Management team research: Internal competition hurts the organisation

Urban Life 14 August 2015 Martin Christiansen

A competitive climate within management groups can lead to burn-out, uncertainty and low performance, research reveals. Spend less time on end results and engage more in employee relations and constructive leadership to elevate motivation and productivity, expert advises.

12 min
Great results. Bad results. Winners and losers. When management teams meet, it often comes down to comparing numbers. Internal competition fosters a strong winner culture that enhances performance – or so it seems. The common perception couldn’t be further from reality, shows a new research project by Ramboll Management Consulting and the Department of Leadership and Organizational Behaviour at the Norwegian Business School, BI.
"We can see that a competitive climate in leadership groups, where individuals are highlighted for their performances and the end results take up more time than the process, is the direct way to burn-out, cynicism, insecurity and ultimately a destructive work", says Andreas Wettre. He is a leadership expert from Ramboll Management Consulting’s Oslo office with extensive experience from advising management teams.

Constructive leadership improves performance

If competition is the highway to uncertainty and sloppy performance, what type of management behaviour and working climate does in fact foster motivation, satisfaction and performance among management teams and their employees?

That is the main question driving the big research programme. Seven Norwegian organisations have participated and more than 1,300 responses in total have been collected so far. The first results point towards a clear pattern, according to Andreas Wettre, who has conducted the research programme with the business school, BI.

He recognises the negative consequences of competition in his daily work with top management in larger organisations and reiterates that the research clearly highlights work engagement, effort and quality as the three areas suffering most from a competitive environment.

"By focusing on numbers, you automatically tend to focus on winners and losers. When I advise management groups and boards, I always encourage them to spend less time on measurements, analyses and results. Instead, they should view end results, such as turnover or profit margins, as a feedback form that gives you an idea about how well you’ve performed on a specific task", says Andreas Wettre before revealing the key to improved performance:

"If directors want a mastery climate (research term, ed.) that emphasises process and effort and facilitates knowledge exchange and collective performance, they must improve their relational skills and become better at supporting middle managers. This entails better feedback, openness about mid-level challenges and allowing managers enough time to talk about specific tasks and initiatives in a process rather than giving thumbs up or down to the end results", he explains.

Gain time through effective meetings

Dedicating more time to feedback and discussion surely top many hurried directors’ unrealistic wish lists. However, valuable time can be won by cutting to the chase at management team meetings.

"Way too many leadership groups get caught up in simple issues that they feel obliged to address. They shouldn’t. They need to outsource these trivial problems to lower levels, thus enabling them to get to the bottom of more complex, cross-organisational challenges that have the widest implications", says Andreas Wettre.

Consequently, management groups should aim to identify areas of the organisation where their time and effort create the highest value. Most teams don’t, according to Andreas Wettre.

Philips: Mutual understanding has replaced competition

At technology giant Philips, leaders have worked determined in their attempt to dissolve competition in management teams. CEO at Philips Nordic, Karen Sørensen, explains that the company wants to form a culture based on mutual understanding and trust within leadership groups.

"Good communication and behaviour in management teams necessitate that team members know each other and understand what matters to the individuals in the group. All of our management teams in the Nordics, about 100 employees, have gone through leadership training where we have worked openly with individual preferences, strengths and weaknesses. This means that we now know where everyone’s personal limits are and can understand reactions from others, their prioritisations and personal ambitions – professionally and privately. Today, we avoid most unnecessary conflicts due to this greater understanding and trust."

She believes that a high degree of competition is often caused by individual goals that do not match the goals of other team members.

"You should spend your energy on winning customers – and not on winning internal battles. When I look at how we work today, there’s been a big change in the way our management teams cooperate. More collective goals, which everyone contributes to reach, have created greater communication and performance. This doesn’t mean that you don’t have to deliver on your personal top and bottom line. But you need a sharper sense of the common job and how you can help solving it as an individual."

Companies must define more common goals for the process with clear links to the hard-core performance targets rather than focusing solely on end results, the CEO argues.

High engagement elevates productivity

From an international perspective, what can we learn from the Norwegian results? Another Ramboll Leadership expert, Lars Munch Svendsen, sees a clear connection between the most recent results and previous studies performed by Ramboll. And his conclusion is pretty straight forward:

"We have looked at more than 400,000 employee responses in thousands of surveys we’ve conducted for especially Danish companies and organisations in recent years. They confirm that highly engaged and satisfied employees are the most productive. If directors can develop a mastery climate from the top, it will undoubtedly spread throughout the entire organisation and ensure that more employees are motivated and enthusiastic about their work", he says.

The next phase of the research programme will dig deeper into the differences in organisational culture and leadership style – between countries, but also between different layers in the organisation.

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