How Great Leaders Manage Conflict to Forge a Culture of Innovation

"Peace is not absence of conflict; it is the ability to handle conflict by peaceful means."—Ronald Reagan

These words by the 40th U.S. president refer to dealing with conflict between rival nations. But they also ring true when talking about how to effectively manage conflict in business—whether it's an internal conflict among employees or an external dispute with customers, investors, or suppliers.

The reality is that far too many companies fear conflict and try to repress it. 

For example, at some point in your career, you’ve likely experienced this scenario. You’re at an all-hands meeting where leadership says, “We want your honest feedback.” But when they hear criticism, they get defensive and act dismissively toward employees who offer “negative” opinions, effectively silencing any further discussion on the topic.

But when genuine concerns, hurt feelings, and misunderstandings don't get addressed promptly, they will fester and grow into much more significant issues that undermine trust, kill productivity, and, ultimately, stifle the collaboration and innovation your company needs to remain competitive. 

As Thomas Iger, author of the classic, “The Ten Minute Team: 10 Steps to Building High Performing Teams,” put it, "Conflict can destroy a team which hasn't spent time learning to deal with it." 

So, how can you and your team more effectively manage and deal with conflict to keep your company on track?

This is where Peacemaking comes in—the seventh of the “Great 8” leadership virtues from my book “The Great 8: A New Paradigm for Leadership.”

(For an overview of all eight leadership virtues, see “The Great 8” Process.)

Virtue #7: Peacemaking vs. Territorialism

At the root of most conflicts is the vice of Territorialism. 

And, if left unchecked, Territorialism will spread like termites that eat away at your culture and, ultimately, cause the organization’s prospects for success to crumble—not from outside market forces, but from within.

Think of Territorialism as the “Reverse Golden Rule”: Do unto others before they do it to you. 

That's because when you're under its influence, you're preoccupied with protecting your own turf—your position, status, reputation—at almost any cost, no matter the impact on the broader organization.

And if we're candid with ourselves, we'll admit that Territorialism is our "default mode" as leaders. We all wrestle with it to some degree because our instinct is to act in ways that preserve our power and position. But that instinct can get us—and our teams—into trouble unless we do something about it. 

Peace through Strength

The antidote to Territorialism?

The virtue of Peacemaking, which can be best defined as leadership strength through vulnerability to restore and maintain "peace" with yourself and others.

This idea is counterintuitive because the perception of Peacemaking or being a Peacemaker is that it’s a mark of weakness—that you’re trying to “keep the peace” by avoiding conflict. 

But the reality is that Peacemakers work to restore peace by having the strength and courage to confront conflict head on. 

They're willing to risk their position to confront a problem and work on a resolution. Instead of talking behind someone's back or being passive-aggressive toward that person, peacemakers refuse to give a bad report about anyone without first going directly to that person and working with them to resolve the conflict.

Peacemakers also possess the confidence to allow positive conflict that comes from having robust debates and sharing candid feedback among team members. 

Therefore, it’s Territorialism that actually reflects weakness, not Peacemaking. Leaders who are under its influence tend to be defensive, insecure, and passive-aggressive. Out of fear, they avoid confrontation. Instead of working to “clear the air” with someone, these leaders grow suspicious of that person’s intentions and work behind-the-scenes in manipulative ways to undercut that person’s ability to do their job.

The Application: Peacemaking in Practice

How do you apply the virtue of Peacemaking in real-world business situations?

At Legacy Advisory Partners, we are often brought in by leadership teams to help them work through disputes on specific issues.

But what we find, more often than not, is that when there appears to be an impasse, with neither party willing to “open up,” there’s more to it than a breakdown in communication; there’s a breakdown in the practice of one or more of the leadership virtues. 

That’s because the previous six “Great 8” leadership virtues are prerequisites to effective Peacemaking. Neglecting any one of these virtues could make true resolution or reconciliation impossible.

Why? Let’s recap the virtues we’ve covered so far in previous articles, and I’ll explain the connection to dealing with conflict:

• Humility. To listen to the other person's viewpoint, you must first have the humility to think that you might be wrong or might have contributed to the issue to some degree. At the very least, you're willing to listen without immediately defending yourself.
• Empathy. As you listen, you’re trying to understand where they’re coming from and what they’re thinking and feeling.
• Attentiveness. You’re focused on that person, making them feel valued by you because you’re not easily distracted by formulating your own “defense.” This helps build trust and openness.
• Accountability. You’ve made yourself accountable to other people, who are not likely to allow you to “vent” and gossip to them without you first confronting the issue directly with that person.
• Acceptance. You refuse to immediately write that person off in a fit of anger but choose to accept them for who they are, no matter what the result of the conversation might be.
• Integrity. You are known as someone who is trustworthy so that the person can have some confidence that you’re genuinely trying to resolve the issue in good faith, even if they disagree with you.

With these six virtues as building blocks, you’ve put yourself in a stronger position to live out the virtue of Peacemaking, fully equipped to confront, manage, and resolve conflict without being overly confrontational.

Promoting Positive Conflict

Keep in mind that not all conflict is bad. In fact, positive conflict is a vital component of innovation. As the Biblical proverb says, "As iron sharpens iron, so one person sharpens another." 

Have you surrounded yourself with highly talented, strong-minded leaders who aren't afraid to push back on your ideas and proposals? Or is your team filled with "yes people" who won't be candid with you, even when they think one of your ideas or initiatives could hurt the company?

The mark of a Peacemaker is they're comfortable with surrounding themselves with a "team of rivals" who will challenge them. They're not afraid of confrontation or dissenting opinions. Instead, a peacemaker invites a spirit of openness, where each person can trust that they have each other's best interests in mind, even when there's disagreement. And it's in this high-trust environment that collaboration and innovation can flourish.

In his classic book, “Up the Organization: How to Stop the Corporation from Stifling People and Strangling Profits,” Robert Townsend writes, “A good manager doesn't try to eliminate conflict; he tries to keep it from wasting the energies of his people. If you're the boss and your people fight you openly when they think that you are wrong—that's healthy." 

Diffusing Negative Conflict

Some conflicts are negative—where one or both parties feel hurt or wronged by the other person. These disputes need to be resolved ASAP before they escalate into time-wasting turf battles, passive-aggressive behavior, and political posturing. 

An excellent tool for how to work through negative conflict is Ken Sande’s “Four G’s of Peacemaking” from his book “The Peacemaker.”

One of the “G’s” is “Get the log out,” which refers to a passage in the Bible (Matthew 7:3-5), where Jesus says: 

“Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank [log] in your own eye? How can you say to your brother, ‘Let me take the speck out of your eye,’ when all the time there is a plank in your own eye? You hypocrite, first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.”

The point here is that, before we engage with the other person, we need to first examine ourselves and take responsibility for any role we might have played in causing the situation—even if our contribution was just 1% of the issue. Did we say or do something inadvertently that could have set the conflict in motion or, at least, caused it to escalate?

When you think about your responsibility, you’re able to diffuse your anger toward that other person, which puts you in a calmer, more empathetic state of mind to work through the conflict.

Communication for Reconciliation

But where do you begin?

Take the initiative to talk and “clear the air.” 

“Our communication has been off lately. Do you have a few minutes to talk?”

“Can you help me if I have done something to hurt you that I may not have recognized?”

Sometimes this process leads to immediate reconciliation, while at other times things cannot be worked out. And occasionally reconciliation unfolds over a long period.

While you don’t have control over how a situation ultimately works out, at least you have a shot for restoring peace when you confront the situation head-on.

Key Takeaways

To recap, here are the key takeaways to help you manage conflict in a way that promotes greater collaboration and innovation.

#1. Be comfortable with conflict.

Albert Einstein once said, "In the middle of difficulty lies opportunity."

The same could be said about conflict. 

Breakthrough ideas and stronger relationships often emerge from friction from well-managed conflicts. 

#2. Think win-win.

I think Mary Parker Follett, a pioneer in the fields of organizational theory and organizational behavior, put it best when she said, "There are three ways of dealing with difference: domination, compromise, and integration. By domination, only one side gets what it wants; by compromise, neither side gets what it wants; by integration, we find a way by which both sides may get what they wish."

When you think about the concerns and interests of the other party, you put yourself into a more resourceful mindset to find common ground and generate ideas that lead to a resolution that both sides can embrace.

#3. Clear the air. 

Avoid the temptation to engage in passive-aggressive behavior. And don’t let the issue fester. Talk to the person as soon as possible. As President Reagan put it, "I've always believed that a lot of the troubles in the world would disappear if we were talking to each other instead of about each other." 

The Bottom Line

Territorialism is a vice that’s built on a scarcity mentality—a fear of loss. It causes people to get defensive and protect their turf at all costs. It sees business as a zero-sum game: for me to win, I must make sure you lose.

But Peacemaking is based on an abundance mindset: if we resolve our differences and work together, we both can win...and on a much bigger scale than either of us could achieve on our own. 

And that’s why you’ll find that the strong, confident leaders—the Peacemakers—are the ones who have built a vibrant high-trust environment where the best people want to work.

If you'd like to learn how to expand your influence and impact, then join me on this journey to becoming a Virtue-Based Leader by subscribing below to receive my best content sent to your inbox. Subscribe Here

About the Author: J. David Harper, Jr. serves as CEO and principal of Legacy Advisory Partners, an Atlanta, Georgia-based firm that helps companies across the nation to build strong leadership teams—and keep them. David is also the author of the book “The Great 8: A New Paradigm for Leadership” that teaches business leaders how they can tap into eight timeless “virtues” to expand their influence and achieve sustainable success for their organizations.