Michael Austin/thesipot.com
The CEO of a fast-growing pharmaceutical startup recently forwarded us an email exchange he had had with his chief financial and chief commercial officers. It seems that the CCO had surprised both the CEO and CFO by proposing to spend more than $450,000 to retain an outside agency.
The CFO immediately fired off a private email to the CEO: “We are in total lockdown mode while we raise Series C funds. We just got a $75 million bridge loan. Why isn’t she coming to me? I should be included in these decisions.” The CEO responded, “I assume if a member of the executive leadership team brings me a proposal, they’ve talked it through with their colleagues.” The CFO replied, “Well, she didn’t!”
Considering this exchange, we told the CEO, “It seems that members of your team immediately jump to escalating issues to you versus trying to resolve those issues themselves.” We added that it would have been better if they had first tried to talk to each other and sort out the issue. If they still had a difference of opinion, they should have documented why they disagreed and how they had tried to resolve it. Then, and only then, should they have gone to the CEO to discuss it — together.
Disagreements and conflict over issues as varied as strategic direction, investments, and daily priorities pervade every organization. In our eight years gathering data on organizational effectiveness from 1,400 executives representing 500 companies worldwide, 84% reported regularly dealing with counterparts they considered “unreasonable.” Such conflict occurs between peers, across different functions and business units, and among executive team leaders and board members. Conflict is sometimes overt and often covert. Conflicts are sometimes resolved constructively, but, more often, conflict compromises execution and damages relationships. Managing conflict so that it does not interfere with operations or damage working relationships is essential to organizational effectiveness.
Clearly defined escalation procedures ensure that disagreements are addressed at the right level and resolved collaboratively and efficiently. This is not a trivial challenge; people encounter multiple points of tension when deciding whether to escalate. (See “Where Tensions Arise in Escalating Issues to Leaders.”) Unfortunately, relatively few organizations have defined and implemented an effective way to ensure that conflicts are efficiently and effectively resolved at the right level of management.
Setting Parameters for Conflict Escalation
In the face of conflict, people often escalate unilaterally, too quickly, and in a manner that produces suboptimal decisions and undermines trust among the parties involved. At the same time, conflicts with strategic implications often are not escalated to the right level of management in a timely fashion, compromising strategic agility. Additionally, valuable learning and strategic insights get lost amid this dysfunction.
By implementing the following six guidelines for escalation, organizations can reduce organizational friction, reduce unnecessary escalations, improve decision-making, strengthen working relationships throughout the organization, and enhance strategic agility.
1. Define clear guidelines for when and where to escalate. By identifying the types of conflicts that employees should escalate immediately versus those that they should attempt to solve themselves, organizations empower their employees to tackle conflict confidently and efficiently. Providing clear guidance on when to escalate disagreements takes significant pressure off the individuals and teams involved, making the situation less fraught at the point of conflict. Conflicted parties need to know that they can, and must, escalate issues whenever high-level management perspectives are necessary to make a good decision. On occasion, urgent and strategically vital conflicts need to be escalated immediately. But most conflicts should be escalated only after both parties have made extensive efforts to reach a solution. In these cases, escalation becomes appropriate as a safety valve for the conflict management process: When the people directly involved cannot come to agreement, even after thoroughly and systematically trying to work through the problem, they need somewhere to turn.
Deciding to whom the conflict should be escalated can be simple in some instances, such as when two parties have the same manager. In many cases, though, the parties will have different managers and must consider not only who has the authority to decide but also who has the knowledge to help make the best decision for the organization. Whenever possible, they should escalate the issue simultaneously with and to everyone who needs to be involved. This should be done face-to-face when possible and via real-time, virtual interaction when it is not. They should use email to share information and keep a record of the process, not as a substitute for dialogue.
2. Require people to document their efforts to resolve conflict on their own before escalating it. To enable efficient and effective escalations, those escalating should be expected to document and explain how they tried to resolve the issue on their own. That requirement serves two significant purposes.
First, it is an effective way to stem the tide of unnecessary escalations when those in conflict have not attempted to work it out on their own. When managers accept ill-prepared escalations, they send a powerful — but unintended — message to their reports that the best way to get things done is to escalate at the first sign of conflict. In contrast, by rejecting those escalations, managers send an equally powerful, and explicit, message that team members are expected to work through the problem-solving process before resorting to escalation. This practice also builds an understanding throughout the organization that the original parties to a conflict have the primary responsibility for resolving it — and that escalation is not a way for individuals to get rid of problems that come across their desks.
Second, this practice ensures that when managers accept escalations, they are equipped to make an optimal decision in the shortest possible amount of time. Too often, people fail to capture the insights generated during problem-solving efforts. After thoroughly working through a problem but failing to reach agreement, escalators should provide the manager with the scope of the problem and all the data, context, and potential solutions considered in the problem-solving effort.
3. Require joint escalation. In most organizations, it is commonplace to see each party to a conflict unilaterally escalate the issue up their own, often sympathetic management chain, framing the problem such that each receives the answer they seek. When an issue is unilaterally escalated up two or more separate management chains, a number of problems tend to occur. First, each manager is presented with incomplete and often biased information that can lead them to make divergent, poor, or hard-to-implement decisions, with potentially serious consequences for the organization. Additionally, separate escalation paths reinforce the adversarial mentality that can be so counterproductive to effective problem-solving.
Workplace conflict frequently takes on a dynamic where each side wants to win the argument rather than arrive at the best possible solution. Requiring people to escalate together can mitigate this. If I escalate alone to my manager, I am seeking approval or support for my answer, not yours. If we are required to escalate together, it is much harder for us to frame our dispute in an incomplete or biased way. (See “Framework for Joint Escalation.”) Escalating together forces both parties to engage with each other’s arguments in a more empathetic way, and to provide a more robust explanation of the conflict to senior decision makers. Providing leaders and managers with a comprehensive set of perspectives on the roots of the conflict, as well as prior efforts to resolve it and how and why those efforts failed, equips them to make a well-informed decision.
Requiring joint escalation also helps build a culture where disagreement and conflict are acknowledged as inevitable due to the division of labor in any complex organization. Different groups and operating units will necessarily have different priorities and perspectives. Conflict does not mean that anyone is wrong or that someone is not being a team player. Instead, conflicts are most often the manifestation of tensions that arise among different parts of a business. When the conflicting parties escalate together to the appropriate managers, they equip managers to identify the optimal resolution — one that balances competing organizational priorities.
This approach sends a strong message that the act of escalating should be a collaborative effort focused on generating an appropriate solution instead of blaming other parties or winning a disagreement. It eliminates the damage to working relationships that can be caused by the threats and surprises ordinarily associated with unilateral escalations. Furthermore, the joint escalation process ensures that everyone has a chance to be heard and reduces participants’ resistance to implementing decisions, which can arise when they feel marginalized or left out of the decision-making loop. Including people with relevant points of view — as well as those with a stake in the outcome of escalation — not only leads to better decisions but also to better implementations. Most people will accept decisions that arise out of a legitimate process; even if they disagree, they feel that they have been heard.
A large technology company with diverse software products and service solutions that we worked with offers an example of a successful joint escalation process. There had been a significant uptick in unilateral escalations throughout the organization as various groups faced intense pressure from senior leadership to move quickly on growth initiatives. Unilateral escalations were being accepted for a variety of reasons — for instance, because a manager trusted the judgment of the escalator, cared deeply about the issue and wanted it resolved quickly, was pressed for time and believed that a joint escalation would require more time to resolve than a unilateral one, or did not see the harm in solving that particular problem unilaterally. Furthermore, most managers did not really understand the value derived from joint escalations and therefore were not aware of the negative consequences of unilateral escalations. The result was a notable erosion of collaboration coupled with significant delays in execution.
We worked with the executive leadership team to help managers understand how their individual actions were negatively affecting their peers and the company. Equipped with the rationale behind a newly defined escalation process, managers throughout the organization committed to common ground rules about accepting and handling escalations. Incidents of unilateral escalation diminished rapidly, resulting in faster decision-making, improved execution, and improved relationships among business units.
4. Encourage employees to limit the scope of escalations. Rather than completely abdicating responsibility to resolve an issue and simply asking senior leaders to render a decision, the individuals in conflict can request guidance on how they should resolve their disagreement. This could include asking for additional information that might help resolve the issue or for suggestions about other options to consider. Sometimes getting clarity around how to prioritize decision criteria and who is accountable for executing on the decision can help. And managers should stand ready to provide team members with coaching on how to have more effective conversations with counterparts.
For example, consider the case of product managers unable to agree on what features to include in a new product. Instead of an escalation requesting a definitive answer about what features to keep or drop and whether to delay the planned launch date, they recognized that their disagreement came down to a major strategic decision: whether to prioritize speed to market or to go to market with a product that was clearly superior to the competition’s. Consequently, they went jointly to the heads of both R&D and marketing to request guidance on how to weight those priorities as decision-making criteria. The product managers subsequently explored and debated options but still could not agree. However, they managed to narrow a complex set of options and trade-offs to a choice between two distinct alternatives with different risk-reward profiles. In the process, they did 90% of the work required for an informed choice and then provided a clear summary of their analysis for a final executive decision.
Limited-scope escalations enable better outcomes arrived at more efficiently. They also encourage people to build creative problem-solving and conflict resolution skills and tend to strengthen bonds of collaboration.
5. Use escalation as an opportunity for coaching. When an issue is escalated to a manager, the manager will frequently assume total responsibility for figuring out a solution, make the decision, and then communicate that decision without clearly explaining how or why they reached it. Sometimes extreme time pressures or sensitive issues act as limiting factors in offering an explanation. But whenever possible, managers should capitalize on the valuable learning and coaching opportunities that arise during the course of an escalation.
When issues are escalated, leaders and managers have a golden opportunity to help those who report to them improve their ability to solve problems in collaboration with their peers. This includes helping their people develop the proclivity and mental discipline to view conflicts and issues from other parties’ perspectives — and to elevate their thinking beyond their own role, team, and department by cultivating an enterprise view of issues.
6. Use escalation as an opportunity for organizational learning. Escalations, documented systematically, provide a rich source of data on organizational conflict. Recognizing that specific types of escalations are prevalent can unearth underlying issues that affect productivity, efficiency, creativity, and morale.
Leaders should monitor the types of issues escalated for insights about the health of the organization and the external marketplace. Individuals in sales, corporate development, and procurement, as well as others who engage with outside stakeholders, can provide valuable input to help keep leadership and the back office from becoming overly insular. Conflict often arises when different parts of an organization are getting different environmental inputs from customers, competitors, and suppliers; such conflict is a source of invaluable information about the external marketplace.
A formal escalation process that tracks patterns of conflict can capture such information and help distill it into strategic insights. Analyzing and addressing recurring conflicts also represents an untapped source of operational innovation for many organizations. When company leaders continually resolve recurring conflicts arising from diverging policies and procedures within different operating units, they miss the opportunity to standardize or harmonize internal processes and practices for greater efficiency and enhanced collaboration among business units.
Resolve Issues Close to the Point of Conflict
The ability to resolve most issues close to the point of conflict is foundational to effective escalation. But too often, people engaged in conflict quickly dig into positions (such as preconceived answers, demands, and bottom lines) and then seek agreement or acquiescence from others. This kind of zero-sum debate is typified by gridlock or a grudging process of making incremental concessions until a “split the difference” solution is reached. In addition to producing poor business outcomes, this process usually strains relationships and eventually damages them in lasting ways.
Conflicts can become personalized, a dynamic that leaders should work to minimize. A systematic approach to escalation, such as the one we have proposed, can itself develop team members’ skills in conflict management and joint problem-solving. But leaders must also continuously communicate — in both words and actions — the importance of respecting different perspectives, goals, and ways of working as part of a larger collective enterprise.
A better approach than arguing positions is one that involves jointly brainstorming multiple possible resolutions before seeking agreement on a final decision. This practice removes the “me versus you” dynamic that often impedes agreement, and it leads to new insights and better solutions. Whenever possible, at the point of conflict, those involved should do the following:
- Frame disagreement as a shared challenge and a resource that can be harnessed to arrive at a truly optimal solution. To keep conflict from becoming personalized, highlight the fact that the parties share a common goal.
- Avoid limiting and polarizing arguments about what the “right” approach is. Instead, engage in nuanced exploration of the relative pros and cons of different approaches.
- Do not assume that the current proposed solutions are the only possible ones. Jointly brainstorm alternatives.
- Consider creative ways to integrate various elements of different proposed solutions.
The ability to effectively resolve conflict at the source and a formal process for organizational escalation go hand in hand. The former ensures that the latter is not overwhelmed by unnecessary escalations; the latter ensures that there is an effective safety valve for the former. Together, they enable organizations operating in complex and dynamic environments to maximize strategic agility, internal collaboration, and speed of execution.