The course of any relationship does not always run smooth, and working relationships are no exception. Conflicts are inevitable, whether it’s a disagreement about the direction of leadership, personality clash, or an alcohol-fuelled slur at after-work drinks.
One thing we can learn from Jeremy Corbyn’s recent experience, though: don’t ignore it, because it isn’t going to go away.
James Biggin recalls how conflict in his family-owned branded merchandise company, Steel City, nearly made them bankrupt. “Over the recession, we really struggled. It was a really dreadful place to be,” he says. “We were heavily overdrawn. In our industry, when we buy some pens, we’re selling them to a customer; we’re not stocking anything. To have an overdraft in that situation, looking back now, was madness.”
Too many cooks
The business was founded by Biggin’s father and a partner in 1980. Biggin joined the team in 2003, and noticed it wasn’t running as efficiently as it could be. “I started to see straight away that systems were quite loose, but I was very new, so I just left it,” he says. “We carried on doing what we always did, which is the way family businesses often work.”
When his father retired in 2008, he took over as managing director. The only catch was he wasn’t the only one; a senior sales employee had been promoted into the role as well, to protect the accounts she looked after. Both felt they were due the promotion. It couldn’t have come at worse time. The crippling economy was taking its toll on the company’s finances and “the working relationship with [the other MD] was very strained. We didn’t agree on any level,” he explains.
It was a hard couple of years, with an unpleasant environment throughout the company and high overheads putting them in a tough financial position. To try and turn things around, Biggin made three redundancies from the 10-strong team and introduced a digital business management system to handle the company’s operations. This saved employees considerable time and showed where money was being lost.
But such knowledge came at a cost: “The one downside was that it created conflict, because we were finding out what the truth was about the business,” he says. In the end, his co-MD left in the summer of 2012. Biggin immediately increased the number of the team involved in sales, and cut costs by around one third. “Within nine months we turned a loss making into a profit, and we’ve made profit ever since,” he says.
Biggin’s experience shows how destructive a toxic relationship between senior team members can be. “If I could go back, I would engineer an opportunity for those involved to lay their cards on the table,” he says. “Tackling conflict early on is vital. It’s better to get it out in the open or there may not be a business for anyone to work in.”
Open communication is key
Unfortunately, personality clashes are not uncommon between employees either. James Tilford, founder of online estate agent CastleSmart, says he experienced problems when the web engineer and designer disagreed over the design for the company website’s homepage. “Both are very talented people and headstrong people in their own fields, which I assume is what caused the clash,” he explains. “The designer would argue that the design was not being implemented correctly, making his work look shoddy, and the web engineer would argue the opposite.”
Eventually, Tilford says he told them that if they couldn’t reconcile their differences, he’d have to let both of them go. “This was quite a drastic decision, but we were trying to get to market as quickly as possible and this was holding us back.” Thankfully, it was enough for both employees to compromise.
Business consultant Lynn Scott says communication is important, but all parties have to be open to it. “When there’s a clash between two people, if the individuals are willing to say, I know I’ve got a part of play in making this better and I’m happy to have a conversation, then you’ve got an opportunity to move forward,” she says. “But if one is completely unwilling and thinks it’s all the other person’s fault, then that’s a really hard place to make any reconciliation from.”
According to Graham Robson, a consultant and mentor for SMEs with Business Doctors, the rapid growth that SMEs and startups often experience is a ripe breeding ground for conflict, especially if the owner hasn’t gone through the formalities of outlining the goals of the business and detailing job responsibilities.
“Typically what happens is the SME owner is very involved, because no one can do it as well as him or her,” he explains. “[Then] you have a workforce whose roles and responsibilities are not clearly defined, and their skill sets might not suit the role they’re in. So the scene tends to be set for conflict.”
Tackling the company culture
One of Robson’s clients, he says, is a tradesman running his own business. What started as private client work has now grown to a business with £1.6m turnover, made up of mainly corporate contracts. This all sounds great, except the workers aren’t happy. For them, the private client work was a pretty good gig – the contractor work demands higher standards of professionalism and longer hours.
“The staff don’t know the direction of the company,” Robson says. “And because that’s not been articulated, they feel disconnected.” The way around this, he adds, is for entrepreneurs to explicitly outline the values and the vision for the business, so the team is fully aware of what your plans. Of course, it’s much easier said than done, and changing the culture of any company can have its casualties.
“You’ve got to be willing to lose people,” says James Johnson, CEO of recruitment company Nicoll Curtin. Johnson recently made a move to improve the gender diversity of the overwhelmingly male executive team in his company by 2017.
Surprisingly, one of the biggest barriers to his plan was inappropriate banter, which had become prolific in the office. Johnson says he sat down with all of the managers and agreed what was and was not appropriate to say. “It’s probably the single most important thing we addressed,” he says, adding that the changes didn’t go down well with everyone. “No one explicitly said that [was why], but we did have quite a large number of managers leave.”
However, the firm has hit their goal and 42% of their management team was female by the end of 2015 – just 12 months after the target was set. Ultimately, Johnson says the company culture has been greatly improved, despite the tension along the way. “There was some conflict, [but] that led to change. It doesn’t have to be nasty. If you’re honest and clear with people, they can make a decision about whether it’s something they want to be a part of.”
Content on this page is paid for and produced to a brief agreed with Kia Fleet, sponsor of the Guardian Small Business Network Accessing Expertise hub.
