How to deal with business conflict effectively

  • 29 Apr 2020

By  David Liddle CEO of conflict management consultancy The TCM Group

Every small business owner will encounter conflict in their team at some point. Dealt with effectively, it can be a force for good

Conflict is an inevitable part of working life. Personality clashes between colleagues, employees falling out with their manager, power struggles between peers, and disagreements over priorities and responsibilities are just some of the issues a small business owner can face.

In its latest research, the CIPD estimates that just over a third of employees have experienced some form of interpersonal conflict at work during the past year, whether that’s in the form of an isolated dispute or an ongoing difficult relationship.


Unresolved conflict is damaging in any business. If a toxic atmosphere takes hold, motivation dips, absence levels rise and productivity suffers. The effects in a small business, where people are often working in tight-knit teams, can be particularly devastating.  

Family-owned businesses, where everything from differing goals and values to sibling rivalry may be at play, can be particularly prone to destructive disputes. So what can you do to nip conflict in the bud and restore peace and harmony in your small business?

Spot the early warning signs

Ignoring conflict in the hope that it will go away is the worst approach. If left to fester, what started out as a niggle can escalate into all-out war. Gossiping in corners, cliques and stress-related absence are signs that conflict may be bubbling away. High-performing people losing their mojo can be another sign. 

Look for situations where people adopt rigid positions and a ‘he said/she said’, ‘I’m right/you’re wrong’ mindset. Extensive inaction or expensive over-reaction are not good strategies for managing conflict. Small business leaders need to show that they are taking action.

Know what healthy conflict looks like

Not all conflict is bad. A certain amount of debate is healthy and, if managed well, will lead to ideas, insights and innovation. Put people with varying views, values and skills together, and their combined efforts will avoid ‘group think’.  

Functional conflict is where team members ‘disagree agreeably’ in order to find win-win solutions and get to the best outcome. Dysfunctional conflict is toxic, insidious, subtle and can tip into incivility, bullying, harassment or discrimination.

Create a safe space

When we feel unsafe at work, we may lash out, withdraw or go into attack/defend mode. For small businesses, this can create a toxic culture. Set ground rules for how conflict will be managed when it arises.  

Make it clear that the aim will be to resolve disputes constructively, compassionately and collaboratively – and that you will be on hand to facilitate that process. Create a safe space where people can be themselves and engage in the open, honest, face-to-face dialogue that gets issues resolved. 


Ensure employees can put views forward without being shouted down and that colleagues listen with respect. Really listen to people, and ask difficult questions that will get to the heart of the matter. Give your team a good listening to and get them to do the same to each other!


Engage your team in decision-making

Toxic conflict can arise because people feel excluded or disengaged. Giving your team members a voice, listening to their concerns and empowering them to shape decisions is an important part of creating a healthy team and removing the potential for toxic conflict. It creates a culture that is both just and fair and it is a mark of an effective leader. Engaged employees are happier, and happier employees work harder.

David Liddle is the CEO of conflict management consultancy The TCM Group, and author of the CIPD/Kogan Page book Managing Conflict: A Practical Guide to Resolution in the Workplace

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