Leadership | Aug 1

Leading through conflict

Leadership | Aug 1

Conflict is an inevitable part of any business, but in small companies, especially those with close-knit teams or family ties, the stakes can feel higher

Ian Wylie Journalist, broadcaster, educator

Reading Time 4 minutes

Disputes can quickly become personal. Yet, conflict is not inherently bad. Handled well, it can even spark innovation and stronger teamwork. So, what are the steps to managing conflict constructively and preventing it from undermining the health of the business?

Recognise the nature of conflict

Not all conflict is harmful, says Randall Peterson, professor of organisational behaviour at London Business School. Peterson recently co-authored a Harvard Business Review article that identified four common types of team conflict: solo dissent, dyadic disputes (between two people), sub-group clashes, and whole-team ‘blame games’.

‘We tend to over-focus on relationship conflict when it’s unlikely to get in the way,’ he says. ‘If success of the team or business is your success, you can work with someone you don’t particularly like, and when the team wins, you’ll dislike them less.’ This perspective is crucial for small business leaders, who often assume every disagreement signals a breakdown in relationships. Instead, Peterson suggests that the real challenge often lies in those dyadic disputes between two individuals. These can ripple out and affect the entire team if not addressed early.

Understanding the nature of the conflict is the starting point, says CreamHR founder Anthony Sutton, who brings not only professional expertise when advising SMEs, but personal experience too. ‘Small business stories are full of examples of relationships being destroyed and families falling out. Early on in my own business life, I experienced this first-hand with my former best friend,’ shares Sutton. He advises leaders to look inward first: recognise how your own emotions might influence your approach to conflict. This self-awareness is essential to managing disputes objectively and fairly.

Tackle issues early

Both Sutton and Peterson stress the importance of early intervention. ‘The best conflict management is avoiding dysfunctional conflict in the first place, which means catching it before it escalates,’ says Peterson. ‘So be pre-emptive, talk about issues when they’re a minor irritation, and don’t wait for them to get urgent or serious because you’ll get emotional and so will they.’

His practical suggestion is to dedicate a few minutes at the end of significant meetings to reflect on how the team performed and what improvements can be made. This proactive communication helps to surface small issues before they grow into larger disputes.

Sutton warns leaders not to ignore the warning signs that healthy debate is tipping into harmful conflict. ‘Early warning signs are when emotions are becoming a little more obvious, comments become a bit more personal and the noise level has increased,’ says Sutton. He urges leaders to step in at this stage rather than waiting for tensions to escalate. Unresolved issues rarely dissipate on their own.

Focus on positive outcomes

Creating clear boundaries and shared objectives is another of Sutton’s recommendations. He suggests all parties agree on what they hope to achieve. Focus on reaching a positive outcome, rather than dwelling on personal grievances and establish ground rules, including what consequences will follow if those rules are broken. ‘It’s very sensible for whatever has been agreed to be confirmed in writing so that there’s a record of the outcome,’ he adds, ensuring everyone has clarity on how the conflict was resolved.

Focus on the collective good of the business. ‘Whenever a discussion tips over from doing what is right for the team or business into “I want to win this argument” then stop right there,’ urges Peterson. ‘Refocus the discussion on what is right for the team or business.’ This mindset can help leaders and employees separate personal feelings from professional priorities.

In some cases, a neutral third party may be necessary. ‘Sometimes the situation can be almost impossible,’ says Sutton, ‘but a third party can facilitate a discussion to enable all parties to have their say in a controlled manner, with the facilitator being the control.’ This can be particularly helpful in family businesses or tight-knit teams where personal relationships can cloud judgment.

Build a culture of openness

Beyond dealing with individual disputes, SME leaders should focus on building an environment that prevents conflict from becoming destructive. ‘Create a culture where openness and honesty are the norm,’ says Sutton, ‘where people can speak freely without fear of recrimination and where people respect one another even if they have different opinions.’

Peterson says structured communication and team reflection can go a long way toward fostering a healthier environment. By routinely taking time to ask how processes can be improved, leaders encourage a team mindset and reduce the likelihood of conflicts festering.

Ian Wylie Journalist, broadcaster, educator

Ian Wylie is a journalist, editor, and broadcaster for the Financial Times, Guardian, BBC, Monocle, and others. For 16 years he was a staff writer, feature writer, and section editor at The Guardian newspaper. He also teaches on Newcastle University’s undergraduate and postgraduate journalism programmes.

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