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Time Out

Effective tips for handling business conflicts
December 1, 2000
URL: http://www.entrepreneur.com/article/34278

Bhavin Shah, CEO of eWOMP Inc., 28, didn't like what he was hearing. Four days before the planned launch of eWOMP.com, a New York City-based Web site where you earn rewards points for sharing things you find online, the Web developers told Shah they couldn't meet the launch deadline. And much was at stake: "With a delay in launch, we stood to lose deposits and money, upset existing client relationships, jeopardize future partnerships, and lose investor confidence," recalls Shah, whose company has raised more than $2 million in angel financing and now has more than 20 employees.

How did Shah respond? The natural response would be to fly off the handle. But Shah kept the big picture in mind. "While it would have been easy to break ties [with the Web firm] at that point and start a lawsuit," he says, "we would have lost the knowledge base and product familiarity we had created in this Web development team, and that would only delay our launch even further. In an industry where competitive edge is defined by time-to-market, we realized that such a choice was unacceptable."

Seeing that it was in the best interest of both companies to resolve the problem, "we initiated discussions with the CEO to explain the dire situation and express our total frustration with the process," says Shah. "Rather than start a blame game, we opted to develop a plan for the next eight days in which the site could be launched."

In the end, Shah was able to reach new payment terms with the developers, and he sketched out a system that included a full-time, exclusive project manager dedicated to the eWOMP team as well as a system of regular, short-term milestones for the development team. And they met their new deadline, launching the site within eight days. Says Shah, "With the conflict management path we took, we were able to preserve the relationship we had developed over the past 20 weeks with our developers and create significant goodwill."

What do you do when you've got a beef with someone-whether it's an employee, partner, customer or investor? Or vice versa? How do you diffuse conflict in your business relationships before they blow up into time-consuming crises? Try these tactics:

Clear your head. When you find yourself ready to lash out in anger, take a time out. Say something like "Look, I realize it is important that we talk about this issue, but I need some time to collect my thoughts so that we can talk about this more constructively. When would be a good time for us to get together?" This way, you'll avoid making rash mistakes that could cost you even more in the long run.

Focus on resolution, not "winning." If Shah had focused on "winning" the conflict, he most likely would have fired his Web developer for failure to deliver on promises. But he wouldn't have solved the underlying problem: getting the site up ASAP to maintain investor and customer confidence.

Seek to understand first, then explain yourself. This is tough, especially when someone is angry with you. Try not to jump to your own defense when someone says things like "You're always late!" or "You never get it right. What's wrong with you?" Just brace yourself, and listen calmly. Then try to genuinely understand where that person is coming from by saying something like "If I understand you correctly, the issue here is that I'm often late to our meetings, and to you this means I don't care about you or your time. Is this correct?" This exercise alone will diffuse most of your conflicts before they blow up. In fact, you may find that once the person has had a chance to cool off, you weren't the problem anyway.

Use "I" statements. Instead of saying "You've screwed up, and now it's your fault that we're going to lose this funding," try saying "I get frustrated when we don't achieve our deliverables and I don't get alerted to problems sooner." When you express your dissatisfaction without putting the other person on the defensive, you open the doors to more constructive discussion.


Sean M. Lyden is co-founder and CEO of PRessCafe.com Inc., an Atlanta-based B2B portal that connects small businesses to the right journalists-for free. The site is expected to launch imminently.