What’s the point of competition, in a business-context? Perhaps more to the point, what is competition in a business-context? And why?
Another of those ‘obvious’ question-themes that turn out to be not so obvious at all… And the answers are very important in enterprise-architecture, business-architecture and business-model design: not least because if we get it wrong – as too many people still seem to do, in business and elsewhere – then we’ll likely find ourselves on a guaranteed path to business failure.
Was reminded of this by two Tweets earlier today, both from Swedish social-business specialist Oscar Berg:
- oscarberg: RT @letterpress_se: In war, there can be only one winner. Not so in business – Stop Competing to Be the Best http://s.hbr.org/soHqME
- oscarberg: Apple, Samsung, Motorola, Nokia et al…please fight your wars in the marketplace, not in courts
The HBR article, by Joan Magretta, that’s referenced in that first Tweet, describes the key part of the point I want to make here. The second Tweet illustrates what happens when people don’t get that point: business-energy gets wasted on things that don’t actually matter, until all the players in that ‘game’ get so wasted, in various senses, that none of them can survive.
[There’s one subtle yet crucial disagreement I’d have with that comment above from Joan Magretta’s article, that “In war, there can only be one winner”. I know it’s a popular belief, but it’s wrong – lethally wrong, often in an all too literal sense. No-one wins from being involved in a war: the only ‘winners’ are those who take care not to be involved, and the parasites who profit from picking up the pieces afterwards – and who often set up the war in the first place, for exactly that reason. No-one wins from a war: everyone loses. We’ll see why that’s so in a moment – and also why that fact matters a very great deal in business.]
So is competition good, or not good? For that matter, should we cooperate with others, or not? In all of those questions, the obvious answer is “It all depends…” – but what it most depends on in each case is what we understand as the nature and purpose of competition, and its apparent counterpart in cooperation. And that, in turn, depends on what we understand as the nature and purpose of power.
What’s the purpose of competition? Is it to win? If so, win what?
Is it to beat the other guy? If so, what happens next?
Or is it less about winning as such, but more about not having to face the feeling of failure, of being labelled ‘the loser’, and everything else that goes with that label in so many societies?
Yeah, that last one starts to hit a bit closer to home, doesn’t it? Oops…
Behind most of the myths of competition is a hugely tangled mess of mostly-unacknowledged feelings and fears. The details change from culture to culture, and I won’t go into much of that detail here, but the real core of it is a really simple set of mistakes about the nature of power in the workplace and elsewhere. Again, I won’t go into the detail – see my book Power and Response-ability, if you’re interested, or the associated brief ‘manifesto‘ – but in essence what it comes down to is this:
– the physics definition is that power is the ability to do work
– most social definitions are closer to the notion that power is the ability to avoid work
Therein lie the roots of some serious problems for business…
In the myths around ‘winning’ and ‘losing’, most of the work being avoided is relational and aspirational: in other words, work that can only be personal, not collective. On one side, it’s often a failure to grasp that, on a finite world, we are always in a closed, finite context where ultimately there is no convenient-scapegoat ‘Them’, but only ‘Us’ – hence there is no-one that we can ‘win’ against. On the other side, we actually can’t force others to face our own feelings for us – no matter how much we would want that to happen – because they’re actually our feelings. And in reality there’s no way to win, in any real sense, unless we find the courage to turn round and face that work – rather than wasting what little energy we have in futilely trying and, by definition, failing to ‘export’ it to everyone else.
Do we really think we can ‘win’ by making someone else ‘lose’? The reality is that the most we could achieve is a temporary respite from that ‘feeling-work’, at the cost of actually increasing the damage and the load across the overall system. At best, we gain a short-lived ‘high’ – exactly like any other form of addiction. Which is why most of the myths about ‘winning’, and most of the myths about ‘beating the competition’, are a literally deadly delusion.
[There are plenty of people who would promote such myths, of course – especially the parasites who profit from the ever-popular ‘game‘ of ‘let’s you and him fight’. The point here is that those myths don’t help you – even (or perhaps especially) in a business-context.]
Competition is good: we need competition if we’re to improve our skills, our competencies, our overall game.
But it’s only good – is only successful, in the longer term – if we compete with others. Not ‘against’ others.
Cooperation is good: we need cooperation if we’re to do anything that we cannot do solely on our own.
But although cooperation is always going to mean working with others in some sense or other, it’s only good – is only successful, in the longer term – if the overall aim of the cooperation is with all others. Not ‘against’ others.
There are only two choices here: either everyone wins, in some way; or everyone loses. There is no ‘win/lose’: it’s a delusory form of ‘lose/lose’, in which an apparent gain for one party masks a greater overall loss for everyone – including the nominal ‘winner’.
If we compete with others, and with ourselves, everyone wins. Sometimes one player is ‘the winner’, sometimes another: but overall, over time, everyone wins in one sense or another – and the overall ‘competing’ is a key part of what helps everyone win.
If we compete against others… – well, in short, everyone loses. No matter what it looks like in the shorter-term, everyone loses.
[Except for the scavengers and parasites, of course. And yes, we all know who they are in business. Except we’re so often required to pretend that we don’t, and that they’re not. Oh well.]
And there’s no way round any of that: all of that comes from the real nature of power itself.
So if we’re going to compete – and in business, we’re going to want to compete, and also often have to compete – then we have to compete with others, not against them. Because if we don’t, we’re going lose – even, or perhaps most, when we seem most to ‘win’.
Which is no doubt somewhat different from what we’d hear in most everyday ideas about ‘business as usual’. But it’s also the only way that works. Which can be kinda tricky – especially in enterprise-architectures and the like, where we do need to deliver something that actually does work. Hmm…
Implications in business-architecture and enterprise-architecture
In architectural terms, what all of this comes down to is one very simple fact:
- every instance of ‘competition-against’, in any form whatsoever, represents an active source for loss of overall effectiveness, and a potential point for catastrophic-collapse of the overall architecture
That applies right up to an overall business-model, onward through design of performance-bonuses of sales, or managers’ resource-allocation, right down to real-time relationships between web-services and code-level conflicts. Competition-with is (usually) good: no doubt about that. Yet every time we allow some form of competition-against to slip through and become embedded in the system-structures, we increase the risk of total system-failure.
Which leads us to one very simple test:
- wherever the architecture includes some form of competition, is it competition-with, or competition-against?
In many cases, perhaps most, we’ll want our architecture to encourage competition-with.
Yet we must eliminate every form of competition-against – otherwise we’re designing an architecture that, by definition, is designed to fail.
And yes, this kind of design is all doable – despite all those conventional delusions about power and the like in ‘business as usual’. We just need to be rigorous about it, that’s all.
There are plenty of examples of how and why this works, at every level of the architecture. For business-architecture, see Joan Magretta’s HBR article referenced above, or Michael Porter’s work on strategy, or Tony Hsieh on customer-service. (For an interesting real-world example, see the small Welsh-border town of Hay-on-Wye, whose core business is built around a ‘competition-with’ web of specialist bookstores.) In the mid-range, see Dan Pink’s work on motivation, perhaps, or John Seddon on service-design. On the factory floor, see Deming’s classic ‘14 Points‘. I’ll admit I don’t know enough current code-level IT to give detailed examples there, but I know plenty of people who could.
It’s all doable. None of this is new, as such; and in itself, none of it is especially difficult, either.
[What is difficult is shifting the mindset – the usual myths of competition, the delusion that we can only ‘win’ by making others lose. That’s hard, true: but it’s also the only way that works.]
Architecturally, the only thing that makes it hard is artificial boundaries between segments of the overall system. This is one area where we need a whole-of-system perspective, and where the obsessive IT-centrism of conventional ‘enterprise’-architecture would be far more of a hindrance than a help. For much the same reasons, we need regular business-folk to understand that the overall enterprise runs on a great deal more than just money. But again, all of this is doable.
More to the point, it’s all been done – and proven in practice, too. And since overall it’s quite easy to prove that competition-with is more efficient and effective than competition-against – as can be seen in the bitter farce of the current fights between cellphone-manufacturers, as in Oscar Berg’s first Tweet above – there’s an interesting point that those who don’t ‘get’ the value of competition-with stand to lose ground against their nominal competitors…
There is, however, one serious structural problem of which we need to become very much aware. Competition-with is the only way that works, but sadly a lot of people still believe that they can be ‘the winner’ in any game of competition-against. (And there are plenty of parasites and predators who’ll prop them up in that belief, too. For a while, at least…) There are plenty of businesses that operate that way – as we all know all too well.
Yet unfortunately the game is naturally weighted in a way that props up those delusions. We know that win/win is the only way that works; we know that we can only win if others win too. But if they believe in win/lose, then they’ll be certain that they can only win by ‘making’ others seem to lose. In other words, whenever we come across someone like that, we want them to win, but they want us to lose – which is not a good place for us to be…
In those circumstances – to quote the old children’s-film War Games – “the only way to win is to not play”. So once we do get properly onto competition-with, we cannot engage with anyone who indulges in competition-against – because we will always lose, in one sense or another, whenever that occurs.
[In fact everyone will lose whenever that occurs – but it’s our organisation for which we’re designing the architecture, hence that’s what needs to be our focus here.]
So that test – explicitly excluding any interaction with any form of competition-against – needs to be embedded right the way through every aspect of the architecture, without exception. And yes, that’s hard. But essential. Seriously.
And that’s what’s actually implied, in architectural terms, from those two Tweets above. Interesting, I trust?
Anyway, enough for now, I guess. Comments, anyone?