Balancing the tightrope of Competition and Collaboration

In modern companies, we find ourselves pulled between two essential yet opposing forces: competition and collaboration. Competition fuels our drive for innovation, productivity, and performance, while collaboration underpins the harmony that helps teams achieve cohesive and sustainable results. When well-balanced, these forces can elevate an organisation, but when they go unchecked, they can lead to inefficiency, strained relationships, and, ultimately, failure.

One well-known case where this tension went wrong is the development of Nokia’s smartphone division in the early 2000s. At the time, Nokia was a leading mobile phone manufacturer, but intense internal competition across its teams and divisions resulted in fragmented development efforts. Instead of working collaboratively to develop a single, competitive smartphone operating system, different groups within Nokia’s organisation competed to push their own versions. As a result, critical resources were spread too thin, and by the time Apple’s iPhone debuted in 2007, Nokia had lost its edge. The internal competition ultimately hindered Nokia’s ability to adapt to the new smartphone landscape, causing it to fall behind its competitors and eventually leading to a dramatic decline in its market position.

Triggered by an article published early this year in The Economist, this week we’ll explore the delicate art of balancing collaboration and competition, draw from real-world case studies, and share strategies for fostering a work culture where both can coexist and thrive. By understanding both the potential and the pitfalls of internal co-opetition, we can shape a workplace that leverages competition for growth while preserving the collaborative spirit that drives sustained success.

As organisations, we constantly walk a tightrope, trying to encourage both collaborative and competitive behaviours among our employees and external partners. While competition drives us to excel, it has become ingrained in our organisational structures, where limited resources and few promotion opportunities can create rivalries. And this tension doesn’t just exist internally. Often, it extends to our relationships with third parties, particularly on large-scale programmes where systems integrators, external consultants, and other third parties work alongside our internal teams. This can make collaboration challenging, especially when we see consultants or contractors as rivals in decision-making or influence.

In these situations, independent external team members, such as neutral auditors, programme advisors, or facilitators, can be invaluable. Much like harbour pilots who navigate ships through complex port waters, these impartial advisors help us stay focused on shared goals and prevent rivalries from overshadowing collaboration. With an unbiased perspective, they can guide both our teams and external consultants toward project success, bringing balance and helping all parties work cohesively.

While competition can be energising, too much of it can lead to stress, which stifles creativity and teamwork. Research by Eddy Cardinaels of Tilburg University and Christoph Feichter of the Vienna University of Economics and Business shows how forced ranking systems, meant to spur creativity, can create anxiety instead. When we start comparing ourselves directly against each other, it’s easy to lose sight of the bigger picture.

Leaders, whether they’re team leads or department heads, have a responsibility here to keep rivalry healthy. By encouraging open conversations about both individual and team goals, they can help us set realistic boundaries for competition. For example, rather than pushing us to compete for individual recognition, they might advocate for “collaborative wins” that reward entire groups, creating an atmosphere where we can strive without undue stress.

One of the biggest challenges we face in a competitive environment is the need to promote our own achievements without overshadowing our contributions to team success. As research by Eric VanEpps and his colleagues shows, balancing self-promotion with team praise is key. When we recognise our teammates’ contributions alongside our own, we’re more likely to gain respect without alienating those we work with.

This approach can sustain positive interpersonal relationships, and some companies, like Procter & Gamble, actively reward employees who support their team’s success as much as their own. This recognition ensures that personal ambition doesn’t overshadow team cohesion.

Senior leaders play an instrumental role here, setting an example by celebrating team-oriented wins on a company-wide level. When leaders highlight projects that reflect collective success, it sends a message that team achievements are as valued as individual contributions. Recognising “team champions” or spotlighting cross-departmental efforts can reinforce that real success is achieved through shared efforts rather than isolated wins.

When we bring in external consultants or systems integrators on large programmes, the potential for rivalry between our internal teams and these third parties adds a layer of complexity. Internal teams may feel that their roles or expertise are being challenged, especially when systems integrators are seen as competing for decision-making authority.

In these situations, independent programme advisors or neutral auditors can be the bridge we need. These independent, external team members can help mediate between our internal teams and third parties, helping us all remain focused on shared goals. Like harbour pilots who navigate ships through tricky waters, they provide guidance and objective oversight, creating a sense of trust and transparency.

Natural rivalries often emerge organically and can drive us to perform better without the pitfalls of overt competition. Studies show that these rivalries can boost productivity and motivation without the toxic side effects of forced comparison. To quote from The Economist article referred to above:

A paper from 2018 by Adam Galinsky and Brian Pike of Columbia Business School and Mr Kilduff found that teams in a range of American sports performed better the year after an intense rival did well in tournaments. In another study, Lisa Ordóñez of the University of Arizona and Messrs Kilduff, Schweitzer and To analysed American-football games and found that teams were more likely to take risky on-field decisions against fierce rivals. Particular opponents encourage greater risk-taking than generic competition, at least if you are a very large man in tights. – The Economist (11th of January 2024).

Executives and senior leaders can encourage natural rivalries in a way that fosters innovation, without letting it get divisive. By supporting initiatives like hackathons or “showcase days,” they give teams the chance to shine and compete in a healthy, structured environment. This recognition, alongside the celebration of team collaboration, creates an uplifting workplace culture.

So, let’s use the above to forumulate some guding principles for leaders and team members in balancing Competition and Collaboration.

1. Set an example of valuing both individual and team success: Senior leaders can highlight balanced achievements, celebrating both personal accomplishments and teamwork to set a company-wide standard.

2. Champion transparent performance measures: Advocating for clear, fair performance metrics can reduce tension, allowing us to focus on growth.

3. Encourage positive, natural rivalries: Celebrating inter-team challenges that foster innovation without divisive competition can keep teams motivated.

4. Adapt competition to fit specific roles and contexts: Department heads can tailor competitive or collaborative environments based on departmental needs, whether in sales or research roles.

5. Avoid high-stakes, zero-sum competition: Minimising extreme competition helps us prevent burnout, ensuring collaboration remains our core approach to success.

6. Involve independent external advisors on large projects: Bringing in neutral, external advisors to mediate and align internal and external teams helps all parties navigate large projects cohesively.

Striking the right balance between competition and collaboration is a complex but crucial element in today’s workplaces. While competition can drive productivity and innovation, it requires thoughtful management to avoid a toxic atmosphere. As the examples of GE, Pixar, IBM, and Apple demonstrate, adopting diverse approaches to balance these forces can improve our work culture and overall success. Ultimately, leaders across levels—from team leads to executives—play a crucial role in creating an environment where competition and collaboration support, rather than undermine, each other. And by involving independent advisors on large projects, we can manage relationships with third parties with greater trust, clarity, and effectiveness.