As UK politicians remain in conflict, businesses across Wales continue to grapple with the decisions they need to take to secure their own long-term futures. As the Brexit deadline looms, Sarah Case, director at financial and professional advisory firm MHA Broomfield Alexander, explores the role of conflict in the development of business strategies and how it can be harnessed as a force for good.
It is essential to understand that conflict affects all businesses, large or small, simple or complex. It can also present itself in many forms – conflict between owners and managers, management and workers, with customers, suppliers or regulators. It can be overt and visible, but also subtle and clandestine.
The dictionary defines conflict as “an active disagreement between people with opposing opinions or principles”, which is something that can happen regularly in business environments. Two parties can effectively be on the same side and even working towards shared goals but differ in their views about the best way for the organisation to get there.
As financial and professional advisors to businesses in a range of different sectors, including charities run by management teams that also have to answer to boards of trustees, we know that owners and managers are not only expected to identify where conflict exists, but also understand how it can affect their organisation. They are often relied upon to steer a path through the various conflicts that arise, at the same time as dealing with all the associated issues effectively and appropriately, to the satisfaction of everyone involved.
Whilst conflict is typically seen as a negative influence on a business, we have also seen instances where it can be harnessed and used for positive purposes. Looking back, lots of owners can identify where conflict acted as a catalyst for a change within their business that led to new opportunities and enhanced performance. Indeed, many commentators agree that conflict, if managed effectively, is actually an essential ingredient in a successful and sustainable business.
One of the most frequent and visible sources of conflict is the pressure that comes from the different strategies that businesses need to employ to meet the needs of today, but also prepare and cope with the demands of tomorrow. The thorny issue of money is often a root cause – whether a business should dip into its cash reserves, or access external funding to pursue an opportunity to introduce a new product or service, hire more staff or access a new market.
Businesses make decisions every day. Some are more important than others, but human nature will dictate that there is rarely unanimous support for those that involve a material change to the way a company conducts its business. Research suggests that the most successful businesses are those that can call on a diverse pool of skills and experience – which usually means an array of personalities and attitudes to risk and change. This mix inevitably leads to disagreement and subsequently to conflict.
In all aspects of life, conflict encourages debate. In a business environment, there is a framework within which that debate plays out – there are management structures, team and board meetings, office politics and key influencers. In businesses where relationships are based on mutual respect and an appreciation that different individuals bring valuable ideas and opinions, this can be a healthy debate. It can enhance the planning process and encourage sound research that leads to good, evidence-based decision making. After all, management teams are not there to rubber-stamp a business owner’s decision but, like a good political opposition, they should challenge their thinking and play devil’s advocate.
Conflict can also lead to innovation. If disagreement occurs between ‘good’ people in a business, that usually means there is room for an alternative way forward. This could mean a compromise approach or a way to pursue two courses of action simultaneously – for example, a business can create a ‘special projects’ team to pursue a specific opportunity, with access to a ring-fenced budget or form a strategic alliance with another business that is prepared to share the risk involved in a new venture.
There is, however, no denying that conflict can be a destructive force within a business environment and leaders rarely set out to initiate it. It can be time-intensive, demoralizing for the team and put important relationships at risk. Sometimes, a helpful way to resolve conflict around a new strategy or an important decision is to bring in a fresh pair of eyes. Some businesses may turn to a non-executive director, while others will appoint an external advisor who knows their business or industry and can take a dis-passionate view of the situation. Very often, the advisor simply asks the right questions and helps the business to reach its own decision about the best way forward.
There is one common factor that often determines whether conflict in business can be harnessed for positive change – and that’s communication. Successful business owners and managers are generally good communicators and, especially in conflict situations, employing these skills can mean the difference between success and failure. Can you ensure that people throughout the business feel that their voices are being heard, show that you are listening to different opinions and taking them on board? Can you encourage creative thinking whilst reassuring other staff that the business is not over-stretching itself? Are you able to give staff the freedom to explore different ideas and ways of working, while keeping the business as a whole on the right track?
The presence of conflict can lead to owners and managers developing effective communication strategies; it can promote greater understanding of and empathy between colleagues and, crucially, it can benefit a business by leading to better planning and superior decision-making. Although it may not all be plain sailing, it’s like the old saying…you can’t make an omlette without breaking any eggs.
This appeared as an article in the business pages of the Western Mail on 8 February 2019.