June 2022
In the sixth episode of our ‘In Conversation with…’ podcast series for 2022, Partner Lucy Lewis speaks to David Liddle, founder and CEO of TCM Group and best-selling author.
David is passionate about reforming organisational culture and HR conflict resolution processes, believing we need to move away from the retributive systems of blame, shame and punishment within workplaces. David explains how managing conflict needs to become a strategic priority, with dialogue having primacy rather than retribution. Ultimately, HR will need to decide if they want to focus on people, culture and values or simply governance, rules and processes. David finishes by talking about the clear business benefits of shifting to a people centred, purpose led and values based leadership system. After listening to David’s conversation, you won’t feel the same way about the grievance process found in every employee handbook.
In Conversation With…David Liddle
Series 2: Episode 6.
Lucy Lewis: Hello, and welcome to The Future of Work Hub’s ‘In Conversation With…’ podcast. I’m Lucy Lewis, a partner in Lewis Silkin’s Employment Team and in this podcast series, I’ll be hosting exclusive discussions with innovators, business leaders and thought leaders to explore their perspective on what the future of work holds.
We know the pandemic has accelerated longer term societal, economic and technological trends and we know we’ve got a unique opportunity, a once in a generation challenge to re-think who, how, what and where we work. But whilst the pandemic has been a significant catalyst for immediate change, it’s only one of the many drivers changing the world of work.
And turning to today, many businesses are focussing on leadership and culture, battling to attract and retain staff, to use that much coined phrase, to build back better. And I can think of no one better to discuss building better organisations for the future than today’s guest, David Liddle.
David has dedicated his professional life to supporting organisations, to integrate purpose-led, people-centred and values-based leadership systems, HR policies and management processes. David is the founder and CEO of TSM Group. He’s also a best-selling author, his latest book ‘Transformational Culture’ has been shortlisted for Business Book of the Year Awards 2022. He was recognised in 2021 as one of the top 20 HR most influential thinkers and he’s included in Thinker’s 50 Radar for 2022.
Welcome David.
David Liddle: Lucy, thank you so much. And thank you for having me.
Lucy Lewis: It’s a pleasure to have you. I’m really looking forward to our conversation today, but I wondered if you could start by telling our audience a little bit about yourself and your extensive career.
David Liddle: Oh wow. Again, thank you Lucy. So yeah, really excited to be here, talking about topics which I’m really passionate about. And in particular focussing on the area of justice, conflict resolution and how that feeds into our organisational cultures, HR systems and management processes.
My journey began really in the late 80’s when I rolled on my first degree, which was in race relations. I was always very passionate. I grew up in Nottingham. I was really passionate and interested in the areas of exclusion and inclusion and discrimination and I was very fortunate to study at a wonderful college called Edgehill College, part of Lancaster University up in the northwest. Following that degree, I really got bitten by the bug around this issue certainly around inclusion and I was put into the Student’s Union for a year and then came to work in the wonderful city of Leicester in the East Midlands and I worked for a year in the area of social and economic regeneration programme and my role in that year was to involve, particularly the black minority and ethnic community, single parents and other, what we would classify as hard to reach communities, in social and economic regeneration programmes.
And Lucy, what I saw there really firsthand was the very damaging and insidious impact of conflict within our communities, across families, in the way that communities worked with and dealt with local agencies and vice versa. And I was shocked, really at the woefully inadequate systems for handling conflict.
So I went to Bristol to find out more about a word that I became very passionate about that I’d never heard of called mediation and restorative justice. And I set up one of the first restorative justice and mediation charities in the country, this was around 1993/94. And for eight years I ran a charity going into community disputes and gangs and neighbour disputes and then more laterally into the criminal justice system working with young offenders and others to bring restorative justice into communities and it was amazing. It was so powerful, and I saw, I really saw first-hand the powerful impact of dialogue and the shifts that people can make, the transformation that people can make when the conditions were created for them to come together and have powerful, high-quality conversations with each other.
So, I ran a charity. I loved it. And I went to study an MBA at De Montfort University. I was doing a bit of consulting work as well, so I was going into some companies to try and help them integrate restorative systems within their organisations, so I thought I best find out how businesses work, did an MBA and probably left with more questions than answers. But what I did start to see from my work there Lucy was that the woefully inadequate systems resolving conflict within communities were being mirrored in our own organisations and the harm, the trauma, the stress, the fear, the uncertainty, the anxiety, the damage on people, on teams, and on a whole organisation because of a failure to manage conflict effectively was endemic across British workplaces.
So I set up the TCM group, which at the time stood for total conflict management, it has changed substantially since then but in health and organisation to integrate whole systems approaches for managing conflict and distributes, using restorative principles and mediation. At the time no one had heard of this thing called mediation. They thought it was medication or some sort of weird meditation and it was all very strange but there were a few people out there. There were two large London councils, Croydon Council and Hounslow Council who were very open to introducing restorative justice into their organisations, which was fantastic. I obviously got the chance to work with the cabinet office.
We’ve gone into organisations, big, big organisations and mediated, and we’ve sometimes investigated or coached and trained and we’ve learnt so much about people and culture and systems and management and being at the very sharp end of when things go wrong. And I think it puts us in a really interesting and actually quite a unique position of working with people, professionals and others, union reps, managers, helping them to re-frame and re-think how they manage their people in a more compassionate and more collaborative I guess constructive way. And that’s really a passion of mine right now.
So, I set up the business and really for the last 20 years we’ve been going into organisations, helping and empowering them to adopt purpose-led, person-centred values-based approaches for culture change, conflict and complaints resolution. Sort of human resources which we’ll talk about a lot today, I think. People management process and of course leadership processes. Finally I guess just in terms of where we are.
We learnt … we’ve gone into organisations, big, big organisations and mediated, and we’ve sometimes investigated or coached and trained and facilitated … and we’ve learnt so much about people and culture and systems and management and being at the very sharp end of when things go wrong. And I think it puts us in a really interesting and actually quite a unique position of working with people, professionals and others, union reps, managers, helping them to re-frame and re-think how they manage their people in a more compassionate and more collaborative I guess constructive way. And that’s really a passion of mine right now.
Lucy Lewis: It’s a fascinating background. Really, really unusual and I can see gives you a really very unique insight. And I guess that takes us to your new book, “Transformational Culture”. It came out last year. It’s a really great timing for lots of our listeners because we know that many businesses are trying out new ways of working. They know they’ve got to re-build culture. They’re battling, you know the so called great resignation, they’re looking at ways that they can engage with staff.
Your book proposes that we’ve taken a traditional approach to resolving conflict that actually is fundamentally flawed.
Can you talk to us a little bit about the business environment and what you think causes the problems with conflict management?
conflict management in the workplace
David Liddle: Well I can start in so many different places Lucy. I’m going to start from our leadership. I’m going to work down, right the way down through the organisation to the employee experience.
And so, I’m going to start with the leadership level in terms of how we manage conflict. Conflict is an unavoidable, inescapable, in fact, it’s a healthy expression of working life and indeed I would argue that when it’s managed well, conflict can be a really important driver or a catalyst to innovation, creativity, growth, insight, learning. In fact, well-managed disagreements conflicts within our workplaces are the antecedent to growth. And therefore, we need conflict and disagreement in our organisations.
Yet we’re fearful of conflict. We treat conflict as a risk. We try and create processes, systems, mechanisms to design conflict out. In fact, I see within our organisations the greatest cultural norms around conflict resolution are what I describe as extensive inaction, ignore it and hope it’ll go away, brush it under the carpet, don’t deal with it effectively. Or when we can’t do that anymore, expensive over-reaction, formal processes, litigation, settlement agreements.
I’m very fortunate and I work at a very senior level in a large number of organisations and I’ll go into boards and ask them, one of the questions I say is ‘Look, can I see your strategy for managing this thing called conflict’, which we all agree exists. We all agree it has a potentially positive, but also a negative impact. And Lucy, I’ve seen better strategies for ordering paperclips in big corporate environments than I have for managing conflict.
So, conflict is not treated as a strategic priority. And instead, because it’s not treated as a strategic priority by our leaders, what we do is we subcontract the management of conflict to our line manager. But we don’t subcontract it to them giving them the tools or the skills or the training or the support that they need, and when they get it wrong, we’ll blame them and we engage in retributive or communitive sanction based approaches. So, our poor line managers are tasked with managing conflict with no skills, not the right equipment, not the right training, not the right support, in a culture of fear or blame and retribution.
And so, when our line managers struggle to deal with this stuff, as they do, we then outsource it to a policy framework: HR systems, grievance, discipline, performance management, capability, absence. And these processes are the antithesis of good conflict management. They retribute it. They are predicated on a blame, shame, punishment system of justice which drags the parties apart and polarises the parties and destroys the relationships and, in some cases, destroys their lives.
So, when those processes fail, and fail they will. We then subcontract it to external partners, to lawyers and to others and we say ‘Look, let’s deliver justice through another route, through litigation and through arbitration or through the Courts or through some of negotiated settlement. And of course, it’s at that point where we see this expensive overreaction and the costs are great.
So, from the top of our organisation, cascading through our businesses, we need to start treating conflict as a strategic priority. Reframing our approach to conflict resolution. So, we’re supporting managers and leaders to have the right conversations that they need to be able to resolve issues constructively at the source. We’re ripping out these acrimonious and retributive systems and processes, grievance, discipline, there’s no place for them in the modern world. They’re destructive. They’re as insidious as some of the approaches that I saw in our communities in terms of managing conflict. We should be removing those and replacing those within our people processes which are focussed on purpose, values, people, dialogues, compassion.
And as I say to many HR and chief HR officers, you cannot claim to be a compassionate organisation and still drag people through the retributive, punitive and acrimonious systems and processes when things go wrong, or when their performance dips, or their face doesn’t fit any more. That’s the opposite of compassion.
And of course, as I’ve mentioned there, our leaders need to recognise that conflict is both a threat and an opportunity and the only way to manage a threat and an opportunity to be effective in our organisations, is if we develop a strategic narrative around it which shapes the thinking and gives a steer and a vision and structure for everyone in the organisation to handle this issue of conflict and culture as well, which we’ll talk about later effectively.
And the other thing I would say really, quickly Lucy is about the employee experience. I mentioned I would start at the top of the organisation and work down to the employee…so welcome to the new organisation, lovely employee. It says in the employee handbook. It’s great to have you here. It’s really wonderful to have you as part of our business, page 1. Page 2 – this is what we’ll do when you fall out. This is what we’ll do when you disagree. This is what we’ll do when you bully someone. This is what we do when you’re bullied by someone else. We don’t trust you. You’re a risk. You’re a potential problem. You’re a threat. We don’t think you’re going to quite fit, so we’ve created a different set of systems and processes to manage you when you don’t fit anymore.
In essence, this is screaming out ‘We don’t trust you!’
So the modern employee handbook, as defined by so many of the HR systems and processes, from the minute the employee walks into the organisation, sets the tone, creates the climate, defines the character of the organisation. There’s an environment where we don’t trust you. You are a risk. You are threat. And we will wrap you up in complexity, bureaucracy and red tape when things go wrong.
So, we really need to re-think the way that we frame those first 100 days of when we bring an employee into our organisation. And setting the tone in our organisations which is about understanding your needs, your goals, your aspirations. Meeting the employee halfway that we have certain rules and processes we need in our organisation. We must open these golden objectives as an individual with a human being within our organisation.
I guess the other part of managing conflict effectively is creating a more human, a more humane or humanising experience for our employees as they enter the organisation. So, as they experience conflict and disagreements and problems, as they were failures, as they do. They understand that there is a new paradigm in the organisation which is transformative in nature rather than retributive in nature, and that’s a massive change that we need to see in our organisation if we’re going to harness the potential of the changes that are happening at the moment.
Lucy Lewis: That’s really interesting. And you’re right, we, you know, we see as employment lawyers quite a lot of these problems. I recognise a lot of what you’re saying.
The other thing that we’re seeing more and more in workplaces is a kind of cultural division in the workplace. So, we saw it probably first with the issues around Brexit. We’ve seen it a bit through the pandemic about different views, different levels of comfort over lockdown measures, vaccinations. We’re seeing it in relation to things like different views on the climate emergency and cultural issues creating conflict.
How can businesses deal with that in practice?
conflict management strategies
David Liddle: You’re absolute right Lucy. I mean these are massive issues and we see fissures and divisions across our organisation. The successful organisations are doing some really simple things.
The first one is it starts with listening. We need to hear and understand what people are saying. And when I see tensions or disagreements in our organisations or are dealing with some of these challenging issues, we write a policy on it. We create a standard operating procedure or a protocol. We communicate that, but we don’t really listen.
And what that does, it’s working, it’s telling people how they should behave rather than working with them to understand their needs and goals and to help shape a workplace which is fit for all. Where the disagreements that we have aren’t a source of adversity, they’re a source of opportunity. And so we need to reframe how we manage these disagreements. We need to learn how to disagree well because disagreement and these fissures will continue to evolve. They will continue to be black swan events, we’ll continue to have massive issues coming down the line here, just looking at the inflation rate today hitting 9% and potentially pushing into double figures, the cost of living crisis. All of the stresses in our economy are going to create ongoing challenges within our workplaces.
So, the nature of the future of work will be defined by the character of the way that we handle disagreements and tensions. The successful organisations of the future will be the ones that harness the potential within the diverse thinking and disagreements and the conflicts. The organisations which will unfortunately struggle, and I just have say stay simple. We can see it in the press. P&O Ferries, that’s a really recent example of just how damaging our employee relations on a conflict management landscape can be on the business and on the reputation. Social media storms, it flows out of our Alexa’s, it’s out of our news feed. How the nature of conflict and disagreement defines the organisation.
So, what do we need to do better? We need to listen. We need to remove these retributive systems of blame, shame and punish. The balance of probability of 51% is not the true test of justice. The true test of justice is have I been fairly treated? Have I been heard? Have my needs, goals, aspirations, and hopes and fears been taken seriously? Have I been able to express my values and beliefs in a way which is constructive, where they’ve been treated with dignity and respect. Have I been able to hear the other person’s perspective, the other person’s point of view? Have we sought collaborative outcomes which deliver meaning and benefit to both parties, and excuse the jargon term, ‘win, win’. But have we been able to work towards a win, win where we know the justice paradigms, so endemic in our organisation, are reductive?
They try and reduce the situation to win, lose, right, wrong. And they encourage, they actively promote power imbalance, the systems and processes actively promote bullying, harassment, discrimination, tension, disagreements in the most constructive form. So we need to re-model our systems, redefine our justice paradigms, give our people a jolly good listening to and think about how our managers, leaders, HR, or people professionals, I prefer that term, people professionals, how they can redraft the balance, so they support, serve and nurture an environment for people to flourish rather than persistently managing people as a risk or as a threat to business continuity or business success.
Lucy Lewis: I mean it’s really, really inspiring. It brings to mind a conversation we had with Margaret Heffernan. She chaired a recent Future of Work Hub discussion and we were talking about peoples’ adaptability when it comes to really needing to change. Big changes. And she said ‘If I do something new, I might fail. But what’s less visible is the incredible danger of the status quo, actually doing nothing is a gigantic risk but just because it’s business as usual, it doesn’t feel like one’.
And it feels like this really falls into that category of we’ve always done things this way, we’ve always had this process-driven approach and we don’t identify the kind of risks that you’ve talked about.
But in terms of actually making the change happen, you know one of the biggest barriers we see is resistance to change, fear of experimenting a kind of fear of doing things slightly differently than people expect or that they’ve seen done before.
How would you encourage businesses to get over that fear?
hr evolution
David Liddle: Yeah, I think I’ve got a few answers to that question Lucy. I think the first thing I’m going to bring is a really person-centred approach to that change. So, we mediate a lot. And you can imagine in mediation, people don’t really want to go into mediation and people don’t sort of clap their hands and get excited about going to mediation. They generally look like it’s the thing they’d least like to do. I heard about 1,562 reasons why the two parties shouldn’t navigate in a room with each other!!
By the way Lucy, I’ve never actually heard a good reason yet. A slight aside, but I genuinely have never heard a good reason why the two of them can’t get in a room with each other. It’s all based on perception.
So the first answer to the question is, when those two parties have the courage, and the support and the infrastructure around them to get in a room with each other, I get an email the next day from the mediator or obviously the CEO of a large company, and the emails generally go along this line.
Why did we not do this days, weeks, months, years ago? … fill in the blank. And it was nowhere near as bad as I thought it was going to be.
That is a really powerful message. Dialogue can move mountains. It’s not always going to work. There are going to be some cases where dialogue is not the right route. But over 90% of cases that we mediate, result in some form of an improvement and satisfaction for the parties.
So, we need to change, we need to become more courageous at creating the spaces for people to engage in dialogue. We need to give dialogue primacy in our organisation. At the moment we give retribution primacy.
Now people may not agree with that or may disagree with that. If you disagree with that, I’ll just say pick up your employee handbook, or pick up one of your policies, pick up your grievance procedure and have a read through that procedure. Does dialogue have primacy or does retribution have primacy? And I’m pretty confident it will be retribution. It’s about blame and punishment. I think the second thing that we need to be really thinking about how we do this is, challenges in our HR systems. Now this is not a challenge for HR professionals. We work with so many HR professionals who, like you’ve said, are inspired by this but unfortunately when it comes to policy development, I believe are fearful of change.
I was speaking to an HR director for a large company yesterday and I said to the HR director, you do know there is no statutory duty on your organisation to have a grievance procedure. That was repealed in the Gibbons review of the then repeal of the statutory dispute regulations. And she said to me “Really, I thought we had to have a grievance procedure”. This is a HR director of a large firm who didn’t really truly understand that the organisation does not have a legal duty to have a grievance procedure. And until HR, and I guess ACAS, a real call for ACAS and I’m calling for Gibbons 2.0 to help really shape the landscape of dispute resolution in this country. Because we really need a big conversation which Gibbons began back in 2007, 15 years ago now, around dispute resolution.
So, we need our HR professionals to be more courageous in the policy development within their organisation. And it’s not a risk to put your people first. It’s not a risk to be more humanising in the way that you develop your policies and processes. It’s not a risk to be compassionate, supportive and to engender an environment where people can be constructive. In fact, it’s the opposite of a risk. You’ll generate the most brilliant outcomes and you’ll release the inner brilliance of your people, your teams and collectively within the workplaces.
So, HR we need you to not take it personally when your policies are critiqued. But to see this as a wonderful opportunity for HR to become potentially the most strategically important part of the firm, or, and unfortunately, my view Lucy, and it might be slightly controversial, is people will start to challenge these HR policy frameworks and it will throw into question the validity and purpose of HR as the custodians and guardians of the policy framework, which is detrimental to organisational wellbeing and organisational effectiveness.
And HR need to make a decision which side of the fence they want to sit on. Do they want to sit on the side of the fence of people, culture, values, purpose, mission and effective outcomes and high performance or do they want to sit on the side of the fence which is about governance, rules, processes? And I think that to me, could be one of the most significant shifts in the way that we think about our organisations.
Lucy Lewis: Thank you. It makes a lot of sense. It can easily be one of those things I think you don’t think about very much and when you hear it articulated as you have, it obviously makes a huge amount of sense.
I wondered, we’re coming close to the end of time, but I know on the TCM website there are some really lovely case studies where you’ve seen very direct business benefit. I wonder if there is a particular case you’ve been involved in where you’ve seen real business benefit that you could share with the audience?
conflict management techniques
David Liddle: Oh, we’ve done some wonderful work with organisations around integrating these approaches to deliver a real business benefit. Aviva, who we’ve been working with for a number of years now, I think do fantastic work, and colleagues at Aviva, Anthony Fitzpatrick and many others are really seeing the development of a resolution framework and mediation making a significant contribution both internally to their business. I think the reduction in the number of formal cases is significant. I won’t try and quote the exact numbers Lucy, but there is a case study on our website in relation to Aviva.
But what Anthony and the team at Aviva have said very clearly and articulated very clearly, is it has enhanced the whole employee experience. It’s enhanced employee wellbeing. It’s contributed significantly to Aviva as a place where people want to work and stay. It’s fed into other strategic narratives within Aviva in particular, as it does in other organisations such as flexible working and hybrid working and new and modern compassionate leadership processes. So, within Aviva, as with many, many other organisations, the business benefits of treating people with compassion and more dignified and respectful way through the processes are significant. We are seeing more and more research being done. In fact, we’re calling on more academics to undertake more research into the impact of these approaches. There is a significant lack, Lucy, of evidence and research out there from academic institutions and we have set up a body called The Institute of Organisational Dynamics specifically to work with academics across the globe, to help develop a research base so we can go out and undertake further research.
And we have launched a really exciting piece of research with the NHS and a body called The HPMA, The Healthcare Professional Management Association looking at developments of transformational processes and the impact across health and social care and that research process has just begun and is already starting to identify some interesting trends around positive and constructive cultures and their impact on employee and patient experience.
So, more work to be done on the research, but certainly anecdotally the work that’s coming out of organisations is really powerful and effective.
Lucy Lewis: I look forward to seeing that, particularly that NHS research sounds fascinating.
I’m going to finish with a question that I’ve asked all our guests on this 2022 podcast series, we know the world of work is going to look very different in 10 years’ time, quite probably in ways that we can’t even begin to predict now. But if you had the power to ensure one change for the workplace of 2032, what would it be?
Future of Work
David Liddle: For me it has to be the outright ban of the grievance procedure. The most acrimonious, retributive, insidious, damaging, destructive, single piece of document in our organisations that looks harmless enough and it looks benign. It’s not benign. It’s a canker and we need to cut that canker out of our organisations if it’s going to be effective.
There’s probably a lot more Lucy, but if you state one thing, cut out the canker of the grievance procedure.
Lucy Lewis: I think that’s a really, really interesting thing and I’m sure it’s something that lots of people won’t have thought of.
It’s been such a fascinating discussion David, thank you so much for joining me.
If you’re listening and you’d like to find out more, you can visit www.thetcmgroup.com. If you want more detail about transformational culture you can visit www.transformationalculture.com and I’d also recommend you follow David on Twitter @david_liddle.
Thank you, David.
David Liddle: Lucy, it’s been a real pleasure and a privilege, so thank you very much for inviting me.