The Conflict Calculator: Estimating the costs of conflict in a workplace team

If in workplace teams, conflict is normal, inevitable, and I would argue required to succeed, the question then becomes whether or not a team will experience positive or negative outcomes as a result of their conflicts. Those that experience positive outcomes of conflict will be more creative and are generally more likely to have their projects succeed, while those who experience negative outcomes from conflicts will have higher costs, less innovation, and are more likely to fail in their projects. Anticipating and engaging with conflict early on in the life of a team is one key to building a cost effective and innovative workplace team. 

Even though proactively engaging with conflict seems like a proven best practice, it has been my experience that a good portion of the work coming in to dispute resolution practitioners is driven by crisis in the work team. In these cases someone has realized that the costs of conflict in the team has risen high enough to do something about it. They have often come to that conclusion through an intuitive sense that the time has come. Cost of Conflict calculators work to take the guesswork out of that decision making process.

Those people who control whether or not a conflict practitioner gets hired want to know what a conflict is actually costing them in real dollars. In most every case someone is making a decision based on what the conflict is costing them vs. what it will cost them to resolve it. In most cases they need some kind of cost of conflict information before they are willing to engage in services. Because of this, we set out to build a single calculator that would show exactly that – the cost of conflict in real dollars. That journey has reinforced three major points:

1. There is a duality to conflict. Conflict will always exist in teams and there are positive and negative outcomes from conflict depending upon how it is managed.
2. Creativity and innovation are deeply affected by how a work team deals with conflicting ideas and task conflicts.
3. Both the positive and negative outcomes of conflicts can be measured and have an associated value.

Ease of Use and Speed vs. Complete Accuracy

It is important to note that Resologics is not the first to think of and act on the idea of measuring the costs of conflict. Other tools exist in a variety of forms and in the examples we found they all used data from the organization to organize, tally and put a value on costs. This is a very sound way of measuring, and, given the right circumstances, the only way. A significant difference in the Resologics Conflict Cost Calculator is that it uses real data collected from the team conflict experience and ties that together with industry estimates of data like average wages, turnover costs, etc… . The results from the Resologics Conflict Calculator™ are an estimate rather than an exact figure, and for the majority of projects, that quick estimate is enough evidence to provide proof for a need for change.

Building the Tool

1. The first step in building the calculator was to understand what it needed to measure and output. We determined that there were 37 costs that came as a result of negative outcomes from conflict. Several are fairly easy to measure and estimate while most are quite difficult to put a dollar value on. I have listed them all later in this article…

2. The second, and unexpected complication, was working with the idea that most conflict can also result in positive outcomes and how to measure whether a team was good at that. We determined that it would make sense to split the calculator in two for the most accurate and understandable results. This resulted in a Conflict Calculator and an Innovation Estimator.

3. The third step was building the actual tools. Easier said than done! Several test rounds later (thank-you Alpha and Beta testers, and over 500 user teams so far!) they are working well. Supporting data on how we did that can be found right here…

The Resologics Conflict Calculator™

The calculator estimates what the team has spent so far, and how much it will spend in the future, on unproductive outcomes from conflict. It outputs easily measured and understood solid dollar costs that are based on industry research and the users’ custom answers. Based on nine questions, the most common and largest dollar value costs are calculated.

Benefits to users include:

• Looks at negative outcomes from conflict in a new way and starts a conversation within the workplace team that is different, quantifiable, and actionable.
• Supports decision making around return on investments (ROI) in conflict engagement processes.
• Gives conflict resolution professionals a strong talking point for initiating services.

Features Include:

• Calculates Multiple Costs
• Outputs Past, Current and Future Expenditures
• Instant On-Line Access and Results
• Takes Less Than 5 Minutes to Run Assessment
• Confidential
• Full Report Feature
• FREE to Use

Here’s the Hard Part of the Build

The most complex part of this Conflict Calculator building project was determining the costs that it would measure and placing a prioritization on each cost based on what was most reliably measured and most important to know. The following is an inside look at the three levels of conflict costs we grappled with. The first seven costs displayed are the ones the current version of the Conflict Calculator measures. By using only seven costs out of a potential of thirty-seven, we believe the results of the calculation will be typically conservative and supportable as real costs to the organization.

A Complete List of Conflict Costs From Negative Outcomes

• Easily Measured Costs

1. WASTED TIME – real productivity cost of wasted time. The organization paid for time and got nothing.
2. WASTED OPPORTUNITY for Billable Hours – Services were not performed so no billing or production toward service happened.
3. LOST TIME – Due to Absenteeism. Sick Leave, Lost performance due to conflict-related absenteeism. Real Productivity cost of wasted time. The organization paid for time and got nothing.
4. LOST OPPORTUNITY – Due to Absenteeism for billable hours. Services were not performed so no billing or production toward service happened.
5. STAFF TURNOVER RELATED, ATTRITION – Severance/ Termination Package costs – voluntary or involuntary, recruitment & staffing costs, training and development costs associated with new replacement employees, loss of human capital investment in skilled employees, loss of opportunity for billable hours during transition and training.
6. LEGAL SUPPORT – fees and time associated with inside and/or outside support from attorney’s, arbitrators, and outside decision-making entities.
7. NON-LEGAL SUPPORT – fees and time associated with inside and/or outside support from mediators, therapists, counselors, specialty trainers and other conflict crisis managers.
8. Cost of Formalized Conflict/Grievances Processes
9. Workers Compensation
10. Fines / Penalties

• Difficult to Measure Costs

1. Bad Press, Marketing Issues
2. Degraded decision quality
3. Lost Opportunities (non-time related) short & long-term
4. Lowered job motivation and productivity
5. Health of employees costs
6. Quality of Work or Service
7. Market Entry Delay
8. Restructuring around the problem
9. Reputation; re Clients & Public
10. Reputation; re Employees & Prospective Employees
11. Hiring Difficulty
12. Creativity Lost or Reduced
13. Demotivated Staff due to lack of progress
14. Injury and accidents
15. Disability claims due to conflict
16. Conflict-incited theft, sabotage, vandalism, and damage
17. Loss of Core Skilled Employees 
18. Erosion of Shareholder Value
19. Project Failure

• Nearly Impossible to Measure Costs

1. Stress, frustration, and anxiety
2. Strained relationships
3. Increased client complaints
4. Presenteeism
5. Diminished Funding potential
6. Diminished Team Morale
7. Customer Service Reduced Quality
8. Loss of sleep

As a final note to this introductory article I would like to encourage readers to both visit the Resologics Conflict Calculator™ to test it out and visit the page we created that explains in more detail how we arrived at the calculations. Your comments and suggestions are welcome and will support an even better version of the tool in the future.

                       

Mark Batson Baril

Mark Baril is a mediator with extensive business, personnel, and manufacturing experience. Mark focuses on managing conflict in businesses so they can thrive. He understands the inner workings and complexities of startups, and established businesses, and has a passion for helping them move from the complexity and costliness of destructive… MORE >