The most extreme version of this that I've encountered is a digital agency where each team has its own profit and loss statement -- and compensation is tied to it. They get paid more when they cut costs and rack up prices. When the opportunity for a new piece of work or a new client comes in, each team has to compete for it internally. This doesn't just incur tremendous waste. It means the company's priorities -- team first, then company, then client -- are completely upside down. But the real victim isn't just the client -- it's the culture.
With this kind of organization, you don't have colleagues, you only have competitors. In a zero sum game of business development, every victory represents someone else's failure. People don't feel nurtured, and the in-fighting (by all accounts) is toxic.
Companies that promote internal competition do so because they believe two things: that what everyone wants most is money, and that the best (or only) motivator is ego. As a result, they end up recruiting individuals for whom this is true. Team players either don't apply or exit screaming. I have a friend who worked there for awhile, attracted at first by his confidence that he was bound to excel.
"What I hadn't anticipated," he told me, "was that when I won, I felt awful. When I lost, I felt awful. No amount of money made up for it. Even the great work I got to do didn't make up for it. Every day, walking to the office, I'd feel my stomach tightening as I braced myself for another day as an asshole."
I'm amazed when I encounter firms that still foster this kind of internal competition. I appreciate that their CEOs want everyone, always, to be improving their game -- but I don't think this is the way to do it. When I worked in television, I was certainly aware of the (many) directors and products that were more talented than I. But I felt inspired by them and worked hard to develop my skills to their level. I didn't compete with them -- and they certainly didn't compete with me.
Who, I wonder, truly believes that in-fighting is productive? Is it just the judges, who sit on the sidelines, or those who fondly imagine themselves always the winner? Have any of you had an experience where this leadership style worked?