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| Excerpt
from the book Leadership and the Customer Revolution,
by Gary Heil, Tom Parker and Rick Tate... |
COMPETITIVELY
DISADVANTAGED:
BUILDING COOPERATION
INSTEAD OF INTERNAL COMPETITION
We act
competitively because we are taught to do so, because
everyone around us does so, because it never occurs to us
not to do so, and because success in our culture seems to
demand that we do so.
-Alfie
Kohn, No Contest
Are they
(the people in your company) thinking more about customers
or employees? About competitors in the marketplace or
competitors in the hallways? About products or protocol?
-Davis
and Davidson, 20/20 Vision
Teamwork.
We're all for it! Many of us have taken part in expensive
team-building exercises where we've climbed rope ladders,
built boats, gone on challenging photo safaris, faced mythical
enemies, and solved mysteries. Over and over, we've been told
we have to learn to work together more effectively. And for
good reason. Today's world is too complex for any one person
to manage the value proposition alone. This is particularly
the case in companies where individuals from different
functional areas, departments, and physical locations have to
work in harmony to meet the unique needs of their customers.
If we hope to succeed, there is, in fact, no real alternative
for many of us but to work as a team, to cooperate.
Unfortunately,
it is this alternative that most organizations are least well
equipped to implement. We are simply not prepared to
cooperate-culturally, structurally, or philosophically. We
are, after all, a nation that makes heroes of individuals who
distinguish themselves competitively. From corporate raiders
to rock stars, from baseball's Most Valuable Player to the
most famous heart surgeon, we've focused on individual
winners. Looking out for #1 is not only expected, but
rewarded.
Nowhere
is winning (and losing) more a part of everyday life than in
our organizations. Here, the thrill of victory or the agony of
defeat is relived by many on an almost daily basis.
Unfortunately, the primary field of battle may not be in the
marketplace, but in our hallways. The arena where the most
intense competition in business is often waged is within the
corporation itself, among its employees. The costs of
unnecessary internal competition are prohibitive in most
organizations.
We
talk about being part of a team but, instead of cooperating in
a system that encourages teamwork, we are pitted against one
another to compete and win as individuals. As much as we claim
we want cooperation, most of our structures don't reward it,
our corporate culture doesn't support it, and our leaders are
reluctant to embrace it-though it is often in the best
interests of the organization to do so. Our people return from
their team-building weekends and, within a few days' (hours'?)
time, they're often back to building their empires at the
expense of the other person and with the hope of a superior
(i.e., winning) performance appraisal, higher merit pay, the
next promotion, or more job security. To meet today's demands
we need to be pulling together, yet the internal competition
endemic to our system is undermining our efforts.
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In Spite
of the System
We're not saying that
cooperation doesn't exist in most organizations. In
fact, cooperation can and often does prevail. People
frequently act on their more noble instincts and help
one another. Indeed, it is nothing less than amazing
that, given the systemic promotion of competition and
the resistance to cooperation, there is as much
pulling together as there is. It seems that
individuals are genuinely driven to do the "right
thing"-contributing to the overall good of the
organization-rather than feathering their own nest.
But the cards in many organizations are essentially
stacked against it. There are simply too many barriers
to acting decently and cooperatively and, conversely,
too many rewards for acting otherwise. If our
structure required teamwork, most people would readily
cooperate without a library of team-building
exercises. The task itself would create a cause to
rally around.
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Avoiding A
Scarcity Mentality
Old-culture
Americans... find it difficult to enjoy anything they
themselves have unless they can be sure that there are
people to whom this pleasure is denied... Since the society
rests on scarcity assumptions, involvement in it has always
meant competitive involvement.
-Philip
Slater, The Pursuit of Loneliness
It
has been a while in coming, but the jury has mostly decided in
the case of Cooperation vs. Competition within the
organization. While a few arguments may be made for internal
competition being effective over the short term to gain a
certain sought-for result or to encourage the performance of
simple tasks, the overwhelming body of current research points
to the fact that it's cooperation, not internal competition,
that promotes higher achievement. A number of these studies
also indicate that the competitive environments in which
people are the least productive are those where rewards are
limited, and where winning by a few necessitates losing by
many. In environments where wins are in short supply and
losses are the rule, not the exception, a scarcity mentality
develops. Unfortunately, it is environments such as these that
are the most prevalent in many organizations.
We've
all seen how a scarcity mentality plays itself out in the
larger world. Individuals or small groups scramble for
whatever is in scarce supply. Whenever they find what it is
they are looking for, they hoard it and do whatever else is
necessary to protect it. The fear that the scarcity will
persist robs them of the inclination to share what they need.
Often, values are perverted, and the individual forsakes a
larger sense of community.
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Divisionary
Divisions
We'd
been involved with a company that had come a long way
in improving the level of service and internal
cooperation until it decided to give a Division of the
Year award to the division that was most progressive
in customer service. Within days of the announcement
of the award, cooperation among divisions began to
disappear. People started hoarding information and
refusing to share resources. It was no longer
"we." Instead, it became "us" and
"them." Getting the highest score, not
improving service to customers, became the most
important goal.
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The
organization whose employees must compete for a limited number
of wins or rewards-whether it's membership in the President's
Circle or the prize for Employee of the Month-tends to create
a scarcity mentality of its own, complete with the same
scrambling, the same hoarding, the same subversion of
potential values, and the same failure to consider the greater
good. The principal difference in the type of scarcity that
exists in world markets-shortages of food or medicine, for
example-and that which exists in the corporation is that the
former is real while the latter is artificially created.
Organizational structures such as forced distribution
performance appraisal or programs such as sales and service
contests get people to compete against one another-a few
people win at the expense of others. Ironically, what is
scarce and often bitterly fought for in the corporation is not
even necessarily something that has real value in the outside
world-the boss' praise, for example.
If
a scarcity mentality exists in an organization and if
employees compete for a limited number of wins, the chances
are good that many people will be more focused on the
competition and the reward than on their work. In any event,
it is far less likely that they'll cooperate with one another
any more than they have to, and far more likely that much of
their energy will be consumed in the campaign for whatever
individual rewards are available.
Of
course, this wasn't our intent when we first put these various
limited-win structures into place. On the contrary, we had
hoped the competition would spur better performance and
stimulate creativity. Originally, the goal may have been to
increase sales, so we implemented a commission structure, then
organized a Quota Club for our top performers. Or, if the goal
was to improve service, we decided to "pay for
performance," limiting the number of dollars available in
any department. The competitive culture that these incentives,
elite clubs, compensation structures, and other limited-win
programs have spawned, however, often has a negative, less
visible effect on performance. The structures that invite
internal competition are undermining the cooperation and
teamwork that we all desperately need to add value and create
loyal customers. Most of us grew up in competitive
environments, therefore, we do not always see what should be
obvious to us by now: instead of adding value, internal
competition, particularly when coupled with a scarcity of
wins, subtracts significant value in most organizations.
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Publish
or Perish?
On a
recent flight, we spoke to a well-known research
scientist who, not long before, had synthesized a drug
that eased the suffering of AIDS patients. He told us
that developments in his field were considerably
slowed by decisions surrounding whose names would
appear, and in what order, in the medical journal
articles. He suggested that new drugs would get to
market faster if the researchers' names were
eliminated altogether, but that would be difficult
because publication credits are a key indicator of
personal success.
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The question
is, Why do we do it? Why do we limit the number of people who
can win? Are there great payoffs for the distinctions we make?
What are the potential downside risks? Here are eight, for
starters. There are many, many more.
- Internal competition
drives out creativity and innovation. Individuals
competing against one another must be playing the same, or
similar, game so that the appropriate comparisons can be
made and the winners selected. Spawned by competition,
this need for similarity makes it more difficult for the
individual competitor to experiment and try new methods.
The result can be significantly lower levels of creativity
and innovation.
- Internal
competition inhibits dialogue. Add the concept
of winning and losing to a dialogue and you get a debate.
In an internally competitive environment, individuals
become less interested in sharing and thinking about new
or conflicting information and become more concerned with
scoring points or pressing their case, right or wrong.
After all, in a competition, winning is the name of the
game.
- Internal
competition impacts relationships negatively. Though
many of us naturally expect the best from people, when we
know we are competing-whether for a promotion, to curry
favor with the boss, or to get a bonus-it is difficult for
us to build trust, work as a team member, or create an
honest relationship. This is especially so when wins are
limited, and your victory is made possible by the failure
of others. In any event, competition makes people
suspicious of one another, and often results in greater
anxiety in workers, who constantly feel they have to watch
their backs.
- Internal
competition lowers product and service quality. As
different individuals and different departments compete
among themselves while trying to get products and services
out as quickly and profitably as possible, the temptation
can be to cut corners, particularly if the problems
created in doing so won't come back to haunt the company
for years, long after the individuals involved have moved
on.
- Internal
competition destroys focus. Winning and improvement
are very different goals. When we focus on besting others,
we are not necessarily focusing on improving the present
system. In fact, there is significant evidence
demonstrating that winning can actually result in lower
levels of performance. When people compete with a focus on
winning, they often take the fastest, most reliable, most
predictable route to winning, which is rarely the most
effective route to continually improving the method of
work!
- Internal
competitiveness reduces efficiency. When individuals
are less innovative, less creative, less trusting, or more
combative, it costs the company in a variety of ways. For
example, when people compete with one another, they tend
to work independently, often duplicating the efforts of
others, solving problems that have already been solved,
generating data for projects for which perfectly good data
already exists.
- Internal
competition demotivates the non-winners. The theory
was that if people competed and the winners were rewarded,
they would feel appreciated and all those who didn't win
would strive to do so in the future. In most cases,
however, it hasn't worked out that way. Far too many
artless and incomplete reward systems result in the
selection of "winners" whose performance was not
any better, and was sometimes objectively worse, than that
of some of the "losers." Predictably, this can
be demotivating to those who "lost." Precisely
how demotivating is hard to tell, because we usually
evaluate the motivational effectiveness (or
ineffectiveness) of our efforts by tracking the reaction
of the winners rather than that of the non-winners.
Instead, we simply assume that non-winners are generally
satisfied, and that they'll try harder next time. In fact,
the opposite often occurs. Once people are labeled
non-winners or feel the deck is stacked against them, they
sometimes stop trying altogether-and who can blame them?
- Internal
competition lessens self-esteem. When some people lose
(or at least are labeled non-winners) in the competition,
they begin to question their ability to succeed in this
(and maybe any other) system. After all, they worked hard,
tried their best, and came up short. Losing is more common
than winning because of the way the system has been
designed: i.e., to make sure that most people don't win.
The long-term effect of constantly coming up short can be
significant. Less confident people simply don't learn or
experiment as effectively as those who are confident.
Having
read this far, if you still think that the same argument can
be made for competition that Winston Churchill made for
democracy (i.e., that democracy is the worst form of
government... except for all the others), please reconsider.
Current research suggests otherwise. Internal competition,
particularly when wins are limited and cooperation is
required, has hidden costs we've only begun to realize.
65 studies
found that cooperation promotes higher achievement than
competition, 8 found the reverse, and 36 found no
statistically significant difference. Cooperation promoted
higher achievement than independent work in 108 studies,
while 6 found the reverse and 42 found no difference.
The superiority of cooperation held for all subject areas
and all age groups.
-Alfie
Kohn, No Contest
Building
Cooperation
Fortunately,
there are a number of ways to break the hold that internal
competition may have on our organizations:
- Increase
the interactions between individuals and groups. The
faceless person in another office performing another
function can easily be ignored. It's far harder not to
cooperate with people you know, especially if your
interaction with them is frequent and you have to
cooperate to get the job done.
- Ensure
that everyone has the opportunity to win. This doesn't
mean rewarding non-performers. However, when a number of
people seek the same goal and the number of wins is
artificially limited, competition will result. If everyone
can win, one person's success doesn't necessitate
another's failure.
- Establish
cooperation and respect as core values. As long as
internal cooperation is perceived to be optional and
internal competition is tolerated, little will change.
Elevating cooperation to a core value will ensure that
climbing someone else's back to get ahead will be
career-limiting. Take a few minutes to analyze whether
cooperation is career-enhancing in your organization. How
do you know whether people are cooperating effectively or
not? Do you understand the effects of the structures that
promote competition? Do your human resource practices
encourage teamwork or individual excellence? What happens
to people in the organization who play politics at the
expense of others?
- Recognize
teamwork, appreciate cooperation, improve recognition
abilities. The more symbolically, visibly, and
frequently we demonstrate appreciation for teamwork and
interdepartmental cooperation, the more of it we'll get.
- Educate
everyone about the entire process. If people
understand how their performance affects others, they will
be less likely to act in ways that negatively impact
others or the company. Most people want to do the right
thing and, given a choice, will make a good decision
unless it is personally punishing. Providing information
about the process enables each person to make an informed
choice.
- Beware of
quick rotations. A focus on short-term results often
leads to a less cooperative environment. If a person has
only a short time in which to impress the boss or make an
impact, the long-term benefits of cooperation can be
perceived to be less important. This is especially true if
a person will be rotated before he or she will experience
the negative effects of non-cooperation. Clearly, in the
fast-paced world in which we compete, most jobs don't last
long and quick job rotations are necessarily the rule. In
these cases, it's even more important to ensure that
internal competition is limited and that accountability
for cooperation is significant. If part of everyone's
evaluation included an analysis of what a person or group
has done to further teamwork, most organizations would be
very different. Whom have you helped lately? From whom
have you learned? Whom have you taught? What group has
influenced your thinking the most? Which people, outside
your group, have been the most instrumental in helping you
succeed?
- Involve
everyone in at least one cross-functional improvement
effort. Mandating that people must work beyond the
boundaries of their own department or functional area will
not only result in more talent being applied to
complicated process issues, but will result in a greater
appreciation of how the entire process works to benefit
the customer. One of the most important reasons for
mandating participation may be symbolic, showing people
that cooperation is not optional and that everyone will
actively participate. People should also be held
accountable for their participation. There's no greater
waste of time than to be a mandated team member on a team
that accomplishes very little.
- Consider
teams as the primary unit of responsibility. Design in
interdependence. It hardly makes sense for several members
on the team to be able to win when the team as a whole
loses and when the customer is shortchanged. If a task
requires teamwork, ensure that teamwork is required of
everyone. Make the team responsible and accountable.
Beware: As some organizations have begun to organize in
teams, many have been unwilling to completely abandon the
old structure, keeping team members accountable as
individuals to their former functional department. The
result is usually a group that does not function as a team
but as individuals representing an area of expertise, each
with veto power over most decisions. Frustration levels
tend to be high as people are torn between functional
responsibilities and group commitments. If we want teams
to act like teams, we must make them cohesive units, with
a real task and knee-knocking team accountability. Going
halfway can be very costly.
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