Naturally, most managers want employees to think and act in an entrepreneurial manner. What this actually means, however, depends on the managers’ viewpoints: Conflicts become evident, for example, when the salesman has a fight with the production department because the latter simply cannot produce the 5,000 spur of the moment bespoke products the client has ordered.
Conflicts over goals, interpretations and a host of other things – be they overt or covert – are part of the every day agenda in every business. Today’s article presents one method to establish leadership alignment and resolve conflicts.
Even “Soft” Topics Have a Price Tag
While every area, every department, every team and every employee each has their own goals - must have them, even, to be individually productive - there are objectively quantifiable goals which are the same for everyone: revenue and EBIT. Closely connected to those are subjectively quantifiable cultural goals such as satisfaction, motivation or a sense of belonging.
Some time ago we mediated between two camps in a leading manufacturer of electronic components: on one side the “hard-liners” who had never considered corporate culture to be important, and on the other side those who were promoting a strengthening of the corporate culture and a reduction in conflict.
The two camps seemed irreconcilable—until we asked the question of how much the lack of a culture in the business was costing per year. Both sides were able to quickly calculate what influence the results of conflicts – absences, staff turnover, burn-out etc. – had on the EBIT and, lo and behold, both sides came up with similar ballpark figures. It was interesting that the hard-liners then, on the basis of the figures that they themselves had come up with, said: “we have to work on the culture, it will cost too much not to!”
“Soft” topics like corporate culture or conflict also have their price tag, and this is the key to comprehensive alignment.
Alignment Incentive: Money is the Lingua Franca
In the lingua franca of the business world, the goal that has the power to unite all employees is EBIT. Alignment on EBIT level leads to alignment on the value level, and thus will influence the behavior of individual employees.
In order to bring this about, remember the Harvard method of negotiation, the basic principle of which is to find a goal on which all can agree: in business, this goal is a healthy profit. Start with solving conflict in order to establish alignment on EBIT levels. Then, step by step, find measures which lead from the large to the small, from the general to the specific. As soon as conflicts become obvious, focus the general view on the EBIT: “is the position we have arrived at now still geared towards increasing the EBIT for all those involved?”
It is an exciting challenge for managers to estimate the impact of their measures on earnings. This estimation allows an organized prioritization of measures.
What’s Making us Happy: Spotlight on our Achievements
We ran a management conference for 160 managers in a medium-sized production company. For this we developed an approach based on the current challenges facing the company, which was used as the focus of the conference. We left the stage amid the applause of a enthusiastic audience. We are very happy that we were able to support our clients in driving change even better and setting up self-organizing coaching groups in which managers can provide mutual support for each other with everyday challenges.