How can leaders handle internal disputes?

How can leaders handle internal disputes?

Leaders are sometimes called upon to intervene in a dispute between direct reports or peers. This situation can be handled adeptly with some thought, practice, and courage. We can easily mishandle things in the absence of each.

A Case Study

A CEO wrestles with a sales shortfall in the second half of the year. A new subscription-based business model and product are replacing an event-based model, creating a revenue shortfall as the annual subscriptions are recognized over 12 months rather than immediately. This timing difference causes a performance headwind for the company. Complicating matters is an internal struggle between a division leader and a product leader. Both are positioning themselves to take the lead in marketing, sales, and client service in the new world.

The discussions between the two leaders have become heated and progressed to the point that the two can’t be in the same room. The relationship between the respected and capable leaders is fractured, perhaps irreparably.

Both leaders have separately approached the CEO with their solutions and frustrations. The answers have only one common thread—each leader wants the new product line under his control.

Approach 1: The CEO decides with little additional input from anyone, placing the product line under the division head. This is consistent with other company products.

Why this approach may work: The CEO may have a command and control style and understand the problem and the people involved. He makes the informed decision that the division head is best suited to lead the go-to-market plan, with the role of the product head limited to design and testing. To an outsider, the decision may seem complicated, but to the CEO, it’s just another day at the office.

Why this approach may not work: The decision leaves the division head with the burden of finding a way to work with the product head who may be reluctant to throw 100% of his talents and support into the project. This is a prime condition for the kiss of yes to emerge. The product leader nods his head in support but does nothing to help as he passively resists progress. Because of the fractured relationship, both leaders start in a position of low trust. The pressure of increasing sales during a business model change (i.e., subscription-based vs. event-based) will weigh on the leaders and their teams. Everyone will be demonstrating their less useful styles under stress. It may also be fair for people to consider the CEO’s actions and conclude that he abdicated his responsibility to engage and help solve the issue personally.

Approach 2: The CEO speaks to each leader separately, promising opposing outcomes to each to keep the peace. He sends each away to work it out between them.

Why this approach may work: The leaders may realize that the good of the company requires them to set aside their differences and work out a plan that increases sales and ensures the new model works. Both may step back and think about their individual and collective responsibilities to the team and client. Both may realize they can maximize their bonus and long-term incentives if they work together.

Why this approach may not work: Both leaders recognize that the CEO is triangulating and making the situation worse by telling each of them what they want to hear. In this case, the leaders have a fractured relationship. To get there, they likely started with a discussion about their roles which expanded into a pattern of increasingly contentious debates and which brought them to the point of impasse. Given these circumstances, it’s highly unlikely that they will be able to create an environment of mutual purpose and mutual respect and walk out of the room with an answer with which both can live. They need someone to facilitate and mediate who can help them see the bigger picture beyond their self-interest and egos.

Approach 3: The CEO brings both parties together to find a solution and broker peace.

Why this approach may work: The CEO has placed himself in the room with the leaders to find a mutually-agreed solution. This is a display of courageous leadership and a clear signal to everyone that the situation is serious. The CEO may also bring a trained facilitator to support the discussion whose only purpose is to help deliver the best outcome for the parties. They can set the ground rules, including creating a safe environment for everyone to voice their concerns. They can also demand that a solution is found by the end of the meeting, setting the expectation that there is a hard stop for discussion.

By focusing on the outcomes of a successful product launch and business model change, the leaders can discuss how their skills and background may contribute to each area. For instance, the division head may be an expert in sales and marketing while the product head has competency in design and customer experience. The answer may lie in splitting the responsibilities by the value-added skills each brings to the table and defining their contributions to the process. This allows each to focus on their respective areas of competence and requires them to work together to be successful.

Finally, the CEO can be explicit that the two leaders must support the decision made in the room and find a way to help one another and role model behavior for the team.

Why this approach may not work: The CEO may not be skilled at facilitating difficult discussions. He may revert to his command style out of frustration and make it unsafe for the leaders to discuss their views openly. The leaders may not be willing to move from their positions, forcing the CEO to make the command call anyway. Further, the CEO will have another decision to make regarding the future of the leaders if they are unable to work together in the interest of the company.

Takeaway: Personally engaging and gathering the right people with the right skills to facilitate dispute resolution has the highest likelihood of success. Suspending egos can be a difficult task for executives, but reframing issues to serve the broader company interests defines the situation in more solvable terms. Most business issues arise from ineffective communication. A leader who excuses himself from the tough conversations is not leading anyone. And a leader who understands his limitations is able to approach tough discussions with the resources required to reach a successful outcome.