Workplace Disharmony And Conflict Directly Costs Australian Businesses Upwards Of $10.1 Billion A Year! 25% of employees have reported that conflict or the avoidance of conflict has resulted in sickness or avoidance of work. Absenteeism and presenteeism account for an average of 3.2 days lost productivity per worker per year. Just one team of four people, each earning $60,000/pa, working on a 6 month project that blows out due to interpersonal conflict and the lack of ability to work together could cost you upwards of $400,854! And that’s just one project! This White Paper outlines the causes of conflict and more importantly how you can Anticipate, Prevent, Identify, Manage And Resolve It before it takes a major toll on your business The Cost of Organisational Conflict As a busy executive you’re concerned with getting results. You have multiple projects on the go and containing costs while delivering bottom line results is always on your mind. Competition is fierce and you have to keep ahead of the pack. You’re constantly being asked to do more with less resources and find yourself working longer and longer to just keep your head above water. You rely on your teams to get things done, but are increasingly frustrated with projects that blow out in both delivery times and budgets. And you find yourself spending 30 to 50% or more of your time sorting out “people issues” between your staff, peers or even superiors. Over time you’ve noticed a number of behavioural symptoms in parts of your workforce including: Low morale leading to excessive employee turnover Reduced collaboration Delayed and missed deadlines leading to reduced productivity Quality problems Increased absenteeism, sick leave and even presenteeism (where people turn up but don’t actually contribute) Passive/aggressive or even abusive behaviour Factions, cliques and general distrust in the workplace Increased customer complaints You know that you need to do something, or things will just keep getting worse until they spiral out of control and you have a major crisis on your hands. And like it or not, you’ll be blamed! Now you might be thinking, “Things aren’t that bad around here. I know we have some issues, and could improve productivity, but I’m not sure how to go about it…” Whichever camp you fall into, one thing is clear. Every organisation has some form of conflict between different individuals. Whether it’s minor or major, every organisation pays a price for mismanaging it. How much? A study in 2007 by Medibank Private (Australia’s largest private health insurer) found that workplace stress caused by interpersonal conflict cost the Australian economy a staggering $14.81 Billion a year with a direct cost to organisations of $10.1 billion. Now you may be thinking, “This is a huge number, and there’s no way my organisation is a big contributor…” but here are some stark facts. SDI - Personal Strengths Aust/NZ - 2 - Ph: +61 3 6231 4226 E: [email protected] The Cost of Organisational Conflict 25% of employees have reported that conflict or the avoidance of conflict has resulted in sickness or avoidance of work. Absenteeism and presenteeism account for an average of 3.2 days lost productivity per worker per year. Just one team of four people, each earning $60,000/pa, working on a 6 month project that blows out due to interpersonal conflict and the lack of ability to work together could cost you upwards of $350,448. And that’s just one project! Now you may think I’m plucking numbers out of the air, so at the end of this document I’ve detailed exactly how I came to this figure. And I’ve put in a worksheet so you can plug your own numbers in. I encourage you to do so, but be prepared… the answers may shock you. Now before I go into the causes of conflict and what you can do to minimise it, I’d like to make one thing clear. Not all conflict is bad. A certain amount of healthy tension in a relationship leads to increased productivity. Defined as “Opposition”, it’s where two or more people disagree about an idea and engage in a healthy debate. Such debates often generate new ideas and/or improved ways of doing things. It’s only when a disagreement becomes personal and one or other party feels an attack that undermines their self-worth, that disagreement or “opposition” transitions to “conflict”. In other words, we experience conflict when we feel our personal values are being attacked or violated in some way and we feel a sense of disempowerment. Conflict is always an emotional state which directly affects our ability to perform. So why does conflict occur and what can you do to anticipate, prevent, identify, manage and resolve it? Let’s start with the causes of conflict… It all comes down to people. Human beings are a skin bag of emotions. Everyone is different. We all have different value systems, behaviours and ways of getting our needs met. SDI - Personal Strengths Aust/NZ - 3 - Ph: +61 3 6231 4226 E: [email protected] The Cost of Organisational Conflict Your way is not necessarily my way. So while you may act in ways that you think are appropriate, I might find them anywhere from mildly irritating to deeply offensive. And of course the same applies the other way round. Which is where all the problems start. The key to effective personal relationships is understanding people. Both yourself and the other person. Once you understand your own motivation and value system you can get a handle on what triggers feelings of conflict within you. And the same applies to people you interact with. Once you get a perspective on their values, motivations and behaviours, you can see where they’re coming from and be able to engage in healthy discussions without risking they move into conflict scenarios. And should things start to get personal (and you or they feel attacked), how to step back and stop the conflict progressing to the point of no return where relationships get damaged. Unfortunately we’re not born with a manual and the traditional educational system doesn’t teach us how to deal with others effectively so we all get our needs met. Which is where many psychometric tools come in. Designed to help you determine “your type”, these tools try to give you insights into your personality and how you are likely to interpret the world around you. You may well be familiar with some of them including Myers Briggs and DISC. Great tools in their space, but they’re either too complex for most people to understand the results or too simplistic to be meaningful. And none of them take into account one simple fact. How you behave under “normal” circumstances – i.e. when things are going well is very different to how you might behave when you move into a “conflict” scenario. In other words your behaviour can change radically when under stress caused by conflict and it’s your ability to a) understand when this is happening to you b) recognise when it’s happening with someone else c) deal with it appropriately that will help prevent escalation and damage to the relationship. SDI - Personal Strengths Aust/NZ - 4 - Ph: +61 3 6231 4226 E: [email protected] The Cost of Organisational Conflict Which is where Relationship Awareness Theory can give you new insights into your behaviour both under “normal” circumstances i.e. when things are going well, as well as when you experience conflict. Relationship Awareness Theory is a model developed by psychologist Elias H. Porter Ph.D., a leading psychologist who worked alongside other luminaries in his field including Carl Rogers and Abraham Maslow. Relationship Awareness Theory is founded on four key assumptions: a) Behaviour is Driven by Motivation for Self-Worth. We act in the way we do because we want to feel good about ourselves – our behaviour is simply a vehicle to help us satisfy an underlying value, need or goal. And when we feel a core value, need or desire is being undermined or undervalued, we start to feel threatened and potentially move into conflict to protect ourselves and our feelings of self-worth. b) Motivation Changes in Conflict. We tend to behave differently depending on whether things are going well or when we feel we are faced with conflict or opposition. Porter postulated that conflict occurs in three distinct and progressive stages. Stage One: We focus on ourselves, the problem and the other person. Stage Two: We focus on ourselves and the problem (we’re no longer concerned with how the other person is feeling). Stage Three: We focus on ourselves and how we can protect ourselves. c) Personal Filters Influence Perception. We naturally tend to perceive the behaviour of others from our own perspective. For example someone who is very concerned with justice and fairness will have a heightened or distorted awareness of the "unfair" behaviour of others. And the so called “unfair” person may think the former too rigid and unyielding – potentially leading to disagreement or conflict. d) Personal Weakness are Overdone Strengths. A personal "weakness" is simply the overdoing or misapplying a personal "strength". For example the ability to see all sides of an argument and take into account everyone's views before making a decision might generally be considered to be a strength, but could also be SDI - Personal Strengths Aust/NZ - 5 - Ph: +61 3 6231 4226 E: [email protected] The Cost of Organisational Conflict seen as a weakness if it paralysed decision making or prevented you from acting decisively in a crisis.