Institutions are full of conflict. They have to be because things happen in them. Things have to be done according to standards, and imposing standards infringes on liberty. So we embrace rules and hierarchy as conflict management tools. And these work to a certain degree.
But there is a problem. Following rules does not motivate. Most of the time, nervousness about whether rules are met imposes stress instead. And if we want people to become more creative, we will need tools other than rules and hierarchy to manage conflict.
What do those tools look like? They are based on adoption of a common mission, where everyone sees the same goal and has the authority to act as needed to reach the goal. This “common mission” is what Bill Ury calls the third person in the room. In the corporate world, it can change the way the firm is organized, the way it shares knowledge, and the way it communicates with clients. Here is an example.