The feedback in the 360-degree reviews was supposed to be anonymous. But it was crystal clear who’d made the negative comments in the assessment of one executive.

Lance Best, the CEO of Barker Sports Apparel, was meeting with Nina Kelk, the company’s general counsel, who also oversaw human resources. It had been a long day at the company’s Birmingham, England, headquarters, and in the early evening the two were going over the evaluations of each of Lance’s direct reports. Lance was struck by what he saw in CFO Damon Ewen’s file. Most of the input was neutral, which was to be expected. Though brilliant and well respected, Damon wasn’t the warmest of colleagues. But one person had given him the lowest ratings possible, and from the written remarks, Lance could tell that it was Ahmed Lund, Barker’s head of sales. One read: “I’ve never worked with a bigger control freak in my life.”

Editor’s Note

This fictionalized case study will appear in a forthcoming issue of Harvard Business Review, along with commentary from experts and readers. If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and email address.

“These comments are pretty vicious,” Lance said.

“You’re surprised?” Nina asked.

“I guess not,” Lance acknowledged.

His CFO and his sales chief had been at loggerheads  for a while. Ahmed’s 360 also contained a few pointed complaints about his working style — no doubt from Damon.

Lance sighed. Five years earlier, when he’d stepped into his role, he’d been focused on growing the company that his father, Eric — the previous CEO — had founded. Barker had licensing deals with sports leagues to make merchandise with their logos and partnered with large brands to produce it for retail markets, and when Lance took the company over, its revenues were about £100 million. Soon after, he’d landed the firm’s biggest partner, Howell. Negotiating the deal with the large global brand had been a challenge, but it increased business so much that Lance and his direct reports still felt as if they didn’t have enough hours in the day to get everything done. They certainly didn’t have time for infighting like this.

“So what do we do with this info?” Lance asked.

Nina shrugged. “This is the first time I’ve been through this process myself.”

“Right. Clearly I’ve got to do something, though. I know that Ahmed and Damon aren’t mates, but I do expect them to be civil.”

Nina nodded, but Lance sensed she was biting her tongue. “You can be honest with me, Nina. I need your counsel.”

“Well, if I’m honest,” she said tentatively, “I think that’s part of the problem. The expectation is that we’re civil, but that doesn’t translate to collaboration. We all trust you, but there isn’t a whole lot of trust between the team members.”

“So does everyone think Damon is awful?” he asked, pointing to the report.

Nina shook her head. “It’s not just about him. You can see from the feedback that Ahmed isn’t a saint, either. He picks fights with Damon, and the tension between them — and their teams — has been having a ripple effect on the rest of us. You see the finger-pointing. It seems like everyone is out for themselves.”

Although Lance hated hearing this, it wasn’t news. He’d just tried to convince himself that the problems were growing pains and would sort themselves out. After all, sales and finance were often at odds in organizations, and the conflict hadn’t had a big impact on Barker’s revenues. They’d grown 22% the previous year and 28% the year before that.

Of course, none of that growth had come easily, and opportunities had certainly been missed. The team had dropped the ball on inquiries from several retailers interested in its products by failing to coordinate getting them into the company’s system quickly. Now, Lance realized that might be a sign of more fallout to come. He needed to fix this. “My dad always wanted to do one of those team-building retreats,” he said, smiling. This had been a running joke among Barker’s executives for years. Whenever Eric had sensed tension, he’d mention the idea, but he never followed through.

Nina laughed. “Unfortunately, I think we’re beyond that.”

This Mess

The next morning, Lance was in his office when he got a text from Jhumpa, the head of product and merchandising: Can you talk?

Knowing this couldn’t be good, Lance called her immediately.

Skipping the formalities, she launched in: “You need to get them on the same page.” Lance didn’t have to ask who “them” was. “Ahmed has promised samples for the new line on the Clarkson account, but his order exceeds the limits accounting set, so we need Damon’s signoff, and he won’t give it.”

This was a recurring fight. Ahmed accused Damon of throwing up roadblocks and using his power to undermine the sales department. Damon retorted that Ahmed was driving Barker into the ground by essentially giving products away. Lance went back and forth on whose side he took, depending on which of them was behaving worse. But he didn’t want to intervene again. Why couldn’t they just find a compromise?

Practically reading his mind, Jhumpa said, “They’ll stay in this standoff forever if you let them. It’s as if they’re in their own little fiefdoms; they act like they’re not even part of the same team.”

“Have you talked to them about this?”

“The holdup with Clarkson? Of course I have. But it doesn’t help. This situation is a mess.”

The last comment stung. The team wasn’t perfect, but it was still operating at a pretty high level.

“It would really help if you talked to them,” Jhumpa gently pleaded.

Lance thought back to the last time he’d sat down with Ahmed and Damon. Each had brought a binder filled with printouts of the e-mails they’d exchanged about a missed sale. Lance had marveled at how long it had probably taken each of them to prepare — never mind the wasted paper.

“Let me look into it,” Lance said. This had become his default response.

“Can I tell you what I’d do if I were in your shoes?” Jhumpa said. “Fire them both.” Though Lance had always appreciated her straightforwardness, he was taken aback. “Just kidding,” she added hastily. “What about having them work with a coach? I mean, we could all benefit from someone to help us talk through how we handle conflicts and from establishing some new norms.”

Lance wondered if the firing comment had really been a joke, but he let it pass. “I did talk to that leadership development firm last year,” he said. “They had some coaching packages that seemed appealing, but we all agreed we were too busy with the new accounts.”

“Well, maybe we should make time now,” Jhumpa replied.

After they hung up, Lance was still thinking about the idea of letting Ahmed and Damon go. Terrifying as the thought was, it might also be a relief. He’d heard of CEOs who’d cleaned house and replaced several top execs at once. He could keep Jhumpa, Nina, and a few others and bring in some fresh blood. It would be one surefire way to reset the team dynamics.

Doing Just Fine

Later that afternoon, at the end of a regular meeting with the finance team, Lance asked Damon to stay behind.

“I heard there’s a holdup on the Clarkson samples,” he said.

“The usual. Sales needs to pare back the order. As soon as Ahmed does that, I can sign off,” Damon said calmly.

“It doesn’t sound like Ahmed’s budging.”

“He will.”

Lance decided to wade in.

“Is everything OK with you guys?”

“Same as usual. Why? What’s going on? The numbers look great this quarter. We’re doing just fine.”

“I agree on one level, but I have concerns on another. It’s taking six months to onboard new customers at a time when everyone is fighting for them.”

“Is this about those 360 reviews? I tried to be fair in my feedback,” Damon said a bit defensively.

“The input is anonymous, so I don’t know who said what, but the tension between you and Ahmed is obvious.”

“Of course it is. I’m the CFO and he’s in charge of sales. If we’re both doing our jobs well, there’s going to be conflict. And that’s what I’m doing: my job. I’m the keeper of the bottom line, and that means I’m going to butt heads with a few people.” Lance had heard him say this before, but Damon took it one step further this time. “Your discomfort with conflict doesn’t make this any easier.”

They both sat quietly for a minute. Lance knew that as part of this process he’d need to examine his own leadership. Indeed, his 360 had been eye-opening. His people had described him as a passionate entrepreneur and a visionary, but they’d also commented on his preference for managing one-on-one, instead of shepherding the team, and his tendency to favor big-picture thinking over a focus on details.

“OK. I hear you on that,” Lance finally said. “That’s on me. But you also need to think about what you can do to improve this situation. There’s a difference between productive and unhealthy conflict, and right now it feels like we’ve got too much of the latter.”

Our Vision Might Crumble

“Have you considered one of those team-building retreats?” Lance’s father asked when they spoke that night. “I know you all never took me seriously — ”

Lance chuckled. “Because you never booked it!”

“ — but I still think it’s a good idea,” Eric continued. “No one really knows how to have a productive fight at work. It’s not a skill you’re born with. You have to learn it.”

“I’m considering it, Dad. But I’m not sure it would be enough at this point.”

“What about the comp?” This was another thing that Eric had brought up routinely. During his tenure as CEO, he’d realized that the C-suite compensation wasn’t structured to encourage collaboration. Bonuses were based on individual, functional unit, and company performance at respective weightings of 25%, 70%, and 5%.

“Maybe it’s time to bump up that 5% to at least 10% or even 20%,” Eric said.

“I’d like to make those changes, but I need Damon’s help to do it, and he’s swamped,” Lance said. “Besides, lots of experts say that too many people view comp as a hammer and every problem as a nail. CEOs expect comp to fix anything, but usually you need other tools. I may have to do something more drastic.”

“You’re not considering firing anyone, are you?” Eric had personally hired all the senior executives now on Lance’s team and was almost as loyal to them as he was to his own family.

“To be honest, it’s been on my mind. I’m not sure what I would do without Ahmed or Damon. They’re an important part of why we make our numbers each year. They help us win. But I look back  and wonder how we did it playing the game this way. I need a team that’s going to work together to reach our longer-term goals.” When Eric had retired, he and Lance set a target of reaching revenues of £500 million by 2022. “This group feels as if it could disintegrate at any moment. And our vision might crumble along with it.”

“I’m sorry,” Eric said. “Do you feel like you inherited a pile of problems from your old dad?”

“No, I feel like I’ve somehow created this one — or at least made it worse.”

“Well, one thing is certain:  You’re the boss now. So you’ll have to decide what to do.”

What should Lance do about the conflict between Damon and Ahmed?

If you’d like your comment to be considered for publication in a forthcoming issue of HBR, please remember to include your full name, company or university affiliation, and email address.

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