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Is your office competitive in the wrong way?

How to tell the difference between healthy and unhealthy competition in the workplace


If you believe pop culture, the top of the business world might seem something like the 80s movie Wall Street—competition is fierce, rivalries are plenty, and greed is good. Even among the most normal of folk and friendliest of offices, is a light version of the same: competition, between personalities or departments or the businesses themselves, is inevitable. But is it that necessarily bad? And if not, when and how can competition be good?

To find out, researchers from the University of London zoomed in for a three-year look at the assumedly cutthroat global reinsurance industry—a $260-billion dollar financial market that insures insurance companies against large-scale losses. “We figured this was a financial industry and expected it to be aggressive, highly competitive, a little like The Wolf of Wall Street,” explains Professor Paula Jarzabkowski. Only their assumptions were way off. “What we saw was so different,” says co-author Dr. Rebecca Bednarek.

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After watching nearly a thousand interactions across 25 firms, turns out competitors were more like collaborators, sharing high-risk deals to spread the liability. To ensure equity, all agreed to the same fair price and stuck to it via an unofficial honour system (aka “gentleman’s deal”). A widespread “tacit mutual understanding” didn’t just keep Gordon Gekko-esque behaviour at bay, but channelled it in all the right directions.

So how can other industries—or at least your catty office, am i right?—get competition working in their favour? Jarzabkowski and Bednarek start by busting these three myths.

Myth 1: Competition, rivalry, jealousy and conflict is rampant 

While every industry isn’t as considerate as reinsurance, certainly others see should-be bitter rivals warmly embracing the competition. “When you look to the hospitality and tourism industry,” says Jarzabkowski, “you see all the top hoteliers—their hotels in direct and total competition with each other—are all friends with each other.”

And they’re not just friendly, she explains, but “they actually help and collaborate, and if their hotel is all booked up, they send people to the competition.” Hoteliers don’t see the other’s failure as their success or vice versa, and know it’s better for the whole business if every tourist gets a bed.

Myth 2: Competition by definition is bad, bad, bad

Blame the diction if you must: “Competition is often seen as war: ‘attack,’ ‘retaliation,’ and ‘dethronement,’” write Bednarek and Jarzabkowski. “Yet competition can also be relational incorporating collaboration and reciprocity.”

Quit assuming that competition among people and products is automatic bad news. In fact, in lots of ways it’s great news in the making. “The more competition there is, the more ways the market finds ways to improve,” says Jarzabkowski. Products by necessity become better in design and more fairly priced. Competition between people can provide motivation, incentive and drive to improve.

Myth 3: Competition between employees should be squashed immediately

“Thinking about teams and person-to-person competition, people undermining each other might help one get ahead, and that’s not good for the organization,” says Jarzabkowski. But since entirely vetoing office rivalries is probably impossible, a better plan is to put that rivalry to work.

The trick here, says Jarzabkowski, is to build a framework that simultaneously rewards both individuals and teams. “You want people to be partially incentivised by what they do and partically incentivised by what the team does. This helps people channel their competitive urges to help everyone do better.”

Myth 4: You should therefore embrace competition entirely

Well, not so fast. Like most things, a little healthy competition is a good thing, but too much can quickly become envy, resentment and animosity. How to tell when you’re moving towards the dark side? “Ask yourself, ‘How sustainable is this competition?’” Good competition propels you forward, whereas bad competition holds you back. “If you’re competing in a way that destroys value, or if it at all feels like something’s gotta give, then that competition has become unhealthy.”