

The Takeaway

In summary, employment law compliance training should not be a dreaded exercise with no strategic impact. Ideally, it will link leadership training with knowledge of the law in a way that is engaging for participants and will up everyone’s game in decision making, building strong teams, and mitigating liability. In the case of conflict management, the best defense is a good offense.

  1. https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-survey-2013-executive-coaching.pdf
  2. Gavett, Gretchen, Research: What CEOs Really Want from Coaching, August 15, 2013, HBR
  3. Lencioni, Patrick, Overcoming the Five Dysfunctions of a Team, A Field Guide for Leaders, Managers and Facilitators, Jossey-Bass, 2005.
  4. Collins, Jim, Good to Great, Why Some Companies Make the Leap and Others Don’t, Harper Business, 2001, page 60.
  5. Lencioni, supra.
  6. Hamm, John, The Five Messages Leaders Must Manage, HBR, May 2006.
  7. Shapiro, Mary, The HBR Guide to Leading Teams, Harvard Business Review Publishing Corporation, 2014.
  8. Shapiro.
  9. Conger, Jay, The Necessary Art of Persuasion, HBR’s 10 Must Reads on Communication, Harvard Business Review, 2013.
  10. Shapiro.
  11. See Dweck, Carol, Mindset, for a brilliant analysis of why this is the case.
  12. Why Teams Don’t Work, An Interview with J. Richard-Hackman, by Diane Coutu, HBR, May 2009.
  13. Collins supra at 72.
  14. Shapiro.
  15. Id.
  16. Frisch, Bob, When Teams Can’t Decide, HBR, November 2008.
  17. Lencioni, supra.
  18. See Perlow, Leslie, and Williams, Stephanie, Is Silence Killing Your Company?, HBR’s 10 Must Reads on Communication, supra, for a chilling description of the “spiral of silence” caused by unresolved conflict.
  19. Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 69-72 (2006)(standard for actionable retaliation is whether the action would cause a reasonable individual to refrain from complaining about discrimination. Determination is context specific.)
  20. The first element of a retaliation claim, engaging in protected conduct, does not require the plaintiff to prove that unlawful conduct based on protected class did in fact occur.