3 ways workplace conflict can actually be a good thing

In a modern organization, forward-looking leaders seek breakthroughs, expect a steady flow of innovative ideas from their staff, and make bold bets to win big. However, our decades of research and hands-on experience suggest that without changing the way key decisions are made, these big goals are hard to achieve. What is the main obstacle? Too often it’s the overrated value of consensus and the organizational tendency to avoid conflicts at all costs.



It’s hard to make decisions when the uncertainty is high and a lot is at stake. Think of launching a new product line, making a call about the M&A deal, or kickstarting a new initiative. However, there is one group of decision-makers who make such risky calls every day: venture capitalists, or VCs. Thanks to Stanford research, we now know how they make decisions behind the scenes and why their behavior differs strikingly from the ways traditional organizations are set up.



Many leading companies, such as Amazon and Microsoft, started out as venture-backed companies. Many of them have intentional processes in place to ensure that they follow the venture mindset from the time they were startups. This gives them the edge to stay more innovative than their more traditional peers.



First. Ask yourself: Is your organization truth-seeking or consensus-seeking? If seeking truth is your priority, then conflict is unavoidable in a world of risk and uncertainty. The right answer is rarely the weighted average of opinions in the room. Too many organizations do their best to collect approvals and make sure that everyone in the room has no objections (or just doesn’t dare to voice them).



Getting to this point often takes numerous meetings and many compromises. But what may work for a politburo is often a doomsday scenario for companies. Finding a common denominator may be necessary in politics, but it is a death penalty for the entrepreneurial spirit.



Venture capitalists are just the opposite. They purposely stir up discussion among the partners. Why? Because VCs know that most ideas are hopeless dreams and only a few will become revolutionary companies like Amazon, Netflix, or Zoom. Therefore, they view conflict as a means of due diligence. This is their only chance to scratch below the surface, debate pros and cons, realize where “unknown unknowns” may lie, and identify startups that will break patterns and return a home run—while at the same time, rejecting those not worthy of their capital and attention.



Marc Andreessen, a famous VC investor, surprised many Stanford students when he said his firm’s “day job is crushing entrepreneurs’ hopes and dreams.” In the pursuit of the facts and evidence, smart VCs question everything. This is what caused Bill Maris of Google Ventures to send a mystery shopper to Walgreens to take the blood test, which led him to the conclusion that Theranos’s pitch was not worth the paper it was printed on. VCs challenge ideas, ask tough questions, and search for facts rather than opinions. The path to finding true diamonds is through constructive conflict, not consensus.



Second. Ask yourself: Is the goal of your meetings to please the leader and achieve harmony or to surface all voices? In a traditional setting, meetings are often an attempt to convince the most senior leader to rubber-stamp the idea or to feel out which way that leader is leaning. The business case is presented to defend an idea rather than to challenge it and provoke further discussion. New or less experienced team members search for cues from those with experience or seniority, and then conform. In our book, The Venture Mindset , we show that such groupthink behavior is normal across managers, students, even monkeys. We are wired to follow the most powerful person in the room.



However, in an environment of high uncertainty about the future, we should welcome different opinions. Such ideas may come from your most junior folks—customer support, sales guys, engineers, anyone! And most of them won’t even open their mouths unless you design a process to encourage them to do so. As one VC told us, once you feel that you can’t critique your partner’s position safely, it’s time to seek a way out.



What do VCs do? They start discussions with the most junior people in the room. For bigger deals, they assign two teams, the “red” team and the “blue” team, to conduct a deep dive into the idea, one in support and one in opposition. They don’t say “do we all agree?” but instead ask specifically for “reasons not to invest.” They appoint devil’s advocates to argue for all such reasons. Rather than avoiding a conflict, VCs proactively stimulate it. All this results in frank discussion within the entire partnership.



Third. Ask yourself: Is your goal to identify a breakthrough solution or to stay within common norms? If it’s the former, you can’t expect everyone to agree. You must agree to disagree. In sports, to win big, you have to make an unconventional bet because consensus bets yield small profits. And similar to horse racing and boxing-match bets, VCs win biggest when they go against the crowd. The majority often rules, but that doesn’t mean the majority is right.



Online shopping was widely considered nonsense before Amazon gradually became the everything store. Remote work was a rare exception until COVID hit and Zoom became the main way to conduct meetings. Who would have ever expected to store their most precious data not on their own servers, but remotely in the Azure cloud?



VCs know that in a world of high uncertainty, at least initially, the majority is often wrong. Moreover, VCs are looking for ideas that others don’t even understand yet. “You can’t out-invest others by investing in whatever everybody thinks,” Mike Maples, Floodgate’s cofounder and an early investor behind many unicorns, told us. “You can’t achieve that by acting the way other people act.” Or as Bryan Roberts of Venrock succinctly summarized, “The worst thing that may happen is to have an organization where people say, ‘If I’m wrong, at least I’m not alone.’”



To succeed, VCs must be contrarian. This is another reason why they embrace disagreements. It simply leads to better overall outcomes.



Finally. Should we apply the VC decision-making framework to every single decision? Not at all. For routine tasks, the traditional mindset is preferred. Think of fast-food-order fulfillment, car manufacturing, or call center operations. In those situations, you must minimize conflict and make decisions semi-automated to maximize efficiency. There should be no debate over the grill temperature, safety standards, or the return policy. However, to deal with innovative ideas effectively, you need the Venture Mindset. This is when conflict avoidance may do more harm than good. Different mindsets for different decisions.



You can’t find the truth if you have a consensus-seeking culture. You can’t avoid groupthink biases unless you proactively promote conflict. You can’t out-invest others by investing in ideas that everyone thinks are great. Conflict and good decision-making often go hand in hand. If you want stability, go for consensus; for breakthroughs, rely on the VC mindset.