Competitive or Collaborative Culture – Which is Better?

Competitive or Collaborative Culture – Which is Better?
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Competitive or Collaborative Culture in the Workplace
When designing the ideal organizational culture to best execute your business and people strategies, what is the best balance between healthy competition to motivate performance and smart collaboration to ensure that the whole is greater than the sum of its parts?  As a leader, how do you know when a competitive or collaborative culture is better?

The Benefits of a Competitive Workplace Culture
Some of the most successful companies are known for their hyper-competitive cultures that put results first.

  • At Accenture and McKinsey the motto is “up or out.”  You either continue to perform and advance or it is time to go.
  • At GE, Jack Welch famously created a performance culture that weeded out the bottom ten percent of employees each year.  Amazon’s culture is often described as “Purposeful Darwinism” where only the most relentless and high performing survive.

Many leaders and employees tell us that this competitive approach to workplace culture is compelling because it seems to motivate, fine tune, and increase employee performance through clear performance standards, rewards and consequences.  Don’t we all want to work with “A” players striving to perform at their peak?

The Downside of Competitive Workplace Cultures
There are downsides to hyper-competitive cultures associated with negative workplace stresses, ethical breaches in ethics, and increased risks.  For example, many competitive cultures use stacked ranking to compare the performance of employees against each other.  In these environments, employees report that they tend to focus on individually winning at all costs instead of on the best interests of their co-workers or for the organizations as a whole.

Employees also report that competitive cultures encourage a belief system where results too strongly outweigh desired corporate values and behavioral norms.  Just look at what happened when:

The Benefits of a Collaborative Workplace Culture
A collaborative corporate culture encourages individuals, teams and functions to work together to achieve common goals.  These collaborative workplace cultures are typically characterized by high levels of trust, empowerment, healthy conflict and learning that make it the norm to collaborate across functions, geographies, levels, demographics, and stakeholders.

In fact our best places to work employee engagement research, tells us that collaboration and teamwork continually rates in the top quartile in terms of improving employee advocacy, discretionary effort and intent to stay.  When collaboration is embedded into a company’s or a team’s fabric, the results can be amazing.

The Downside of a Collaborative Workplace Culture
While most of us have been taught that working in teams is the best way to get the job done, our clients continue to lament the difficulties associated with working on teams to get important tasks done.  While high performing teams can be game changing for everyone involved, most teams report struggling to deliver extraordinary results in the way they originally intended.

It can be highly disengaging for high performers to get bogged down in dysfunctional team dynamics due to unclear goals, roles, success metrics, and processes.  And as teams get larger, the levels of frustration, duplication of effort and underutilization of capabilities seem to grow exponentially. In other words, when collaboration works, it can be extraordinary.  But when it doesn’t, the results can have widespread negative affects at the personal and company levels.

So, Is a Competitive or Collaborative Culture Better?
It depends on how work needs to get done to execute your strategy and if you are willing to do what it takes to fully align your desired culture with that strategy.  A competitive culture works for companies like Amazon because the culture and strategy are fully aligned to deliver customer excellence.  On the other hand, if your strategy calls for teamwork across functions, individual competition may hinder your ability to execute your strategy.

The Bottom Line
First, as a leader, be clear about what constitutes strategic success at the company, team and individual levels.  Then ensure that you define how you expect those results to best be achieved in terms of behaviors, values and beliefs.  Finally, align your performance management and reward systems with the cultural norms you need to live to achieve your strategy.

To learn more about the nuances of a competitive or collaborative culture, download The Science behind How Much Leaders Should Push for Higher Performance

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