Leadership Lesson: Who else is your competition? One surprise

Published in the Phoenix Business Journal on November 30, 2018

Unsuspected. Think of your toughest competitor that keeps you awake at night. Now multiply it by several times. This is the internal competition of rivalry among your employees. Find out who your internal competition is and repair it. They can put you out of business.

The less obvious

Most CEO’s and other business leaders understand the value of internal collaboration. But, a few organizations have subscribed to visibly fostering internal competition. They do it in the belief that it strengthens the organization. 

At one time General Electric asked managers to force rank their employees and then fire the bottom 10%. Goldman Sachs periodically selected 500 out of 35,000 employees to be promoted as partners, but many more are weeded out in the process. 

Evidence suggests that internal competition generates more morale issues than any productivity gains for the organization. The cost in both human capital and monetary capital is high.

The more obvious

Even worse than bitter competition among employees, is the not-so-hidden rancor among executives and business partners. Employees will tend to mimic the behavior of their “leaders” and amplify the growing loss of productivity.

When employees compete with each other for their own gains rather than collaborating with each other there are great costs, including:

·     Teamwork dies

·     Conflicts flare

·     Confusion ensues

·     Progress slows

·     Morale dissipates

·     Good people leave

·     Weak people stay and poison others

·     Creativity caves

Finally, operations slow down, costs go up and profitability bleeds red. Death is near.

The most obvious

Neutralize and prevent destructive internal competition in order to focus your energy on beating external competition. Here are some practical and proven methods:

Check egos at the door - isolate the negative executives and employees who are the root of internal competition, those who are more interested in personal gain than greater good of the organization. Give them an opportunity to change, or remove them and replace them with win/win people.

Cultivate win/win - encourage teamwork so that all employees win, rather than just a few isolated “stars.”

Hire to values - given the good values of the company, interview and hire employees whose personal values mesh with those of the organization.

Clarify all roles - everyone should have a clearly stated job description with roles and responsibilities. Share them. This eliminates duplication, gaps and uncertainties that can lead to confused competition within.

Build project teams - great satisfaction for all the players comes as the result of watching teamwork work. It defeats internal competition and proves the value of successful collaboration.

Offer incentives - reward teams, both the individuals and the group as a whole. PepsiCo pays 40% of annual bonuses for high performance teamwork.

The evidence of practical experience teaches us that internal competition is costly and dangerous to the sustainable wellbeing of an organization.


We know the adage, “One rotten apple can spoil the barrel.”

Remember these unnerving statistics, per Gallup research:

· 51 percent of employees are not engaged (potential bad apples)

· 32 percent of employees are engaged (good apples)

· 17 percent are actively disengaged and creating trouble (real bad apples)

That 17 percent is internal competition. Clean out the barrel.

The bottom lines

Wake up. Internal competitors will destroy businesses faster than external competitors. First, find and dissolve internal competition, included negative employees. Build collaborative teams and reward them for success. Soon.

Click here to read this article on the Phoenix Business Journal site.