About 12% of the total available working time is lost due to lack of cooperation. Lowered quality, for example, can be an indicator for unresolved conflicts. In today’s working place intense self-managed cooperation is a must. Such demands call for more discussion and debate, while, at the same time, employee satisfaction and active participation grow. However, under such changed conditions it is necessary to spell out and discuss differences in interests with a constructive and solution-oriented attitude. If no win-win solutions can be found in an efficient way, certain debates may block an enterprise for months or even years. Highly ranked managers invest between 15 to even 70 percent of their working time for mitigating differences among their subordinates or with other organisational units. Therefore, conflict resolution puts forward a high demand on leaders’ time that might otherwise be used more productively.
Cost for lack of cooperation can accrue at any place in the organisational system or interpersonal interactions. Before resolving a problem that is not understood, it is important to analyze costs caused by poor cooperation or inappropriate leadership. To this effect we facilitate our client organisations in conducting a conflict audit.
Our experience with this method indicates that productivity per employee decreases when conflicts remain unsolved. Costs climb to monstrous heights when team members resign or are terminated in such a way that all the parties involved end up in a labour court.
The return on investment can be increased drastically when litigation and dispute are settled as early as possible. For any organisation it is therefore useful to help their employees find ways for improved and constructive handling of conflicts.
Your benefits from this process:
- Cost reduction
- Enhanced cooperation
- Innovation and creativity because of better use of the collective brain
- Sensitized about cost of conflict
- Enhanced knowledge
- Improved communication strategy
- Introduction to the conflict audit method
- Analysis of potential in this specific organisation (interviews, text and financial data study)
- Introduction to recent methods of conflict handling and strengthening of cooperation
- Planning for practical change strategy
- Joint reflection of proposed measures
GAINING FROM IMPROVED LEADERSHIP SKILLS
How do we measure the increased productivity gained from improved leadership and conflict management? First of all, we measure the visible and invisible cost of conflict and non-cooperation in a company or organisational unit. This process is called ‘conflict audit’. Based on such an audit the subsequent calculations are presented to the Board or the Executive Management of a company. The ‘conflict audit’ indicates the company’s ‘investment’ in conflict and actions to reduce such cost.
Example: Production company with a turnover of app. 10 million Euro per year with 60 employees calculated over a period of three years.
Strategy proposed during
Savings in three years in Euro
|Reduce quality losses such as bad coordination, lack of efficient communication. The production waste accrued to approx 2% of the total annual turnover of the company.||Through improved interfaces in the production process and through enhanced leadership quality loss should come down from currently 2% to 1% in the third year. (1% = Euro 100’000). Reduction in year 1: 0.33%, in year 2: 0.66%, year 3: 1%||200’000|
|Speed up and improve coordination and cooperation among employees.
It is planned to reduce cooperation losses in the teams, between the teams and between the directors and the teams, within three years for totally 1 hour per working day and worker.
|It is expected that by applying these measures every employee will have gained 1 hour per day after two years. This means 60 working hours per day or 300 hours per week for the whole company. If the cost of a working hour is estimated at Euro 50 per hour, this means Euro 15’000 weekly, or annually Euro 705’000 (47 working weeks). Reduction in year 1: 0.33hrs, in year 2: 0.66hrs, year 3: 1 hr||1’410’000|
|Achieve managers’ and leaders’ time savings. The two leaders are heavily involved in conflict and crisis management. The aim is to reduce this time immediately at the rate of 4 hrs. per week or aprox 10% of the working time||4 hrs. per week for each of two managers during 52 weeks in three years = 4 hrs. x 2 persons x 52 weeks = 416 hrs. annually@ Euro 200 or 1248 hrs. in 3 years||249’600|
|Improved leadership and management competence: Clear and binding instructions; appreciation for the performance of the workforce and the potential; early detection and intervention in the case of conflict or bullying||Prevent 5 unnecessary resignations. Cost per such resignation, including search and integration Euro 70’00 . For 5 persons = Euro 350’000x.Avert 4 unnecessary crisis interventions (4 x Euro 8’000 = Euro 32’000).||382’000|
|Estimated savings in three years due to better leadership, cooperation and team management||2’241’600|
|Cost for consultancy and building people’s skills, including time spent by employees for development and training||450’000|
|Savings in three years||1’791’600|
Through our leadership development, conflict management, team building, and communication training, an estimated amount of Euro 2’241’600 can be saved. In order to produce these savings, an estimated amount of Euro 450’000 has to be invested for trainers, consultants, training facilities, and employee time. In other words: For every one Euro invested, the company can save four Euros.