How to defuse disputes

Neither side is willing to see the other's perspective each maintains that they are right and the other is wrong. As a result the organisation is paralysed. Messages from the top team are confused.

There is a lack of clarity about the direction of the business, and as the situation progresses, increasingly extreme positions are adopted. For each side even to try to understand the other's point of view would be to compromise their integrity.

According to Michael Greenspan of business Psychologists Kiddy and Partners, intense conflict of the kind described above is not unusual in the investment banking industry.

Investment banking's combination of high IQs, high stress and powerful egos does not always make for a peaceful environment. And conflicts may be seem to be getting worse these days.

There has long been tension in some areas - trading and sales staff spring to mind - but the pace of change in the business world means that conflict is spreading. Rising stress and post-merger disarray are increasing the opportunities for disputes.

Investment bankers may, in fact, be worse at dealing with conflict than others.

With performance closely linked to the bottom line, good interpersonal skills do not rank high on the City of London's wish list, says Jaquie Drake of the Praxis Centre at Cranfield School of Management.

Nevertheless, good interpersonal skills are to be valued, because when conflict is taken to its logical conclusion there is invariably a loser: City outplacement firms abound with individuals who have mismanaged disagreements.

But, there are disagreements and there are disagreements. Greenspan says that communication between peers in the City is often very direct.

Directness, is not a problem, he says - it facilitates good decision making - but when directness escalates to the point of becoming adversarial, things go wrong.

This is echoed by Drake: conflict is bad, she says, when it turns into an attack-defend spiral of the kind illustrated in the opening paragraph.

Tackling the Problem

Instead of attacking, Drake advises decoupling the person from the problem. Treat the other person with respect, separate them from the source of conflict, and then the two of you can deal with the problem together. Collaboration is preferable to confrontation.

But collaboration takes effort. Conflict is an iceberg: it may be centred on immediate issues, but below the surface there are an awful lot of hidden layers.

In their book Resolving Conflicts at Work Kenneth Cloke and Joan Goldsmith suggest that, personalities, emotions, needs and desires, self-perception and self-esteem, hidden expectations, and finally, that old Freudian chestnut - unresolved issues from the past - all contribute.

Managing conflict with success requires that differences be seen as an opportunity. Instead of insisting that you're right, try talking to your opponent. Collaboration requires that you listen and hear properly what is being said.

Listening

Listening is not a passive activity. Active participation in a conversation is imperative to effective listening. Cloke and Goldsmith provide the following advice for listeners:

• Encourage your opponent towards more open dialogue by saying things like: "Please tell me more..."
• Clarify points that are made - this shows that you are interested in the speaker
• Actively empathise with the speaker, and question them as to their opinion on the best means of reaching a solution
• Reframe "you" statements as "I" statements: instead of saying "You're incompetent", try saying "I feel [whatever] when you [do whatever]."
• Respond to what the speaker is saying in a way that comes to terms with what is being said. Rather than responding angrily or defensively say: "If I understand correctly, you see the problem like this..."
• Summarise what has been said in your own words, and ask the speaker if they agree with your interpretation of their position

By listening effectively to your colleague's perception of their "indefensible position," you will lead the conversation to a more constructive outcome.

Hidden factors in conflict

Listening and speaking are crucial to communication, but communication also occurs intangibly. Be aware of your body language. Crossed arms and legs suggest a negative attitude and that you are closed to the other person's suggestions.

Don't invade the other person's space, face towards them, and try to adopt a more neutral stance.

Resolution also requires an awareness of the hidden parts of the iceberg and their ability to cloud your judgement. Do your accusations of incompetence have any valid foundation, or are they based on your personal dislike of the other person?

Acknowledge and deal with these kinds of negative emotions and try to empathise with the other person's perception of the problem.

"Be willing to accept whatever you find beneath the surface without shame, anger, or judgement. Create empathy through role reversing dialogue," urge Cloke and Goldsmith.

Write down what you would like to say to your opponent, what you think they would say back, what you would say next, and so on. Be honest. And be prepared to apologise for past indiscretions.

Conflict, compromise and collaboration

Resolving conflict is not tantamount to compromise. Compromise in itself can merely sweep issues under the carpet where they will fester until a later date. There are situations in which compromise is a good idea.

If a quick decision is needed and your intentions will not be damaged by compromise, there is for example, little point in persisting to disagree. Equally, where an urgent decision is needed, "aggressive" conflict is justified.

But where a longer-term solution is sought, collaboration will always be the best option.

City time constraints set a limit to the amount of soul-searching that can be done, and it is only in extreme cases of conflict that an emotional purge is likely to be embarked upon.

But, over a period of time, constructive discussion will make your team more efficient, will increase your bonus, and will prevent the pointless recurrence of the same argument.

Next time you're involved in conflict, be honest with yourself: is the dispute wholly motivated by professional concerns?

Bear in mind that a win-win situation is better than a win-lose situation, and frame your statements so that a mutually advantageous outcome is possible.

This way you should be able to stop the downward spiral before it starts.