As much as we like to think of the workplace as a bastion of teamwork and collegiality, in reality it’s often a hotbed of personality conflicts, power struggles, disagreements about competence, breaches of trust, hurts and anger.

The longer you work with the same people, the more these emotions and conflicts are likely to pile up. Eventually, you and your colleagues may come to resemble a dysfunctional family where everyone pushes each other’s buttons.

How can you nurture the interpersonal harmony that an advisory practice needs in order to operate productively? To explore solutions, I interviewed several experts in the field of workplace transformation. In the first part of this series, Diane Katz explains an elegant and efficient system to resolve conflicts. Stay tuned to future issues of Investment Advisor for insights from Ira Chaleff that may help you become more courageous in fulfilling your company’s mission; and Dennis and Michelle Reina’s seven-step process to rebuild trust after it has been broken or eroded over time.

I met organizational consultant Diane Katz, Ph.D., several months before the publication of her powerful new book "Win at Work! The Everybody Wins Approach to Conflict Resolution" (Wiley, 2010). Through her Working Circle process, Katz has helped facilitate conflict resolution for many organizations. (Disclosure: Katz worked with an organization headed by my brother, Stuart Mellan.) I was eager to reconnect with her, knowing that many advisory firms struggle with workplace conflicts that hamper growth and succession planning.

Mellan: Diane, what drew you into this work?
I’ve always been interested in how organizations can be more successful and work more collaboratively. My corporate career was in financial services (American Express, Chase, KPMG), where I did interventions that helped divisions or departments that were not getting along well to cooperate better and improve profitability. As head of HR for the U.S. operations of Alexander & Alexander, I designed a national conflict resolution process. My doctoral work was the development of a process for resolving conflicts and making decisions without confrontation.

In 1995, I started my own company, The Working Circle, to help organizations become more successful by valuing their people. Every time I’ve used the Working Circle process with groups or teams, they have reached resolution. I now have over 250 clients nationwide.

Mellan: In Win at Work! you contrast masculine and feminine conflict resolution styles. Explain those to us.
The masculine style is typically linear, aggressive, competitive and more traditional. The feminine style is more withdrawing, conciliatory and compassionate.

If an organization’s style is heavily weighted toward either style, conflicts will not get resolved. For example, in an organization where the style is heavily masculine, internal competitiveness will prevent the accomplishment of organizational goals. On the other hand, organizations (these are much fewer) that are heavily feminine in style will not resolve conflicts because people are too “nice.”

The Working Circle enables organizations to balance the masculine and the feminine, so creative problem-solving and collaborative conflict resolution can take place.

Mellan: What are the eight steps of your Working Circle process?
The Working Circle is literally a circle, not a linear process with a beginning and an end. Each step is linked to a fundamental question that will help resolve conflict.

Question one is “What are the facts of the situation?” We ask people to assess what is happening as if they were a camera. This helps defuse subjective reactions. People start to calm down, even in a highly conflicted situation.

For example, one financial advisor had issues with an employee who wasn’t producing enough income and refused her suggestions to network more. When she sat down with him, she led the conversation with a version of question one: “Let’s look at the situation with the facts only. We both have emotions about this, but let’s just look at what’s going on.” It was clear that his performance was questionable, but the conversation wasn’t dominated by emotion. If he became defensive, she said patiently, “Let’s just look at the facts for now.”

Then they went to questions two and three. Question two is “What is negotiable?” This helps disputants find common ground, which again helps to defuse the situation. In this situation, “how to get there” was negotiable. The employee needed to win more clients, but how he got them was up to his own style, preferences and level of comfort.

Question three is “What is non-negotiable?” By allowing people to explain where they draw the line in the sand, this helps them claim their personal power and become less defensive. For example, when the financial advisor asked her employee if he would join a particular organization, he refused and said it was non-negotiable because he had had a prior negative experience with that organization. However, he was comfortable approaching people at his church.
Going through these two questions helps people reach resolution by sifting what is absolutely critical from what is not. Once you each have a list of what is negotiable and what isn’t, you can move on to the next step.

Question four is “What have we learned from previous experience?” The focus on applying lessons from the past helps organizations become more adept at learning from earlier mistakes and successes.

When I facilitate conversations around this question, people sometimes go as far back as their childhood experiences. In this case, the employee said he had learned when he was a Boy Scout scoutmaster that he wasn’t comfortable in large organizations. The financial advisor learned that she would need to give him more autonomy to help him succeed.

Having answered that question, they moved to question five: “How do we feel about the situation?” This question gives participants an opportunity to air their emotions so they can move on to finding resolution.

At this point, the employee expressed concern for his job. The manager voiced concern about his ability to succeed. Both agreed that they could move on to making a plan.

Question six asks “What is our game plan?” In this step, the employee was expected to devise a detailed plan of what he would do to get more clients. He said he would join the church board, and he identified a number of prospects from church whom he would invite for coffee. He estimated how many would become clients and how much revenue that would bring into the firm. He set a timeline. The financial advisor approved the plan, and he agreed to start on it the very next day.

This is where most conflict resolution processes end. But not the Working Circle.
Question seven, “How will our plan transform us?” asks participants to look at the transformative results of the plan, because we put our attention where our intention is. So the financial advisor asked, “When you complete your plan, what impact will this have on our relationship, the business, and on you as a professional?” This enabled the employee to clarify how he wanted to improve as a professional by overcoming obstacles he needed to face.

Once this question is answered thoroughly, it becomes relatively easy to address question eight: “Will this be good for the long-term future?”

The relationship between the advisor and the employee improved. As it turned out, he did not produce the results that he had committed to and they agreed to separate. But due to the process they used, it was an amicable separation.

Mellan: What’s the most important thing to keep in mind when using the eight steps?
The more deeply the situation is explored, and the more diligently previous learning is brought to the foreground, the more comprehensive and long-lasting the solution will be.

In practice, Diane told me, the Working Circle process has proved to help resolve strife between groups, as well as individuals. It makes perfect sense to me that this guided trajectory, incorporating rational strengths and emotional needs, past experiences and future visions, can lead to more durable conflict resolution.

Look for Part 2 of this series, “Speaking Truth to Power,” with Ira Chaleff, in the March issue of Investment Advisor.    

Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Client Connection: How Advisors Can Build Bridges That Last, available through the Investment Advisor Bookstore. She also offers money psychology teleclasses and facilitates intergenerational retreats for wealthy families. E-mail Olivia at