Part 1: The Real Cost of Forgiveness Withheld
Gordon Hinckley once wrote in his book Standing for Something: 10 Neglected Virtues That Will Heal Our Hearts and Homes that “The willingness to forgive is one of the great virtues to which we should all aspire. Imagine a world filled with individuals willing both to apologize and to accept an apology. Is there any problem that could not be solved among people who possessed the humility and largeness of spirit and soul to do either or both?”
As “Monday Mornings with Madison” is a work-life advice column, what does forgiveness have to do with work or business? Forgiveness is a virtue we typically relate to personal relationships… unresolved conflicts with close family and friends. But actually forgiveness is a virtue – dare we call it a skill — that has value and purpose in all areas of life, including and perhaps especially in business. There is ample evidence that while forgiveness is regularly discussed in classrooms and places of worship, the act of forgiving or being forgiven past transgressions is one that is neglected and undervalued in the world of work, and certainly seldom spoken of in board rooms. Yet, some experts believe that unresolved conflict represents the largest reducible cost in many businesses, yet it remains largely unrecognized (Dana 1999, Slaikev and Hasson, 1998). What might the average workplace be like if every person, from entry level staff to C-Suite execs, were all equally willing and able to give and receive apologies and release resentments quickly and freely? Might forgiveness actually impact a company’s bottom line?
Qualifying The Cost of Unresolved Conflicts
We should start by differentiating between disagreements and conflicts. Disagreements are a natural and normal part of interactions between people and are typically of no consequence to an organization. A disagreement can be defined as a difference of opinion that does not directly affect behavior, decisions or the ability to accomplish a task, and so does not usually impact organizational effectiveness in any major way. A conflict, on the other hand, is when there is a divergence of opinion or clash of personality in which the goals of the parties involved cannot be achieved simultaneously and this, in turn, affects behavior and decisions and impacts an organization’s ability to accomplish a task. Unresolved conflicts can create many serious consequences.
Impact of Unresolved Conflicts at Work
- Project delays
- Missed deadlines
- Missed market opportunities
- Damaged customer relations
- Failure of teams to work cohesively
- Excessive employee turnover
- Low morale
- Reduced productivity
- Quality problems
- Increased supervision overhead
- Increased stress
- Reduced collaboration
- Fractioned activities
- Passive-aggressive behavior
- Abusive behavior
- Damaged management credibility
- Decreased customer satisfaction
- Negative upward attention
- Split alliances (factions & cliques)
Organizations with chronic unresolved conflicts amongst staff typically have trouble attracting and keeping quality employees. In fact, chronic unresolved conflict acts as a decisive factor in at least 50% of staff departures. A team’s inability to resolve issues and let go of resentments ultimately can have a profound impact on a company’s bottom line.
Quantifying The Cost of Unforgiveness
Is it possible to accurately quantify all of the costs and long-term consequences of unresolved, unreleased conflicts? Not completely. Some of the impact can be broken down into a dollars-and-cents impact. But a lot of the impact cannot be truly calculated, and may have a serious impact on a company’s bottom line.
Lost revenue as a result of missed deadlines, late deliveries, etc.
Employee replacement costs, including termination costs, recruitment, etc.
Increased expenditures resulting from problems (having to re-do work; time lost discussing the issue, etc.)
Loss of market share as a result of “missed windows of opportunity”
“Ramp-up” time required for replacement employees to become effective contributors and fit into the organization/group
Increased supervision or management activities
Passive-aggressive behaviors exhibited by disgruntled employees
Loss of effective management resulting from loss of credibility
Miscommunication with other groups resulting from confusion
Poor image within the industry, marketplace or organization
Inability to recruit top talent because of reputation for organizational dysfunction
This can add up to a lot of waste of company resources: staff, time and reputation. Controllers and Chief Financial Officers should take heed. Unresolved conflicts can, and often do, escalate even further to litigation. Given the cost of unresolved conflicts, progressive organizations are becoming more proactive in finding solutions. Corporations that have developed collaborative conflict management systems have reported significant litigation cost savings. Brown and Root reported an 80% reduction in outside litigation costs. Motorola reported a 75% reduction over a period of six years. NCR reported a 50% reduction and a drop of pending lawsuits from 263 to 28 within a nine-year period.
Indeed, the basic concept of giving and receiving forgiveness and forgetting past transgressions is the key to eliminating the “largest reducible cost” of business today. So how does a company get its employees to be more forgiving? Stay tuned next week as we examine what is forgiveness and look at the steps to help employees — at all levels — improve their ability to forgive and forget.
Quote of the Week
“Forgiveness is of high value, yet it costs nothing.” Anonymous
© 2012, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.