Resolving conflicts

Solving problems is a part of startup culture. All companies have problems. How you acknowledge and address problems and account for power dynamics in reporting is a fundamental part of your company culture. Resolving conflict fairly with a focus on positive opportunities can mean fixing problems earlier with less fallout, building trust on your teams, and spending more time focused on your business and less time on people issues.

Building a culture is hard work. Having an open environment with many different people is likely to lead to wonderfully different ideas, but also to not-so-wonderful clashes when trying to make decisions and integrate different ideas and behaviors. Reporting problems and enforcing solutions in a collaborative, solution-focused way is part of a well-functioning, transparent, and inclusive company.

We encourage companies to think creatively to resolve differences and find solutions for bias and harassment problems. Keep diversity and inclusion in mind as you define the culture you want and develop a code of conduct to support it. Track your processes and results to see what is working and what needs revising. Keep in mind that as hard as it is to build a good culture, rebuilding a broken culture is much harder.

Train someone to receive complaints. This role reflects an internal positive focus within the company (inclusion of employees) rather than an external (e.g. recruiting new employees, public face of the company) or often negative legal (some aspects of HR) one. Otherwise, problems only surface through HR as a last resort, because employees do not have anywhere else to go — or you notice the problem when you see high attrition numbers or receive the threat of a lawsuit. In these cases, it’s probably too late to resolve the issues.

HR and People Operations are between a rock and a hard place. By their structure and role, they serve as advocates for the company and not for employees. They are often instructed to escalate complaints into legal issues quickly, often leaving the employee at a disadvantage, because they are tasked with risk mitigation for the company instead of collaborative problem-solving for all parties. It also happens because this is the status quo — the only way companies know how to address problems.

Legal liability can become a bigger concern than employee welfare. Companies may be worried that if they have information about problems on file, it could become grounds for a lawsuit if those problems aren’t resolved quickly enough. Consequently, many prefer to focus on risk avoidance and the existing problematic solutions to conflict. Instead of proactively seeking information to prevent issues in the first place, they wait until potential problems are reported.

And when those problems are reported, they try to get the person who brought them up out of the company instead of solving them. It starts with HR usually going to internal or external lawyers. In higher stakes situations, the lawyers bring in investigators. Investigators are paid by the company and are usually biased in favor of the company as a result. Some are management-side lawyers and view the situation with a management-oriented lens. The process usually involves collecting information that can be used against the employee in litigation — not resolving the issue that caused the complaint.

Most victims of inappropriate workplace conduct choose not to report violations. Often they fear retaliation, being labeled a troublemaker, or not being believed. These fears are not unfounded. Research indicates that victims who report discrimination are more likely to suffer a social cost, even when discrimination is found to exist. When allegations of discrimination challenge beliefs in the meritocracy, the response can be even more negative. 1

Unreported violations come at a high cost for both the individuals suffering from inappropriate behavior and the company where such behavior goes unpunished. Individually, incidents of discrimination and harassment, even on a relatively small level, can have a negative impact on economic, mental, and physical health. Potential consequences could include impeded advancement, lower earnings, higher levels of stress, depression, and poorer self-reported health status.2 Companies that fail to address discrimination are more likely to suffer from toxic work environments, low morale, lower productivity, and higher rates of turnover.

What are our recommendations

Consider using a third-party ombudsperson

An ombuds can avoid conflict of interest by serving as a neutral third party who doesn’t represent the legal interests of the company, but rather its diversity-focused concerns.

An ombudsperson is an outside, third party resource for employees to get information. For employees, the independent ombudsperson should provide an independent outline of options and potential outcomes, including what is likely to happen if HR gets involved. As a neutral party, the ombudsperson should be aware of the power dynamics at play in the situation and be open about sharing the dynamics and their likely impact.

Ideally the third party should be set up to be truly neutral and hired through an outside independent company; an ombudsperson who is managed, firable, and compensated directly by the company is not likely to be perceived as independent.

Companies could also get information about problems in a timely fashion with an ombudsperson. We see the ombudsperson as being able to collect data regularly while raising issues early with company management. Protection of employee confidentiality is also critical, because we believe it will result in earlier reporting — and solving — of problems and encourage more creative solutions and a less adversarial process.

Make reporting solution-oriented

The reporting process should be clear, solution-oriented, collaborative, and accomplished through multiple mechanisms. Your code of conduct should clearly outline procedures for reporting violations and provide detailed instructions, though not all victims will feel comfortable coming forward. Fear of reprisal, lack of faith in authorities, or shame may prevent victims of inappropriate behavior from speaking out. It is important that a code of conduct acknowledge these legitimate concerns while providing a clear path for those who do want to report violations. Companies may consider adopting several reporting mechanisms, with different levels of visibility, which may trigger an array of responses. Potential reporting options could include an anonymous email form, a suggestion box, or a dedicated email address.

Clear, consistent enforcement is perhaps the most important factor in ensuring the effectiveness of a code of conduct. A code of conduct should clearly state the penalties for violations and the mechanisms for enforcement. Violations should be responded to swiftly, following the procedures in the code of conduct.

Account for powerdynamics

The most effective solutions for solving and reporting problems will recognize the power dynamics between the parties involved, and seek to provide an equitable solution for all of them. 2

In reporting and dispute resolution, these dynamics come into play in several forms. Employees are dependent on employers and managers for compensation, references, promotions, and sometimes, their social circles. Team members may fear social, financial, or professional retaliation if they share information on problems in an investigation or otherwise. Employers typically have more and better legal resources; larger startups have in-house counsel, sometimes teams of lawyers. In disputes, they often hire outside counsel, which may have much larger teams allocated than an employee can afford.

Track who is leaving and why

Know where you are losing diverse staff, and whether it is voluntary and involuntary. 3 Gain a better understanding of links and blockages in the pipeline. Track both overall attrition rates and losses along demographic slices: Is a company losing women of color at a rapid rate? Are Black employees more likely to be fired than their white counterparts? Is there a common culture reason for employees leaving? Are people leaving the same manager? Where are they going? Are Performance Improvement Plans helping or hurting? Exit interviews that ask employees why they are leaving can flag problems before they become more widespread.

Termination practices should be a checkpoint for whether a company is operating well. Layoffs and involuntary attrition should not have a disproportionate impact on underrepresented groups. Today, this is often not the case. 4 Criteria for dismissal and termination should be objective, based on performance reviews and promotion data. Subjective criteria could be influenced by bias against members of underrepresented groups. Run a metric check on attrition demographics before making any final decisions about reductions in force.


We share these helpful references as starting points and encourage you to continue exploring.

  1. Kang, S., DeCelles, K., Tilcsik, A., and Jun, S. (March 29 2016). “The Unintended Consequences of Diversity Statements.” Harvard Business Review. Retrieved April 2016 from:

  2. Klein, F.K. (2007). “Giving Notice: Why the Best and Brightest Are Leaving the Workplace and How You Can Help Them Stay.” San Francisco: Jossey-Bass. 

  3. Costs of attrition are at around 20 percent (213 percent at higher levels) of annual salary. 

  4. Elvira, M.M. and Zatzick, D. D. (April 2002). “Who’s Displaced First? The Role of Race in Layoff Decisions.” Industrial Relations 41(2): pp. 329-361. Retrieved April 2016 from: