July 2, 2007
Latest Silly Fad: Internal vs. External Competition
The avowed capitalist will tell you that competition inspires better
performance. The avowed capitalist is right. Competition is so
effective, it’s hard to imagine a situation in which it would not be a
Well, as I’ve often told you, I love capitalism, but I find that
capitalists have a tendency to act weird. One such application of this
weirdness is the tendency to believe that, if something is good, it is
good always and everywhere.
Alfredo sauce is good, but not on ice cream. Exercise is good, but not
when you’re asleep. Many a capitalist who believes in the virtue of
competition neglects the next step of considering where and when
competition gets the job done. He just figures: Everywhere! I’m a
capitalist! Competition is always good!
Thus we find ourselves faced with an emerging fad in the business world
– that of internal vs. external competition. It works like this:
The department head calls together a team from the department and
announces a new project. It is the Strategic Bloviation Initiative. It
will require high-level bloviation execution by a team of skilled,
“You are the team we have chosen to compete for this project,” explains
the department head.
Huh? Compete? With
whom? For what?
“We have sent RFPs to four qualified bloviation firms,” the department
head continues. “You – the members of the team we have assembled – will
compete with these firms for the bloviation project.”
“Because competition is great!”
This is the latest brilliant brainstorm of corporate America. Get your
employees to perform better by making them compete with outside sources
for the right to actually do the work that needs to be done.
with most silly ideas, this one wouldn’t exist if it didn’t have just
enough kernels of common sense to fool its adherents into thinking it is
completely logical. The competition, or so goes the thinking, will serve
as an incentive for the internal team to improve its efficiency, control
its costs and improve its outcome.
And they might do all those things. But if they really think about it,
they might not. Here’s why:
Your employees are on salary. Granted, you might entice them with
bonuses or something of that nature for winning the project, or for
performing well if they win it. But for the most part, you’re paying
them whether they do the project or not.
you’re asking them to work really hard for the privilege of working even
harder. They have to prepare a proposal, a presentation and a budget to
persuade you to add more work to their plates.
And they will want to do this . . . why? Perhaps you think it’s to prove
to you that they’re needed in the company. But by creating the
competition, you’ve just told them that you’re not so sure about that
yourself, and this is the kind of thing that tends to get resumes on the
street rather quickly.
the meantime, you’re asking four outside companies to compete with your
internal staff for this project. Now, I ask you, have you ever won a
contract with a company, only to get in there and find that a person or
group of people within the company doesn’t want you there?
this case, if you win the project, it is already guaranteed that one of
the parties you defeated for the project is sitting there waiting for
you with howls and scowls pointed in your direction. They might actually
be relieved that you got the project, since it’s less work for them, but
that doesn’t mean they want you to succeed at it.
Indeed, the best-case scenario for the employee group is to lose the
bidding, then have the contractor screw up so the company wishes it had
picked the employees.
So, nice work, Bunky. Either your employees are overworked, and mad at
you for making them compete for the privilege, or your contractors are
being undermined at every turn by the employees who – oh yes – are mad
at you for making them compete in the first place.
Competition is always good! Except when it’s obviously not. You have to
think, boss. Even alfredo sauce is yucky sometimes.
© 2007 North Star
Writers Group. May not be republished without permission.
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