Entrepreneurial

Why startups should embrace conflict

December 21, 2010

– Jeff Bussgang is a general partner at Flybridge Capital Partners and an Entrepreneur-in-Residence at Harvard Business School. He is the author of “Mastering the VC Game” and writes the blog “Seeing Both Sides“. The views expressed are his own. –

One of my favorite business books of all time is Patrick Lencioni’s “Five Dysfunctions of a Team”. Like all books by Lencioni, it begins with a short fable in a corporate setting of a management team that is operating dysfunctionally. Then he provides a framework that analyzes the situation and draws out the general lessons as to why teams operate poorly together and how to systematically combat it.

The following pyramid graphic summarizes his advice:

Each of the layers of the pyramid resonate with me (which is probably why I have this pyramid printed and hung up in my office), but the one that I always come back to and re-read is “Fear of Conflict”. Again and again, I see management teams and boards of directors shy away from conflict.

It’s quite natural for humans to avoid conflict. In fact, our deeply programmed “fight or flight” instincts are designed to protect ourselves and run away when we sense danger. Interpersonal conflict is a danger we all prefer to avoid as it makes us uncomfortable. Your stomach gets a little queasy, your heart beats a little faster, and you think, “How do I get out of this situation?”

So, you tell a joke. You change the topic. And you feel a sense of relief.

When I see this happening in management teams and in board rooms, it makes me uncomfortable because I know where it leads. It leads to mistrust, simmering issues, politics and dysfunctional behavior. Here are a few techniques I’ve found that help address this issue, particularly in startups.

1. Building trust. The foundation for handling conflict productively begins with building trust amongst the management team. It’s easy to say, but particularly hard to do in a startup when people have been slammed together quickly and are so crazy busy, that it’s hard to stop and take the time to understand each other more deeply. One technique I have found very helpful here is to conduct a facilitated, day-long offsite where each management team member takes the Myers-Briggs test to help surface how each party thinks, processes information and makes decisions. I did this with my management team at Upromise and again when we were starting off at Flybridge. In each case found it helped us understand each other at a far deeper level.

2. Annual reviews. It’s easy to be running so hard and so fast that CEOs and boards forget to conduct systematic reviews where a broad range of feedback is collected and tough development issues are addressed head on. I try to do this at each of my boards. At Flybridge the general partners conduct 360 degree reviews of each other. Done correctly, these can be emotionally draining and difficult, but very productive exercises where a safe forum for brutal honesty and constructive dialog can be developed.

3. Systematic post mortems. In my early product management days, I learned the value of the post mortem – the process of gathering all the relevant team members into the room to talk about what happened after a product ships and why errors or schedule issues occurred. Extending the post-mortem process into all business activities can be very valuable. It allows a clinical, unemotional examination of what has happened, how everyone operated under pressure, and what process improvements can be made for next time. Whether it’s done post product release, when an executive team member departs because things didn’t work out, after a board meeting in an executive session, or after an investment goes bad, an analytical examination of what just happened is a useful exercise that forces all parties to address difficult issues.

4. Go direct. At Flybridge, we have developed a mantra for addressing issues amongst the partnership: Go direct. When one of us has a concern about how another partner is handling a portfolio company situation or evaluating a deal opportunity, we don’t allow indirect conversations. If two partners find themselves talking about a third partner, we stop the conversation and bring in the third partner so the issue can be addressed directly, out in the open rather than it festering behind closed doors. I learned this lesson as an executive team member at a startup that was not good at going direct. The VP of sales would come into my office and complain that he wasn’t getting good support from the VP of marketing. Ten minutes later, the VP of marketing would storm in and complain that the sales force wasn’t properly executing on our strategy. The entire executive team avoided going direct because it was uncomfortable, so we had false harmony in our Monday staff meetings and deep divisions the rest of the week.

Conflict can be stressful, draining and uncomfortable. Yet, it’s an incredibly natural, healthy part of life, particularly in a startup. And creating a culture that can handle conflict effectively clearly has a positive impact on performance, as recent research has shown (see i4cp study: “Leaders With Low Emotional Intelligence May Be Depressing Bottom Line“).

If you want to avoid your startup feeling like a soap opera, try some of these techniques.

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