Competition vs Collaboration

From sporting events and business competitions to academic contests and political campaigns, we are constantly being encouraged to strive for success and outdo our rivals. This obsession with competition is not new; it has been a feature of human societies for centuries. But why are we so obsessed with competition? And is this obsession always a good thing?

One reason often stated for our obsession with competition is that it can be a powerful motivator. When we are competing against others, we tend to work harder and push ourselves harder in order to succeed proponents claim. Competition is also argued to drive innovation, as people and organizations strive to outdo their rivals and come up with new and better ways of doing things. However, are this advantages exclusive to competitive environments, or can people work hard and innovate without being in a completive environment?

According to self-determination theory, the strongest motivator is intrinsic motivation, or the desire to engage in activities for their own sake. It suggests that people are more motivated when they feel competent, autonomous, and connected to others which does not seem to imply that competition is the only way to feel motivated.

How about innovation? Another one of the common arguments for why we need competition is that it leads to more innovation. However, in a competitive environment you're wasting a lot of resources doing parallel development. Different groups working competitively towards a shared goal will not share information, and in fact will prevent other groups from using their information through patents. Had they been able to share and use each other's knowledge in a collaborative way, a lot of resources and time could have been saved. In fact competitions are an inefficient way to allocate resources if the goal is innovation.

One can argue that there is no such things as truly competitive innovation. No one works alone, and even if one researcher was to work alone, they would be building their results on top of the results of other researchers. The famous saying "standing on the shoulders of giants".

However, does competition have no virtues? A study that investigates how competition and collaboration affect team performance finds: "A competitive structure enhanced one task dimension, speed, whereas a cooperative structure enhanced accuracy. Teams with extroverted and agreeable members performed better under the cooperative structure, whereas teams low on these orientations performed better under the competitive structure. Finally, reward structure had more impact on team members with low performance.". So it seems that some people benefit more from collaborative structures than others, moreover, competitive structures are better at producing fast results. However when another study which investigates collaboration in crowdsourced contests concludes "We found that teams can improve their performance in competitions if they actively collaborate in discussion forums and if they share solutions with other members in the community. Our results suggest that both discussion forum performance and solution sharing performance are important to team performance in crowdsourcing competitions.", it raises the question if competition is useful for solving real world problems.

Internal competition within businesses. One way businesses promote internal competition is through internal markets. Jack Welch, former CEO of General Electric (GE) implemented a strategy of dividing the company into smaller business units, each with its own profit-and-loss responsibility. This approach was known as "Neutron Jack" because of the large number of layoffs that occurred during the restructuring. While this strategy initially led to increased profitability and made GE one of the most valuable companies in the world, the company later suffered from a lack of innovation and was hit hard by the 2008 financial crisis. Why did this fail? As the business was split up into different interdependent but independent units, they stopped caring each other's business. Units that depended on each other to operate would drop each other and find third parties to increase profit the unit-wise profit while decreasing the total profit. Many more examples of businesses establishing an internal market, and it backfiring could be listed, but it appears that within businesses cooperation once again is more effective than competition.

Another way businesses (such as Microsoft, Amazon, and others) use competition internally is to encourage competition among employees by firing the lowest performing employees each quarter. A practice called the vitality curve first pioneered by by GE's Jack Welch in the 1980s. The idea is it encourages people to perform their best, but in reality it leads to employees sabotaging each other, taking credit for others' work, and is generally demotivating. There is no empirical evidence that it works.

Our society is obsessed with competition this essay opened with. However, we have seen that competition neither works strongly as an individual motivator, nor is it an efficient allocation of resources to reach a shared goal. We have seen that when businesses promote internal competition, it often backfires, and makes them worse off than if they had stayed collaborative in the long term.