The Hidden Cost of Internal Competition
Posted by : Frids Kowmbon, 09 Februari 2010 07:58:38
Kategori: Strategi SDM | Viewed : 11 | Rating:
Minimizing competition in the wrong place can maximize our ability to compete in the right place
By Evan Rosen
The right place for competition is the marketplace, and the wrong place is the workplace. Put simply, the same behavior that can create value externally can cost a company big-time internally.
Competition is kind of like ozone. Ozone benefits us by reducing the sun’s harmful ultraviolet rays outside the Earth’s atmosphere. But inside the atmosphere, ozone wreaks havoc by creating air pollution and damaging our lungs. Similarly, competition damages our businesses when it manifests internally and with business partners. So when it comes to competition, the trick is to avoid confusing outside with inside. This means leaders must understand when and how to morph from competitors to collaborators.
Bringing to market better, faster, thinner, greener products involves competition. But the second we begin competing with team members and business partners, we lose value. Consider this scenario. Your company’s flagship product is suddenly under siege, because a venture-backed startup with disruptive technology has just signed deals with two of your largest customers. Sales, marketing, and engineering come together for a white board strategy session. The immediate objective is to stop the customer defections. Should there be competition in this situation? Absolutely. The company’s survival is at stake! But competition must be externally focused.
The Blame Game
It’s exactly this sort of crisis that breeds internal competition. Many team members focus on which function, team, or person deserves blame. Some ”star” players struggle to appear that they’ve saved the day. Jostling for position, finger-pointing at another function or department, developing solutions without engaging key stakeholders are manifestations of internal competition. They distract our companies from the business at hand, compromise agility, and reduce value. The more effective response is to collaboratively develop solutions.
Despite the hit to the balance sheet, many companies foster and encourage internal competition in the mistaken belief that all competition is good competition and that the cream rises to the top. For these companies, competing with colleagues is ingrained in organizational culture. Worse yet, competition is often institutionalized in company procedures.
Some companies embrace a star culture in which individuals are recognized and rewarded for achieving more than their colleagues. Some companies compensate and promote managers only for their own accomplishments rather than for developing the abilities of team members. Still, some companies ”rank and yank” team members and regularly eliminate the bottom-performing 5% of the workforce. These practices pit employees against one another and force team members to spend more time, energy, and focus competing with colleagues. What’s lost is the motivation to work collaboratively in innovating processes, retaining and acquiring customers, and developing products and services.
Reducing Internal Competition
Internal competition is a double-whammy. No. 1, internal competition compromises value by distracting the workforce and forcing people to focus on the wrong things. To compound that loss of value, internal competition also prevents companies from creating value through collaboration. Perhaps the most significant way that internal competition derails collaboration involves trust. How can we trust one another if we’re competing in a dog-eat-dog culture? Instead of trust, fear prevails. Another way that internal competition short-circuits collaboration involves information hoarding. Achieving within an internally-competitive culture requires an ”it’s my stuff” attitude about data and information. This attitude complicates collaboration, because collaboration requires sharing.
Companies in industries ranging from transportation to consumer products chalk up substantial results by curbing internal competition. That value includes eliminating redundancy, reducing product development time and enhancing customer satisfaction.
By Evan Rosen
The right place for competition is the marketplace, and the wrong place is the workplace. Put simply, the same behavior that can create value externally can cost a company big-time internally.
Competition is kind of like ozone. Ozone benefits us by reducing the sun’s harmful ultraviolet rays outside the Earth’s atmosphere. But inside the atmosphere, ozone wreaks havoc by creating air pollution and damaging our lungs. Similarly, competition damages our businesses when it manifests internally and with business partners. So when it comes to competition, the trick is to avoid confusing outside with inside. This means leaders must understand when and how to morph from competitors to collaborators.
Bringing to market better, faster, thinner, greener products involves competition. But the second we begin competing with team members and business partners, we lose value. Consider this scenario. Your company’s flagship product is suddenly under siege, because a venture-backed startup with disruptive technology has just signed deals with two of your largest customers. Sales, marketing, and engineering come together for a white board strategy session. The immediate objective is to stop the customer defections. Should there be competition in this situation? Absolutely. The company’s survival is at stake! But competition must be externally focused.
The Blame Game
It’s exactly this sort of crisis that breeds internal competition. Many team members focus on which function, team, or person deserves blame. Some ”star” players struggle to appear that they’ve saved the day. Jostling for position, finger-pointing at another function or department, developing solutions without engaging key stakeholders are manifestations of internal competition. They distract our companies from the business at hand, compromise agility, and reduce value. The more effective response is to collaboratively develop solutions.
Despite the hit to the balance sheet, many companies foster and encourage internal competition in the mistaken belief that all competition is good competition and that the cream rises to the top. For these companies, competing with colleagues is ingrained in organizational culture. Worse yet, competition is often institutionalized in company procedures.
Some companies embrace a star culture in which individuals are recognized and rewarded for achieving more than their colleagues. Some companies compensate and promote managers only for their own accomplishments rather than for developing the abilities of team members. Still, some companies ”rank and yank” team members and regularly eliminate the bottom-performing 5% of the workforce. These practices pit employees against one another and force team members to spend more time, energy, and focus competing with colleagues. What’s lost is the motivation to work collaboratively in innovating processes, retaining and acquiring customers, and developing products and services.
Reducing Internal Competition
Internal competition is a double-whammy. No. 1, internal competition compromises value by distracting the workforce and forcing people to focus on the wrong things. To compound that loss of value, internal competition also prevents companies from creating value through collaboration. Perhaps the most significant way that internal competition derails collaboration involves trust. How can we trust one another if we’re competing in a dog-eat-dog culture? Instead of trust, fear prevails. Another way that internal competition short-circuits collaboration involves information hoarding. Achieving within an internally-competitive culture requires an ”it’s my stuff” attitude about data and information. This attitude complicates collaboration, because collaboration requires sharing.
Companies in industries ranging from transportation to consumer products chalk up substantial results by curbing internal competition. That value includes eliminating redundancy, reducing product development time and enhancing customer satisfaction.
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