Collaborative Culture or Competitive: Which Is Best for Business?

Find out why a collaborative culture might give your business and its employees better odds for success than a traditional competitive culture.

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Collaborative vs. Competitive Culture

Does your business foster a collaborative culture or 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 many organizations are moving toward a more collaborative approach to improve productivity and empower employees.

Understanding competitive and collaborative cultures

When it comes to business success, workplace culture is the number one factor. According to Forbes, companies who have a strong culture can expect as much as a 400% growth in revenue growth. They also experience sustained growth in their average annual returns, sometimes as high as 495%. But is it competitive or collaborative cultures driving this success?

One path to success is employee recognition. A competitive culture gives recognition to employees who perform extremely well or who hit high benchmarks and receive awards. This works well for employees who have motivation around awards. It doesn’t help employees who don’t hit those benchmarks despite their best efforts, or who don’t have motivation around rewards.

A culture of collaboration recognizes and rewards employees and teams with great ideas for innovation, improved productivity, cost-saving measures and streamlined processes, among other company objectives. This means that collaborative cultures tend to recognize the accomplishments of far more employees when compared to a competitive culture.

Competitive cultures focus on achieving goals and providing rewards for met and exceeded goals. This can create an “every employee for himself” attitude. That is not ideal for training and getting employees ready for promotions and lateral moves to new departments where they can better use their skills.

Collaborative cultures focus on individual employee improvement as well as innovation and improvement through teams. However, let’s examine both competitive cultures and collaborative cultures in detail.

Competitive culture is based on individual rewards and recognition

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 characterized by [having] winners and losers and [a] reward or lack of reward,” said 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.” Also, individual results are 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 said. This approach will never get “the best” efforts from employees, he added.

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 blaming when individuals feel they must justify their “loss” or lack of performance.

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

The downside of in-house competition

Suz O’Donnell, an executive business coach who works with Fortune 500 companies as president of Thrivatize, said 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 individual goals compete with team goals, individuals look out only for themselves, and not your company, your department, or your customers. This hinders their ability to complete their jobs, and can hurt 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 said.

In other words, a competitive environment may not foster the type of employee engagement and team performance that upper management and executives desire. The good news is that transitioning to a collaborative workplace can improve employee engagement and enable employees to be more satisfied with the company, its culture and its values.

Consider collaborative competition

Despite the negative connotations of an overly competitive business environment, competition isn’t necessarily all bad. Collaborative competition can bring about better team performance and relationship building.

Despite the negative connotations of an overly competitive business environment, competition isn’t necessarily all bad. Collaborative competition can bring about better team performance and relationship building.

Sweeney points out that when a team, rather than an external leader, generates competition, 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 said. This type of competition can motivate individuals to push themselves in terms of innovation, creativity, and productivity because they have initiated it, rather than employers imposing it on them. This switch from external force to internal motivation can create high performing teams.

Collaborative cultures optimize innovation and productivity

According to a white paper from the University of North Carolina 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, the paper says. They become more engaged, and this produces 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,” said O’Donnell. “Simply put, fostering collaboration through all departments truly maximizes their performance.” O’Donnell said that collaborative cultures are “typically really good at proactive two-way communication.” This lets managers function more as coaches than bosses.

Collaborative spaces encourage individuals to work together to “get things done,” which boosts productivity. And open communication between individuals from diverse backgrounds and departments, and with different interests and learning styles, fosters innovation through relationship building and employee engagement.

Related: How Company Culture is Directly Linked to Productivity

Too much collaboration leads to burnout

As organizations move toward a more collaborative work environment, it’s important that they collaborate effectively to avoid the downsides. After all, there can be too much of a good thing. 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 Harvard Business Review article, Eric Garton, co-author of the book Time Talent Energy, reported that senior executives field approximately 200 emails a day! Receiving too many emails isn’t just an American business problem. NBC reported in 2017 that France banned sending work-related emails after 6 p.m. for companies with 50 or more employees. The government said it gave the order to protect French workers’ non-work hours.

Things have gotten no better since then, especially with the switch from in-office to work-from-home. Too many digital communications can waste employees’ time, become overwhelming and lead to burnout. This hinders workplace collaboration.

An over-reliance on meetings

Another example of how a collaborative culture may lead to burnout is the overuse of meetings.  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 “meetings miss opportunities to bring the team closer together.” To maximize the benefits of team collaboration, organizational leaders must balance open communication opportunities against the deluge of “FYI” emails and mandatory meetings.

When it comes to successful collaborative efforts, it’s important to use the right communication avenue for the information you’re sending. Avoid scheduling a meeting when an email will suffice. Don’t send an email when a short text message will do. For longer communication or where input is necessary, consider a phone call or an in-person office visit at a convenient time for all participants. After all, the goal is creating successful collaboration, not an overabundance of communication.

Optimize workplace culture with collaboration tools

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

This is partly because of the changing demographics of workers. “An externally generated competitive culture does not cut it anymore,” said 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. A succinct but thorough evaluation of your current company culture along with implementing the right collaboration tools may be all that’s needed to create a collaborative company culture, improve your working environment, encourage employees and boost productivity while rewarding teamwork.

It may be that a few simple changes can point your team in the right direction.

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