Tension in the workplace can torpedo even the most successful companies. Here are expert suggestions for resolving the most common scenarios.

Workplace conflict creates emotional stress for employees, politicizes the office, and diverts attention away from an organization’s mission. Employers can’t afford — literally — to ignore these conflicts as they can escalate beyond internal issues and into expensive legal action.

And as recruiting, retaining, and engaging quality employees are becoming central to business owners’ strategies to remain relevant, conflict resolution must be taken as a serious concern. According to a recent survey, just over 50 percent of employees describe themselves as disengaged and that same number said they were just waiting for an opportunity to leave their current situation.

Before we talk about solutions, let’s take a look at side effects that can result from workplace conflict.

Not surprisingly, absenteeism tops the list. Just like school days, there is a temptation to “play hooky” when people feel picked on or just plain miserable. Scheduled vacations are fine, but unplanned absences can drive employers’ costs up, creating a need for replacement/substitute employees, causing even higher stress levels between team members, and lowering overall employee performance. 

Turnover is another, longer-term result. No one really wants to stay in a toxic environment any longer than necessary. Whether you know it or not, there may be a stream of people just waiting for an opportunity elsewhere before they walk out your door. This most often occurs when employees don’t trust the management team or perceive they’re acting unfairly toward others in the workplace. The statistics tell the story. Companies with a healthy corporate culture have less than 14-percent turnover, while those who don’t average nearly 50 percent!

And just like absenteeism, turnover costs money. There are recruiting and training expenses when bringing new people on board, performance costs while they are learning their roles, and often a loss in productivity among the rest of the team who may not be pleased with the turn of events or new staff dynamics. A recent survey estimates the cost of replacing entry-level employees as between 30 and 50 percent of their salaries; nearly 90 percent of companies spend $15,000 to $25,000 to replace a single departed Millennial employee.

Recent studies show that disengaged employees cost their firms $450 to $550 million annually, while the cost of disengaged managers is even more staggering at $77 to $96 billion each year. Conversely, a healthy culture with an engaged workforce typically generates 2.5 times more revenues than their competitors with lower engagement. Customer retention rates are 18-percent higher for companies with highly engaged workforces.

We asked two highly respected business management consultants for their perspective on resolving conflicts in the workplace.

Front-line approach

Jason Bader, a principal of The Distribution Team, tackled the subject of internal staff issues and shared suggestions on how leaders and managers can most effectively resolve conflict within their team.

Bader has more than 30 years of experience in distribution, overseeing operational teams, managing small and large facilities, and serving in an executive management capacity for the last 10 years of his distribution career. He has also served on the board of directors of STAFDA (Specialty Tools and Fasteners Distributor Association) and was the youngest president in the association’s 26-year history.

“People in management positions have to step up and de-escalate conflict,” Bader advises. “When someone comes in blazing and wants to unload on you, you’ve got to take a deep breath and just let them do it. Going toe-to-toe is exhausting; instead, use this as an opportunity to listen to what they’re saying and understand their issue. The best way to do that is to stop talking, listen carefully, and then repeat their points back to them, lowering your tone and slowing the pace as you go along. Be patient; you may have to do this step several times to totally grasp all of their concerns.”

Among many people’s pet peeves are when people don’t seem to be listening to them, or when managers are playing favorites.

“This is where little things can turn into something much bigger,” Bader notes. “It’s up to good leaders to get ahead of the problem. You can’t feel entitled to just ‘run the show’ because you sign their paychecks. That’s not the way to gain loyalty and dedication. You’ve got to show your team that you have their back and have their best interest at heart.

“To do that, you need to make yourself available and ensure that your team feels safe to enter that ‘open door’ you say you have. Once they’re in front of you, employees need to know that you are really listening. When they’re speaking, give them your full attention. I often recommend taking notes as they speak. Active listening is key in resolving conflict.”

One of the ugliest scenarios can occur when there is an inner-office dispute between team members. To successfully resolve that type of issue without causing even further damage, leaders must ensure their decisions can’t be taken personally.

“Don’t ever pit employees against each other or make one feel unheard,” Bader states. “Protect the stability of your team by ensuring your decisions don’t appear personal. Instead, refer back to the core values of the company. Point to your values, mission, and vision when settling disputes, and choose the position that best reflects them. By doing that, no one can accuse you of showing favoritism.”

Bader acknowledges that while ideally these types of conversations should occur in a private setting, sometimes you don’t have that option. “In those cases, you just have to drop your ego and let the person vent,” Bader says. “However, with all that said, in the rare instance that someone on your staff is creating conflict just for sport, you need to terminate their employment before they can wreak havoc on your company.”

Many times, employees aren’t actually angry with their manager or colleagues. Their frustration can often be traced back to a new pressure they feel from something in the workplace or within their own lives.

“I also recommend that, as leaders, you train your team in appropriately dealing with conflict. For example, your delivery drivers probably encounter these issues more than anyone else in your organization. Do role-playing exercises with your drivers on scenarios they may encounter so they are prepared to handle them as your ambassadors in the field.”

In some situations, though, purposeful conflict isn’t necessarily a bad thing. “Your sales team is probably full of competitive people, so you’re inevitably going to have some conflict on occasion,” he explains. “It’s important to emphasize that you’re all working together to achieve the same goal. Once that belief is instilled, their competitive natures will be a huge asset to the company.

“For that reason, I don’t usually recommend having sales contests. You’re setting yourself up for issues. Instead I encourage clients to set a team goal and offer a team reward. I’m a huge believer in event-based rewards — group activities like bowling or ball games can enhance camaraderie, but everything in moderation. It shouldn’t be at the expense of people’s time with their families.”

Bader notes that many of the same tenets apply when issues arise with vendors or customers:

Slow down the conversation

Ensure the other person knows you’re listening

Take the emotion out of the discussion by staying true to your company’s core values

Define the identifiable point at which your values won’t stretch beyond

“If you stick to this method of conflict resolution, you have the best chance of avoiding more serious trouble for yourself and your organization,” Bader remarks. “Just because you may not agree with someone on a particular point doesn’t mean you can’t get along or should stop doing business together. But if they aren’t working toward the same goals as you, it’s okay to fire an employee, customer, or vendor.

“Any time there is conflict, it is stealing resources from your company — primarily the time you and anyone else involved must spend working through it — that could be focused on profitability and productivity,” Bader says.

Preserve the family

Business management consultant Rich Schmitt has spent much of his career working one-on-one with closely held, family-owned companies in the electrical, plumbing, and hard goods supply chains. He has one clear credo for conflict resolution: Preserve the family relationship first.

Schmitt is President of Schmitt Consulting Group, which he founded after more than a decade of consulting and management experience with a Fortune 100 company. Rich and his daughter, Jen, have gained tremendous respect for the integrity of their work. Part of that is due to their grounded approach of coaching clients through any issues that exist among family members involved in the business before focusing on their companies. 

“Difficult situations can arise when there are multiple siblings or generations,” he shares. “And often the process of destroying the family was pretty far along before they called us, but we’ve always been adamant that family comes first and start them on a ‘reset’ course of re-examining their priorities. Even the most jaded parent or child usually doesn’t want to destroy their family just to be right.”

Family-owned businesses are especially susceptible to generational breakdowns. It can be hard for older generations to let go of the control they’ve had, especially if their opinions are at odds with their descendants.

“The older generation can get offended when the new generation doesn’t follow the same practices,” Schmitt explains. “They often feel like others think they’ve been doing things wrong. In reality, it’s only natural that businesses have to make changes to survive.

“For example, we worked with a father and son who were at odds with each other. The father was very disappointed with the son and didn’t think he was doing the right things. When we looked at the facts and numbers, we saw the business was thriving.  In fact, it was doing better than ever, but the father’s ego was wounded. We spent a lot of time getting the two of them to talk and re-establish their family relationship. In the end, they were able to negotiate a compromise — they agreed to disagree about certain things, but were not going to let it hurt their business,” he recounts.

In some cases, compromise isn’t possible. “Some family members simply can no longer be involved in the business,” Schmitt comments. “That has to be explored if the family ultimately wants to retain ownership of the business. In situations when there is no way for family members to exist within the business, we recommend that they sell. It’s not optimal, but it usually can help save the family relationships.”

Successful family businesses are especially susceptible to generational issues because the older generation has done such a great job building the business that their children don’t realize how hard they worked to achieve that success. 

“The new generation really doesn’t understand the ins and outs of the business’ operations,” he explains. “They have benefited from the success of the business and the country club lifestyle, but haven’t participated in the difficult activities required to maintain its growth. 

“Parents think they’re doing the right thing by shielding their children from the sacrifices they had to make,” Schmitt states. “Unfortunately those grown children think they can walk into a leadership role without putting much time or effort in. This type of arrogant and/or uninformed attitude creates a terrible atmosphere for the rest of the team. Sometimes it’s so bad that it will actually ruin the business.”

Instead, Schmitt strongly believes in the traditional mentoring process when bringing the next generation into the business. The mentoring doesn’t necessarily have to come from a parent; often non-family executives are a better choice.

“Many of the most successful new leaders I’ve encountered have started out in the warehouse and at the counter,” he recalls. “It’s important for them to see what all of the employees do on a daily basis and learn the business from the ground up. I’m a proponent of having kids work at McDonalds or a similar entry-level job for a while. It’s a great learning experience for anyone. They’ve got rules, schedules, managers, training etc., that are a part of most jobs.  

“At the same time, I have seen some very unhappy people over the years who felt like they were forced into joining or taking over the family business. I encourage parents to groom their children along the way for the business — but then give them a choice of whether they want to make it their career,” he says.

Schmitt believes that clear communications — and what he terms “interactive stream of consciousness coaching” — are significant factors in avoiding issues between family members.

“When you’re operating above board, have outlined expectations and objective measurements, there is very little room for miscommunication,” he explains. “That is enhanced when you are in tune with all the activities of your team and provide them with open feedback. If there is an issue, you can’t wait until a review or a board meeting to tell someone they’re not meeting your standards.

“Ultimately, you want everyone around you to operate in an ongoing discussion mode to keep tensions from boiling over. I believe most people want to do a good job. If they don’t know what the expectations are, they may be working their tails off, but incorrectly,” he warns.

The question of who should be the leader is often a decision family-owned businesses must tackle, and the results can create hard feelings if not handled correctly.

“Most parents love all their children equally so it can be very difficult for them to pick one over the other,” he remarks. “There is so much to navigate when selecting and then announcing the new leadership, an outside consultant can be very beneficial. A third party can test various skillsets and make recommendations that parents might not see. It also decreases potential repercussions by removing the personal aspect and being able to blame on the consultant.

“That said, it is almost always obvious how leadership should be divided among siblings,” he comments. “There is typically one who is the right fit to lead the company, and the other siblings usually have their own talent sets that then fill other positions within the organization.”

No matter who the conflict is with or between, Schmitt recommends these actions to help ensure constructive human interactions both family and non-family:

 

Actively listen. Take notes. Make eye contact. Pay attention to their body language.

If you’re on the phone, let them know you’re taking notes and listen carefully to their tone of voice.

Summarize what you heard with a statement like “I understand I/we did this wrong.”

Ask how they would suggest the problem be solved. 

Lay out a plan of action and follow it. Do what you say you’re going to do to gain/regain credibility.

Be sincere.