Business-Busting Conflicts are Frequent in Startup Teams
/[Updated April 2021]
In the years I’ve worked as mediator, conflict coach, trainer, and confidant, I’ve seen hundreds of startups in conflict crisis mode — in the midst of amazing ideas, great funding, market possibilities and bright futures.
For a variety of predictable systemic reasons they had gone over the cliff so not only did they need to get the job done, they also needed to rebuild their teams and, in some cases, their close relationships, from the bottom up to get back on their feet again.
Back in 2013, I pulled together some statistics and takeaways on startups who fail due to conflict, drawn from my personal experience, interviews with founders, and some curiosity-inspired digging. As far as I can tell, the stats still hold up today, and I’m still working with startup teams on these same issues. So it feels worthy and important to share this information again.
Here is a chart that quantifies the reality for startups.
Takeaways for startup partners, leaders, and investors
Predictable: When people are put into the types of situations that startups encounter, there will be conflict. No doubt at all. They are ripe for conflict at many levels, due to the very nature of the environment startups operate in — new, fresh, lots of unknowns, creative ideas bouncing around, high risk, high energy, high stress (did I mention unknowns?).
These factors all feed the levels and nature of trust, which is an essential element of a high-performing team. Well-managed, constructive conflict is where creative ideas and innovation happen. Unmanaged, it can be where disputes, misunderstandings, interpersonal clashes, separations — negative conflict run amok — can happen.
If it can be predicted, we can manage it and minimize its effects.
Identifiable: If you and your team are in the midst of a dispute, you are probably full of confusion, frustration and concern. You might be worried about losing money, clients, your reputation, production capacity, market entry and perhaps your own identity.
Or, you are not in the thick of a dispute, but conflict is happening — it’s just sitting under the surface about to boil over. Everyone appears to be getting along in meetings and interpersonal relationships, but in fact conflict is festering and eroding trust, productivity, teamwork and friendships.
Here are just a few of the warning signs that conflict is occurring in your startup. Many of these are indicators of a loss of trust within the team.
Dysfunctional meetings. Do team meetings end up being gripe sessions instead of brainstorming sessions? Are there some people who always seem to dominate the conversation while others appear annoyed, distracted or quietly fuming?
Anger. Any anger, but especially that which is an over-reaction, needs to be addressed immediately. Anger is rarely the response for a first-time upset.
Anxiety. Are there certain individuals who seem anxious or on edge most of the time? Maybe they avoid social interactions, are always doubting their work or asking more than the normal amount of questions. Anxiety is often an indicator that there may be an issue festering on an interpersonal level.
Clique forming. Does it look like some people are taking sides in an otherwise cohesive team? A few people seem to be ganging up on others. There are more side conversations happening or decisions being made offline. The team isn’t functioning as one body and perhaps not as productive as usual.
Repetitive disagreements. Does it seem that the team members always disagree? Is the conflict often over petty matters? Decision making that used to be productive seems be slowing down or stalled.
Manageable: There are many proven models of conflict management which are deployed through professional conflict advisory and mediation. Besides expertise in these models, the mediator provides what the startup team cannot — an outside, impartial, confidential, expert and fresh set of eyes. We set up a process that is safe, comfortable and effective for everyone involved, creating a neutral space for all parties to come together to resolve whatever is in dispute. According to the American Arbitration Association, over 85% of all mediations result in a settlement.
The really unexpected and beautiful part about working with entrepreneurs to mitigate, prevent, and resolve disputes is that the very same skills they learn in and around conflict also help them build much more creative and nimble teams. Not a lot of kumbaya, just real skills in handling the most complex thing in the world — human relationships. Important to startups and important to scaling.
When we join a company, partnership or team, our expectation is that everyone involved will exhibit professional behavior toward us and each other. Instead, it’s highly possible that we may become one of the more than 60 million adults in the United States who are affected in some way by bullying behavior at work.
What kind of behaviors are we talking about? Our definition is any interpersonal behavior that causes emotional distress in others sufficient enough to impede their productivity or disrupt organizational functioning. It isn’t just a personality conflict — it’s a chronic pattern of disrespectful behavior.