Re-considering the value of competition as a business technique

 

The number of doping scandals in professional sport lately ought to make us all think again about the true impact of today‚Äôs virtual cult of competition. Sport (together with warfare) is one of the commonest sources of folk ideas about business, so when the world of sport gets into trouble through excessive competition, it‚€™s worth asking what is going wrong, and whether it might reveal anything relevant to the business world as well.

Like sport, the world of business is full of competition. We‚€™re often told that competition is good for the health of the economy and the pockets of consumers. Laws exist to prevent cartels and other means of circumventing competition between businesses. Competition is ‚€œgood.‚€Ě

That‚€™s why creating a sense of a contest is often held up as the best way to motivate people. Organizations use incentives and open competition for bonuses and promotions. More and more leaders are turning excellence at work into a crude contest between employees: a potentially bitter rivalry where my success (and bonus payments) arise mostly because you have ‚€œfailed‚€Ě to outdo me and claim any share in a limited pool of rewards. Winner takes all, in the belief that the ‚€œlosers‚€Ě will be spurred on to work harder so they can be the next winners; and the current winners will do just about anything to avoid that happening.

Winners create losers

In many corporations today, every activity is turned into a contest like this, where winning is more than a happy result of hard work and talent: it is the only acceptable outcome. Select groups of ‚€œhigh-fliers‚€Ě—assumed or potential winners—are given special privileges. The rest are dismissed as ‚€œordinary:‚€Ě a necessary, but unfortunate, group who are tolerated merely to support the high-fliers and provide the necessary contrast.

That‚€™s the trouble with competition: winners cannot exist without losers, just as light cannot exist without darkness to reveal it. One of the paradoxes of organizations that encourage the cult of the winner is that they must inevitably increase the number and impact of losers in direct proportion.

Every winner needs one or more losers to beat. And since to win grandly, which is the desire of most champions, demands that you overcome a host of competitors, one winner typically needs multiple losers. For every person on the winner‚€™s podium, there must be six, or ten, or a dozen, or even more people who are now seen as ‚€œlosers,‚€Ě with all the feelings that public failure brings.

Competition as a way of managing people may encourage a few to excel, but it forces too many others to be labeled inadequate. The more winning is praised and rewarded, the more failure becomes a badge of shame and disgrace. That‚€™s why so many competitors in sports today take the enormous risks of turning to performance-enhancing drugs, although they fully understand the risks and the continual efforts of the authorities to catch those who cheat. Failure is too common and too hard to bear.

The cost of excessive competition

When an organization claims ‚€œall our people need to be above average,‚€Ě it is not just fooling itself and revealing statistical illiteracy; it is preparing the ground for a culture where keeping up with the Joneses is replaced by beating the bejesus out of the Joneses and everyone else for the egotistical joy of public display.

Of course, the only genuine competitors in business are other organizations seeking to sell into the same market. Competition within the organization—between departments, teams, or individuals —is setting the organization against itself. If employees are more interested in competing against their own colleagues, because that is what the organization is requiring them to do, how much time and energy will they have left for anything else? Didn‚Äôt Jesus of Nazareth, more than 2000 years ago, say something about how a kingdom divided against itself must surely fall?

Competition is only healthy when it is against an attainable standard, or against your own previous best. In such cases, there can be any number of winners, each one aiming for a level of excellence that is within their capabilities. But when it becomes mere rivalry—where victory consists only of the debasing and trivial pleasure of beating someone else to a limited reward—it is unlikely to produce anything but negative results.

Far from being a panacea for business ills, increasing competition and focus on ‚€œwinners‚€Ě is a sure route to a poisonous atmosphere, greatly enhancing the likelihood of dishonest, mean, vengeful, selfish, and egotistical behavior.

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