Resolution Resources

Preventing Conflict in Healthcare – A Missed Opportunity!

Physician wearing red boxing gloves

In May of 2008, the Joint Commission released its Leadership Standards for 2009 with the goal of creating a Culture of Safety. A key element of the new standards was the prevention of workplace conflict that the JCAHO determined was disrupting communication between practitioners, which their research confirmed was compromising patient care.

In response, Healthcare Organizations developed and attempted to rigorously enforce Codes of Conduct among their Medical and Nursing Staffs.  Despite that considerable effort, conflict in the Healthcare Environment remains as prevalent as ever. So what went wrong?

A Broken System

Most organizations decided that reports of violations had to be dealt with in secret and the resolution decreed by leadership fiat.  Concerns about confidentiality and Peer Review Privilege meant that those individuals that were on the receiving end of the disruptive behavior, the ones who filed the complaints, were completely ignored in the process.

The complainants were seldom told about actions taken in response to their reports of Code Violations. Equally counterproductive, they were never asked whether they believed the remedies decreed were suitable or appropriate. In a painful irony, the only “update” many of the complainants received were when they were confronted by the person they’d reported.

The Rules of Engagement

The commitment and resolve of executive and Medical Staff leadership are essential to the success of any effective campaign to address workplace conflict but their opinions as to what constitutes an effective resolution aren’t the ones that really matter!  We need to remember that JCAHO’s belief was that quality patient care was being impaired as result of poor communication.  That can only be corrected by those whose communication and relationships have been impacted.

That requires that the parties to the disruptive event find a way to begin trusting and respecting one another again. This won’t happen unless they are allowed to speak candidly with one another about the event and their actions/reactions. Any conversation they might initiate on their own isn’t likely to be productive if it’s not conducted in a safe and constructive setting!

That setting is best created in Mediation because facilitating the parties’ journey through this emotionally charged minefield require the skills of an educated, experienced and objective 3rd party neutral.  It shouldn’t the sort of hard-nosed, distributive bargaining many have encountered in malpractice or employment-related litigation because resolution isn’t based on legal integration or a monetary settlement.

Instead, it should be facilitative or transformative model of mediation, the satisfactory outcome of which is the restoration of the relationship among members of the clinical care team.

Resolve the Differences

Conflict in the workplace doesn’t have to be a disaster—it can be an opportunity for transformation. Too often conflicts in healthcare environments are avoided, handled inadequately, and allowed to escalate into major disputes. Robert Fielder provides coaching and resources to effectively deal with stressful situations without damaging the team or jeopardizing medical care. If you are ready to minimize workplace conflict contact us today.

This article was originally published at DCCS Consulting Healthcare News & Insights.

Thoughts on Patient Satisfaction Surveying

Two Research Studies

Two recent research studies on patient satisfaction surveying have just been published. One study questions the fairness of the surveys, while the other documents the unintended consequences of how the results are being used. Both are going to reignite the controversy surrounding patient satisfaction surveying.

The First Study: Questioning the Fairness

The first study presents compelling statistical evidence that “…using only 4 demographic and hospital-specific predictors (i.e., hospital beds, percent non–English speaking, percent bachelors’ degrees, percent white), it is possible to utilize a simple formula to predict patient satisfaction with a significant degree of correlation to the reported scores…”

The Second Study: Consequences from Results

The second strongly suggests that efforts by physicians and hospitals to “game” the results of patient satisfaction surveys are increasing the cost of healthcare while reducing the quality of care delivered.

Published Articles

Details of the two studies have been presented in articles published in professional journals.

  1. Demographic Factors and Hospital Size Predict Patient Satisfaction Variance—Implications for Hospital Value-Based Purchasing”, published online in the Journal of Hospital Medicine, May 4, 2015 and reported on by Alexandra Wilson Pecci for HealthLeaders Media, June 3, 2015.
  2. Patient-Satisfaction Surveys on a Scale of 0 to 10: Improving Health Care or Leading It Astray?”, published in The Hastings Center Report on March 6, 2015 and subsequently referenced in the June 8, 2105 edition of Becker’s Infection Control and Clinical Quality.

Raising Questions

Both of these studies raise very troubling questions about patient satisfaction surveys, at a time when the use of the tools and significance of the results is at an all-time high. To emphasize that point, the Journal of Hospital Medicine article notes that “Hospital Value-Based Purchasing (HVBP) incentivizes quality performance-based healthcare by linking payments directly to patient satisfaction scores obtained from Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) surveys.” As to why providers may be motivated to “affect” their results, The Hastings Center article states that “more than 59 percent of physicians reported that their pay is linked to patient-satisfaction ratings.”

Hospital Value-Based Purchasing

Hospital Value-Based Purchasing (HVBP) started being phased in for the Centers for Medicare & Medicaid Services (CMS) payments in the 2013 fiscal year. The final step of the staggered implementation is to occur in the 2017 fiscal year, at which time it will affect 2% of all CMS hospital reimbursement. Given the millions of dollars represented by the 2%, it’s easy to see why healthcare executives are eager to boost their institutions’ scores.

My Experience

My familiarity with patient satisfaction surveying comes from many years in past roles as:

  1. Contract manager staffing clinical service departments for hospitals
  2. Practice manager working with multiple hospital-based physicians

Those experiences have been reinforced by my recent roles as:

  1. Advocate representing either hospitals or physicians in the negotiation of employment contracts
  2. Mediator to facilitate their successful conclusion or aid in resolving disputes regarding these agreements

The Development of Patient Satisfaction Surveys

The government and healthcare industries have been eager to identify quantifiable elements of provider performance to help define quality. That led to a pell-mell search for objective tools to do the job. The patient satisfaction surveys that were developed provided both objectivity and transparency, and that appeared to be enough. Now that they’ve become well established, we’ve conveniently forgotten that the survey tools weren’t intended to measure individual provider performance.

The Benefits of Surveys

To be clear, patient satisfaction surveying can be an essential component of any institution’s self-awareness. Even with the concerns raised by these two studies, survey results can offer remarkable insights into the interworking of an organization as a whole. However, it is critical to understand how that’s done and the limitation of the methodology.

Employers Push for Surveys

These two most recent studies merely add to the serious limitations of the available survey tools were already known. However, without other available options, hospital employers continue to insist that the compensation provisions of their employment contract with physicians and other providers include a patient satisfaction component. Healthcare executives quite accurately point out that patient satisfaction measured in the HCAHPS scores is impacting their HVBP payments. As such, why shouldn’t they extend that risk exposure to those directly involved in delivering care to the patients?

Physicians Push Against Surveys

Not surprisingly, most physicians hate the surveys and actively resist the inclusion of contractual provisions that put their compensation at risk based on these measurements. When this issue emerges, the contract negotiations can become quite contentious. I’ve seen several negotiations stalemate over this issue, with the loss of key personnel or the termination of existing relationships.

The Pros and Cons of Compromise

There are ways to make patient satisfaction provisions both acceptable and meaningful, but most negotiations that end in an agreement do so in a simple compromise. Either the patient satisfaction compensation provision stays in the agreement and the dollars put at risk are drastically reduced, or the performance standard is so modest that payment is virtually guaranteed. The doctors can accept the diminished exposure while the hospital’s negotiators can claim that they’re measuring and incenting patient satisfaction. Unfortunately, these accommodations largely defeat the purpose of having the provision in the first place.

Surveys Will Continue

Even with the grave concerns raised by these two research studies, the current surveying method is simply too well established. Creating a more accurate and meaningful patient satisfaction assessment process is possible, but it takes time and effort to construct. For that reason, the use of the existing surveys with all of their inherent shortcomings may be with us for years to come.

Conflict Assessment Case Study: Reducing Conflict, Increasing Satisfaction

Analyzing an organization’s past conflict is one of the best ways to reduce future incidents. Here are steps to do that and a case study of how it worked.

Conflict Assessment Process

  1. Look for similarities among past conflicts.

Rather than focusing on the identity or intentions of a guilty party, begin by looking for circumstantial similarities among the past conflicts. Look closely to see if any of the organization’s actions or policies may be contributing to these disputes.

  1. Identify the conflict triggers.

Contributors to conflict can be political, procedural, structural, and/or personal. By regularly reviewing workplace disputes, it’s possible to discern operational or behavioral patterns occurring across a variety of conflicts, even in separate venues. Once they are identified, the circumstances can be altered to reduce or even eliminate the conflict.

  1. Evaluate the options.

Consider the options available for altering the circumstances so that it’s possible to achieve the desired result without the unintended consequence. Experiment with alternative policies or practices, carefully observing to see if one option works more effectively than others.

Case Study: Conflict Assessment for a Community Hospital

I used this comprehensive conflict assessment method for a community hospital.

Investigative Committee Formed

First I recommended they form a multidisciplinary committee to investigate the most frequently occurring conflicts within the institution. Based on my suggestions, the committee was comprised of: physicians, surgeons, patient care and charge nurses, and a designee from the senior leadership team.

Source of Conflict Identified

After just a few sessions, the committee concluded that the most common source of conflict was the after-hours phone calls between nursing units and on-call physicians.

Exceptions to the Conflict

In the course of their review, the committee discovered several nursing personnel and physicians that seemed to have very few conflicts resulting from their after-hour communications. So they examined how these personnel were able to consistently deal with the after-hours call without complications.

The Cause of Unintended Consequences

The committee also looked for policy or procedural issues that might have resulted in unintended consequences. They discovered that past insults had prompted a variety of defensive moves by both the nursing administration and the medical staff. The resulting actions and attitudes had intensified the sensitivity surrounding these calls, which did little to enhance effective communication.

Experimenting with Procedures

Based on their findings, committee members began experimenting with different after-hour call procedures, across a variety of in-patient units. They implemented a simple preparation protocol prior to each call to consistently gather data. The committee found this increased the effectiveness of the communication and greatly reduced the number of conflicts and on-call response delays.

Implementing New Protocol

The committee then shared their findings with the administrative, physician, and nursing leadership. Together, they agreed to change the old, more defensive policies and to implement the more effective protocol across all nursing units in the organization.

The Results

The hospital benefited from improved after-hours response, increased patient satisfaction, and better clinical outcomes. Additionally, the frustration levels among nurses and doctors dropped dramatically. The results were documented by a steep decline in the number of complaint calls to the Chief Medical Officer and Chief Nursing Officer, as well as declines in nursing transfer requests and turnover.

Examine, Diagnose, Remedy

Determining whether there are organizational or operational contributors to conflict in your hospital or practice requires a careful examination of dispute patterns and contributors. It also requires that the senior leadership examine its own policies and practices, and be willing to remedy the unintended consequences of their actions. If you’re ready to reduce the conflict in your organization, contact us to help.

Transforming Healthcare’s Conflicts

Healthcare professionals and institutions are confronting a host of threats and challenges. Despite the increasing volume and variety of those complications, there is one achievement that, if accomplished, has the potential to greatly impact them all.

The hospitals and provider organizations that find ways to deal effectively with workplace conflict will be the performance leaders in the years ahead. So the key question is how to bring about the individual and organizational behavioral changes so essential to improving workplace relationships and performance.

The Positive Side of Conflict

Conflict transformation is the new “watch word” among those who study and research conflict. It is thought to be a much better expression of the objective and desired outcome.

The work of social scientists and researchers indicates that conflict is a constant presence among interconnected units and affiliated groups (such as the workforce and staff of a hospital or group practice).[i] While that’s a sobering prospect, those same studies indicate that conflict has both negative and positive characteristics.

If so, the focus needs to shift from dispute management or resolution to the search for ways to alter conflict from its counterproductive and destructive manifestation in order to secure the positive and constructive benefits of our continuing differences and disagreements.

Overcoming the Challenges of Conflict

Conflict in healthcare certainly isn’t new! However, in this era of growing demand and increased treatment options and capabilities confounded by tighter budgets, the consequences and costs of conflict are simply unsustainable! Unfortunately, the nature of the industry’s disputes, the personalities involved, and the emotionally charged context in which they typically occur should caution us that meaningful improvement won’t be easy, nor will it come quickly.[ii]

In deciding to take on the challenge of transforming conflict within an organization, the institution’s leadership must recognize that progress won’t be a straight line and that on-going success will require a long-range commitment to the effort. To be successful an organization must be prepared to tackle the host of long-standing and established ideas and attitudes that continue to cause conflict in healthcare.

The code of ethics published by the professional organizations that represent an institution’s two key constituencies (doctors and nurses) shows the organizational and philosophical barriers that will need to be overcome.

The following statement is taken from the AMA’s committee on Ethics and Judicial Affairs, Principles of Medical Ethics, which outlines the organization’s stance on inter-professional collaboration:

E-3.00 Opinions on Inter-professional Relations: Nurses:

“…One of the duties in providing reasonable care is fulfilled by a nurse who carries out the orders of the attending physician.

When orders appear to the nurse to be in error or contrary to the customary medical and nursing practice, the physician has an ethical obligation to hear the nurse’s concerns and explain those orders to the nurse involved.

Debra Gerardi writes in the Ohio State Journal of Dispute Resolution (Vol. 23:1 2007) that, “the statement clearly underscores the assumption of dominate status of the physicians as related to the nurses and joint decision making does not seem to be valued…the assumption is that questioning a component of the treatment plan is assumed to be due to a lack of understanding rather than legitimate difference of opinion.”[iii]

In contrast, consider the ANA’s Code of Ethics. It states:

ANA Nursing Code of Ethics Interpretive Statement 2.3: Collaboration

“Collaboration is not just cooperation, but it is the concerted effort of individuals and groups to attain a shared goal. By its very nature, collaboration requires mutual trust, recognition and respect among the heath care team, shared decision-making about patient care and open dialogue among all of the parties who have an interest in and a concern for heath outcomes.

Nurses should…have a voice in decision-making about patient care issues…should see that the questions that need to be addressed are asked and that the information needed for informed decision-making is available and provided.”

As the example demonstrates, the differences in attitude, perspective, and orientation make healthcare’s conflicts particularly vexing. It also means they are going to continue to occur and are likely to do so with increasing frequently and intensity!

Physicians Spend Half Their Day Dealing With Conflict

Colby J. Anderson and Linda L. D’Antonio, in the Georgia State Law Review, “indicated that 62% of the conflict [healthcare professionals] experienced was with other health professionals and that 50% of each physician’s day was spent dealing with conflict.”[iv]

That sounds bad—and it is! But it also offers hope that things can get better!

If doctors and nurses are truly spending half of their time in conflict (or even if it’s just 1/3 or 1/4), consider the potential upside for the delivery of patient care if that dynamic can be changed! Given more productive use of their time, we should see dramatic increases in treatment capacity, enhancements in patient care, improvements in financial performance, and almost unimaginable gains in patient satisfaction.

So how does a hospital change that dynamic?

Steps to Resolve Conflict

Phase 1: Gauging an Institution’s Conflict

The first step is quantifying the current state of conflict within an institution.[v] Many hospitals conduct routine employee satisfaction, employee engagement, and/or culture of safety surveys. Likewise, many hospitals are actively assessing the attitudes of their medical staffs. The accumulation of this data may be sufficient to establish a meaningful baseline for measuring the extent of conflict experienced in the institution and the impact of future conflict improvement initiatives.

Or supplemental surveying may be necessary. If so, the additional information gathering can be accomplished via internet-based survey tools. Alternately, the data can be gathered by conducting on-site, one-on-one interviews of representatives from the various constituencies that make-up a hospital’s workforce and staff.

The Internet approach offers the advantage of widespread involvement and participation. The individual interviews afford the opportunity to explore issues in greater detail and to pursue inquiry into areas not initially identified or included in a fixed survey document.

Regardless of the survey method deployed, the topics to be explored include:

  • Communication
    • Individual assessment capability
    • Identification of colleagues and co-workers thought to be effective communicators
    • Personal observations of examples of poor communication
      • Impact of those incidents
      • Future implications of these instances
    • Ideas for improvement
  • Professional Relationships
    • What’s working
    • What’s not
    • Ideas for improvement
  • Conflict
    • Attitudes about causes and consequences
    • Individual approaches for dealing with conflict
      • Methods
      • Experiences and expectations
      • Effectiveness
    • Impact of existing conflict on:
      • Relationships
      • Productivity
      • Patient care and safety
    • Organizational/Systemic Contributors to Conflict
      • Policy conflicts
      • Procedural conflicts
      • Cultural conflicts
      • Mission conflicts

Regardless of how the conflict baseline is established, once it’s done, the real efforts to effect change can commence.

Phase 2: Normalizing Conflict

Meaningful direction on ways for hospitals to address conflict can be gained from examining the experiences of other principled organizations (those bound by an overarching philosophy or guiding belief), especially those that routinely experience frequent and disruptive conflict. Foremost among these are religious institutions and congregational groups. Among other things, the experience of these organizations and membership indicates that there is a critical need to “normalize” conflict within the hospital’s staff and workforce. [vi]

In addition to the emotional toll of the conflict itself, church members and staff frequently experience enormous guilt over having allowed their disputes to disrupt the church’s higher calling and purpose. That guilt deepens the divisions and intensifies the conflict.

In his book, Never Call Them Jerks, Arthur Paul Boers identifies 13 reasons, “Why Churches are Vulnerable.”[vii] His book was written as a tool to aid other pastors and clerics in dealing with conflicts within their parishes or congregations. To fully appreciate his perspective, realize that the “jerks” he’s referring to are his parishioners!

How many times in a healthcare setting do we hear the parties to a dispute or the ones tasked with resolving that dispute using similarly descriptive terminology? Not surprisingly, one can replace the word “church” with “hospital” in each of Mr. Boers’ thirteen reasons and not alter the substance or accuracy of any of his statements.

Similarly, evidence suggests that healthcare workers are also burdened by the realization that their conflicts are interfering with their higher calling (“to do no harm”). So a critical step in the process is to help them appreciate that conflict in the healthcare setting is a constant and when appropriately confronted, improves patient care and safety. Achieving that understanding starts the process of de-intensifying theirs and the institution’s conflicts.

But normalization is just the opening phase of an extensive education program designed to improve communication and conflict handling skills. At the conclusion of the initial education phase there will be an on-going need for refresher courses. Additionally, implementing a dispute resolution system can’t be completed until sufficient numbers of hospital personnel can receive the specialized training needed to provide the services and resources to be included in the system.

Phase 3: System Components and Design

The economic and logistical benefits of a dispute resolution program have been documented in a research study commissioned by the American Arbitration Association.[viii] Additionally, business and management literature is replete with articles and studies highlighting the benefits of these initiatives.

William Ury (author of Getting to Yes) envisions a system that brings about “negotiation as early as possible…and at the lowest possible level”[ix]…(within the organization). Ury and others suggest consideration and inclusion of a wide variety of elements or resources into these programs.

However, the final determination of what, when, and how is made by a local design team comprised of representative personnel from throughout the institution. That team is multi-disciplinary, comprised on both professional and managerial as well as rank and file staff personnel.

The prospects of the use of procedures like mediation and arbitration (see the list of possible program components below) can be very concerning to many healthcare executives, especially those with experiences with EEOC challenges and/or a unionized workforce. However, remember in this context, it will be the peers of rank and file personnel and staff members that deliver these services. And they’ll deliver them to fellow employees and physicians as those individuals endeavor to find ways to more effectively resolve their differences so they can continue to work together.

In these circumstances, the hospital may not even be a party to the dispute. Conversely, in those situations in which the dispute is between supervisor and subordinate or involves hospital policy or practice, the institution may have an interest. However, allowing the parties to the dispute to have the means and opportunity to find ways to address the issues in ways that work for them may well obviate the need for the hospital to take a position on the outcome or an active role in the process.

These systems are not usually intended to replace or interfere with the grievance procedures contained in the union agreements. Interestingly, it is union members who are often among the first to make use of the coaching and mediation elements. They too are seeking effective resolution rather than the continuation of the dispute or the deliberations.

Some of the elements, stages, and/or interventions that may be selected by the design team include:

Transforming Healthcare's Conflicts blog image

Phase 4: Prevention

As a part of their deliberations, the design teams with their multi-disciplinary membership frequently have both the cause and opportunity to focus on actual conflict episodes and incidents. Supplemented with historic survey data, these spirited debates surface and discuss the details of current and past conflict situations. Frequently that leads to the discovery of a startling number of commonalities and shared characteristics among the various incidents.

Those discoveries, in turn, lead to the identification of procedural or organizational shortcomings that caused, contributed to, or intensified the conflict. Working with senior leadership, the design team then brainstorms and may even experiment with ways to address the systemic triggers so that similar conflicts in the future are avoided or the intensity of future disputes are lessened.

Finally, the success of these multi-disciplinary discussions and examinations highlight the benefits of on-going review of future conflicts as a means of securing continuing improvement. The result is often to formalize this multidisciplinary review process, completed by the managers, employees and staff persons of the unit or department that experienced incidents (rather than senior management or leadership personnel). This becomes the standard follow-up to any significant upsets that occur within a particular unit or department—especially those incidents that complicate or compromise staff communication and relationships and/or patient care.

The objectives of these continuing and detailed examinations (or debriefs) of future incidents are intended to first, quantify the extent of the damage to the workplace relationships. Second, to identify the actions needed to address that damage in order to limit its future impact on the ability of the affected personnel to work together.

Thirdly, the staff members and employees engaged in these reviews are empowered to search for procedural or organizational contributors to the incident and to report those findings up the institution’s chain of command. In return, management commits to conduct further review of the identified contributors and to inform the affected employees of their conclusions and, when warranted, the planned or implemented actions intended to correct the identified deficiencies.

Phase 5: Implementation

Once the various system components are considered and approved by the design team, the hospital’s senior leadership proceeds with the system’s implementation. In doing so, administration will need to adopt and revise policies in order to accommodate their employees’ access to the methods and resources envisioned by the resolution system. Among other things, administration will need to provide the means and opportunity for the personnel selected to be peer coaches and mediators to receive the appropriate specialized training.

Likewise, the medical staff and the medical executive committee will need to revise medical staff policy. Particular attention will need to be given to the provisions of the code of conduct policy that specify options available to physicians for resolving behavioral complaints.

For the most part, the system should be voluntary with any staff member or employee able to make use of it or not. Regarding physicians, the opportunity to make use of coaching or mediation could be included as additional elements of the collegial intervention phase of the code of conduct process.

As a part of the voluntary nature of a dispute resolution system, employees, staff or physicians should be able to access the system at any level. As such, some design teams choose to limit the range of levels or options within the system. But in every case, the education and promotion of the program is designed to encourage the individual disputants to see the value and wisdom of learning to resolve their own disputes. And if they can’t do it themselves, they are encouraged to continue their efforts, this time with coaching and/or mediation assistance from their designated and trained peers.

There is also the option of adding a compulsory extension to the dispute resolution system. In this sense, the addition may not be viewed so much as an element of the dispute resolution system but in a way in which the institution and its workforce can gain maximum benefit from the personnel trained as coaches and mediators.

For example, if a code of conduct complaint progresses beyond the collegial intervention phase, and especially if a physician has not opted to seek coaching or mediation assistance voluntarily, medical staff policy might be revised to enable its leadership to direct the physician’s participation in one or both of these activities.

Likewise, the hospital’s personnel policy might be revised to allow for managers or supervisors to direct disputants to coaching or mediation as an option before consideration of other remedies available under its progressive disciplinary policy.

Ironically, the biggest obstacle to the meaningful consideration and effective implementation of a dispute resolution system may be the institution’s management staff and leadership. Healthcare managers and administrators have long accepted the challenge and responsibility of resolving the conflicts encountered by their employees and staff. Many view this as an integral part of their day-to-day activity and take considerable pride in efforts in this regard.

However, much as they may want to help their direct reports resolve their differences, the evidence overwhelming indicates they may be doing more harm than good. As such, the first hurdle may be convincing those well-intentioned managers and supervisors that they need to stop.

And when they do, the entire organization’s culture will change. Then the challenge and responsibility for dealing with conflicts will shift to those that are directly involved in the dispute. And even though management won’t continue to be directly involved in the dealing with the dispute, managers will still have considerable influence on the outcome of these transformational efforts.

That’s because in order to improve their employees’ and staff members’ prospects for success, management must commit to a new role. They must ensure that the resources, systems, and support those employees and staff need are in place. When they do, then their staff and employees will be encouraged, empowered, and enabled to take on the challenge of addressing and transforming the conflicts they encounter, themselves!

[i] Kirk Blackard, James W. Gibson, Capitalizing on Conflict, Davis-Black, 2002

[ii] Debra Gerardi, The Culture of Heath Care: How Professional and Organization Culture Impacts Conflict Management, 21 GA. St. U. L. Rev. 857 (2005).

[iii] Debra Gerardi, The Emerging Culture of Heathcare – Improving End of Life Care Through Collaboration and Conflict Engagement Among Health Care Professionals, Ohio State Journal of Dispute Resolution, Vol. 23:1 2007.

[iv] Colby J. Anderson & Linda L. D”Antonio, A Participatory Approach to Understanding Conflict in Heathcare, Ga. St. U. L. Rev. 817 (2005).

[v] Kirk Blackard, James W. Gibson, Page 169.

[vi] Carolyn Schrock-Shenk, Lawrence Ressler, Making Peace with Conflict – Practical Skills for Conflict Transformation, Herald Press, 1999.

[vii] Arthur Paul Boers, Never Call Them Jerks – Healthy Responses to Difficult Behavior, The Alban Institute, 1999.

[viii] Dispute-Wise Business Management – Improving Economic and Non-Economic Outcomes in Managing Business Conflict, American Arbitration Association, Dispute Resolution Services Worldwide, 3/2006.

[ix] William L. Ury, Jeanne M. Brett & Stephen B. Goldberg, Getting Disputes Resolved: Designing Systems to Cut the Cost of Conflict, Cambridge, 1993.

Entity Design and Formation: The First Step in Conflict Management

I’ve always been fascinated with workplace conflict. In fact, I am so intrigued with organizational approaches to conflict that it was the focus of my Masters in Dispute Resolution.

I certainly experienced my share of workplace conflict during my days as a rank and file employee. But it wasn’t until I became a business owner and CEO that I realized that I was such a major contributor. I’m still amazed at difficulties I inadvertently created by my actions and decisions.

Establishing Conflict Management in an Emerging Organization

If your organization is just forming, it’s a an opportune time to think about incorporating healthy ways of managing conflict from the beginning.

  • What proactive conflict management actions can be taken even as your enterprise is being organized?
  • How can you prevent workplace conflict before the attitudes that underlie the organization’s culture have been fixed?
  • How can you design policies and practices that are still effective in addressing conflict as the entity matures?
  • What role should dispute resolution professionals play in identifying ways to avoid needless conflict?

My Experience as a Start-Up Owner

For me, opportunity to put these questions into action came in 1985 with the start of my own new business, with the objective of creating other start-ups. In fact, my success would be dependent upon the success of these new entities and their effective delivery of a critical clinical service—emergency physician staffing in small to medium-sized community hospitals.

The good news was that these start-up entities would by necessity be comprised of highly trained professionals—emergency physicians. The bad news was that they’d be total strangers at the time of the entity’s formation, and they weren’t likely to have much management or operational experience. Despite these complications, the newly created entities would have to be perceived by their prospective clients (the community hospitals) as organizationally stable in order to be accepted as a reliable provider of emergency physician service.

I’d spent several years involved with two large corporate contractors that provided staffing of this clinical service. As result, I was very familiar with many of the logistical, cultural, and political challenges that would have to be accommodated in order to meet the needs of both hospitals and emergency physicians.

In a relatively short period of time, I had the opportunity to experiment with the design and construction of professional corporate entities on a large scale. No doubt there are attorneys and advisors that have facilitated the formation of far more entities than I. However, I believe that the frequency of my experiences involving a consistency of circumstances, participants, and objectives made my efforts and outcomes truly meaningful.

Periodic follow-up with the operators of these new entities confirmed that the structure of the organization did impact the frequency and intensity of conflict. Most significantly, those reviews confirmed that the establishment of proactive governance mechanisms minimized disruptive issues and counter-productive behavior.

A Business Plan for Less Conflict

With such a remarkably high correlation between appropriate design and resulting performance, I believe that the process of forming any new enterprise should include in-depth discussions on structure and governance, much more than is routinely done today! For that to happen, those charged with organizing the entity (the lawyers, consultants, accountants, etc.) need to have an in-depth understanding of the functioning of the new entity as well as a deep appreciation of the market to be served and the unique cultural, political and logistical challenges likely to be encountered.

But the insights associated with my experiences aren’t limited to the narrow niche I was attempting to serve. They offer meaningful lessons on the foresight and preparation that should be given to any major re-organizational action undertaken by established businesses. They also provide guidance on the formation and operation of governing bodies (Boards of Directors) whether those serve the commercial marketplace or the non-profit sector.

But isn’t time and attention given to governance and decision-making usually a part of entity formation? What more needs to be done?

It’s true that completing the operating documentation typically requires identifying the key players and may include the description of voting interests or financial ones. But too often the language is pro forma, completed by legal counsel or the accountant without sufficient thought or insight to the circumstance or personalities unique to this new entity. Ironically, the new owners themselves rarely fully appreciate the challenges and complexities they’ll face. Many, in fact, grossly under-estimate the conflicts they’ll experience, especially if they’ve had a long-standing relationships with those that are about to be their partners or investors.

I believe that this aspect of new business creation should be an essential component of effective strategic planning. It should be given as much or more time and attention than that afforded to developing the business plan, design of products and services, or the plans for securing start-up funding. Regrettably, with the process of establishing legal entities becoming even easier (with the advent of Internet-Based Legal Services) I’m very concerned that this level of organizational planning and preparation won’t get the attention it so clearly deserves.