Competition

I love competition, and I hate it. 

Playing basketball at 100%, intent on getting the ball it into the opposition basket, sweating, running, shouting, senses wide open for opportunity, body accelerating and swerving into openings, hands a blur, mind in the zone, eyes scanning for mates and opposition, hardly aware of the strain on legs and lungs. A great feeling, one way to feel truly alive. 

Taking on a skilled and committed team, using every ounce of skill, training and agility to win is what I love. Using dirty tactics is what I hate.

Staying within the rules builds a positive experience, a playing field where we know how to succeed, where there is honour in the outcome, where the outcome is not determined by who is willing to step furthest or quickest into the barbaric. Playing without adhering to rules is a recipe for pain and damage, anger and violence.

Open markets, free markets, capitalism rely on competition as the mechanism that will ensure the most efficient distribution of resources, whether they be money, time, raw materials, people or ideas. Just as in basketball, we have realised that rules enforced are necessary for our economic systems to deliver benefit. We do not thrive if competition is the only rule. 

Competition does not have morality. It knows only winning, or maximising. It is the people in the competitive arena that bring morality, that decide on actions based on factors other than going all out for the win, that count the cost and see that the end does not justify the means. 

There are many acknowledgements of this in the legal and regulatory frameworks within which we all live. Civilisation is about competitiveness tamed, given parameters, kept within bounds. Anti-competitive behaviour includes trying to become a monopoly, which is surely the ultimate goal of unfettered competition, to be the only person, or company, standing. 

Businesses acknowledging the rules, understanding their customers and delivering the optimum value to them for the best achievable price, enhancing their ability to produce, innovating in their products and processes, seeking to make the maximum number of customers as happy as possible is what maximises benefit to society. Working to cripple competitors by blocking their access to resources, by threatening their staff, by smearing their reputations, by stealing their intellectual property will not maximise benefit in the long run.

There is an expression in rugby: “Play the ball, not the man”. The concept applies to business as well. I am playing the ball when I am striving to deliver maximum value to my customers, and to other stakeholders. I am playing the man when I seek ways to degrade the performance of my competitors.

Interestingly, research tells us that the only source of sustained competitive advantage is operational excellence (Jeffrey Pfeffer – The human equation, Tom Peters and Robert H. Waterman Jr – In Search of Excellence). Operational excellence is the opposite of dirty competition. Its essence is that we strive to run our business as well as we can, that we can succeed, and succeed well above our competition, if we get really good at what we do. 

We don’t need dirty tactics to win in business.

Just as people bring morality to competition, some people revel in playing on the edge, and in playing dirty. We cannot plan for that to disappear; we must be ready, willing and able to protect ourselves from those sorts of people. What we can do is to choose the higher ground, even when reacting to underhand tactics. That is always going to be a personal decision. I find that I cannot write the imperatives about it being the best way, or the only way. My gut tells me that will be a waste of time. People either will or they won’t choose the high ground, and my written insistence that it is the better way, the only way will be wasted on those that just don’t get it. Life, in its rich fullness, is a much better driver of change.

Lets regroup – good competition is striving to be really great at the way we do things. Bad competition is playing the man, not the ball. 

The implicit assumption I make in the discussion so far is that good competition is judged from the point of view of society as a whole, not from point of view of the individual. Using society as the view point makes it easier to see that underhand tactics have negative consequences. Any business that stoops to attacking a competitor is diverting resources from delivering value to their customers, and is diverting resources in the competitor to counter the attack, or to repair the damage caused. Society loses out because the overall delivery of value is reduced.

Some, revealing the nature of their competitive attitudes, would argue that it is good to take down the weak, that progress is best served by eliminating those that are not up to a standard. Virgin, Microsoft, HP, IBM, Apple are all companies have all been less than top notch performers at points in their histories. Arguing to eliminate the weak is to argue that we can predict the future of a company. Believing that you can tell who is weak and deserves elimination is arrogant. Let them work out their own destiny.

Good competition will eliminate the weak; taking deliberate action to drive the weak to destruction is not necessary. Clean competition will still cause lessons to be learned, build the disciplines required to succeed. Choosing to not use destructive business practices does not leave us with a world where inefficiencies abound. Get good at what you do or cease to exist will still be strongly part of our world.

I would argue that a world without underhand tactics is going to be tougher than a world with them. Businesses that rely on underhand tactics don’t feel the pressure from truly superb competitors. I have not heard Toyota accused of underhand tactics, yet look at the pressure that Ford, GM and Chrysler are under from a company that is the role model for being good at what they do. It must be so tempting to take out Toyota by any means to relieve the pressure. 

Real men and women, and businesses choose a level playing field. It is harder and more satisfying that way.

We also use competition within our businesses because we believe it has benefits. I have railed in general against performance appraisal systems in another article. Here I will focus on the competition they drive. 

Performance appraisals are used to determine who gets bonuses, promotions and pay increases. It is not possible for all to succeed equally, normal distributions are applied because some must be underperforming and others must be top performers. Performance appraisal systems, by their nature and application, drive competition.

Is competition good within a business?

Competition is inevitable. It is how it is expressed that matters. 

What does good competition look like in a business?

I do want people to look around and be challenged to do their work better. But I don’t believe that there is any benefit in someone trying to be better than the person next to them. The business benefits far more if we all try to be great at what we do. I can be better than the person next to me if I can undermine their performance. I don’t have to choose to improve my performance. 

Sharing my success with others builds up the whole organisation. Keeping my success to myself so that I can continue to be better does not.

Good competition in businesses, then, must include raising the capability of all by consciously and unconsciously choosing to help those around me. Rewarding individual performance works against this. Jeffrey Pfeffer, in The Human Equation, presents compelling evidence that building inclusive rather than competitive environments drives much higher levels of performance. Twenty to forty percent higher, in fact.

I believe that Lean has the best concept of competition within a business – compete against perfection (James P Womack and Daniel T Jones – Lean Thinking). Do not compete against the person next to you, or the company down the road; compete in a way that means you will always be improving, always be taking the next step. You will not be distracted by trying to keep up with what the competition is doing, you will be helping those around you to increase their ability to deliver, you will be focussed on the thing that matters most in business – delighting customers. If you have not yet done so, read Lean Thinking. If you don’t see the value of Lean on reading the book, go back and read it again. Then discuss it with someone that knows, such as David Meier. 

Using best practice or benchmarking produces limited benefit, if any. Numbers become their own purpose, blinding us to reality, deceiving us with a pretence of certainty that good decisions are being made. We follow where the numbers lead, believing that they are the answer. 

Good decisions happen every day, in the context and the complexity of what is real, not in the boardroom far removed from what really happens. Numbers plucked from opinion in the meeting and inflicted on those that do, rather than discuss, age rapidly. Middle management distorts the little meaning they did have, and the people they are supposed to guide interpret them from a position of distrust, eliminating any lingering value they may add. Far better to make decisions on the floor, in immediate reality, with the people that have the deepest understanding of what happens there. Management is best done in person, not by measures. 

By all means use numbers, but use numbers that emerge from the shop floor in response to a specific need. Let those numbers morph and refine by the same process that decisions about other improvements are made, by competing against perfection. Make the numbers visible to all, let everyone make decisions based on those numbers, don’t impose rules and targets based on the numbers. Perfection is not in a standard or a target. 

Adopt the highest standards of decision making when competing against perfection. Make sure that you squeeze every ounce of value out of a change, don’t settle for the first or the obvious solution. Experiment, predict the outcomes, learn from the differences between the outcomes and your expectations, experiment again, make the final decision based on evidence. Decisions based on opinion only are merely prayers. Get real by experimenting and letting that reality drive the decision. Then look for more ways to get perfect. 

Perfection is the perfect competitor.About the same time I wrote the above, I wrote a blog on Quality for Bankwest. It is sufficiently different to the above to make it worth a read.