Understanding Organizational Competition

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Is competition good or bad? The answer, depending on several factors, could be “yes, no, or it depends." What about organizational competition? My answer would be the same! Let’s look at how to determine if organizational competition is helping or harming your team and organizational results.

Organizational Competition is Good When…

• It spurs innovation and creativity. When the team is competing for customer loyalty and success, they will seek new ideas. And that may result in better results.
• It improves efficiency and productivity. When the team wants to reach new targets, they change habits and processes to be more successful.
• It builds energy and momentum. There is nothing like competition to get us motivated to act.
• It drives learning and growth. Competition can serve as a motivator, pushing individuals and teams to improve their skills, knowledge, and performance.

Organizational Competition is Bad When …

• It creates too much stress and anxiety. While competition can make us more focused, it can also move us to overwhelm and exhaustion.
• It drives an overly short-term focus. Focus is great. But focusing too much on winning this month or this quarter could mean winning the battle but losing the war.
• It skews priorities. Related to the overly short-term focus, if the competition is limited in scope, other priorities may take a back seat. If you are prioritizing price, you might hurt margin. If you prioritize volume, you might sacrifice quality.
• It reduces cooperation or collaboration. While we think competition can be helpful, are we harming collaboration at the same time?

Which Is It Then?

Competition can be a powerful force for movement and results. It can also get in our way unintentionally. In terms of organizational competition, we need to make sure we are balancing the positive and negatives. As organizational (and individual team) leaders, we must keep this in mind. Watch your teams and turn the competition up or down based on the ideas above.

But there is a bigger question here – one that supersedes all the rest.

Think about this question:

Who are we competing against?

• If individuals are competing, the team may suffer.
• If teams in the same department (shift crews, or regions for example) are competing, they may try to sabotage others to make themselves look better.
• If departments are competing, silos will form or become stronger and taller.
• If your organization is competing in the marketplace, better results may occur.

Here is the big idea about organizational competition. Who people and teams see themselves competing against matters. If the competition is focused inside the organization, there is significant risk of suboptimization, misalignment, and lower results. If the competitor is outside the organization – competing with those in the marketplace – the value of competition goes up dramatically.

It is our responsibility as leaders to understand and use competition to our advantage. Perhaps now you have some new perspective on how to best do that.

[A version of this article first appeared in our blog/

What Do You Think?

Share in the comments your answer to this question… How is competition helping or hindering your team or organization?

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