08 - How to Manage Conflict in Your Business

Be the Anchor – Strategies and Support for Small Business Owners

None of us get into business anticipating disappointing clients or having disgruntled employees. We all have the best of intentions about pleasing customers and making employees feel valued in jobs they enjoy. Unfortunately, humans have different perspectives and navigating those perspectives can lead to conflict. So how do we manage conflict when it arises in our business?

The first step to developing a strategy for conflict is to reflect on how you currently manage it. Do you tend to ignore conflict, hoping it will go away? Do you feel like you need to have all the answers and scramble for a solution? Or do you immediately go on the defensive? All of these are natural responses but they aren’t effective strategies. I’m going to talk about how to work past those instinctive responses to develop a more measured plan of action.

Part of conflict management is getting to the root of the issue and then being willing to address it. Simply giving in to complaints only reinforces negative behavior by rewarding it. What is the complaint really about? Could it have been preemptively avoided by inviting regular feedback from customers and employees? I’m helping you with the difficult navigation of conflict, but I’m also going to help you avoid some of it by talking about strategies that deflate complaints before they become conflicts.

Key Moments

05:36 Avoiding conflict and other ineffective methods of dealing with it

07:25 Conflict with customers

18:50 Conflict with employees

• How do we manage when we’ve had a negative review?
• Why getting feedback, positive and negative, is so important
• Do employees have all the correct expectations about their roles so they can rise and obtain raises?

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Contact Kari Lotzien | Be the Anchor:

• Website: BeTheAnchor.ca
• Facebook: BeTheAnchorLtd
• Instagram: BeTheAnchor.ca
• Linkedin: Be-The-Anchor-Ltd

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Transcript:

Kari Lotzien: [00:00:01] Welcome to Be The Anchor the Podcast. I'm your host, business and leadership coach Kari Lotzien. When the seas of life gets stormy, and they always will, it is not up to us to captain anyone else's ship or to try to calm the waters of the ocean. It's up to us to set our own destination for what we really want, and to learn how to navigate those waves of life together while finding that place of security and stability with others. I call this being an anchor. If you are a dreamer, a visionary, an entrepreneur, whether you have an idea, big or small, that you think might just make the world a little bit better, kinder, gentler place, you are in the right spot, my friend. We are going to talk about everything from big ideas to mindset and strategy, and sometimes just how to get through the day. I don't want you to miss an episode, so be sure to follow and subscribe to the podcast so that we can stay connected and keep doing this journey of life together. Thanks so much!

Kari Lotzien: [00:01:10] Hello my friends, I'm so glad you're here. Today I want to talk about a bit of a sticky subject around managing conflict in your business. Now, no one went into business planning to disappoint people or have disgruntled employees. You went into business because you really thought that you could deliver a product or a service that your customers wanted, and that they valued, and that they would appreciate you for. You hired people thinking that you would treat them well, and that they would have jobs that they enjoy, and they would contribute to the growth and the success of your business. I get that. And just because you're dealing with conflict, big or small, in your business, doesn't mean you're doing anything wrong. I want you to really hear that. If you are working with, serving, or have humans as part of your business, we have different perspectives. There are times where we're maybe not as responsive and we're maybe a little more reactive than we want to be. And as we're trying to just navigate this together, it can create challenge and sometimes sticky, uncomfortable situations. Now if this is happening on a repeated basis and there's a pattern to it, then maybe we want to dive into that a little bit deeper. But for the most part, I want to just talk about how you might have a strategy or a plan to navigate that conflict in your business.

Kari Lotzien: [00:02:43] The first step, I think, is just pausing to take a bit of time to reflect on how you manage conflict currently. When someone shares with you that they're not that happy or they feel that they were treated poorly in your business, what's your natural reaction? And how is it working for you? So I can tell you I had a rehabilitation practice for well over 20 years. And when I first encountered conflict in my business, it was often related to cancellations, so late cancellations that came in, or people who just didn't show up for their appointments. And I got to a point where I developed a cancellation policy that if you canceled within 24 hours of your appointment, that you were charged a 50% fee. What I didn't have a plan for was how I was going to implement that when someone would say that they didn't want to pay it, or that they felt it was unfair. And to be honest with you, there was times where they didn't say a word about it, and I anticipated that they were going to be upset. So I just didn't charge it. I would do whatever I could to appease my client, to just not have to deal with that so that they would stay happy and I feel like they would continue to have a long term relationship with us as client. Now what happened is my lack of ability to manage that conflict ended up creating a bigger conflict when I had additional team members, because now when someone would cancel on very short notice or would just forget about their appointment and not show up, my staff still expected to be paid. And let's be honest, we had clients that were kind of notorious for canceling last minute, and we wanted to change that behavior. We wanted to make sure that, especially when we had a wait list for our services, that if there was going to be a cancellation we could allow someone off the wait list to come in on short notice so that we could fill that slot. That was our desire. But when we weren't either at least addressing the issue of what that means to our business when you cancel on such short notice, how that affects the clients that are sitting on the wait list, how that affects your success in your program, all of these things, when we didn't address them, just compounded the problem and made it bigger later on.

Kari Lotzien: [00:05:36] The other thing I often see is people who just avoid the conflict. They might hear rumblings that people aren't happy or there's something going on, and we just kind of ignore it and hope that it goes away. And I can tell you not the best solution either. The third, sometimes we feel like, especially if we are a sole entrepreneur or we are the single leader of a team, that we feel like we have to have the answers. So if someone comes to us with a conflict that we immediately have to have the solution. And when we are stressed, when we are feeling overwhelmed, we might not have the solution, or we might not be the one who has the full perspective of what's going on. So just notice, are you the type that feels like it's up to you to come up with the solution to the conflict? And the last is when people feel like they need to defend themselves. So when someone comes to you with any sort of disappointment that you feel the need to go into that defensive posture to explain your side of the story and that you are right. This can happen online. I think we see it often with business owners who will go on and respond to a negative review and try to explain their side of the story, which creates this position of opposition with their client or their customer. And again, not the strategy that I would suggest. So I think the first thing to do is just recognize how are you responding right now? And is it working? Are you potentially creating more conflict in the future in your method that you're currently managing these things that are coming up?

Kari Lotzien: [00:07:25] The next thing I want to go into is to just kind of divide into two sections. So let's talk about conflict when it comes to customers. So how do we manage when we've had a negative review? Or how do we manage when maybe one of our customers is not completely satisfied with our service and they've come to us about it? The first thing. So I'm going to talk to you about a customer of mine, she prides herself on their business being efficient, professional, they do incredible work. And she called me one day and said, Kari, I don't know what to do. We have had someone post a really negative review of our business and she was devastated. Number one, she felt that it was a really personal attack. The way that it was written was really questioning the professionalism of her business. So what was happening is this person attacked their pricing structure and accused them of overcharging and basically falsifying information on an invoice, and she took it really personally. So as we kind of dove into it, we started looking at, okay, how have we dealt with this in the past, number one? And how did it get to this point? Third, we go to is there anything we could have done to prevent this in the future?

Kari Lotzien: [00:08:56] So number one, when I asked her tell me about this client. So number one, she couldn't respond to go into defense, which is what she kind of wanted to do was to tell her side of the story as to why the charges were absolutely justified, how they tracked their time, why her pricing was very similar, if not better than her competitors. She wanted to go into the whole story. Naturally. But what we were also a little bit tied with, and if you are in health care or you have a business that needs you to protect the confidential information of your clients, you need to be really careful of this, because we don't want her to disclose any of the confidential information about her client, or to put them at risk. So, number one, she couldn't do that. She also didn't want to just ignore it because she said, I only have a couple of Google reviews on my site, which we're going to circle back to.

Kari Lotzien: [00:09:59] I said, did you know that this client was upset previous? And she said, oh yeah, this client does this every month. They complain about their invoice. Okay. How has that been managed in the past? And she said, well, it started off where this customer would just email us back and say that I feel that there was an overcharge on this and this and this. And she said we would typically just adjust our invoice and carry on. And she said, and then I got to the point where I was like, kind of getting irritated with it. So she said, I didn't respond, and I just sent the reminder that the invoice needed to be paid. And she said, and then the customer phoned me and said, I need to talk with you about these charges. I think this is unfair. And she said, and when they leaned in and complained again about the charges, I adjusted the invoice and carried on. So do you see what's happening? What had built over time is that this customer was being financially rewarded through their conflict, and the way that the owner just wanted to appease the client, right? We have that idea the customer is always right, so she was waiving parts of his bill and saving him significant money just to appease him.

Kari Lotzien: [00:11:18] Now, what had happened was she decided in this particular encounter that she was no longer going to do that. And she said, please give me a call. I'm willing to go with you through the invoice with you line by line and explain the charges, but we will not be reducing our fees this time. So she held the boundary, which she had never held before, and he increased it and took it to a public platform to really show a negative review on her business. So when we leaned into this, number one, we had to recognize that part of the problem was the way that she had dealt with the conflict in the past. She had never felt that she had overcharged. She had never felt that there had been falsified information on an invoice. She absolutely stood behind her systems and processes in things being very accurate. And she was really proud of the fact that her team was efficient and often came in under the budgets of her competitors. But in this particular situation there was a reward for him complaining. So we recognize that if we would have set that boundary earlier, it likely would not have escalated to this point. So then we went through and just navigated how we were going to go through this together. So we leaned in, we said, I want you to create some sort of a response to the review. So we want you to lean in, acknowledge that you understand that there were some challenges that you are really open to discussing in a private situation, and that you would be reaching out by phone within the day to discuss this further.

Kari Lotzien: [00:13:03] So what this does on the public platform is it takes it to, Who's watching? All your audience wants to know when they look at your reviews online is, Are you willing to address the challenge? So the fact that she doesn't say, you know, reach out to me if you want to talk more about this, she takes the initiative and says, I will be reaching out to you today by phone to discuss this in a private setting. What this did for her audience is it showed even if someone's upset, she doesn't ever break confidentiality when it comes to her clients. She is willing to lean into that discussion, which is difficult, and she took some initiative on how she was going to deal with that. So we developed a little bit of a script on how she could respond to any negative reviews that come up in the future. The other piece of this, that we dug down a little bit deeper to, was she didn't have many five star reviews because she never asked for reviews from her customers. She relied on word of mouth, which I know a lot of you do. We tend to think that when people are happy with our service, they recommend their friends and family, and they recommend us to other people and that that just builds. But if someone doesn't know you yet and they find you online, they rely on those reviews to decide if you're the type of business that they want to work with. So make sure that you're proactively asking for feedback from your customers.

Kari Lotzien: [00:14:30] Now let's lean into that a little bit more. I think getting into the habit of asking for feedback from your customers, and not just give us a five star review, get detailed, ask them questions about how their experience was. What they maybe particularly enjoyed or what stood out to them. And is there anything that we could have done that would have made your experience just a little bit better? Those three questions can help your clients if they were hesitant in sharing that, you know, maybe they weren't upset with the service, but it wasn't as good as it could have been. This opens the door for them to say, I want your feedback. We value you as a customer, and we really want your experience with our business to be exceptional every time. When you invite that feedback, and you do it not only with new customers, but you do it with your long term clients as well, maybe that looks a little bit different. So it's not the same questionnaire that goes out every single time they come to your business. Maybe one of the times you have your admin phone and just say, hey, I noticed you came in last week. Just like to touch base on how your experience was. You've been a long term customer. We really appreciate that. Anything you feel we could be doing a little bit better? Right? That tells your customer, hey, I know you've been here a long time and we really appreciate you. And I don't take for granted that just because you keep coming back, that means you're a raving fan. We can always be doing a little bit better.

Kari Lotzien: [00:16:13] One of my clients, she's a massage therapist, and she said, one of the things that I used to do is when someone came to see me for a massage and they had a really particular issue or challenge going on - so maybe they had, you know, a lot of pain in their upper back and they were really struggling with shoulder checking - she said, I made a habit to just give them a quick phone call within 24 to 48 hours later and just, she said, often, I never even talked to them. I left a quick message and just said, Hey, I'm just checking in. I'd really like to know how you're feeling today. How's your neck? Are you able to shoulder check, noticing any differences? If you have any questions, give me a call. She said 90% of the time they never called back, but they always commented on it the next time they came in. They'd never had that experience before. When you lean in to getting feedback, when you take that extra little step, this creates that open door where people, if they do have something maybe a little bit subtle that just didn't quite feel right, they're going to reach out to you because what we don't want is they start to feel maybe a little bit disappointed and instead of saying anything, they take their business somewhere else. And worst off, when someone asks them for a referral, they don't give it to you. They send it somewhere else, and maybe they share their disappointing experience with their friend or their family member, and they never let us know. Which never gives us an opportunity to change the experience. So I really feel like when you lean into this with your customers and you show a willingness to get curious about what their experience was like, and you show them that you're not just going to defend your own position, even if you're justified. So the position with my client, who had a really negative review, that was a little bit different than what I'm talking about here in getting ahead of it. Your approach is a little bit different, but when you consistently use a proactive approach to inviting any negative feedback, it really creates long term raving fans because then we see it over and over again. You know you can't be all over social media if someone says something negative about you on a community page. But when you have created a habit of leaning in and requesting feedback from your customers, they have your back. So if they're on the site, they will defend you. They'll tag you in the post to make sure that you have a chance to respond. It's really the best thing ever.

Kari Lotzien: [00:18:50] Okay, now let's go to the other side. Let's talk a little bit about employees. So I want to give just a three step kind of process to how we can manage conflict on our team. And I'm going to do this through just a couple of examples. A couple of things that are coming up quite often are working from home or working remotely. Or, I feel like I should be paid more. The working from home challenge. What we're hearing is that with the last few years, a lot of businesses allowed their team members to work from home or work remotely, or have some sort of a hybrid model where they were in the office sometimes and not others. And where I'm seeing it is owners and managers are questioning, Do I still continue this because I have a discomfort with it? Is this really working well? Is it working well for my team culture? Am I getting the results from employees that I really need? So the first step to this is make sure you've identified the real issue. Because often the issue that is brought up - I feel I'm not being paid enough or how come they get to work from home and I don't, are we allowed to work from home or not - that's not the real issue.

Kari Lotzien: [00:20:19] When we peel the layers of the onion we can dig down to what is the actual issue. Working from home. When I start asking more questions, which is the number one thing that I think we need to do is stay curious before we react. Especially if you're the type of person that just wants to appease or wants to go to defensiveness. Can you stay in that middle zone and just stay curious? Not respond. Give yourself a little more time to understand. When I dig in with a lot of my clients around, what is the real issue when it comes to working from home? The issue is not where they work. The issue is, well, I have some questions because I notice that when this one person works from home, they get a ton of things done and I really don't have an issue with that. But when this other person works from home, what I notice is that when I call them, they don't respond. I email them, sometimes hours go by and I don't hear anything, and I question, Are they really doing the work that I need them to do? Or, you know, when they have the distraction of kids in the background, is that really impacting their ability to stay focused on the projects and the work that we need done? When I dig into that with them, we identify that the issue is not whether you work from home or not as a team. The issue is how do we ensure that there's accountability no matter where we're working from? And how do we distinguish if a remote working environment is the best solution for this employee with this role in this situation. And it might be different for different members of your team. When we dig into that and we then start to identify, okay, now let's go to the second step of let's explore all the solutions to this challenge. So the solution might be we allow everyone the option of working from home. Or, nope, everyone has to come into the office. There might be more solutions that allow us to address the true issue. How are we going to measure accountability? How are we going to maintain team culture and connection? How are we going to ensure that there is a high level of service for our customers, that we still have that same quality no matter where we're working from? How do we measure that? How do we do a check in? Now do you see it opens up so many different options and different solutions. Then we go to deciding what the outcome from that conflict is going to be.

Kari Lotzien: [00:23:05] What I suggest is that when we go to step two, you might get some input from the team. You might decide that you know what? Help explain to me why this works for you, or what your concerns are, or why you really want this. And I'm going to share with you what our worries are or how we're going to work through this together. So you create this space where you're not trying to defend your own position. You're just looking at all options. So your goal at this place is to stay really broad in your perspective and scope. Then you may take it back to a smaller team. Maybe this is your senior management, maybe this is just you, to make the final decision. So you want to be clear, if you take this to a team, this is not a vote. It's not that the majority wins. It's not that the loudest person in the room wins, or that person that you like the best. You want to identify that you will be taking the input from everyone, and that you will come back with a final decision and likely an explanation as to how you got there or why. Now, once you've decided you can make a different decision, you might then talk about reevaluating. So we're going to try this plan for 2 or 3 months and then we're going to evaluate how it's working. So just because you make the decision doesn't mean that you need to be forever stuck in it. But it's important that you make a decision. Don't stay in that gray zone too long, because that's when people start to feel really uncertain and they don't really know what's happening, and they feel like nothing's being done and maybe you're going back to just ignoring the problem. So you want to make sure that you've got that.

Kari Lotzien: [00:24:47] Now let's let's go for the other side. I feel like I'm not being paid enough, I feel like I deserve to have a raise. When we dig into that, what might be revealed is that the issue is maybe not that this person is being paid unfairly compared to a similar role within your organization or with the competition. So the first data that you might need is has the market changed? Are people being paid more and you were just unaware of it? That might be one of the issues. The issue might be that you're actually expecting more of this person, that you hired them, and you really expected, based on their experience and their background, that they were going to be able to deliver a little bit better quality than what they are. It could be that this person really wants to go to that next level. But maybe in your mind you think, I need a little bit more experience or I need you to have this specific skill set. Maybe it's a course or some really focused training to be able to access that next level. When you look at the real issue, is it that they're being paid unfairly compared to market? Is it that you could pay them more but they don't know what training or what your expectations are, because maybe your job description was not clear. And when you come back and you reflect on the description of the job at hiring, to just say, okay, are we matching the expectation of what you're currently being paid and pointing out if there's any gaps, then the person knows, okay, these are the things that I need to clean up so that I can get a promotion or I can be financially compensated for what I'm doing here. If I want a really substantial raise, it's not a matter of just showing up and doing the same job for longer, but that really I need to up level my skills or I need to take an additional training course, or I need to get some licensing or a different role. Now you've shown them the guideline as to here's how you could achieve that next level. So when you look at all of the solutions, this isn't just about paying them more so that they stay in their current role so that they don't quit. When you then make the decision, We'll review this in three months, here's the training that I want you to do. Or here's a couple of the key skills that I really want you to work on. And then we're going to book a meeting and follow this up in 6 to 8 weeks to see how this is going, it moves us through the conflict together.

Kari Lotzien: [00:27:26] Because what I don't want to see, similar to the customer that was leaving the negative Google review, what we're seeing sometimes in business is that your employee threatens to quit, or they ask for a raise and they get it. And you don't want to set up a situation where the only time people get raises is when they threaten to quit because the word will get out. And typically people who have done it once or twice will continue to do it because it works the same way it was working for that client to get money taken off of his invoice. What you want is that business is a collaborative relationship. It's an exchange. You are more than willing to pay for service that is improving the quality and the service in your business. But your employees might not know how to get there. So make sure that you're just helping to set that up. And if you really just can't, if there is a reason why you are maxed out and this decision just is not available to you, then with some reflection and integrity, you don't want to be disclosing too much, but you do want to make sure that people know why you've made the decision that you've made based on the knowledge or the data that you have available. So if you just can't give raises right now because your lease costs just went up 30%, or your utility costs have doubled, or maybe you're in the food industry and you are just not able to recover the price of food based on the overhead of your building, your utilities, and your food costs, make sure that people know that, because sometimes we'll create a story in ourselves that we assume, Well, the reason that they don't want to give me what I'm asking for is because they don't care about me. They don't value what I'm doing here, or they're taking it all for themselves. So you want to make sure, be transparent and speak to that. If you value that person, make sure they know that. I absolutely appreciate the time and the energy that you put into this. Here's what I see, I see that you're always looking to make our business better, I see that you are absolutely exceptional with our customers. And I absolutely don't want to lose the appreciation or the value that I see in you. I can't do this right now, but here's how we could or here's maybe another solution to our challenge. Could I give you a bonus somewhere else? Could I give you a little bit more flexible hours? Could I offer you maybe a different role where you could develop a different skill set and be compensated in a different way? Show that you're willing to work together to solve the conflict, that it doesn't just become a you win or I win situation.

Kari Lotzien: [00:30:17] All right. A couple of just dangers that I want you to just think about as we close up. I want you to know that there is a long term consequence of not leaning into conflict. Developing the skill set for knowing how to navigate this, which starts with self-reflection, know how you typically respond, and ask yourself if it's working for you. If you find that you lean towards kind of ignoring conflicts and hoping they go away or assuming that the loudest voice in the crowd represents the majority, this brings us all the way back to the beginning. I know that you didn't go into business to disappoint people and to have them say bad things about you. But sometimes it can feel like the loudest voice in the crowd represents all of your customers, and you can start to feel really discouraged and feel like no one appreciates what you're doing, and the value is just not there and that you're not appreciated. Recognize that it is just because one voice in the crowd is so much louder than the others. So it is up to you as a business owner to ensure that those quieter voices in the crowd have a space to have their voice heard, whether that's through one on one reaching out, having them fill out a customer service questionnaire, asking them for a review with some focused questions. We want to make sure that we are surveying enough people that we get an accurate representation of where the issues are and where we're doing really well so that it balances out. This, I know, will help you to create a community of people who are raving fans of your business and will have your back when you're not there.

Kari Lotzien: [00:32:06] All right. This is where I'm going to leave you. I want you to lean in to just a little bit of conflict. You know where it is. You know where there's potentially some gossip or some sticky things going on. How can you show up with a little bit of transparency today, keeping your feet on the ground, to just lean in and get a little bit curious? Thanks so much for being here. I'm so grateful that you're listening in, that you're continuing. If you haven't liked and subscribed yet, please do. I don't want you to miss an episode. And if you know of someone who is really struggling to navigate some negative feedback in their business right now, please take a screenshot or share a link to this episode with them, because this time can be a little tricky and we want to make sure that there's support. Let's give each other a hand up. And if someone's doing something really well in business and you've had a great experience, let's make sure those voices are heard too. If you can reach out and give someone just a little bit of a boost today, please do. Thanks so much.

Kari Lotzien: [00:33:12] Please know that this podcast is meant for entertainment purposes only. It is not a substitution for medical or professional mental health advice. If you require support, please do reach out. Thanks so much.