Handle conflict productively: take risk aversion into account

(This is part 3 in the series Leading people through conflict)

To lead people safely through conflict, you have to be aware of risk aversion as a factor. If you don’t, it might prevent people from following your lead.

This is the third article in a series that addresses the question: How to lead people through conflict? Effective leadership in handling conflicts allows you to utilise the unused potential of conflict situations.

In the second article in this series, Getting Your Message Across Successfully, we focused on the importance of trust in communicating your message. We noted that the manner in which you communicate is at least as important as the content of what you communicate.

In this third article we elaborate on how the perception of what you communicate is influenced by an important emotional factor: risk aversion.

Risk aversion as a factor in handling conflict

As we’ll explain, risk aversion plays a large role in the cause and course of conflicts. Trust in you, as a leader handling conflict, is dependent on factors perceived under the influence of emotions. Many of these emotions rise from a bias of risk-aversion and a corresponding need to assess personal safety.

Risk aversion is a bias that is present in most situations that are perceived as carrying potential risk. Conflict is one of those situations where people feel unsafe, or in other words: a situation that they perceive as a potential risk.

People estimate intuitively what level of risk they perceive, and what it means for them personally. This in turn decides what action people take, or do not take. You have to be aware that people base this decision mainly based on emotional, non-rational factors. The decision is largely informed by the desire to avoid risk.

When people perceive a risk, they decide what NOT to do

It turns out that once people decide what a situation means to them assessed from the personal risk involved, they decide above all what NOT to do.

Unfortunately, for the development of truth telling to power and achieving results, NOT doing what is asked of you isn’t the way to make a career. That is why people will not tell you they are not going to do what you ask them.

People will find a way to act as if they’re doing what you ask, while in fact being busy with not doing what you ask. Clearly this can’t be the way to handle conflicts productively. Or for that matter doing anything at all productively.

Trust: the critical success factor in handling conflict successfully

This means that when you find yourself in a situation that may be considered a possible risk to the people involved, such as a conflict situation, it is important to be aware of risk aversion as a factor. Risk aversion means people will be cautious in following your lead. They will rather do nothing, than do something that they perceive as being risky.

People will first assess their level of trust in you. Is your proposition safe to be followed?

Granting most people’s natural bias of risk aversion, it pays off to accept that people assess each other instantly on a personal scale of trust.

Again and again it appears that two things determine the outcome of this personal assessment.

To gain trust, you need to be credible and predictable

People ask themselves, mostly unconsciously, if the situation and the proposition at hand is:

  1. Credible (do you hear and address my safety concerns?)
  2. Predictable (do I know that what you offer as a solution is doable for me?)

This question about the level of safety is intuitively and therefore instantaneously answered. The person assessing the level of trust doesn’t take the time to think about the content of the message or the rational arguments and facts.

The focus instead is on factors judged under the influence of emotions. These emotions rise from what is perceived as a result of the bias of risk-aversion.

Take the lead in establishing safety

Unfortunately, you as the leader proposing something about the conflict, will intuitively be seen as the representation of the possible risk. This possibility of risk is perceived to be greater in conflict situations than in normal interactions. Emotions in conflict cases will play an even larger role in assessing situations and people.

Summed up: this intuitive decision-making is based on risk aversion. It rules whether you, the leader, and the proposition you make is deemed trustworthy or not.

Going through conflict, trust is the critical success factor.

You have the possibility to positively influence the level of trust. You do this by actively taking care of the credibility and predictability of your proposals. The key is to look at your proposals as they are perceived by those you ask to follow you. The fact of addressing these issues openly will lead to a lowering of the emotional tension. This in turn will mean a higher level of trust in you as a leader.

By Rudi de Graaf and Iris Dorreboom

About us: 30+ years of international experience in executive coaching, working with CEO’s, their colleagues and direct reports. We provide you with an experienced, unbiased outside perception, and results focused advice.

We focus on handling conflicts productively, because we know they hide unexploited opportunities for growth.

Please feel invited to ask us how we can assist you in handling conflicts productively and leading people safely through conflict. Contact us directly, or ask us to contact you by using the contact form below.

Read part 1 and 2 in the series Leading people through conflict:
Leading people though conflict
Getting your message across successfully while handling conflict

or go to Part 4 in the series: Leading people through conflict: how to create safety

Interested in handling conflicts productively?

Ask us to contact you for more information.

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