Conflict, Tradeoffs and VIPs

Integrations and alliances are gruesomely complex. Multiple firms, often dozens of teams, myriad tasks large and small. Early decisions have years-long repercussions. Feedback comes slowly. Effective leaders and managers develop a feel for the tradeoffs. Their intuition requires years of experience.

Value-Inflection Points (VIPs) accelerate this knowledge-building process. They identify, understand and catalog the first, second and third-order consequences of decisions. They draw from a much broader set of experiences than a single manager.

In the BTD VIP podcast series, Vickie Dalton, Tim O’Connor, David Thompson and BTD’s Nick Palmer discuss how companies build their VIP catalogs to account for the longer-term consequences of decisions.

There are two steps to using VIPs. First, the leader must identify the lynchpin decisions. Not all decisions are equal. The difference is frequently not obvious. Second, the leader must build the framework to understand tradeoffs tied to VIP decisions.

An example is the balance between suppressing today’s conflict keep on track versus accepting a disruption to build a team’s conflict-resolving ability.

In the seminal Harvard Business Review Article, The Right Kind of Conflict Leads to Better Products (December 2016). David S. Thompson, then chief alliances officer at Eli Lilly & Company, and his collaborators look to Lilly’s alliance portfolio. They examine thousands of data points from over a decade-and-a-half, responses of both Lilly and partner-firm participants. The authors conclude:

“Particularly with partners, we often try to avoid conflict to avoid irritation. But too little irritation risks failing to create the pearls of wisdom that good conflict can produce.”

These “pearls of wisdom” are, in fact, the building blocks of what is often vaguely labeled “Culture.” MIT’s Professor Edgar Schein identifies Culture with the underlying routines that a group adopts (See Organizational Culture & Leadership). Such routines cannot be mandated. They grow and evolve as the group confronts problems, acts and observes (and must live with) results. This trial-and-error process reinforces routines “that work.”

When confronting inevitable alliance and integration conflicts, Value-Inflection Points provide a manager and her team a clearer understanding of first- second- and third-order consequences. This drives better decision-making through clearer prioritization.

To learn more about Value-Inflection Points from the experts, join BTD’s mailing list for early access to full podcast episodes as they drop.

We also invite you to join the conversation with the “JAVI” group, over 100 expert practitioners from over 30 companies who meet regularly — virtually and in person — to discuss and refine these ideas. Contact us if you would like to find out more.