In startups, conflict is often treated as a warning sign – something to resolve quickly or avoid altogether. Alignment between founders or with the investors is seen as critical. However, the absence of visible conflict doesn’t necessarily indicate strong alignment; and when used correctly, conflict can be one of the most productive management tools.
Our three-part article series explains how to understand conflict, handle it better, and use it to make stronger decisions in startup teams and between investors and founders.
What is conflict?
Dealum’s co-founder, investor, and mentor Rein Lemberpuu sees conflict as a positive phenomenon. Rein himself is an entrepreneur, investor, and mentor who has founded over 30 companies and invested in dozens of startups. He’s an experienced mentor and a founder of a self-develpment school.
According to Rein, most people confuse conflict and argument: “Simply put, conflict arises when two – or more – parties observe the same situation, but describe it differently: “I see A, you see B”. If these views are different enough, then it is a conflict.”
Conflict in itself is not negative, quite the opposite – it’s a natural and necessary phenomenon that arises from different perspectives. It becomes an argument when the parties are not interested in understanding each other’s point of view and focus only on defending their own position.
Conflict as a source of innovation
According to Rein, we often assume that we get a better result when the A and B of different parties always overlap. In fact, it is this difference in perspectives that allows us to map the new and unknown. If we all saw the same picture, there would be no innovation in the world.
“I would even say that all of our perceptions are different worlds. The way those worlds oppose or collide, ignites evolution. When we try to cooperate in some way, we start to investigate what the difference is in these perceptions and why we see it that way – and both parties can learn about the other's point of view. Although everyone, of course, learns as much as they want – you can also just insist that my view is more correct than yours,” laughs Rein.
If you imagine A and B as two circles, according to Rein, the greatest potential lies where these two circles do not touch at all. “In between there is a completely unknown area where new innovative ideas emerge. We wouldn’t even have a chance to start discovering them if someone didn’t put their very different vision next to ours.”
Arguments are usually aggressive, but even if both parties are calmly just defending their own point of view, the benefit of arguing is practically zero. “In the case of constructive conflict, we turn it around and say, ‘Hey, it’s really interesting that you see it that way – tell me more.’ Creativity starts working from this mutual curiosity, and very interesting ideas are born,” Rein describes.
Why do good conflicts usually go to waste?
If conflict is so valuable, why do most teams fail to benefit from it? There are several reasons, and they are unsurprisingly human.
- We assume that someone must be “right” – we have a default assumption that if there are two views, one of them must win. In fact, there are no absolute truths. There are relative truths. This directs all energy in the wrong place – instead of exploring the difference, we start proving our rightness.
- We take the argument personally – according to Rein, people often do not distinguish their views from themselves. Therefore, criticism of the idea feels like an attack on the whole person. “If you say there are 10 mistakes here, then I hear that I have 10 mistakes. From that point on, there is no more learning, only self-defence.”
- We avoid conflict altogether – it may seem like keeping the peace, but in reality, it is like extinguishing a flame with firewood. "You keep adding fuel to the flame. At first, it may suffocate the fire, but when that bang comes at some point, the whole house burns down," Rein describes.
The balance between conflict and harmony
When talking about conflict, we must also talk about harmony. Conflict and harmony are at different ends of the same scale, and they’re both extremes – both constant conflict and constant harmony are actually bad.
“Conflict always requires additional resources, and if you don’t have these additional resources to resolve the conflict or learn something new, it is not possible to benefit from the conflict. Constant conflicts require resources, and even if you know that this learning is positive, it doesn’t really work, because no one has endless resources to spend on resolving conflicts,” explains Rein.
According to Rein, harmony does preserve resources, because nothing new needs to be learned, but then innovation disappears: “Constant harmony is basically stagnation – it depreciates, becomes inert and outdated. Harmony is not something that is preserved in its quality; it needs to be refreshed all the time. And the quality of harmony can be increased through high-quality conflict solutions.”
How to extract value from conflict
Turning conflict into your own advantage starts with changing your perspective. First, you need to understand the following:
- Conflict is not bad. As long as you see conflict as a problem, you are trying to avoid it.
- All it takes is one party to view conflict as positive. Both parties do not always have to be ready, but someone must consciously take on this role in order to start exploring the other's perspective.
- Conflict is not a communication skill, but a leadership skill. According to Rein, the ability to resolve conflict is proportional to your own leadership ability. The better you manage yourself – your emotions, your reactions, your thinking – the more value you will get from conflict.
Good leadership lies in balance – conflict creates new ideas, harmony helps to implement them. If everyone in a team sees things the same way, they will blindly run into a wall. Conflicted founders naturally see many different sides of things, but highly cohesive teams need to consciously test and balance their perspectives.
According to Rein, today, it is not the teams with less conflict that win, but those who know how to use conflict: “In a way, a conflicted CEO has an advantage in today's fast-paced, uncertain, and aggressive world. Not because he fights more, but because he is not afraid of differences. It is especially good if he knows how to turn these differences to his advantage.”
Stay tuned for the next posts in the series:
- Founder mismatch: when conflict becomes a problem and how to solve it
- Practical tools to resolve conflict effectively
Dealum’s co-founder Rein Lemberpuu is an entrepreneur, investor, and mentor who has founded over 30 companies – from one-person companies to organizations with several hundred employees – and made dozens of startup investments as an investor. He has worked as a mentor for 10+ years, led an international startup mentor program, and is the founder, CEO, and mentor of the self-development school .Contriber School.
