E-Paper
A fact-finding mission
Multiple options can lower chances of inter-personal conflict, say Aruna Raghawan and Dr. Jayant Bajpai.
Multiple options can lower chances of inter-personal conflict, say Aruna Raghawan and Dr. Jayant Bajpai.
Some managers believe that working with too much data will increase inter-personal conflict by expanding the range of issues for debate. We found that more information is better — if the data are objective and up-to-date — because it encourages people to focus on issues, not personalities. At Alpha, for instance, the members of the top management team typically examined a wide variety of operating measures on a monthly, weekly and even daily basis.
They claimed to 'measure everything'. In particular, every week they fixed their attention on indicators such as bookings, backlogs, margins, engineering milestones, cash, scrap and work-in-process. Every month, they reviewed an even more comprehensive set of measures that gave them extensive knowledge of what was actually happening in the corporation. As one executive noted, "We have very strong controls."
Alpha's team also relied on facts about the external environment. One senior executive was charged with tracking such moves by competitors as product introductions, price changes and ad campaigns. Another one followed the latest technical developments through his network of contacts in universities and other companies. “We over-M.B.A. it,” said the CEO, characterising Alpha’s zealous pursuit of data. Armed with the facts, Alpha’s executives had an extraordinary grasp of their business, allowing them to focus their debate on critical issues and avoid useless arguments rooted in ignorance.
At Bravo, we found a similar dedication to current facts. The first person the new CEO hired was an individual to track the progress of engineering development projects, the new-product lifeblood of the company. Such knowledge allowed the top management team to work from a common base of facts.
In the absence of good data, executives waste time in pointless debates over opinions. Some resort to self-aggrandisement and ill-formed guesses about how the world might be. People — and not issues — become the focus of disagreement. The result is inter-personal conflict. In such companies, top managers are often poorly informed, both about internal operations, such as bookings and engineering milestones, and about external issues such as competing products. They collect data narrowly and infrequently. In these companies, the Vice Presidents of Finance, who oversee internal data collection, are usually weak. They were often described by people in the companies we studied as ‘inexperienced’ or ‘detached’. In contrast, the Vice President of Finance at Delta, a company with little inter-personal conflict, was described as being focussed to feel “the constant pulse of how the firm is doing.”
Management teams troubled by inter-personal conflict rely more on hunches and guesses rather than on current data. When they consider facts, they are more likely to examine a past measure, such as profitability, which is both historical and highly refined. These teams favour planning based on extrapolation and intuitive attempts to predict the future, neither of which yields current or factual results. Their conversations are more subjective. The CEO of one of the four high-conflict teams told us his interest in operating numbers was ‘minimal’, and he described his goals as ‘subjective’. At another such company, senior managers saw the CEO as a ‘visionary’ and ‘a little detached from the day-to-day operations’. Compare those executives with the CEO of Charlie, who had a reputation for being a ‘pragmatic numbers guy’.
There is a direct link between reliance on facts and low levels of inter-personal conflict. Facts let people move quickly to the central issues surrounding a strategic choice. Decision makers don’t become bogged down in arguments over what the facts might be. More importantly, reliance on current data grounds strategic discussions in reality. In the absence of facts, individual’s motives are likely to become suspect.
Some managers believe that they can reduce conflict by focusing on only one or two alternatives, thus minimising the dimensions over which people can disagree. But, in fact, teams with lower incidences of inter-personal conflict do exactly the opposite. They develop multiple alternatives, often considering four or five options at once. To promote debate, managers will even introduce options they do not support.
For example, Charlie’s new CEO was determined to improve the company’s lacklustre performance. When he arrived, new products were stuck in development and investors were becoming anxious. He launched a fact-gathering exercise and asked senior executives to develop alternatives. In less than two months, they developed four. These included:
Sell some of the company's technology
A major strategic redirection
Use base technology to enter a new market
Redeploy engineering resources and adjusting the marketing approach
Sell the company!
Working together to shape those options enhanced the group’s sense of teamwork while promoting a more creative view of Charlie's competitive situation and its technical competencies. As a result, the team ended up combining elements of several options in a way that was more robust than any of the individual options.
The other teams we observed with low levels of inter-personal conflict also tended to develop multiple options to make major decisions. Alpha, for example, faced a cash-flow crisis caused by explosive growth. Its executives considered, among other choices, arranging for lines of credit from banks, selling additional stock and forming strategic alliances with several partners. At Bravo, managers explicitly relied on three kinds of alternatives:
Sincere proposals that the proponent actually backed
Support for someone else’s proposal, even if only for the sake of argument
Insincere alternatives proposed only to expand the number of options
There are several reasons why considering multiple alternatives may lower inter-personal conflict. For one, it diffuses conflict — choices become less black and white, and individuals gain more room to vary the degree of their support over a range of choices. Managers can shift positions more easily without losing face. Generating options is also a way to bring managers together in a common and inherently stimulating task. It concentrates their energy on solving problems and it increases the likelihood of obtaining integrative solutions — alternatives that incorporate the views of a greater number of decision makers. In generating multiple alternatives, managers do not stop at obvious solutions. Instead, they continue generating further — and usually more original — choices.
Based in the US, the authors Aruna Raghavan and Dr. Jayant Bajpai run a consultancy on benchmarking total reward and assessment policies with reference to practices at Fortune 1000 companies
