How to Handle Internal Competition

A leadership team with whom I worked had a system for keeping close tabs on how they were doing against the competition and rallying their teams around crushing their opponents. The only problem: That competitor they were targeting was actually another division of the same company, and those opponents were, in fact, their coworkers. 

In some circumstances, healthy competition can increase our motivation, improve our performance and rally teams together. The danger comes when a company culture has become internally competitive: pitting employees against each other and discouraging them from sharing ideas and information.

It is possible to break down this internal competition and shift your company’s culture to one that is collaborative. It starts with three tools: finding mutual goals and purpose, repairing relationships and redesigning rewards.

1. Mutual goals and purpose

The strongest company cultures are clear on their overarching purpose and their goals for success. Individuals, teams and business units see themselves as part of a greater whole. Rather than focusing solely on the performance of particular departments or divisions, they recognize that their success is dependent on each other.

The client I mentioned had become so internally competitive that they were failing to acknowledge that their success was actually dependent on the performance of all of their divisions.  If even one division was struggling, then they all suffered from the decrease in the company’s share price.

In order to optimize the results of the whole, leaders need to consider whether they’re making decisions through too narrow a filter. Instead, they need to see how different parts of the company operate together for collective results. The first step can be reminding your team about the mutual purpose between internal factions. And if a mutual purpose hasn’t been defined, then find the opportunity to get together and articulate one.

Ask yourself:

• How narrow is your definition of success?
• Does it depend solely on the performance of your team or business unit?
• Can you find a broader purpose that you all serve, such as delighting the customer or increasing your stock price?
• And – for those who are inspired by competition – can you identify the external competition against whom you can focus your energy?

2. Relationships

Healthy cultures are made up of strong relationships built on trust. These positive working relationships enable employees to collaborate more effectively and achieve better results. Employees in these cultures communicate more effectively and approach conflict constructively.  

When the company culture has become internally competitive, it is often necessary to rebuild relationships. Building rapport, reestablishing communication channels and addressing conflict can help individuals and teams get back on track. From a foundation of trust and credibility, greater collaboration is possible.

Rather than seeing others as adversaries or rivals for internal resources, we can look for ways in which to help each other. In fact, a mindset of collaboration encourages us to find ways in which other employees can support us in achieving our goals.

Ask yourself:
 

• Are you seeing colleagues as people who can take scarce resources away from you?
• Or can you see them as resources for helping you achieve goals?
• How could you work even more effectively if fractured relationships were repaired?  
• Whose help might you need to build these relationships?

3. Reward system

When employees are rewarded based solely on how individuals or small work groups perform, they are less likely to consider collaborating with other teams and divisions. If your company has done the work to establish mutual goals, then it should broadly assess how the organization is tracking toward these goals.

This isn’t to say that we should do away with all rewards based on individual performance. Especially in Western countries, employees prefer to know how they are performing as individuals. But finding the right balance between individual and shared goals can remind us that we’re in this together and striving for the same things. It’s possible to reward individuals while still working together toward collective goals. 

Consider this: When Lebron James won the NBA’s MVP award for the 2012-2013 season, his team (the Miami Heat) worked together incredibly well to achieve a record 27-game winning streak and went on to become the NBA champions.  

If you’re not in a position to impact your company’s compensation system, you can still recognize other employees who are helping to diminish internal competition. You can thank colleagues who share their ideas and best practices internally. You can look for opportunities to call out those who are working for the greater good.

Ask yourself:

• How are employees rewarded: for individual success only or for the greater good?
• How am I contributing to this?
• Am I sharing ideas and giving credit to others when they do the same?
• Am I celebrating others’ successes?

If you’re noticing that you or your colleagues are competing more often against others within your company than you are against the external competition, it is time to take steps to create a more collaborative and less competitive culture. Look for mutual purpose, repair relationships and consider how performance is rewarded.

Company culture can be a true competitive advantage. But not when that sense of competition is turned internally.

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Fletcher, T.D., Major, D.A., Davis, D.D. (2007). The interactive relationship of competitive climate and trait competitiveness with workplace attitudes, stress, and performance. Journal of Organizational Behavior, 29 (7).

Tett, G. (2015). The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers. Simon & Shuster.