Survival of the Fittest: How Competition Accelerates Innovation

We often do our best work in competitive environments – whether we’re racing against our market competition, or competing in internal “innovation contests." Some of history's most important inventions were the products of intense competition. No fewer than 20 people claimed responsibility for the light bulb when Thomas Edison began marketing his invention. The telephone drew on the contributions of at least 10 individuals working over a period of 50 years, even though it is commonly credited to Alexander Graham Bell. This competition helps companies and individual inventors be on top of their game and avoid getting complacent.

The Relationship Between Competition and Innovation

Steve Tobak writes in Entrepreneur Magazine that competition "doesn’t just create winners and success stories. It builds strong personalities, resilience and determination, and a sense of humor and humility. It builds high-performing entrepreneurs, executives and business leaders. It makes us strong." Looking back at the history of civilization, he notes that the "survival of the fittest" has shaped our development since the dawn of our species, becoming encoded in our methods of progress.

Whether you're an individual innovator or a giant brand, chances are you have competition in your market space. High performance rivalries between companies like Apple and Google have been responsible for major leaps in innovation. Without that competition, it would be easy for big brands to sit back on previous accomplishments rather than push forward into new territory. Competition means always looking ahead, pushing yourself to be the first, the fastest, and the best.

In a competitive market, the best and the brightest ideas succeed. In fact, competition is vital to the consumer visibility of new products and services. Without a competitor to compare to, consumers don't have a frame of reference from which to understand a new product. Competition creates a paradigm that increases product visibility and gets consumers emotionally invested in the success of their preferred brand. That's good for everyone, from consumers to stockholders to innovators.

Competition, Innovation, and the Inverted U

One theory -- Yerkes-Dodson Law -- maintains that individuals perform better when under stress, up to a point. The graph of this relationship looks something like an upside down letter U, thus the "inverted U" moniker. The premise is that competition, deadlines, and other pressures release stress hormones that sharpen memory and cognition. Thus, competition acts not only to keep innovators on task and focused on their work, but also to become even sharper mentally than they would be without the stress of competition.

However, there is a down side to the prolonged release of stress hormones. Too much stress, too much competition, can actually have a negative effect. Think of the football team's kicker, who can win the game with a good field goal kick. Instead of nailing the kick, he sloughs the ball and "chokes." Too much pressure can create a breaking point and impede performance.

Harnessing the Power of Competition

Embracing the natural competition of your market space and viewing it as an ally rather than an enemy is the first big step to making competition work in your company's favor. In addition to external market competition, you can create friendly internal competition to increase productivity and innovation. In a recent article on the Salesforce.com blog, Bob Marsh offers great tips for increasing collaboration and driving results with internal competition. I've adapted them below:

• Make Results Visible
  Whatever your success metrics are, make them visible. Creating a "leaderboard" encourages friendly competition by keeping everyone accountable. The satisfaction of being at the top or rising through the ranks incentivizes progress and success.
   
• "Socialize" Competition
  In addition to a visible leaderboard, other efforts to make friendly competition a part of your company culture will go a long way towards increasing productivity and innovation. Publicly acknowledging success and encouraging others to do the same creates an atmosphere in which success is at the forefront. Think of the excitement surrounding the Olympics or World Series -- water cooler conversations keep friendly competition alive and thriving.
   
• Collaborate Across Departments
  Creating goals and metrics that encourage inter-departmental collaboration rallies teams together around a common cause. Competition in isolation can be discouraging and counterproductive, but get a whole team involved and collaboration and cross-pollination results, increasing innovation and boosting morale. 

What's the Bottom Line?

While you may find it stressful to have another company or innovator right on your heels, working on the same or similar project as you are, such competition is actually likely to be pushing both you and your competitor to achieve better things. Harnessing this power within your organization can have positive effects on productivity and creativity as well as support a healthy company culture. 

Remember the Inverted U, however, and don't use competition as an excuse to push your people too hard. Always recognize and reward success, but don't mock or penalize failure, otherwise competition can quickly turn toxic. Done right, internal competition partnered with market competition creates a work space that is vibrant, innovative, and collaborative.

How have you used competition to your advantage? Tweet as @EidsonPartners to share your thoughts!