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Drawing the Line Between Healthy and Excessive Competition: Communication and Transparency as Keys to Driving Business Growth

Updated 26.03.24 4 minutes read
Joorney Updates

Competition is an inevitable part of business, whether it is between candidates for a job, between employees for promotions, bonuses, etc., or between companies themselves for market share. How much competition within a company is beneficial and where is the line where it becomes exhausting to its employees, resulting in low individual and company growth?

Healthy vs. Excessive Competition Defined

A clear distinction between healthy and excessive competition is exhibited through each of their outcomes. Healthy competition promotes growth of all involved parties by increasing engagement and motivation through friendly and collaborative competitive activities. Usually, growth will happen down different lines, but it will nevertheless benefit everyone.

On the other hand, an overly competitive environment clearly leaves at least one side dissatisfied and can ultimately result in the loss of devoted employees and/or lower employee morale and motivation, to name just a few negative effects. Eventually, if not immediately, such competition hurts the business overall.

Let’s take real estate agents who work for the same brokerage as an example. Their sole focus can be to get as much commission as possible, without any cooperation. They could opt to not show their own listings to coworkers’ buyers or – similarly – the coworkers’ listings to their own buyers, which results in properties spending more time on the market. Such competition does not create the best environment for long-term growth.

However, if these real estate agents collaborate, they can sell their listings and find houses for their clients faster, ensuring swift growth for the entire brokerage. Even though these real estate agents might have to share their commission with each other in the short-term, this kind of collaboration also leads to:

  • faster property turnaround,
  • relationship-building between agents and their possibly repeat clients,
  • exposure for the entire brokerage as the one that successfully closes deals, and so on.

All of these lead to more business and higher growth in the long run.

In my experience, the most dedicated employees, when supported adequately by their employer, do not engage in competition in order to achieve a quick gain. Rather, they do it to benefit by improving their skills and knowledge and achieve personal as well as company growth. In other words, they value and strive in a healthy competitive environment.

Many companies find competition overall to be a positive force. The important question is how do you create a collaborative culture and nurture healthy competition within a company, without it going too far the other direction?

The Keys to Promoting Healthy Competition:

1. Communication

In my opinion, communication is the key, especially between decision makers and their employees. Demotivation and lack of commitment usually come from lack of communication. Communicating openly can sometimes be intimidating; however, if the company creates such an environment where transparency in communication is encouraged across all levels, then it becomes easy. Therefore, it is the company’s responsibility to create and promote a culture of open communication across all levels.

2. Transparency

The important thing to remember is that everyone has both strengths and areas for improvement. Thus, a company – by communicating important information transparently – can usually position its people effectively and allow them to thrive. People want to receive honest feedback and understand how they can advance in their work environment. Silence can only lead to loss of motivation and stagnation, which is not beneficial to anyone.

For example, by clearly communicating that a certain line of promotion is not envisioned, a supervisor can allow his subordinate to focus on other internal opportunities and explore alternatives for advancement in the company.

3. Promoting collaboration

Some individuals will naturally be more competitive than others. If the company opts to lean towards the collaborative approach, it is important to recognize and promptly promote those who show such a spirit in the workplace to leadership positions. In doing so, the company enables these people to share a culture of openness, transparency, and cooperation with other employees whose work they oversee.

A healthy competitive culture can also be nurtured by rewarding not only results, but also effort and commitment. While achieving results is very important in business, sometimes results are delayed due to a set of circumstances unrelated to effort. Recognizing and rewarding those who have worked diligently will improve company morale and inspire similar efforts in the future. Having the patience to recognize such occasions and offer the right support will lead to results, both in the short- and long-term.

Another way of adopting and nurturing a collaborative culture is by rewarding teams, not only individuals. By creating incentives for teamwork, a business will ensure both results and a positive work environment.

Additionally, through joint activities outside the workplace, the company can also promote cooperation. While team-building activities where teams or individuals are competing against each other are great, in my opinion an even better option are those activities that promote joint-added value creation.

For instance, one of Joorney’s teams recently attended a painting workshop as their team-building activity, where – in an informal environment, and while enjoying music and wine – they were able to express their creativity and create a joint result of their work. The activity resulted in a very friendly work environment that was clearly reflected in their communication, which as a result benefited the team’s productivity.

Just as we’ve witnessed at Joorney, when communication, transparency, and collaboration are nurtured, competition can be a positive force in any business!