The truth is that starting up is one thing, but staying alive is another. Research shows that half of new business startups fail within the first five years of operation, and over 60% fail due to negative outcomes from conflict. Noam Wasserman’s research on startups, described in his best-selling book The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, reveals this: Most business startups ‘sink’ not because of lack of planning, failure to test the market or undercapitalization, but rather due to interpersonal complexities, destructive co-founder disputes, destructive team dynamics, and people problems.

Put another way, there’s at least a 34% chance your investment in a startup will be adversely affected by destructive conflict within the team. A stunning and sobering statistic..

But Don’t Be Disheartened
Another truth is that conflict is a necessary part of successfully running a business. This is because conflict is a natural occurrence which can happen any time two or more individuals have different ideas, wants, and needs. Conflict is normal in any environment. However, if not properly managed, conflict can escalate into disagreement and become entrenched to a point of no return for a young, fragile business.

How to make sure these natural and predictable conflicts are well managed in your teams?

Know the Pitfalls

“I’ve seen too many startups flounder and fail because of co-founder conflict. Everyone starts off with the best intentions — and then things start unraveling. In many of these cases, the conflict could have been avoided — or at least surfaced sooner, if the founders had confronted some of the potential issues and asked each other the hard questions early-on.”

— Darmesh Shah

Repressing, ignoring or avoiding conflict. Leaning into conflict is one of the hardest things for us to learn to do. So most people tend to avoid conflict, shoving it under the rug and hoping it will go away. However, in most cases it just gets bigger, more entrenched, and ultimately too toxic for the business to recover. Even if there is not an evident crisis, over time the undercurrent of persistent conflict can undermine your business team.
Failure to see a systemic issue. Our analysis has identified 11 common issues that cause destructive conflict in new teams. Startup founders who understand and proactively address these issues in their teams have a much better chance at success than those who do not.
Missing the positive power of conflict. If you are not experiencing a few robust conflicts within your team, this also raises a red flag. Conflict is not always bad. In fact, constructive conflict has been shown to drive productivity, initiative and innovation - what every startup needs. Here’s an important takeaway: If you are part of a startup organization and there is no conflict or "creative tension" in the team, know that there are costs to that inaction.
Going it alone. To give your startup the best chance of success, bring in experts who know conflict. Conflict advisors (with ombudsman services) can work with your partners, teams or leadership to:
- Normalize conflict and help the team understand the benefits of constructive conflict.
- Use constructive conflict to your advantage as a tool to move toward goals faster and foster a workplace of creativity and innovation
- Offer impartial, objective and expert view that supports your conflict management capacity

The good news is that you are on the right track to beating the startup-failure odds just by reading this article - understanding that the nature of conflict is powerful!

Four Myths That Perpetuate Abrasive Behavior At Work

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.

When your business team starts spiraling down

A healthy business team is one with strong relationships and vibrant engagement. It’s a beautiful place to be, where people feel heard and creative ideas bump against each other in an open, constructive way. We call it the Creative Tension Zone and it’s the dream (or should be) of any organization with an aim toward consistent growth.

Teams fall out of this place for various reasons, and the spiral downward can devolve into destructive conflict. It is critical to know where you and your team are on the Conflict Curve in order to make good decisions in “real time” so you can recognize what’s happening and pull your team back from the Conflict Spiral abyss.

The Difference Between HR and Organizational Ombuds Functions

On average an ombuds will see 3-5% of an organization’s members in the course of a year. Our work as organizational ombuds has increased steadily over the last couple of years, where we’re initially called in because someone in leadership is being dogged by a “small” conflict that won’t go away but keeps festering and growing until they can’t sweep it under the rug any longer. (From there, we typically enter a contractual arrangement with clients where we serve as their ongoing go-to ombuds, mediator, and conflict adviser.)

10 Ways an Ombudsman Can Increase Your Workplace Productivity

He could have been sitting in the corner of the conference room where I was convening as Organizational Ombuds for a team that was stuck - there was (emotional) clutter, plenty of discord, and a really difficult situation. Tension was high, people were venting. At any moment (my experience told me) someone could explode with frustration. It was like a freight train approaching the room, about to crash!

Creative Tension in the Workplace: Who needs it? You do!

Creative Tension Zone is where huge ideas emerge, innovation thrives, and empires are built! The most successful workplace teams know how to manage constructive conflict to encourage creative tension. What every leader needs to know about leveraging the power of conflict in a team.

Workplace Conflict: How to Deal with Hot Buttons

Have you ever said: “That person just presses my buttons”? We call these 'conflict hooks', because your reaction to the button-pusher has the potential to feed conflict. Understanding what conflict hooks are can help you and your team make better response choices.

9 Early Warning Signs of Workplace Conflict

Conflict doesn't just appear out of nowhere. There are always signs warning that a conflict is developing. Managers who know what these signs are can be more effective leaders by confronting the problem before it rages out of hand. By resolving conflict in the early stages, the company will run much more smoothly and the overall productivity level will be increased considerably. What are these subtle signs of conflict to look for?...

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Dear Startup Investor: Why You Need to Know about Conflict Before You Commit

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