Making the important decisions together. Paris Ramezanpour 4167281082

Making Decisions Together (When You Don’t Agree on What’s Important)

"Most strategic initiatives are run by teams whose members are drawn from around the company — from different functions, different business units, sometimes different countries. When it’s time to make decisions, these teams often run into trouble because individual members’ interests aren’t perfectly aligned. I spoke about the tensions inherent in collaborative work with Jeff Weiss and Jonathan Hughes, consultants with Vantage Partners and authors of a best-selling HBR article that addresses this topic: What Collaboration? Accept — and Actively Manage — Conflict.

Why do so many conflicts arise when people from different functions or units work together on a project?

Jon: Because they have different priorities and metrics for success.  One group’s accountable for managing costs, for example, and another group’s responsible for growing market share. There’s a built-in tension between the two goals — that’s as it should be. These are natural checks and balances. But obviously such tensions can create dysfunctional conflict.

Where do these conflicts tend to arise most often?

Jeff: It always shows up in discussions about budgets and resource allocation. Who will pay for what in a joint project? Will new projects be given priority over existing ones? What project gets the top talent?

For our clients, conflicts often arise when a multi-unit company is bidding for work. If several units with different P&Ls are working on a proposal, they have to sort through which will take a profit or margin hit to make the overall pricing work for the client.

Jon: Some interesting conflicts come up with companies in the technology sector. One unit might see another company as a strategic partner, where a different unit sees it as a major competitor – that’s not easy to sort out. And, if a company with both products and services is developing a solution, the product groups may believe they need to be completely agnostic about what products to recommend – if another company’s product is a better fit for the client, so be it. The product group does not see it that way (to put it mildly). Both sides have a reasonable point of view, but if they can’t engage in respectful conversations about how to balance this tension, it can metastasize.

You recommend developing a common process for resolving these conflicts. What might that look like?

Jeff:  If the people involved don’t have good conflict management skills, or they are moving so fast that they don’t want to deal with the conflict, they quickly resort to escalating it.   Various clients have found it helpful to build conflict-management mechanisms lower down in the organization: a standard method where each party articulates their position, and the interests behind the position. Then they come together  to develop multiple possible solutions, as well as objective criteria for sorting through the best option.

If this leads to resolving the conflict, terrific.  If not, at least they have a shared definition of the problem and some possible solutions to take to the next level of management. Many companies have also developed a standing meeting where the right range of cross-functional leaders get together, or can be called together, on a regular basis to resolve conflict upon escalation.

You also recommend providing criteria for making tradeoffs. What are some examples of those?

Jon: You can look at these issues from any number of perspectives. Here are some that we’ve found useful:

• First ask: What are the core strategic imperatives that should govern this decision? This one often gets overlooked.
• Second (and this is related): Why are we doing this in the first place? Were we trying to get into an emerging market, develop a new capability, or what?
• Third, are the different parties’ risks and rewards structured differently, so that we can find a way that nobody has to give anything up?
• Fourth, is there a way to split the difference? (This can be useful; it can also be dangerous because it can lead to nobody getting what they need.)
• Fifth, if we looked at this from the point of view of the customer (or whatever third party we’re dealing with), would the best answer become clear?

What are the traps groups tend to fall into when making decisions together?

Jeff: We talked about three “myths” in the article: the myth that collaboration happens automatically if you take a team approach. That’s nonsense; it ignores the fundamental differences between business functions and divisions. Then there’s the myth that you can structure incentives to eliminate conflict. I guarantee you, you’ll never get it right. And finally, the myth that some magical organizational structure exists that will get everyone on the same page.

Jon: Here are some others: People tend to frame issues in an unnecessarily binary way — “Should we do X or Y?”  This generally leads to arguments about what is true or false.  Instead, exploring the upsides and downsides of various alternatives is typically much more productive.

Also, attempts to resolve conflicts get hijacked by people’s egos.  Once individuals stake out different points of view on an issue, their energy is focused on being right, rather than finding the optimal answer.

Another common trap: Assuming that a conflict either needs to be resolved by consensus (which can take a very long time!) or that a senior executive will need to step in, autocratically, and impose a solution (which may create a significant risk of poor implementation).  Be a bit more granular in parsing roles and responsibilities.  Decide who will make the final decision, if it comes to that.  (You want to limit this to a very small number of individuals.)  Who will have the right to be heard during the decision-making process?  The trick is to clarify these roles at the outset of a conflict, beforedigging into the issue itself.

Perhaps the biggest problem is that people, and organizations, don’t learn from their conflicts.  In most companies, there are a few patterns of conflict that happen over and over again.  Leaders need to spot the patterns and explore what’s driving them.  For example, is there an emerging change in the marketplace that is creating very different pressures on different parts of our business?  The goal is to reduce unnecessary conflict, where possible, at its root, and also to extract strategic insights hidden underneath other conflicts"