Editor’s Note: This blog post was originally published on April 15, 2015 and has since been updated to reflect the latest insights.

Imagine your group of friends is playing ping pong. Things are casual, people taking turns, and then someone comes up with the idea of having a little tournament. Suddenly, people start playing differently. Some are more focused, more engaged, and playing better. Others seem to be making more mistakes than ever before. 

Creating extraordinary performance is part science and part art. Sometimes improving performance benefits by igniting the competitive fires; at other times, better performance requires greater cooperation. 

The question is, how do leaders sort out when the competition is a good thing, boosting engagement, focus, and drive and when it’s a bad thing, stifling creativity and productivity? 

The underlying difference between good and bad competition is rooted in an organization’s culture, values, and norms. 

Trophy AwardWhy Is Competition Good?

Competition has a natural tendency to bring out the highest effort in people for several reasons. In general, competition…

  • Drives people to win and succeed
  • Increases engagement, focus, and productivity
  • Keeps people accountable 

Looking at it this way, it would seem that competition is always good. After all, what leader wouldn’t want people to be driven, focused, and accountable? 

When Competition Is Bad

Often, competition puts individuals against each other. The problem with one-on-one competition is that it inevitably results in a single winner and multiple losers. 

Picture a business where sales associates are competing to see who can collect the highest number of qualified leads in a month. The winner will earn an extra three days of paid time off. 

Over the course of the month, associates work overtime to land as many qualified leads as possible. But problems begin to develop. When one team member comes up with a creative new sales pitch, he keeps it to himself to ensure others don’t benefit and beat him. Across the room, another associate promises a potential customer an unrealistic discount to win them over. 

At the end of the month, the organization has a great big pile of new qualified leads but there’s been a steep price to pay. Nearly all the team members distrust each other, and many of them resent the associate who won the competition. 

When competition pits people within an organization against each other, it decreases teamwork, tears apart teams, and crumbles culture. 

Happy EmployeesCompetition as Culture

Instead of creating competition that works against an organization’s culture, leaders should focus on competition that is integrated into the work culture. 

Picture the same example of the sales associates and qualified leads, but instead of competing against each other, the entire team is working together to beat the organization’s record for total qualified leads in a month. 

Now, instead of working against each other, teams are working together against a challenging goal. They’re sharing sales tactics, collaborating on landing new clients and finding creative ways to engage as one unified unit. 

At the end of the month, not only has the organization achieved the same records for qualified leads, but teams are now more focused and productive. 

Leaders must understand that good competition always meets these key criteria:

  • Mutually beneficial
  • Reflective of organizations mission, values, and norms
  • Supportive of team members

As you think of ways to incorporate competition within your organization, find ways to align the competition with the way you want teams to interact with each other. Competition should focus, engage, and drive the productivity of teams as a whole, not just individuals. 

Want more ways to improve company culture? Check out our free resource: The Innovative Leader’s Guide to Transforming Company Culture…Starting with Yourself