Why Healthy Competition Among Employees Works

One of my favorite childhood memories is the centuries-old national tradition of color war at camp. I loved the intensity of this week of games, contests, and events, as well as the life lessons it imparted. We celebrated when we won and cried when we lost, but we learned to compete and respect each other simultaneously.

We are now just emerging from a generation of parenting that gave the competition a bad rap and ignored the psychological benefits that can be gained from learning how to win and lose. And that’s not just my own experience — it’s been said that competition effectively brings out people’s creativity, innovation, and camaraderie.

Building A Killer Instinct Among Friends

At my company, we strive to infuse color war-style competition in the workplace and have found that not only does it improve our culture, but it also raises our performance as a team. From brain teaser scavenger hunts to “Amazing Race”-style challenges, our focus on healthy competition has paid off: Acceleration Partners was ranked No. 4 on Fortune’s 2016 list of the top 10 places to work within our industry.

To promote collaborative innovation and trust among teams, you need to appreciate the competitive process more than the end result. Competition exists in life and business; you can’t ignore it. Someone out there wants your employees, your clients, your marketing mindshare and more. If you’re content with being in second or third place, that’s where you’ll end up.

If you want to be a market leader, you have to understand these three truths about fostering competition:

Competition can be a good thing. 

When team members work together towards a shared goal, they push one another to be more creative, productive and motivated. Even when a team loses, its members maintain that feeling of goodwill.

At our annual meeting in Boston last year, we held a “Great Race” competition based on Boston-specific clues. One team had the odds stacked against it: Not a single person on the team was from (or familiar with) the city. It was no surprise that the team finished last, but that didn’t discourage its members.

They didn’t get angry or let their loss sour the experience. Instead, they worked together and learned what they could have done to overcome their disadvantage, building resilience and determination, and some new friendships. In the end, we all agreed that this team had more fun than any other!

How you compete for matters. 

When competition is tight, research shows that those who compete out of fear of losing often turn negative. Rather than learn from the experience, some companies might demonstrate this by acting like sore losers when they’ve lost a bid, badmouthing competitors or making excuses for why they didn’t get the work. Don’t be that company.

Failures, after all, can be valuable learning opportunities. And the more you learn, the better you become.

Performance marketing is a very competitive industry. We don’t win every client opportunity that we’d like to, but we compete respectfully, and it’s paid us back in spades. Many times, clients who initially passed on us have reached out down the road to work with us. Because we display no hard feelings when we aren’t initially selected, we keep the door open for a future relationship.

How do we manage to maintain this mindset? Our version of “color war” has helped us embrace and appreciate healthy competition. By creating random teams that compete for a small period of time and then returning to our normal groups, we ensure that everyone understands that how you treat people during the contest matters. Just because someone is on another team one day doesn’t mean he can’t be on yours the next.

Internal — and external — collaboration is essential. 

Collaboration and competition are not mutually exclusive. To effectively compete, you must collaborate. Many highly-talented individuals within our company wouldn’t be nearly as effective if they didn’t work together as a team. It’s all about leveraging each person’s skills and capabilities and not expecting one person to carry the entire load or have all the answers.

This idea also applies externally: The most successful companies are those that expand and strengthen partnerships, resulting in nimble innovation and strategic problem-solving. We’ve seen this concept at work at my company. Although some companies in our industry might view us as competitors, we know that when we collaborate and share our expertise as partners, we can help each other solve some of the industry’s biggest challenges.

Finish Strong — No Matter the Results

Even if you know you’re not going to “win,” there’s real value in seeing the competition through and displaying resilience. For example, in a brain teaser competition held at our annual meeting, only one team could win. Even after word spread that we already had a winner, the remaining teams continued to work together to complete the activity.

They didn’t quit just because they knew they wouldn’t win; they all wanted to see it through and solve the problem themselves. When teams are released from the pressure of winning or losing, they start to feel free to reach for (and focus on) personal performance heights. All startups could use a little more of that initiative within their teams.

Entrepreneurs need to remind their employees how enjoyable the challenges of healthy competition are and teach them to embrace the opportunities it affords them to reach their full potential. Pretending there aren’t winners and losers doesn’t help anyone; in fact, it often sets up a situation for disappointment. It’s time to return to embracing competition because, whether we’re winning or losing, we’re always learning.

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In partnership with Citi, the Young Entrepreneur Council (YEC) recently launched BusinessCollective, a free virtual mentorship programme that helps millions of entrepreneurs start and grow businesses.