Competitive or Collaborative? How Your Corporate Culture Hinders or Helps Business Success

October 16, 2017
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Collaborative vs. Competitive Culture

Does your business foster a competitive culture? While competitiveness is usually a good thing in the business world, encouraging competition between individuals or departments within an organization is no longer the preferred approach. Research shows that today many organizations are moving toward a more collaborative and team-based approach.

The 2017 Deloitte Human Capital Trends Report found that 94% of companies globally believe that “agility and collaboration” are critical to their organization’s success. And 32% of respondents say they’re changing their organization’s structure to be more “team-based.”

“Based on all of the clients I’ve worked with, I am a huge proponent of a positive culture that supports collaboration, communication, and coaching,” says Suze O’Donnell, an executive business coach who works with Fortune 500 companies as president of Thrivatize. “The types of culture found at cutthroat organizations are far less effective, breed a culture of information hoarding and an inappropriate level of competition that is actually counterproductive to attaining corporate goals,” she says.

Despite the current popularity of collaboration, there are still some benefits to a competitive culture. At the same time, a collaborative or team-based culture isn’t without some negative features.

Competitive Culture Based On Individual Rewards

If your organization encourages individual performance by depending heavily on rewarding productive or profitable behavior, you could be promoting a competitive culture. This is often the environment of sales departments.

“Competitive environments are usually characterised by [having] winners and losers and [a] reward or lack of reward,” says Terence Sweeney, a business author, consultant, and speaker who focuses on culture within organizations.

According to Sweeney, hallmarks of a competitive culture in an organization include “regular targets” and “regular rewards,” with individual results shared among all members of the organization.

“The problem with a competitive environment is that there is always a winner and a loser, and although in theory this should motivate/encourage others to perform, in reality most people end up trying to perform to avoid losing,” he says. And Sweeney says that this approach will never get “the best” efforts from employees.

A competitive culture promotes separation into competitive “units,” which then builds resentment between “losers” and “winners.” It also leads to fear or shame of future poor performance, and blame when individuals feel they must justify their “loss” or lack of performance.

“None of this fosters widespread long-term engagement,” says Sweeney.

O’Donnell says that a focus on competition within teams leads to bad feelings between staff members.

“Cultures that are super aggressive and overly competitive breed the type of barriers between employees that are counterproductive to attaining business goals and that leave everyone feeling miserable when they go home.” O’Donnell explains that when the importance of individual goals becomes overly competitive with the team goals, individuals look out only for themselves, and not your company, your department, or your customers. This then hinders their ability to complete their jobs, and can impact their communication and customer service performance.

“They will exist in a state of paranoia which renders them particularly ineffective at their work, and they are typically aggressive with colleagues and customers alike,” she says.

Consider Collaborative Competition

Despite the negative connotations of an overly competitive business environment, competition isn’t necessarily all bad. Within an organization, it can even be a good thing, depending on how it comes about.

Sweeney points out that in those cases where competition is generated by the team itself instead of an external leader, a competitive environment can be beneficial.

“This freely generated collaborative competition can be powerful and exists in an environment of choice and self-expression, rather than fear,” he says. This type of competition can motivate individuals to push themselves in terms of innovation, creativity, and productivity because they have initiated it, rather than having it imposed on them.

Collaborative Cultures Optimize Innovation and Productivity

According to a white paper authored by Kip Kelly, Director of Executive Development at UNC Kenan-Flagler Business School, “in a truly collaborative environment, everyone has a voice.”  Having a voice encourages employees to contribute their best to an organization, becoming more engaged, and resulting in improvements right across the board. And today’s technology supports collaboration across projects, departments, and even physical locations more smoothly than ever before.

For example, organizations that use the Zenefits platform, which supports integrated team-based and collaborative apps like Asana, Hive, G Suite, Slack, Blueboard, Bonusly, and OfficeVibe, have the option to manage and encourage collaboration from one dashboard.

“Building a collaborative culture is the foundation for optimizing innovation, productivity, and revenue,” says O’Donnell. “Simply put, fostering collaboration through all departments truly maximizes their performance.” O’Donnell says that collaborative cultures are “typically really good at proactive two-way communication.” This lets managers function more as coaches than bosses.

A collaborative culture encourages individuals to work together to “get things done,” which boosts productivity. And open communication between individuals from diverse backgrounds, departments, and with different interests and learning styles fosters innovation.

Related: How Company Culture is Directly Linked to Productivity

Too Much Collaboration Leads to Burnout

As many organizations move toward a more collaborative framework, the downsides of this approach are emerging. In the pursuit of better team-work and encouraging collaboration between members in all levels of an organization, some experts believe things have gone too far, resulting in stressed-out and burned out employees. One example is the large number of emails sent and received among team members.

In a recent Harvard Business Review article, Eric Garton, co-author of the book Time Talent Energy wrote that research for the book revealed that today’s senior executives field approximately 200 emails a day! Receiving too many emails isn’t just an American business problem; as NBC reported, in early 2017 the country of France banned sending work-related emails after 6:00 pm for companies with 50 or more employees in order to protect French workers’ non-work hours.  

Another example of how a collaborative culture may lead to burnout is by reviewing the number of meetings individuals attend. Are all these meetings really necessary? Researchers from Harvard University surveyed 182 senior managers on their thoughts about the effectiveness and importance of business meetings. Surprisingly, 62% said that “meetings miss opportunities to bring the team closer together.” To maximize the benefits of a collaborative culture, balance open communication opportunities with the number of “FYI” emails and required attendance at weekly meetings.

Today’s business leaders and experts agree that organizations built on primarily competitive corporate cultures will have difficulty remaining competitive in the larger business world. “As we move forward, businesses who foster competitive culture will not be able to compete,” says O’Donnell.

This is partly because of the changing demographics of workers. “An externally generated competitive culture does not cut it anymore,” says Sweeney. “Millennials, in particular, are not motivated by competition in the way past generations were.”

To best position your organization for future success, consider the competitive and collaborative elements within your organization. It may be that a few simple changes are all you need to point your team in the right direction.

Related: The Key Factor Contributing to Employee Burnout and What You Can Do About It

About

Sarita Harbour is a business and personal finance writer who comes from a long line of business owners. When Sarita isn't writing, she's homeschooling her younger kids and encouraging her older children as they continue the entrepreneurial family tradition.

Category: HR Tips & Trends, Management


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