LAW
7
EMBRACE RESPECTFUL CONFLICT
IN MOST ORGANIZATIONS, PEOPLE squabble over creative differences, turf, and budgets. They butt heads over all manner of political issues, big and small. The more people there are, the more matters they have to fuss over. It’s just a fact of work—and life. The difference between conflict in a dysfunctional company and in a high-trust organization is not whether there’s conflict, but how people deal with it.
There is a distinction between conflict that works and that which does not. Where debate is a pretense, it gets the organization nowhere and does more harm than good. By contrast, if the debate is truly a process whose objective is to find a good answer within an open marketplace of ideas, then it is powerfully trust-building.
A standard of mutual trust and respect, where the best idea—not the most powerful presenter—wins, allows disagreement to generate better ideas. Out of high-trust discussion come not only new ideas but also more trust. And that increased trust makes debate less threatening. It’s a virtuous cycle.
Steve Jobs could be gratuitously condescending and impatient. But at Apple (as noted in Law #2), his emphasis on freewheeling discussion helped the company invent game-changing products. Jobs knew that corporate consensus—choosing the middle ground, splitting the difference among competing ideas—is a formula for incrementalism, the antithesis of creativity and innovation. If Jobs had believed in that approach, we might all still be using iPods.
Robust debate prevents companies from languishing in the status quo. Just ask IBM, which didn’t anticipate Microsoft. Or ask Microsoft, which didn’t anticipate Google, the rise of mobile, or the rebirth of Apple.
Technological disruptions depend on debate. In The Creative Priority: Driving Innovative Business in the Real World, industrial designer Jerry Hirshberg (Nissan cars, TaylorMade golf clubs) coined the concept of creative abrasion. “Friction between individuals and groups is typically thought of as something harmful,” he wrote. “Creative abrasion recognizes the positive dimensions of friction, the requisite role it plays in making things go. Without it, engines would not work; a crucial source of heat and electricity would be eliminated.” What the best organizations do, according to Hirschberg, is recognize and transform “pregnant moments of friction and collision into opportunities for breakthroughs.”
To outsiders, an organization with creative abrasion may appear to be conflict-ridden. But inside, leaders know they’re harnessing different viewpoints to power progress. As in most functional human relationships, people in high-performing organizations work through friction in a spirit of mutual respect. When opposing points of view are contested freely, the result is often an outside-the-box solution. Being proactive in dealing with differences, though uncomfortable, roots out fuzzy thinking, faulty practices, and political maneuvering. It can accustom people to working through differences instead of working at cross-purposes, and it only happens when a level of trust has already taken hold. Facing conflict requires courage. As Peter Drucker wrote, “Whenever you see a successful business, someone once made a courageous decision.” Many times, courageous leadership means not running from problems. When trust is strained, people avoid the pain of dealing with problems. Instead, they keep their mouths shut or take half measures—or simply run away.
But in a high-trust organization, people run toward the fire rather than just hope it will put itself out or that someone else will handle it. After all, it’s their own house that’s at risk, built through years of overcoming challenges, winning, and celebrating with people they like and trust. I recently served as a board member of Ladder Capital Finance, a commercial real estate investment business. It was founded by Brian Harris, whose father was a Brooklyn firefighter. Brian’s father indelibly taught his son, “If you see a fire, run toward it, not away from it”—and I’ve tried to adopt that worldview.
Let me tell you about my own biggest business mistake, an error rooted in my own failure to run toward the fire when taking responsibility might have made all the difference. In late 1986, many people in U.S. commercial real estate—caught up in the industry’s big gains at the time—failed to notice it was headed for a crash. But as a senior partner at the world’s largest private real estate developer, Trammell Crow Company in Dallas, I’d had a grim premonition. The firm had more than $10 billion in leveraged real estate assets and was spending billions more each year buying and building new properties. All over the world, we had transformed skylines and landscapes, created jobs and wealth. It was a heady time, and not an easy one in which to pause and ask: How long would it be until we were careening down a mountain of debt?
We had always been driven by the credo of founder Trammell Crow, who liked to remind young partners, “In the history of the world, the seller has always been wrong.” Most of us had grown up in a system that was allergic to selling, or even to borrowing less than we could, so we plowed ahead doing what we did best: building more skyscrapers, retail shopping centers, and warehouses. But from where I sat, we wouldn’t survive unless we applied the brakes in time. I argued for serious pruning of our development activity. Eventually, my pleas to sell every nonstrategic asset conflicted so directly with Trammell’s philosophy that I failed to do what I should have started with: Make my case to him face-to-face.
Instead, Trammell and I tiptoed around each other—each managing the organization with our own respective agendas—until it was obvious to everyone that there was little unity at the top. By the end, I decided to leave the state, opting to commute one thousand miles every week from my home to my office in Dallas rather than squarely face the daily crisis of trust. The real estate market did in fact crash, sending the company into turmoil. Partners jumped ship, and I found myself embroiled in preventable litigation with Trammell (who had been my most important mentor), and with the company (which was now my former employer).
Though the details aren’t important, failing to run toward the fire and be clear about my concerns turned out to be a watershed for me in thinking about handling mistakes and how that affects trust within an organization. My financial analysis had been solid, but I ran from the smoke that meant the fire had already started. In the end, the whole episode may well have contributed to the eventual sale of Trammell Crow Company—not what anyone was hoping for.
My mismanagement of this conflict is, to this day, my worst professional judgment. However, I took from it a valuable lesson about the importance of confronting a difficult reality. I’ve learned as well that when you choose to ignore or run away from bad news, you’re only doing a disservice to yourself, your colleagues, and your family—and you’re violating their trust in you.
In the almost thirty years since, I’ve never stopped reminding myself to seek out and take on conflict, and sooner, not later. When parties disagree openly in a spirit of mutual respect and move toward—not away from—problems, trust grows rather than recedes.
You can convert discord into opportunity by facilitating these three practices:
1. Set the standard that the best ideas win. Any other criterion for making decisions may well be a symptom of low trust. If the best idea loses, it can mean that disagreement is so abhorred that many ideas never get aired in the first place. It could especially mean that input from junior employees or new hires is ignored. When senior management rarely accepts ideas that don’t come from within its ranks, those siloed executives don’t get fresh ideas. In trust-poor enterprises—which frown on debate, or even punish it—the tranquil veneer of equanimity may reign, but it’s the type of quiet you might find in a hospital. Just below the surface simmers a much worse kind of disease than the fever that may result from conflict. Deprived of the information that comes from expressing disagreement along the way, such organizations allow problems to fester, with no route to needed change. The suppressed conflict always finds its way to the surface—later, and in more costly forms.
In high-trust cultures, on the other hand, leaders don’t just look for employees who learn to toe the line. Quite the contrary: When great ideas come from less-senior team members, high-trust leaders aim the spotlight at the unexpected contributors. That kind of celebration encourages bold thinking from all quarters. Where the best ideas win, more good ideas surface.
2. Think like a mediator, not a judge. An important step toward resolving differences is to make sure team members are heard. That means being a good, neutral listener—listening without an agenda. Before offering feedback, be sure you’ve heard all sides. Strong leaders hold back as much as they speak up. At times, leadership can mean silence. When others are allowed to speak, trust grows.
When either party in a conflict walks away steaming with resentment, the whole organization suffers. So, while you want to exercise the wisdom of a judge, aim also to reflect the attitude of a mediator: Instead of assigning fault or picking sides, look for common ground to create win-win solutions. It may be that by seeking more viewpoints and allowing perspectives to clash, the group can settle on a solution built on diverse perspectives. Sometimes there’s no way to square a circle, and it’s counterproductive to try to harmonize that which is irreconcilable. But the point is to think twice before declaring an impasse, and along the way to ensure that everyone has been given a fair hearing.
3. Don’t let tensions boil over. Suppressed strife invariably blows up. Disagreements happen. So process conflict along the way. If there’s a safety valve on the pressure cooker, there won’t be an explosion.
EVEN AFTER FOLLOWING SUCH counsel, it’s inevitable that some conversations will end in hurt feelings. When people are invested in their ideas, they care about outcomes and put themselves on the line. But high-trust leaders realize this is a good thing and that conflict is infinitely better than apathy. Fostering a culture in which conflict is processed openly is vital not only to innovation but also to the creation of trust. But the tension must be faced squarely and discussed openly. You can’t fear the fire.
Coercive leaders who quell debate, spackle over differences, or run from fires can put a temporary stop to conflict, but they have merely increased the likelihood that the superficial peace achieved will ultimately explode in trust-annihilating aggression. Moving toward the fire, on the other hand, ensures that the best ideas win and allows leaders to douse any flames that threaten the organization.