Strategy Discussion by Coach: Financial Impact of Disagreements May Surprise You
In today's fast-paced business environment, conflict is an issue that often goes unnoticed, particularly the silent, slow-burning kind, according to Stephan Lendi, a Swiss moderator and communication coach at Newbury Media & Communications GmbH, and a Harvard-trained mediator. Over two decades, Lendi has observed that such conflicts can undermine organizations, leading to significant consequences.
The true cost of unresolved conflict isn't just financial. It includes lost productivity, damaged relationships, and staff attrition. In the UK, the annual cost of unresolved workplace conflict is estimated to be around £30 billion. In the U.S., the figure is even higher, with unresolved conflict costing over $359 billion each year, or more than $3,600 per employee, according to CPP Inc.
Ignoring tension within a team can potentially define a leader's leadership and impact the company's future. HR teams, often stretched thin, may hesitate to intervene, which can allow tension to ripple across teams and result in staff attrition.
However, treating conflict resolution as part of the leadership culture, not a side project, can contribute to a company's success. Mediation and negotiation skills are essential leadership tools. Mediation can shift the culture of an organization by valuing dialogue and ensuring that no one's voice is too small to be heard. A neutral mediator provides a safe space for real issues to surface, especially when power dynamics are at play.
Open forums, early interventions, and honest check-ins can help larger firms resolve conflicts more effectively. Digging deeper into exit interviews, informal complaints, and engagement trends can help identify unspoken tensions. Sharing how leaders have handled tough conversations can foster openness throughout the organization.
Larger corporations sometimes get stuck in processes, which can lead to unresolved conflict. In contrast, family-run companies often deal with conflict head-on, using direct feedback and bringing in trusted individuals when necessary.
Empowering the people team or creating a separate ombuds function that employees trust can help resolve conflicts. Structured conflict resolution, such as mediation, can make a significant difference in resolving disputes quickly, saving time and money, and fostering openness.
Handled well, conflict can become a source of insight, connection, and innovation. It's crucial for leaders to recognise this and approach conflict not as a threat, but as an opportunity for growth and improvement. By doing so, they can turn potential setbacks into steps forward, fostering a more productive and harmonious work environment.
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