Organisational Leaders Dissolving the Conflict Tax
You’re Responsible for Three Outcomes:
- Commercial Responsibility. Strong margins, operational efficiency, return on investment.
- Customer Satisfaction. Quality, speed, and service that keeps customers coming back.
- Culture. Engaged employees who bring their best work every day.
Where It Breaks Down
In practice, these three dimensions shouldn’t be in conflict—but they often feel that way. As a result, sales pushes for revenue whilst operations fights for efficiency. Cost reduction undermines culture. Meanwhile, customer satisfaction initiatives drain commercial performance.
You want Collaboration, Innovation and Throughput but you keep getting Conflict, Silos and Waste.
Trying to balance all three seems impossible!
What if the tension between these three dimensions was actually your path to breakthrough performance?
At a Glance: What HPtE Delivers for Your Enterprise
- Stronger, more reliable margins – Efficiency gains and smarter decision-making reduce waste and variation instead of relying on one-off cost cuts.
- Customer experiences you can sustain – Service, quality, and responsiveness improve in ways your commercial model can actually fund over time.
- A culture that drives performance – Employees feel safe to raise issues, contribute ideas, and own improvements—not just comply with directives.
- Faster, better cross‑boundary decisions – Silos soften, conflict is channelled into problem‑solving, and complex issues are resolved closer to the work.
- A repeatable way to do all three – The 3Cs Model gives you a practical framework to integrate Commercial, Customer, and Culture in every major initiative.
The Foundation: Why HPtE Works
Because most organisational change approaches treat fundamental human nature as the problem to be overcome.
Traditional management theory assumes people are self-interested and need control systems, that resistance to change must be overcome through force, that expertise sits at the top and flows downward, that conflict is dysfunction to be eliminated.
No wonder they fail.
You cannot sustainably improve performance by fighting against fundamental human nature. You cannot build high performance by treating people as obstacles to be managed rather than capable human beings.
HPtE takes the opposite approach.
We are, at our core, social animals with an innate capacity for collaborative problem-solving. We feel safer together. Our advantage is that we have empathy—the capacity to understand what another person is experiencing. This isn’t learned behaviour. This is evolutionary wiring.
HPtE treats our social, empathetic, problem-solving nature as the true source of competitive advantage, not the problem to be overcome.
When you create conditions that align with fundamental human nature—psychological safety, shared understanding, collective problem-solving, meaningful contribution—performance improves. Not because you’ve installed a new management system. Because you’ve removed the barriers that were suppressing human capacity that was always there.
The 3Cs Model: Finding Synergy in the Conflict Zones
Traditional management approaches force you to balance competing priorities—improving one dimension at the expense of another. The 3Cs Model works differently.
The three dimensions are completely interdependent:
- Commercial Responsibility requires strong customer relationships (revenue) and engaged employees (efficiency). You cannot cut your way to sustainable commercial success.
- Customer Value requires commercial discipline (you must be able to sustain the service) and constructive culture (disengaged employees deliver poor quality and slow service).
- Culture requires commercial success (job security, fair compensation, development investment) and pride in delivering customer value.
As an enterprise leader, every tough decision you face sits somewhere in the tension between these three dimensions.
But here’s what’s crucial: these three dimensions naturally create conflict zones where they intersect.
Most organisations treat conflict as dysfunction to be eliminated. HPtE treats conflict as the creative engine of innovation and performance. The 3Cs Model reveals three natural conflict zones where competing priorities create tension—and where practitioners do their most valuable work.
This tension is your potential source of innovation.
Conflict Zone 1: Commercial ↔ Culture (Collaboration)
This is where industrial conflict lives. The tension between “we need commercial discipline and financial performance” and “we need people to feel valued, safe, and fairly treated.”
Symptoms when you don’t know how to work in this zone: Striking, grievances, high absence, turnover, adversarial relationships, breakdowns in trust.
You cannot address anything else until people feel safe enough to engage. This is foundation work. When Zone 1 remains unresolved, every other improvement effort fails because the underlying distrust sabotages implementation.
What emerges when you know how to work in this zone:
Collaboration – genuine partnership between union and management, between departments, between people who previously saw each other as opponents. Not because conflict disappeared, but because they learned to work productively within it.
Conflict Zone 2: Culture ↔ Customer Value (Innovation)
This is where the capability-operations tension shows up. The conflict between “we need sustainable working conditions and professional development” and “we need to deliver excellent customer service consistently.”
Symptoms when you don’t know how to work in this zone: Silos between departments, slow change, finger-pointing, “that’s not my job” attitudes, initiatives that stall during implementation.
Once trust exists (Zone 1 resolved), people can focus on serving customers without fear that operational demands will be used to exploit them. The psychological safety created in Zone 1 enables the difficult conversations needed here.
What emerges when you know how to work in this zone:
Innovation – people find creative ways to deliver customer value sustainably. They identify problems that leadership couldn’t see and design solutions no consultant could have imagined. Discretionary effort emerges not because it’s demanded, but because people can see how their work matters.
Conflict Zone 3: Commercial ↔ Customer Value (Throughput)
This is the throughput tension. The conflict between “we need financial performance and cost control” and “we need to deliver excellent customer service.”
Symptoms when you don’t know how to work in this zone: Waste, higher operating expense, quality problems, rework, customer complaints, initiatives that improve one metric whilst damaging another.
Once collaboration exists (Zone 1) and people are focused on sustainable customer delivery (Zone 2), you can optimise the commercial-customer relationship without triggering the defensive patterns that would have emerged if you’d started here first.
What emerges when you know how to work in this zone:
Throughput – the organisation generates more customer value with the same or fewer resources. Not through cost-cutting that degrades service, but through eliminating waste that neither serves customers nor generates revenue.
Why the Sequence Matters
These zones must be addressed in order because each creates the necessary conditions for the next:
- Zone 1 first: Until people trust each other and understand commercial reality, they cannot collaborate on anything else
- Zone 2 second: Until people can work together sustainably, customer focus becomes exploitation
- Zone 3 third: Until collaboration and customer focus exist, financial optimisation triggers conflict and defensive behaviour
When you start with Zone 3 (as most change programmes do), you activate the distrust in Zone 1. Efficiency drives feel like cost-cutting and cause defensiveness. Performance management feels like control and drives resistance. Customer service standards feel like unreasonable demands. People feel like they are being reduced to machines. Humans don’t do well in this environment.
Start with Zone 1, and each subsequent zone builds on genuine partnership rather than fighting against it.
HPtE doesn’t encourage people to act like machines. It creates conditions where being human—social, empathetic, collaborative—becomes the source of competitive advantage. And it recognises that the conflicts between Commercial Responsibility, Customer Value, and Culture aren’t problems to be eliminated—they’re the creative tensions that drive breakthrough performance.
When You Get It Right
When you work in the conflict zones—strengthening all three dimensions together through strategic partnerships—you unlock:
- Collaboration between teams that used to compete
- Innovation from employees who feel safe to contribute
- Throughput from reduced waste and faster problem-solving
And these create a positive reinforcing cycle: Investment drives collaboration. Collaboration creates throughput. Throughput generates margin. Margin enables more investment. Speed increases. Quality improves. Satisfaction grows—for employees, customers, and the business.
When You Get It Wrong
But when you optimise one dimension independently—cutting costs at the expense of culture, driving customer satisfaction without commercial discipline, building engagement without customer focus—you create:
- Industrial conflict between management and employees
- Departmental silos that block collaboration and slow decision-making
- Operational conflict between departments and functions (sales vs operations, HQ vs field)
- Waste in time and money
These aren’t bad luck. They’re the predictable outcome of single-dimension optimisation.
Proven in Aviation, Applicable Everywhere
Air New Zealand under CEO Christopher Luxon (now Prime Minister of New Zealand) demonstrated what happens when leadership explicitly commits to all three dimensions:
“The thing for me is recognising that, as a business leader, you have a responsibility to lead a company for the future, leaving it in a better place in five, 10, 15, or 20 years’ time. My job is to make sure that commercials are strong, the customer experience is great, the culture of the organisation is constantly improving.”
— Christopher Luxon, CEO Air New Zealand (2012–2019)
The results? The two best financial years in their 80-year history, multiple customer satisfaction awards, and increased employee engagement.
Patrick Behrendt, General Manager of Continuous Improvement, describes the impact:
“I’ve had the absolute pleasure of working alongside Karl as we introduced a more collaborative workplace across Air New Zealand. Karl has a unique and extremely valuable skill set within the philosophy and practical implementation of High Performance Engagement.
He has rich and real capabilities in this space to think and engage strategically with internal and external stakeholders, build effective and improved working relationships, and facilitate workshops and training sessions across all levels of complex organisations.
His toolbox and methods, combined with his deep understanding of human and organisational psychology, enable him to be a trusted and impartial partner and advisor. I would absolutely recommend Karl to any organisation serious about creating a High Performance Engagement workplace.”
— Patrick Behrendt, General Manager of Continuous Improvement, Air New Zealand
What this means for Enterprise Leaders: When your CEO makes the 3Cs their explicit leadership mandate—not as aspiration but as operational priority—you transform a highly regulated, cost‑pressured industry into a platform for sustainable competitive advantage.
Thomas Cook Airlines faced unprecedented pilot strike action in September 2017 after years of mounting tensions and adversarial relationships. Following the industrial action, management had a choice: continue the old adversarial approach or try something radically different. They chose HPtE. Within months, what would traditionally take years to repair was transformed—the first pay deal following industrial action was delivered to a satisfactory conclusion for both parties in 2018.
What this means for you: Even after severe industrial conflict with legal confrontation and complete trust breakdown, HPtE can rapidly repair relationships and deliver results that satisfy all stakeholders.
A major UK airline demonstrates HPtE at enterprise scale in one of the world’s most complex airline operations. After decades of adversarial union-management relationships and a history of costly industrial action, multiple improvement teams now work in the conflict zones—career structures, rostering systems, training transformation—each strengthening all three dimensions simultaneously.
What this means for you: Long‑standing conflict and distrust can be converted into joint governance that solves your hardest commercial and operational problems.
If the methodology works in union-management relations—the hardest test—it works anywhere.
Cross-functional teams. Organisational change. Customer partnerships. Operational silos. Management-employee tensions. Same framework, same tools, same proven results.
The Methodology: High Performance through Engagement (HPtE)
If you’re asking “What would this actually look like in our enterprise?”, HPtE provides a clear blueprint.
HPtE provides the framework, tools, and governance structures to transform adversarial relationships into strategic partnerships that strengthen all three dimensions:
Strategic Framework: The 3Cs Model ensures you’re integrating Commercial Responsibility, Customer Value, and Culture—not optimising one at the expense of others.
Practical Tools:
- Joint Co-Leadership from both sides of any organisational boundary
- Interest-Based Problem Solving (IBPS) that gets beneath positions to underlying interests
- Theory of Constraints Thinking Tools including the Evaporating Cloud (aka Conflict Cloud) for resolving conflicts by surfacing and challenging hidden assumptions
- Consensus decision-making that creates genuine buy-in
- Group effectiveness disciplines that make improvement teams productive
Governance Structures: Strategic Development Groups that tie the three dimensions together through joint leadership and collaborative problem-solving.
This Isn’t Theory—It’s Proven Practice
The 3Cs Model builds on Dr Eliyahu Goldratt’s Theory of Constraints, first articulated in his 1994 book It’s Not Luck. He identified these three dimensions as necessary conditions—you need all three working together for sustainable high performance. This wasn’t abstract theory. Goldratt developed it by working with real organisations facing the same challenges you face today.
What makes HPtE different is that it channels fundamental human nature rather than fighting it—through two complementary tools that work together.
Interest-Based Problem Solving (IBPS): Getting Beneath Positions to Underlying Interests
Interest-Based Problem Solving (IBPS) is an outcome of the Harvard Negotiation Project, a group that deals with all levels of negotiation and conflict resolution. The process was captured by Fisher, Ury and Patton (1981) in their book Getting to Yes: Negotiating Agreement Without Giving In.
Getting to Yes offers a proven, step-by-step strategy for coming to mutually acceptable agreements in every sort of conflict. The four key principles of Interest-Based Problem Solving are:
- Separate the people from the problem.
- Focus on interests, not positions.
- Generate a variety of possibilities before deciding what to do.
- Insist that the result be based on some objective standard.
Using these problem-solving principles, the conflict in the decision-making process is not only reduced but is harnessed to deliver greater creativity, productivity, enhanced morale, and personal growth.
IBPS is traditionally very slow but can be accelerated by combining it with other tools like the Evaporating Cloud method and Prerequisite Tree from the Theory of Constraints.
Interest-Based Problem Solving is the key to reducing conflict and unlocking more harmony in your organisation.
IBPS works because it aligns with our social nature: when people feel heard and understood (empathy), when their genuine concerns are respected (psychological safety), when they’re invited to solve problems collectively rather than fight over positions (collaborative problem-solving), they bring their best thinking.
The Evaporating Cloud (EC): Resolving Conflicts by Challenging Assumptions
The Evaporating Cloud doesn’t ask people to compromise or give up their legitimate needs. Instead, it invites both parties to surface what they’re genuinely trying to achieve—then challenges the assumptions that create the apparent conflict.
This works because it aligns with how we’re actually wired: it respects both parties’ concerns (empathy), invites collective problem-solving (social collaboration), and assumes a solution exists that serves both (optimism and creativity).
When management and union representatives work through a conflict cloud together, they often discover that the conflict isn’t between their genuine needs—it’s between assumptions about how to meet those needs. Challenge those assumptions, and breakthrough solutions emerge that neither party could have designed alone.
How IBPS and EC Work Together
In practice, these tools are complementary and often used together:
- IBPS surfaces the interests: What does each party genuinely need? What are they trying to achieve? What concerns drive their positions?
- EC structures the conflict logic: How do these positions appear to conflict? What assumptions make the conflict seem impossible to resolve?
Together, they create breakthrough: IBPS ensures everyone’s genuine interests are understood and respected. EC reveals and challenges the assumptions that make those positions appear incompatible. The combination transforms adversarial negotiation into collaborative problem-solving.
Traditional change programmes fail because they treat humans like machines—programmable, predictable, controllable. Every command-and-control system generates resistance, not because people are obstinate, but because the system fights evolutionary wiring.
HPtE works because performance isn’t something you extract from people through control systems. Performance is what emerges when you create conditions for humans to do what they’re naturally good at: solving problems together.
The Transformation Journey
This isn’t a black‑box consultancy playbook. It is a transparent process your own leaders and teams can learn and use.
HPtE follows a systematic five-phase approach:
- Phase 1: Exploration – Stakeholder engagement, relationship building, introducing the 3Cs framework
- Phase 2: Proof of Concept – Demonstrating the methodology through focused projects, building confidence
- Phase 3: Governance Structure – Establishing joint leadership, creating programme infrastructure, formalising the approach
- Phase 4: Project Teams – Scaling to multiple improvement teams working in the conflict zones
- Phase 5: Embedding – Making this “the way we work”—integrated into daily operations, self-sustaining
Each phase builds on the previous one. Each has clear success criteria and decision gates. The pathway is proven, documented, and repeatable.
Your Investment Funds Itself
When you work in the conflict zones—turning conflict, silos, and waste into collaboration, innovation, and throughput—you eliminate operating expense whilst improving performance. The waste you’re already carrying funds the transformation.
You’re not adding cost. You’re redirecting what you’re already spending from adversarial relationships into strategic partnerships that strengthen all three dimensions simultaneously.
What a First Conversation Looks Like
This isn’t a sales call. It’s a diagnostic conversation — structured, confidential, and designed to answer one question:
What is your organisation’s Conflict Tax, and where is it compounding?
In a single one-hour conversation, we’ll:
- Start with what you’ve heard — what brought you here, what you’re hoping to solve, and what you already know about HPtE
- Build the model together — walk through Commercial Responsibility, Customer Value, and Culture as three necessary conditions, and see what happens where they meet
- Diagnose the three borders — at each Conflict Zone, test for the symptoms your organisation recognises and estimate what that border is costing you
- See the transformation — how Conflict becomes Collaboration, Silos become Innovation, and Waste becomes Throughput — and why the sequence matters
- Map the pathway — a clear sequence of next steps, each with a decision point. Nobody commits to a programme — you only commit to the next step
You’ll leave the conversation with a clearer picture of what’s happening in your organisation and what it’s costing — whether or not you choose to work with us.
What Happens Next:
Phase 1 – The Industrial Conversation – Exploration
If the diagnostic conversation reveals an opportunity worth pursuing, there’s a clear sequence from here. Each step has a decision point. You determine readiness as you go — if management or the union says no at any point, they’re not ready. That’s not failure. It’s information. Nobody commits to a programme — you only commit to the next step.
Step 1: HPtE Discovery Session — Senior Leadership Team (half day)
We take what we mapped in the first conversation and put it in front of the people who own the borders — so they can see it together, not just hear about it secondhand.
Decision point: The leadership team decides whether to engage with the union or unions.
Step 2: Introduction Session with Union Leaders (1 hour each)
Each Union Leader gets the same diagnostic conversation — a one-hour introduction. They see the model, recognise the zones, and evaluate what’s being proposed on their own terms. Not as something management is bringing to them.
Decision point: Each Union Leader decides whether to proceed.
Step 3: HPtE Discovery Session — Union Side (half day)
The Union runs its own half-day Discovery Session — their representatives, their perspective, their pace. They need to own their understanding of the model before they sit down with management.
Decision point: The Union decides whether to proceed to a full Exploration Day.
Step 4: HPtE Exploration Day (full day — each party separately)
A full day going deeper into the model, the methodology, and what working on the borders actually looks like in practice. Each party — management and union — runs their own Exploration Day separately. They need to fully understand the approach from their own perspective before sitting down together.
Decision point: Each party decides whether to attend a joint session.
Step 5: Joint Session — Proof of Concept Project
Both parties come together to identify a Proof of Concept Project — a real piece of work at one of the borders where you can test the HPtE approach and see measurable results.
Each step produces enough evidence for the next decision. Shortcuts fail — each side needs to reach its own recognition before they can work together.
Enterprise Capability Development
For organisations ready to build internal capability, the Enterprise HPtE pathway develops your leaders and managers to work this way within their existing meeting structures — no permanent external dependency required.
The goal is simple: your people learn to read the three borders, diagnose where the Conflict Tax is concentrating, and run structured sessions that convert conflict into measurable operational improvement — without needing an external practitioner in the room.
Foundation Session (full day)
Your senior leadership team and key operational managers experience the full 3Cs Model and HPtE methodology firsthand. They build the model, map their own Conflict Zones, and see how the methodology works on real issues they recognise. This isn’t a briefing — it’s an immersive working session. By the end, they understand what the borders look like in their own organisation and why the sequencing matters.
Host Training (2 days)
Selected leaders and managers are trained to facilitate Rapid Improvement Sessions — the core HPtE working tool. They learn to use Interest-Based Problem Solving at the borders, apply the Thinking Processes to surface root causes, and run structured sessions within their existing meeting rhythms. The emphasis is on practical facilitation capability, not theoretical knowledge. They practise on real operational challenges during the training itself.
Cohort Practice (ongoing, with external support)
Your trained hosts begin running Rapid Improvement Sessions with their own teams — applying the methodology to live operational challenges at the borders they’ve identified. During this phase, external support is available for observation, feedback, and troubleshooting. The rhythm is designed to fit within existing meeting structures so it builds naturally into how your organisation already works, not as an additional overhead.
Review and Embed
A structured review of impact — what shifted at the borders, what the Conflict Tax reduction looks like in practice, and where the methodology is gaining traction. The focus is on refining the approach, addressing any areas where capability needs strengthening, and transitioning to fully self-sustaining operation. The external relationship moves from practitioner to advisor to available resource — and eventually, you don’t need it at all.
The measure of success isn’t how long we work together. It’s how quickly your organisation can do this without us.
Ready to Turn Conflict into Competitive Advantage?
Together, we can:
- Transform adversarial relationships—wherever they exist in your organisation—into strategic partnerships
- Break down silos that block collaboration and waste resources
- Build engagement-driven performance that strengthens all three dimensions: Commercial, Customer, Culture
- Create the positive reinforcing cycle that makes high performance self-sustaining
- Map where your current initiatives sit across the 3Cs and identify conflict zones where you’re currently leaving value on the table
The methodology is proven. The pathway is systematic. The results speak for themselves.
Who You’ll Be Working With
Karl Perry – Founder & HPtE Practitioner
Current work includes enterprise-scale transformation in aviation — both industrial relations and cross-functional operational improvement. Based in London – Working globally.
The most powerful question any leader can ask is:
“What is our Conflict Tax?”
If you’re ready to find out, get in touch.
The 3Cs Model and HPtE Strategy® was developed by Karl Perry through deep practitioner experience across aviation, healthcare, manufacturing, and public sectors. HPtE integrates Interest-Based Problem Solving, Theory of Constraints Thinking Processes, and the Human Synergistics International Culture framework to create sustainable high performance through genuine engagement. The 3Cs Model, HPtE Strategy®, and The Perry Approach to the Evaporating Cloud are intellectual property of Karl Perry and Employment Relations Centre LTD.
Frequently Asked Questions
How is this different from traditional change management?
Traditional change management often focuses on processes and structures. HPtE works in the conflict zones—transforming the relationships and mindsets that determine whether any change initiative succeeds or fails.
Most change programmes treat conflict as dysfunction to be eliminated. HPtE treats conflict as the creative engine where breakthrough solutions emerge. Instead of cascading change from the top down, HPtE creates the conditions where people closest to the problems can solve them collaboratively.
The difference shows up in implementation speed, solution quality, and sustainability. When people design solutions together through working in the conflict zones, they don’t resist implementation—they drive it.
What if our unions or teams aren’t interested?
The HPtE approach starts with exploration—discovering whether there’s genuine interest from both sides. We don’t impose partnership; we create the conditions where partnership becomes the rational choice because it serves everyone’s interests better than adversarial approaches.
Often, resistance comes from exhaustion with failed change programmes, not opposition to improvement itself. When people see that HPtE addresses their legitimate interests—job security, fair treatment, meaningful work—rather than demanding they compromise those interests, engagement follows.
If there’s no genuine interest from both sides, HPtE won’t work and we’ll tell you that directly. Partnership can’t be forced. But our experience is that once people understand what HPtE actually offers, the question shifts from “Why should we do this?” to “Why didn’t we do this years ago?”
How long before we see results?
Phase 1 (Exploration) and Phase 2 (Proof of Concept) typically deliver visible results within 3 to 6 months. Full embedding takes 12 to 18 months. But each phase builds capability that compounds—you’re not waiting 18 months for value, you’re getting progressive returns throughout.
Early wins often surprise people. Thomas Cook Airlines delivered their first post-strike pay deal satisfactorily within months. Major UK airline teams are solving problems that had been stuck for years.
The timeline reflects genuine transformation, not quick fixes. Culture change and partnership development can’t be rushed. But the alternative—continuing with adversarial relationships, silos, and waste—costs you more every day you wait.
What’s the investment required?
Investment varies based on organisation size and scope. The transformation funds itself from eliminated waste—conflict, rework, inefficiency. We typically structure engagements as retainers covering strategic guidance, facilitation support, and capability building.
Think about what conflict, industrial action, or departmental silos cost you now. Major airline strikes can cost over £100 million in just two days. Even a fraction of that redirected into partnership transformation delivers extraordinary return on investment.
More importantly, this isn’t a cost—it’s redirecting expenditure you’re already incurring. You’re currently spending resources managing adversarial relationships, firefighting crises, and implementing changes that don’t stick. HPtE redirects those resources into building collaborative capability that makes your organisation faster, more innovative, and more resilient.
Let’s discuss your specific situation in a discovery consultation. We can map where you’re currently leaving value on the table and what transformation would look like in your context.
What You Need to Know
This isn’t quick
Genuine transformation takes 12-18 months from exploration through embedding. You can’t rush culture change or partnership development. But the investment compounds—each phase builds capability that accelerates the next.isn’t quick.
This requires commitment
From senior leadership, from the people on both sides of organisational boundaries, from skilled facilitation support. Transformation fails when organisations want the results without the process.
This doesn’t replace your existing management toolkit
—it changes how you use it.
This scales
Once you establish the methodology, governance structures, and internal capability in one area, it becomes transferable across your organisation.
This works
Not because of luck or exceptional people, but because of systematic methodology that finds synergy across the 3Cs rather than forcing trade-offs.
Explore the Three Conflict Zones
Zone 1: Organisation vs People
When commercial imperatives and workforce interests collide, the Conflict Tax starts here — and compounds everywhere else.
Zone 2: Departments vs Each Other
When Culture and Customer Value are in opposition, silos form — and the organisation loses its ability to deliver coherently.
Zone 3: Financial Pressure vs Customer Value
When cost-cutting becomes the strategy, customer value erodes — and the balance sheet eventually tells the truth.