FounderFuel: Mediation skills for founders and startup leaders

Who reading this has never had an argument? A conflict? A fall-out?

I suspect no-one has put their hand up. They happen all the time.

As humans we have different viewpoints, different needs, different ways of reacting.

These differences can either lead to more understanding and synergy and a better way of being together, or they can escalate towards aggression, towards loggerheads, towards stalemate. 

What does this look like in a startup or scaleup team?

Issues can range from co-founder disputes over roles, communication styles and strategy, to team members whose disagreements are impacting performance and company cohesion, to disputes within the board which are threatening company vision and momentum.

According to ACAS, workplace conflict costs employers £30bn a year. Data also shows that as much at 20% of management time is spent on managing conflict – which essentially means managing human relationships under stress.

This results in loss of productivity, an unhappy working environment, poor employee wellbeing and potentially financially damaging legal situations.

On the flipside, well-managed conflict could lead to better practices and higher productivity, an open, trusting culture and a sense of team involvement and empowerment.

So conflict is either a window of opportunity for generating something better than what was there before, or a self-perpetuating descent into full on deadlock.

You decide.

Let look at a case study:

Anna and Seth* were brilliant co-founders with a 2-year old startup. They had worked tirelessly and passionately to raise money, create their product and get it out there. Now at year 3 they had customers, a growing team, and a great reputation. On paper a great result.

However, in the last few months things had stagnated: they were barely communicating, the atmosphere was tense within the team, their hard-won customers were being neglected.

Why?

They had never entirely agreed on who was responsible for what – it had just happened organically. Anna felt stuck and bored doing all the internal company work, whilst Seth felt exhausted by being out talking to investors and customers all the time. Anna struggled to communicate her boredom and felt resentful of Seth. It reminded her of past work situations, and she thought Seth was deliberately taking the limelight whilst she did the grunt work. Seth felt under high solo pressure to deliver sales and that he wasn’t appreciated. He longed to spend more time on strategic thinking. Both were unhappy and beginning to feel hopeless.

 Their conflict was threatening to derail the company they had built up.

It was hard to unravel because it contained both emotional and rational components. It was both about the past and about the future. How do you unravel such a conflict?

I offer a three-part pathway to consider. Each one leads to the other.

Pathway 1: Pre-empt conflict!

The earlier you can prime yourself and build into your team a system and culture for dealing with conflict the better.

• Know yourself. Build your own self-awareness. What is important to you? What upsets you? How do you show that you are unhappy with others? what is your conflict style? What do you expect from others?
• Know others. Develop an understanding of how others operate. What is important to them? How do they differ from you? What do they expect from you? Have a read of my earlier article on co-founder conflict to get key questions to help with these two steps
• At a team level, develop a code of conduct around behaviours such as listening properly and communicating respectfully. This supports the creation of a culture around being open, celebrating differences and exploring disputes in a generative way, fuelled by a belief that differences can lead to something greater than what went before. As part of this, create a company Conflict Resolution System.

Pathway 2: Have a conflict resolution system

Having an agreed plan or system in place for handling conflict both normalises the likelihood of conflict, making it less scary, and also creates a route map for when things do go wrong so they are less likely to escalate. This is where you can really help as a startup leader, both at a team level but also to potentially support people in your team if there is a conflict brewing.

In our recent founder-family Scaleup Session on the topic of mediation skills for founders and startup leaders, we explored the different levels that this support could take;

Level 1. Direct management by the individuals

Like it says on the tin, at this level the conflict is resolved between the parties themselves – perhaps with awareness-raising and training around conflict, so that individuals can deal with it effectively by themselves. It will also involve agreements around processes to surface and manage conflict before it gets ugly – for example, some co-founders I know have monthly “elephant in the room” meetings.  

Level 2. A trusted neutral other

At this level, someone else (potentially you, if you can be genuinely neutral) within the company helps facilitate a conversation between the two people in dispute. This person can help facilitate listening between the parties and capture agreements – but it can be a weighty responsibility, so some training would be helpful so that they’re ready to help people surface and resolve issues.

Level 3. Formal Resolution

Call in an outsider such as a mediator to help bring the conflict to resolution – which brings us to the third pathway.

Pathway 3: Formal mediation

Sometimes a conflict has got to a stage where someone external is needed. Perhaps the conflict is simply too inflammatory and too complex, there is too much at risk, or there is no-one in the team who is truly impartial.

A mediator will spend time individually with each of the parties concerned understanding the situation from their perspective and coaching them to see what a better future might look like. They will then spend time – a half or full day- with the parties together, supporting them to get all the issues out on the table, acknowledging and understanding what has gone wrong and then working towards some form of resolution brainstorming and testing what a productive resolution might look like. This can result in a formal written agreement that both parties sign stating clearly what they have agreed to. A difficult process – yes – but also a releasing, healing and future-facing one.

Find out more about our mediation support for founders and startup teams here.

So, what happened with Anna and Seth?

One of their board suggested external help which was the wakeup call they needed. There was an intense week involving individual sessions and then a day spent together.  They expressed themselves and listened to each other. By the end, they genuinely understood and valued each other’s needs. A tangible plan was formed. that involved bringing in a sales person to relieve Seth, and Anna moving some of her work to external facing investor relations. More importantly months of tension unravelled, and they both felt unblocked.  They were both energised, understood each other more and the company was ready to move on to the next stage.

So conflict: generative or destructive?

You decide.

FounderCircle members can access a recording of the Scaleup Session on this topic here.