| During my past 24 years of telecommunications | | | | damage: $ 5,389 |
| experiences, I have often wondered what the real | | | | #7: Restructuring around the problem: $ 10,778 |
| agenda was of some corporate executives. A recent | | | | #8: Health costs: $ 450 |
| conversation with a former colleague revealed a belief | | | | #9: Degraded decision quality: $ 112,090 |
| that is widely accepted in his work environment but | | | | TOTAL COST of this conflict: $ 332,192 |
| never openly talked about. This belief is that for some | | | | This simulation assumes:o There are only 10 people |
| corporate executives, profits are not as important as | | | | are directly impacted in this project conflicto No cost |
| maintaining the status quo. According to him, these | | | | for impact to the Project Executive, IT Manager or |
| leaders believe that the appearance of 'being strong' | | | | Computer Technician due to the conflicto No additional |
| and 'in control' is more important than being responsible | | | | cost to managers or executives outside of the |
| to the bottom line. If this is true, then it is one | | | | projecto There is no absenteeism due to the conflicto |
| explanation for why one would observe day-to-day | | | | The conflict only last 10 weeks (my former colleague |
| decision-making that results in poor company | | | | sited a conflict that's been ongoing for 78 weeks)o |
| performance. | | | | Each of the project members impacted by the conflict |
| This was in part the response my former colleague | | | | only loses 1 hour/week due to the conflicto Only a 5% |
| shared with me after I presented the opportunity that | | | | reduction in project members' job motivation and |
| my project mediation service provides for removing | | | | loyalty resulting from the conflict |
| costly conflict from the work environment. He believes | | | | This is the simplest simulation of project conflict. In |
| the corporate leaders in question thrive on conflict and | | | | reality, corporate executives are responsible for larger |
| use it to improve their position of power within the | | | | projects and more than just one. Typically, more than |
| company structure. The perception is that conflict | | | | 10 people are affected for more than one hour every |
| leads to blame, which triggers organizational | | | | week of a conflict. Project conflicts can easily be |
| restructuring, ultimately resulting in promotion | | | | responsible for financial losses in the millions of dollars. |
| opportunities. After receiving this insight, I decided to | | | | Looking ahead, the opportunities in project mediation |
| evaluate the cost of 'appearing strong and in control'. | | | | are tremendous. Global competition has and will |
| This simulation uses the Dana Measure of Financial | | | | continue to create cost reduction pressure for |
| Cost of Conflict tool, designed by Dr. Daniel Dana, | | | | American companies. When companies are ready, |
| author of Managing Differences and founder of | | | | there is a solution available to assist them with picking |
| Mediation Training Institute International. | | | | a low hanging fruit that I refer to as project conflict. A |
| The simulation is a realistic situation for one (1) project | | | | project mediation or "decision-making" service can be |
| overseen by a corporate executive (Project | | | | engaged to guide conflicting parties to an agreed |
| Executive). The leaders involved in this project are a | | | | resolution within 24 hours, avoiding further project |
| Project Manager, a Sr. Software Developer, an | | | | delays and reducing overall costs. This service can be |
| Operations Manager and an IT Manager. In addition | | | | delivered anywhere in the United States for a relatively |
| there are two (2) Software Engineers working at the | | | | small cost ($5000). Now, assume that a mediation |
| direction of the Sr. Software Developer. A Customer | | | | meeting was scheduled during the 9th week of the |
| Service Representative, Installer, Specialist and | | | | simulated conflict. A resolution was reached that |
| Electronics Technician are all working at the direction | | | | required an additional two weeks to implement, ending |
| of the Operations Manager. A Computer Technician is | | | | the impact of the conflict after 11 weeks. The model |
| working at the direction of the IT Manager and an | | | | now calculates to cost of conflict to be: |
| Administrative Assistant is working on behalf of the | | | | #1: Wasted time: $ 4,149 |
| entire project team. There are a total of 13 people, | | | | #2: Opportunity cost of wasted time: $ 6,224 |
| including the Project Executive. The average | | | | #3: Lowered job motivation and productivity: $ 207 |
| compensation used in this simulation is from PayScale, | | | | #4: Lost performance due to conflict-related |
| Inc. under United States Telecommunications, updated | | | | absenteeism: 0 |
| July 18, 2008. | | | | #5: Loss of investment in skilled employees: 0 |
| Assume that an unresolved conflict develops between | | | | #6: Conflict-incited theft, sabotage, vandalism, and |
| the Sr. Software Developer and the Operations | | | | damage: $ 5,928 |
| Manager one month after the project start. This | | | | #7: Restructuring around the problem: 0 |
| conflict is allowed to persist for 2 ½ months (10 | | | | #8: Health costs: $ 495 |
| weeks). The conflict is resolved when the Sr. | | | | #9: Degraded decision quality: $ 112,090 |
| Software Developer leaves the project. Upon leaving, | | | | TOTAL COST of this conflict: $ 129,094 |
| the individual is frustrated and communicates that his | | | | The simulated conflict resolved through project |
| skills have been requested on another project. The | | | | mediation ($134,094) yields a savings of at least |
| cost of this conflict as is as follows: | | | | $198,098 compared to the cost of doing nothing |
| #1: Wasted time: $ 3,772 | | | | ($332,1920). A proactive Project Executive who |
| #2: Opportunity cost of wasted time: $ 5,658 | | | | schedules an earlier intervention would save an |
| #3: Lowered job motivation and productivity: $ 189 | | | | additional $11,700 for every week the conflict interval is |
| #4: Lost performance due to conflict-related | | | | reduced. One day soon, we will not question the |
| absenteeism: 0 | | | | agenda of any particular corporate leader. Business |
| #5: Loss of investment in skilled employees: $ 193,866 | | | | profitability will be the agenda. |
| #6: Conflict-incited theft, sabotage, vandalism, and | | | | |