What is the cost of conflict in your organization?

Organizations lose 3 hours of productivity per week per employee due to conflict, according to Martin Freres (Journal of the International Ombudsman Association, volume 6, number 2, 2013). For a 100-employee company with an average pay rate of $15/hour, the annual productivity loss due to conflict is $225,000.

Conflict costs. The good news is that the negative impact conflict has on your bottom line can be reduced with the right efforts.

There are thousands of books, seminars, workshops and online trainings that recommend how to “resolve” your conflict at work. With all of the tools and skills available to organizations today, why does the challenge still exist?

The problem many organizations face today in handling conflict is that the methods and tools that they are using are ineffective until there is a shift in the mindset of the employees, leaders and organization as a whole.

How can you reduce the cost of conflict in your organization?

When we work with CEOs, leaders and business owners to help them solve this challenge, we begin by explaining the difference between conflict resolution and conflict transformation (see How do you handle conflict? Conform or Transform) which is your internal choice to conform to the situation or transform your world. Then we ask them two simple questions.

Who are you in this situation?
What do you really want?

Let’s use an example to show how these two simple questions can provide powerful results.
Situation: A leader (Jack) within a volunteer organization has 10 volunteer direct reports. In the monthly meetings, Jack is regularly challenged with a volunteer (Jill) who contributes great ideas, commits to action items and rarely delivers on the commitment.

Jack’s Conflict: How can I hold Jill accountable without losing her?

Jack’s Dilemma:
1. Confront Jill about her inability to honor her commitment and potentially lose her and the valuable ideas she contributes to the meetings


2. Keep quiet and find someone else in the organization to execute on the ideas

Conflict Transformation Approach (CTA):
CTA: “Jack, who are you in this situation as a leader within a volunteer organization?”
Jack: “I am a leader who is committed and passionate about this charitable cause. I am a leader who wants to inspire accountability and greatness in those around me.”

CTA: “Jack, what do you really want in this situation?”
Jack: “I want to foster a culture of accountability within this organization that attracts others who are committed and dedicated to this cause.”

Once answering these simple conflict transformation questions, Jack clarified who he is and what he wants in this situation. He then saw an opportunity to talk with Jill about the expectations of the organization, her value and how best she can contribute.

Notice the shift from Jack’s Dilemma: “Keep quiet and lose accountability or speak up and lose Jill” to Jack’s Conflict Transformation Approach: “I am a leader committed to inspiring others and fostering a culture of accountability”. Once he shifted his mindset, he was able to see opportunity where before he only saw conflict.

Read our next blog to get the rest of the story of Jack and Jill.