Calculators - Supporting Data


There are real costs associated with the negative outcomes of conflict AND there are costs that come from not being able to turn conflict into positive results.

  • If you are a small business and you have destructive conflict in a team, you are wasting money right now.
  • If you are part of a startup business and there is no conflict or "creative tension" in the team, you have costs associated with that inaction.
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Here you will find background information to support the data that Resologics' CONFLICT CALCULATOR  and INNOVATION ESTIMATOR produce. The objective is to be as transparent as possible so the calculators will be of greatest value to you. RESOLOGICS has taken up-to-date research on the costs of conflict, and paired that with your custom team conflict dynamic information to build unique tools that can be used for a number of purposes including; budgeting, due diligence, conversation starting, dynamics normalization, change initiating, option building, return on investment (ROI) estimating, etc.


This easy and fast to use "starter" tool estimates what the team has spent so far and how much it will spend in the future on unproductive conflict. It outputs easily measured solid $ costs that are based on industry research and your custom answers. Based on nine questions, the most common and largest dollar value costs are calculated.

Costs Measured:

  1. Wasted Time
  2. Wasted Opportunity
  3. Lost Time - Due To Absenteeism
  4. Lost Opportunity - Due To Absenteeism
  5. Staff Turnover Related
  6. Legal Support
  7. Non-Legal Support

Background Numbers:

  • Your custom answers are used to build multiplier values in the calculator. Those values are multiplied against several dollar values outlined below.
  • This starter tool uses a wage per Team Member of $45,790.00 This figure is based on the average/mean annual wage per person in the USA in 2012. Salaries vary widely from industry to industry and from company to company. (The Conflict Auditor™ tool allows you to enter your own actual wages.)
  • Mark-up (billable or revenue generating rate) on all individuals within a team is equal to 2.25X their salary. So if employee Z earns $45,790.00 per year, the company takes in total revenue of $103,027.50 because of employee Zs production/work.
  • The cost of the turnover of one employee has been calculated at 30% of their salary for one year. This figure is on the low end of the research figures and includes items like; 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.
  • The rate of absenteeism due to conflict is difficult to predict. Taking that the more intense the conflict is and the longer it has been going on, the more stress, sickness, and absenteeism will follow - this estimator uses a multiplier defined by your answers to assess the level and length of a conflict and pairs that with the wage value of employees being effected. For example; a team of 8 people with approximately half the team being effected by "out of control" feeling conflict for at least 3 months would produce 6 days of absenteeism per month for the entire team. About a 4% rate of absenteeism due to conflict.
  • If the root cause of the conflict has been uncovered and is being worked on, we assume the destructive conflict will end within 3 months and will never return.
  • Legal Costs are valued at $10,000.00. A single instance of legal assistance is assumed by a yes answer.
  • Non-Legal Conflict Management support is valued at $5,000.00 A single instance of assistance is assumed by a yes answer.
  • CAUTION: This tool assumes that the user is looking for an accurate and fast estimate of cost with minimal input. Caution should be used as this calculator purposely avoids calculating hard to measure soft costs that in most cases will render a much higher total cost of conflict. Please see the complete list of costs on this page as well as the RESOLOGICS Conflict Auditor™ for a more complete answer.

This easy to use "starter" tool uses a combination of research data about positive conflict outcomes, and your custom answers about the team dynamics to calculate the yearly costs for the business associated with having untapped conflict. This unique tool is meant to highlight that well managed conflict is good in fast paced teams. As we began the process of building this tool, it became clear that there was a distinct list of costs associated with not pushing the limits of human dynamics around conflict and many of those costs centered on innovation - or the lack of. Measuring the costs associated with a lack of innovation or creativity was determined to be an impossible task. What we could do though was  build a tool that produced a baseline cost that could be used to compare the team to itself and other teams with some very calculated questions and many years of experience and research as a foundation. The result - a tool that produces a basic cost number to start a conversation within your organization/team about this real issue. Do you work well enough with conflict to get the job done?

 

Costs Measured:

  1. Lack of New Ideas and Innovation
  2. Reduced Creativity
  3. Diminished Problem Solving Capacity
  4. Lost Opportunities (short & long-term)
  5. Degraded Decision Quality
  6. Change Resistant Team. Difficulty in Pivots
  7. Market Entry Delays
  8. Focus on Productivity is Diminished
  9. Lack of sense of Urgency
  10. Quality of Product or Service Diminished
  11. Reputation; re: Employees & Prospective Employees
  12. Incompetence Tolerated / Team Complacency
  13. Lowered Job Motivation and Productivity
  14. Demotivated Staff Due to Lack of Progress
  15. Loss of Core Skilled Employees 
  16. Reduced Innovation Premium on Company Value
  17. Erosion of Shareholder Value

Background Numbers:

  • Your custom answers are used to build multiplier values in the calculator. Those values are multiplied against dollar and percentage values outlined below.
  • The Estimator uses $260,000.00 for the Revenue Per Employee (RPE) instead of having you add in your actual revenue number. This figure is based on 2007 data from the top 50 industry categories in the world. The top 25 industries were removed that included among others, mining and energy and investment companies that produce extremely high RPEs, and we use the average of the 25 remaining lower earning industries.
  • 2% is the yearly percentage of your revenue that we value your companies innovation and creativity at. There is no back-up data on this figure. It is a base line figure that the calculator builders determined was a safe starting figure.
  • This calculator only measures a negative value of costs associated with a lack of innovation and creativity. It does not give a positive number if you are doing a good job with conflict.
  • Breaking down the costs measured into percentage categories would be futile without a much more in-depth questionnaire.
  • It is assumed that the person taking the estimator survey is aware of what is going on in the entire team. A more complete way of gathering this data and producing a more accurate result is to have an entire team take the survey. Please see the Conflict Auditor™ tool or the Team Assessment tools Resologics offers.

Complete List of Conflict Costs

Conflict is normal, inevitable, and some would argue required to succeed.. The real question is whether or not you and your team will experience positive or negative outcomes as a result of it.

TOO MANY NEGATIVE OUTCOMES

(A) Easily Measured Solid Costs

  1. WASTED TIME - real productivity cost of wasted time. Company 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. Company paid for time and got nothing
  4. LOST OPPORTUNITY - Due to Absenteeism for billable hours. Services were not performed. 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 Formalised Conflict/Grievances Processes
  9. Workers Compensation
  10. Fines / Penalties

(B) Difficult to Measure Solid 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

(C) Nearly Impossible to Measure Soft 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

NOT ENOUGH POSITIVE OUTCOMES

Difficult to Measure Real Costs

  1. Lack of New Ideas and Innovation
  2. Reduced Creativity
  3. Diminished Problem Solving Capacity
  4. Lost Opportunities (short & long-term)
  5. Degraded Decision Quality
  6. Change Resistant Team. Difficulty in Pivots
  7. Market Entry Delays
  8. Focus on Productivity is Diminished
  9. Lack of sense of Urgency
  10. Quality of Product or Service Diminished
  11. Reputation; re: Employees & Prospective Employees
  12. Incompetence Tolerated / Team Complacency
  13. Lowered Job Motivation and Productivity
  14. Demotivated Staff Due to Lack of Progress
  15. Loss of Core Skilled Employees 
  16. Reduced Innovation Premium on Company Value
  17. Erosion of Shareholder Value

Discussion and Research: Positive and Negative Impacts of Conflict on Costs and Innovation

$45,790.00 is the average/mean US estimated annual wage based on May 2012 BLS.gov numbers. http://www.bls.gov/oes/current/oes_nat.htm

Revenue per employee (RPE) is $260,000.00  This figure is based on 2007 data from the top 50 industries in the world. We average the bottom 25 industries of these top 50 to get to the average RPE used in the calculator. CNN Money Fortune 500 Report. (2007)

"Workplace Conflict And How Business Can Harness It To Thrive." CPP Global Human Capital Report. (July 2008). (Study commissioned by CPP, OPP and Fellipelli - all conflict management firms)

  • (CPP) Our survey found that, on average, each employee spends 2.1 hours every week – approximately one day a month – dealing with conflict in some way (being involved in a disagreement, managing a conflict between co-workers, etc)."
  • "25% of survey respondents have seen it (conflict) result in sickness or absence."
  • "... the turnover cost of one employee can be anywhere from 30% to 150% of the employees annual salary."

"How Commitment Affects Team Performance." James Wallace Bishop and K. Dow Scott. HR Magazine. 42.2 (February 1997): 107-111.
"Research shows that if unhealthy conflict goes unresolved for too long, team members are likely to leave the company or use valuable time to search for alternatives. Interestingly enough, this research applies to executive teams and implies that the role of the CEO in managing conflict at the executive level is crucial."

"Controlling Conflict Costs: The Business Case of Conflict Management." Buss,Helmut. International Ombudsman Association Journal. 4.1 (2011): 54-62.
Helmut Buss in the International Ombudsman Association Journal highlights the costs of conflict and works effectively with a number of studies to outline: productivity rates dealing with poorly managed conflict using up up to 8.3% of workers time and from 30-70 percent of managers time; turnover rates with conflict being the decisive factor in departures in at least 50% of cases; absenteeism factors; reputation costs, etc... 

"The Virtue and Vice of Workplace Conflict: Food For (pessimistic) Thought." Carsten K.W. De Dreu. Journal of Organizational Behavior. 29.1 (January 2008): 5–18.
"Many authors, myself included, have suggested that workplace conflict may be beneficial to the organization. I argue that the support for this conclusion is rather weak. A selective and necessarily limited review of the literature shows that: (1) the positive functions of conflict are found only under an exceedingly narrow set of circumstances, (2) the conclusion that (particular forms of) conflict and conflict management has positive functions can be criticized on methodological grounds, (3) even under favorable circumstances a number of serious negative functions can be identified as well, (4) negative functions easily outweigh positive functions, prohibiting the emergence of ‘positive workplace conflict’ (where conflict has predominantly positive consequences), and (5) organizations need cooperative conflict management not because it brings positive conflict, but because it prevents workplace conflict to hurt too much."

"The Journal of Occupational and Environmental Medicine reports that health care expenditures are nearly 50% greater for workers who report high levels of stress and many studies suggest that stress is a byproduct of a conflicted work environment. Stress has seen a 316% increase as a reason for absenteeism since 1995." (1999 Unscheduled Absence Survey by CCH Inc)

"CCH 2007 Unscheduled Absence Survey" http://www.cch.com/press/news/2007/20071010h.asp
"It’s probably no surprise that the more unhappy employees are, the more reasons they’ll find not to come to work. The effect of morale is reflected in the 2007 CCH Unscheduled Absence Survey, which found that organizations with Good/Very Goodmorale experienced a 2.0 percent unscheduled absence rate while those reporting Poor/Fair morale had a rate of 2.7 percent." 

 

"Conflict and Creativity in Groups." Lisa Troyer, Reef Youngreen. Journal of Social Issues. 65.2 (June 2009): 409–427.
"Consultants and researchers have long recognized the debilitating effects that conflict between group members can have on both group and individual outcomes. Yet less attention has been paid to the important role that conflict may play in helping generate innovative solutions to ill-structured problems. Furthermore, conflict (properly managed) is critical to the avoidance of groupthink (i.e., the tendency to sacrifice quality decision making and problem solving for the sake of consensus and conflict avoidance). What strategies can group members use to incorporate conflict, or more specifically, dissent in group problem solving? We argue that the delivery of dissenting opinions (negative evaluations) affects the extent to which dissent fosters creativity. We report the results of an experiment in which the target of negative evaluations was varied (e.g., source of an idea vs. idea itself ) and compared to a condition in which no negative evaluations were incorporated. The results show that (1) creativity is higher in the conditions involving idea-targeted negative evaluations than source-targeted or no negative evaluations; (2) negative evaluations from others increase in conditions in which there are source-targeted negative evaluations and idea-targeted negative evaluations, compared to no negative evaluations; and (3) group members report higher levels of satisfaction when working under conditions involving idea-targeted negative evaluations, compared to source-targeted or no negative evaluations. We discuss the implications of this research for organizational settings, with particular attention to how they might inform the design of group decision support systems." 

"Workplace Conflict And How Business Can Harness It To Thrive." CPP Global Human Capital Report. (July 2008). (Study commissioned by CPP, OPP and Fellipelli - all conflict management firms)

  • "Roughly three quarters of workers reported positive outcomes that resulted from conflict – results that in all likelihood would not have been produced if conflict was not initiated."
  • "Among all employees, 76% have seen conflict lead to a positive outcome, such as better understanding of others (41%) or a better solution to a workplace problem (29%). This figure rises to 81% and 84% in the US and Brazil, respectively – the countries where training is most common. Belgium and France, where employees experience the least training, also have the lowest incidence of positive outcomes. This shows a clear link between training in conflict management and conflict’s impact as a catalyst for positive change."

"Mental Set and Creative Thought in Social Conflict: Threat Rigidity Versus Motivated Focus." De Dreu, Carsten K.W., Nijstad, Bernard A.. Journal of Personality and Social Psychology. 95.3 (Sep 2008): 648-661. 
"According to the traditional threat-rigidity reasoning, people in social conflict will be less flexible, less creative, more narrow-minded, and more rigid in their thinking when they adopt a conflict rather than a cooperation mental set. The authors propose and test an alternative, motivated focus account that better fits existing evidence. The authors report experimental results inconsistent with a threat-rigidity account, but supporting the idea that people focus their cognitive resources on conflict-related material more when in a conflict rather than a cooperation mental set: Disputants with a conflict (cooperation) set have broader (smaller) and more (less) inclusive cognitive categories when the domain of thought is (un)related to conflict (Experiment 1a-1b). Furthermore, they generate more, and more original competition tactics (Experiments 2 - 4), especially when they have low rather than high need for cognitive closure. Implications for conflict theory, for motivated information processing, and creativity research are discussed." 

"Energizing Learning: The Instructional Power of Conflict." David W. Johnson, Roger T. Johnson. Educational Researcher. American Research Association. http://edr.sagepub.com/content/38/1/37.short
"Although intellectual conflict may be an important instructional tool (because of its potential constructive outcomes), conflict is rarely structured in instructional situations (because of its potential destructive outcomes). Many educators may be apprehensive about instigating intellectual conflict among students because of the lack of operational procedures to guide them. Ideally, operational procedures should be based on social science theory that is validated by research. Constructive controversy is an instructional procedure that is designed to create intellectual conflict among students and that meets these criteria. The authors of this article summarize the theory underlying constructive controversy and review the results of their meta-analysis of the validating research. The positive outcomes indicate that intellectual conflict can have important and positive effects on student learning and well-being." 

"When And Why Creativity‐Related Conflict With Coworkers Can Hamper Creative Employees' Individual Job Performance." Onne Janssena, Ellen Giebelsb. European Journal of Work and Organizational Psychology. 22.5 (2013): 574-587.
"We examined when and why focal employees' creativity-related conflict with coworkers is related to their individual job performance. As hypothesized, a survey among 113 employees in 14 manufacturing work groups showed that creativity-related conflict with coworkers escalates into dysfunctional relationship conflict when focal employees have low rather than high trust in those coworkers. In its turn, relationship conflict with coworkers was found to be negatively associated with focal employees' individual job performance when they lack support from their supervisor. Finally, the indirect effect of creativity-related conflict on job performance through relationship conflict was found to be significant when both the first stage moderator of coworker trust and the second stage moderator of supervisory support were low rather than high."

"How Does Cognitive Conflict in Design Teams Support the Development of Creative Ideas?" Petra Badke-Schaub, Gabriela Goldschmidt, Martijn Meije. Creativity and Innovation Management. Blackwell Publishing Ltd. Volume 19.2 (June 2010): 119–133.
"Is cognitive conflict detrimental to the development of innovative ideas in design teams, or is it a precondition for innovative performance? Assuming that there is a relationship between cognitive conflict and innovation, what kind of strategies do teams use in situations of cognitive conflict and what are the consequences for creativity? This paper reports on a study analysing how design teams cope with cognitive conflict during idea generation in an experiment. The design process was captured in protocols that were generated from video recordings. We report the results of the analysis of verbal protocols according to the five styles of (cognitive) conflict behaviour: competing,collaborating, compromising, avoiding and accommodating. Out of six teams, the results of the two highest and two lowest scoring teams are compared as regards innovation and functionality, which we see as the two components of creative outcomes. We show that design teams, even in a laboratory environment, encounter a considerable amount of cognitive conflict. A statistical comparison between the groups with the highest and the lowest innovative/functional design concept scores reveals significant differences in their conflict behaviour styles. The high innovation and high functionality groups used a more competing and a more compromising style, whereas groups rated low on the same parameters used a more collaborating style. The high rating groups on both creativity components used a more associating and rejecting behaviour style; the high innovation groups also generated more new ideas than the low innovation groups. The low rating groups on both innovation and functionality tended to repeat ideas more frequently. The main finding is that, in contrast with reports in previous research, the groups with higher innovation and functionality scores collaborated less than their peers in the low rating groups on these parameters. We interpret these results as signifying that creative performance in teams is not achieved mainly by agreement but needs cognitive confrontation." 

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