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How far should internal competition between managers be pushed?

posted Dec 7, 2016, 5:35 AM by John Oliver
Constructive vs destructive competition between managers
There has been speculation that the downfall of Ericsson (this 30-07-16 Economist article "Hans Free") has been in part due to an over emphasis of cultivating internal competition between managers, encouraged by the outgoing CEO Hans Vestberg.

Much has been written about the benefits of internal markets and open competition within organisations, especially in relation to encouraging innovation, which Ericsson desperately needs (Mr Vestberg, who has spent his whole career at Ericsson, failed to produce a radical plan beyond building networks. Shareholders bemoaned low investment in new areas).

This HBR article from November 2015 "To Encourage Innovation, Make It a Competition" lays out convincing arguments, especially for the public competitions.

However, when the competition is internal to an organisation, there is a very delicate balance to find between competition and collaboration. These are classic orthagonally competing values, as detailed in Cameron and Quinn's Competing Values Framework. 

The solution I propose is in having clear principles to where and how the limits of the competition are drawn.

Time and time again, when seeking to harness competing values, explicit principles can provide guidelines for all participants for a conscious embrace of the benefits of constructive conflict.

Designing those principles requires careful throught, and there are some great examples from the organisation case study research on this website. 

Please contact me if you'd like some guidance on references!

John Oliver
Tel. +33 6 33 02 94 08