Strategic conflict disagreement at the top over the future direction of the organizationis conflict at its deadliest. A few years ago, a major oil company's Canadian operation was floundering. Amid fierce competition, sales were down. The profits that were needed to fund exploration had evaporated. Each time the president met with his senior team, sparks flew. Each executive vice president viewed his or her function as being the key to the organization's future strategic success. Not surprisingly, debate raged around resource allocation as each vice president argued adamantly for a bigger piece of the action.
The president was a veteran oilman whose idea of growth was to simply keep diggingto find as much oil as possible and sell it at the highest price the market would bear. The vice president of production had a different idea of how to grow the companyand power his own career. His ambitions centered on petrochemicals, and he envisioned himself at the head of an empire of chemical plants. The vice president of marketing and sales argued that, because of its superior distribution network, the company could easily move a variety of products, in addition to oil, into the marketplace .
Predictably, the senior team's confusion about the company's strategic thrust cascaded down through the organization. The competition for resources at the top was mirrored in similar firefights among the functional and regional directors, with each lobbying for the lion's share. There was constant clawing for the company's top talent, with department heads literally raiding one another's functions for the best people. Priorities were defined not by an overarching business strategy but by the self-interest of those heading up the silos . One production manager, for example, felt perfectly justified in saying, "If I'm going to grow production, I'm going to need the most talented people, even if that means poaching talent from other areas." This was a case of robbing Peter to shore up Paul.
And, with no clear direction from above, support functions were unable to prioritize their services. From information services (IS) to human resources, the squeaky wheel and power politics were the engines that drove resource-allocation decisions.
The uncontained internal conflict migrated beyond the company's borders. Relations with the national and provincial governments became strained, as regional executives issued contradictory statements about the company's short- and longterm intentions.
Eventually, the company achieved a turnaround , but not until it developed a clear strategic direction and an aligned top team did it move from being a fragmented environment to become an integrated, competitive force.