Thursday, 2 October 2008

Five effective actions for solving a corporate conflict

In a corporate world, there are bound to be conflicts and miscommunication between different parties or organizations. When problems occur, finger pointing is not the logical response of solving the problems itself.

However, most resort to such behavior, often overwhelmed by emotions such as anger, frustration, distrust, prideful, and so on. This results in bad feeling in the air for both parties and keep people away from solving the issues at hand which are the objectives.

Recently, I am able to witness a corporate conflict involving a vendor and a dealer. Jeffrey’s help was engaged to solve this conflict. Thus, I have a valuable chance to see and learn how to solve this problem in an efficient manner. Since this is a real incident for corporate environment, I would use fictitious names to preserve the anonymity of the parties involved.

Johnny, the dealer, gets a project to supply products and services, consisting of software and hardware, as well as training and support services to a customer. The customer gives the project to Johnny because of his good experience and reputation in the industry. However, Johnny does not produces the products himself so he sources the products from a vendor company XXX whom he was previously working for. Johnny has some rough experiences with the vendor company before, especially with Eddie, the superior of the sales manager who is managing his deal. Eddie was also his ex superior in XXX.

He was dealing very well with the vendor so far in getting the products and services delivered to the customers. However, in the third purchase, the vendor not only raises the price of the products but also decides to not supply to Johnny anymore. Hence, Johnny faces the risk of not fulfilling his customer’s orders, breaking the customer trust and also ruining his reputation in the industry. In summary, he is in dire state.

When dealing with conflicts, it is important that we keep the following five actions in mind:

1. Stay focus on the subject. Do not deviate. Do not get clouded by emotion.

Since Johnny has some bad experiences with Eddie before, he is filled with frustration and anger. Instead of trying to understanding the other side of the stories and solving the problems, he keeps on thinking that Eddie is making things hard for him on purpose to get back at him.

When Jeffrey talks to Eddie, it is found that the reason why Eddie does not supply to Johnny is that Johnny has not settled the earlier two payments. Johnny argues that he cannot settle the payment yet because the customer does not want to pay him until the implementation is fully completed. The customer complains some features are not in the system and the last training cause their staffs to enter wrong data into the system. Thus to the customers, the implementation is not fully completed yet.

Eddie argues on his side, he has delivered fully and should get the payment. Due to his company policy, Eddie cannot continue to supply to Johnny if he cannot clear the payment. To Eddie, he is only dealing with Johnny and not Johnny’s customer, so Johnny needs to settle the payment regardless whether the customer has paid him or not. Eddie also admits his subordinate has previously given the wrong quotation and which cause him to re-adjust the pricing on the third purchase.

Thus, in staying focus on the subject, on business ground instead of personal matters, we now know the only way to solve the problem is to pay Eddie and quickly get him to fulfill the third orders. The other matters are histories.

2. Present things in a pleasant manner.

When Jeffrey presents the issues and prompts both parties to talk, he avoids having both parties finger-pointing at each other. Instead of focusing on “me” and “you”, he focus on the powerful word – “WE”. In many cases, he emphasizes that “WE” are doing business here and the deals are beneficial to both parties. So, “WE” should solve the problems together instead of harping on who is at fault or on the past issues like bad services, wrong pricing, etc. “WE” is A VERY POWERFUL WORD.

3. Keep a non-tempered and cool composure.

Confronting the problem on hand, Johnny is very frustrated and angry since the beginning. To him, Eddie and his teams have not delivered a very good service to him and his customers. And this is the cause that the customer is not paying him. Thus, he is unable to pay Eddie’s company. On the other hand, Jeffrey tries to keep the situation in a cool manner by not delving too much into these issues. He asks Johnny to calm down and remind him being angry does not serve any purpose. Several times, when Johnny gets into an angry tone when talking about his pain, Jeffrey asked him to pause and talk slowly to keep him in a cool composure.

4. Discuss on problem-solving and future co-operation issues and also channels of communication.

After understanding the issue, it is obvious that the most important issue to attend to is to continue to provide the customers with the products and then prompt the customer to make payment. Although Johnny has not get the payment from the customers, he must pay Eddie for his company to continue provide the products first. In the future, Johnny needs to be careful in managing the customer expectations and also service delivery by the vendors. Johnny may also take over the training and support services from Eddie’s team so that he can provides better support to the customer if he wants to.

Johnny, being the middle man and consultants in the deal has to bear the responsibilities in keeping both parties (vendors and customers) happy at all times.

(Up until now, I always think being a dealer is a simple job of getting the supplies and delivering to the customers. But the fact is a dealer has to take the double pains from both the vendors and the customers. He also has to bear any risks of any parties not doing their jobs well enough)

Since Eddie admits one of his sub-ordinates has made the mistake in the quotation and thus creates all the confusion, he agrees to remove him from the future correspondence. Eddie will assign another sales manager to handle this deal in the future.

5. Provide a compromising situation for both parties for future collaboration.

After getting each parties to understand what needs to be done immediately to solve the issue, Jeffrey goes on to discuss what it is like for future collaboration to prevent the same problems from happening again. There may be more deals between both parties in the future and they need to learn how to work closely.


What I know is Johnny certainly has a lot to learn from his mistakes in this conflict. He need to start by practicing the 3 principles in doing everything in life.

And you know what? Jeffrey bought some of Johnny’s share in his company and the deal was sealed. Eddie was very surprised that Jeffrey, who actually owned the company, was logical and not single sided in handling the matter.

Thus, what we have learned today? Ask yourself….

1 comment:

Millionaire Maker said...

Hi,
Fantastic post, wonderful breakdowns . Simply put ………. Very useful . Thanks heaps for sharing your experiences and knowledge.