This article is from the Leading Effectively Series of the Center for Creative Leadership.Is conflict creating trouble in your organization? As a leader, how equipped are you to deal with conflict?
Conflict at work may be frustrating, but is it worth the effort to change? Authors Craig Runde and Tim Flanagan suggest taking a close look at the financial and human costs of conflict incompetence.
In their book, Becoming a Conflict Competent Leader, Runde and Flanagan write, “When conflict is mismanaged, costs mount. Some out-of-pocket costs like absenteeism and lawsuits are relatively easy to see and compute. Others, like poor decision-making, lost opportunities and diminished quality of working relationships, can prove more costly, but they are more difficult to quantify.”
To identify the cost of conflict in your organization, consider the following factors:
Wasted time. How much management time is wasted dealing with conflict rather than addressing more productive issues? Not to mention the lost productivity when employees spend time complaining to coworkers about the conflict.
Employee turnover. When conflict is severe or ongoing, employees are likely to seek a better place to work, particularly when the job market is strong, according to Runde and Flanagan. “The replacement cost of finding, training and bringing a new person up to speed can often exceed the annual salary of the employee who leaves. It certainly costs more than addressing conflicts in the first place so employees do not get frustrated and leave.”
Grievances, complaints and lawsuits. If problems are handled effectively at the start, many issues can be resolved informally with much less cost. If problems are ignored or not handled well, “then the conflict spirals out of control and becomes a dispute that requires a more formal third-party intervention, which can increase the time, effort and cost required for resolution,” note Runde and Flanagan.
Absenteeism and health costs. Employees may stay away from work to avoid dealing with conflict or to delay a confrontation. Others may take time off to address the physical and emotional stress of conflict. Health care costs, in connection to stress-related illnesses, are part of the price of mismanaged conflict.
Workplace violence. Conflict can escalate way out of control. The National Institute of Occupational Safety and Health estimates that more than one million workers are assaulted each year at work, report Runde and Flanagan: “A significant number of these assaults come from disgruntled customers, patients, coworkers and employees. The emotional toll on the targets of the violence as well as on their coworkers can be enormous and can increase the costs associated with retention, absenteeism and health care.”
Poor decision-making. Destructive conflict disrupts the organization's ability to function effectively. People begin to lose their energy and creativity. They pull back, stop sharing information and take fewer risks. The result can be poorer quality decision-making.
Poisoned workplace. Conflict causes all sorts of unpleasant emotions that poison relationships and the workplace. Anger, fear, defensiveness, negativity, hurt and embarrassment, combined with misunderstanding and distrust, will lower morale and strain working relationships.
The Benefits of Conflict
Not all conflict spells trouble. Disagreements and diverse perspectives are needed for organizations to adapt to change and find solutions to challenging problems. When leaders can encourage different views, ideas and approaches in a non-combative way, conflict can:
~ Stimulate creativity and problem-solving.
~ Foster teamwork and improve social relationships.
~ Encourage listening and perspective taking.
~ Promote reflective thinking and open communication.
~ Yield information about people and situations.
~ Signal that changes are necessary in relationships or the organization.
~ Provide the means for expressing emotions, which can ultimately clear the air and reduce tension.
Coach Carolyn
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