Internal competition can often be the most dangerous kind

Remove individual metrics or performance indicators, make team success the important goal. Most of us work in a team of some kind, yet in places like retail sales they often pit employees against eachother with individual budgets instead of store budgets.

If you ever go into a clothing store and wonder why the changerooms look like they haven't been cleaned in weeks, that's probably why. If everyone is trying to meet an individual sales budget no one can afford the time to clean the store since it could cost them a sale. If it doesn't matter who gets the sale as there is only a store budget, they can work together to get all the extra tasks done. One person can clean the change rooms while the other takes sales etc.

When you start tracking a metric there can be all kinds of second order effects, so it's important to pick your metrics and goals wisely.

You have to define who the external "enemy" is. If your enemy is the person closest to you, you will not share.

But as said, they raced as a duo against other teams, so then the external enemy becomes the other team.

I'm sure when they shared with other teams, where was even another party that was the enemy (other state? other countries?).

I think in a company it's always healthy to define an outside "enemy" that you are competing against, now within the company.

I think this is exactly backwards. The overwhelming majority of people I have met in life are by default collaborative and supportive.

What screws this up is the introduction of bad incentives, often unintended ones.

I'm not saying there are no natural incentives to competitiveness etc., but if you artificially introduce more of them it tends to be net negative. Lots of companies do this, even without intending to.

It all depends on what game you are playing. On one level you can characterize it as zero-sum vs. positive sum, on another level as closed (play once) vs. open ended (keep playing).

When your goal is to keep playing and improving iteratively as a player, it is definitely to the advantage of each player to help their counterpart improve, regardless of who is currently 'winning'.

You can also pose the whole thing as an iterated prisoner's dilemma, where the best overall strategy is tit-for-tat with generosity (default to cooperation as a starting move) and forgiveness (occasionally cooperate even if the other defects).

There are additional iterative loops that could be going on too, like opponent/partner selection even when the game is ostensibly zero-sum (eg. "nobody likes a sore loser"), and finally there is the meta-game of game selection, which can be characterized as 'culture'.

What good is it if 2 teams are solving the same problems. It's a waste of time when the other team could be solving a different problem. At the end of it you share your solution.

There's too many cases of teams just being walled off from everyone else and then duplicate work being done.

Isn't the incentive getting paid?

You're basically saying "this can't be fixed by management" and then saying "it must be fixed by management".

I'm probably just misunderstanding you. Could you clarify?

FWIW, in the organization I'm working at, I don't have that problem. There are literally hundreds of other sw engineers that could do exactly my job, and we all have the same title, and collaboration works really well between everybody. There are some personal differences here and there, but the overall environment is excellent and we don't compete internally. We try to learn from each other and push each other forward.

Maybe you get this one project out the door, one team wins, the other one loses. Great. And then what? Half the other team quits since they didn't get that bonus and feel betrayed by management. The other half stays, but resents both management and the "winning" team. Now you reshuffle, and those guys have to work with each other. Start the game anew, with a new project? Great, now people know what's up and will play their cards accordingly. Infighting is guaranteed. That's a terrible way to manage teams. Short-term gain? Maybe. Long-term destruction? Basically guaranteed.

The "without any justification" part of your answer dismisses that that's exactly what the original article is about that we are discussing here. That alone is justification and it matches many people's experience.

I'm personally experiencing the exact opposite these days. I'm thriving on my company not doing this nonsense and we are doing fantastic!

...if failure is independent, sure. Not only is independence generally a dangerous assumption, but in particular when it comes to software engineering, it's been shown that problems are not independent. I don't have the reference at hand, but if I did, I could show you that completely separate teams tend to make the same mistakes.

The opportunity cost is the productivity of an entire team of developers who might well be better employed doing something useful.

Plus all the bad feeling when one team "loses."

It's irrational sports cult management - competition good, cooperation bad.

(Not drawing other parallels to nazis here, please don't accuse me of that.)

It doesn't stop at 2. When I left Amazon about a decade ago there were at least half a dozen digital money services/products. Each vertical (retail, 3-p retail, Kindle, Gaming etc.,) all had their own stored-value service managing a slightly different version of the same digital money (gift-card, merchant balance, game coins). The feature sets overlapped ~95%. It may well turn out alright for the company but if you are an engineer or manager tasked with building yet another such service it's no fun at all.

If you acquire a competing company, you ideally assimilate the employee work force and integrate them into your organization. You welcome them and make them feel home from day one. At least those that you keep. There are likely a few that you let go. But it's really important not to get hard feelings in there, 2-tier engineering, internal competition. I'd quit immediately any organization that doesn't understand this.

I do plan on re-reading Out of the Crisis to begin with, though, so maybe there's some (good? bad?) subconscious reason I want to start with that.

First off, individual rankings often do not measure actual performance, but rather statistical noise. Awarding Alex with a bonus because Alex happened to be the luckiest in what was essentially a lottery (that's what the maximum of statistical noise is) tends to breed frustration, first in everyone else for not getting the bonus despite doing almost everything the same as Alex. But the next year, some people will start doing things like Alex did them, and they'll still not get the bonus because they didn't also have the luck of the draw. Alex will also get frustrated because Alex might have continued to do things exactly the same as before, except now ranked much worse!

When you're rewarding statistical noise, you're effectively holding a lottery. That's weird, but probably not so bad. When you tell your employees that it's based on performance, you're flinging your company into a cycle of despair and confusion -- or, at best, indifference.

But wait, there's more!

Let's pretend that you work for a company that is careful to ensure that performance is statistically significant before awarding any bonuses or ranking people. Companies don't do this, but we're free to imagine them to.

Even in this case, Kim's outperformance is often possible only because Kim's team propped them up and assisted them. Rewarding only Kim and not their team breeds discontent in their team. You might argue that "if Kim wants to continue outperforming, obviously it is Kim who should share the bonus with the team." Sure, but do you ever think that happens? What happens is that the team will start hiding information from Kim.

And then people start to game the system. They go for the easy sells to customers who are bad fits. They ship things that shouldn't be shipped. They cherry-pick metrics to support their performance. When you make a ranking or a bonus a goal, that's what you're telling people to aim for, not quality of work.

There are more arguments here like how bonuses are not as motivating as you think -- unless you pay people too little to begin with in the first place, but I think Deming's arguments end with the above.

I can see how having the team rewarded for "your" performance can suck. In a healthy team, "your" performance wouldn't be possible without your team anyway, so it's not so odd as it may sound. In an unhealthy team, the work of improvement maybe has to start somewhere else.

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I am doing it by myself. I'm the architect and I'm the engineer. I'm drafting the design and building it. And I did it. By myself. Inside of a month.

At the same time, another team is working on the same thing. Dozens of people on the team. Architects and engineers and a couple of data scientists. They took three months to get their first design out and it failed during testing. Their estimate to next iteration is two more months.

My design passed all the tests but one in the first trial and I fixed the remaining bugs inside of a week.

There's a good chance that the other team is going to have their product pushed into production ahead of mine, which will negate the need for mine so my code will get pushed to some archive server and sit there gathering dust.

Same goes for the azure work that I'm doing. Again alone and without any support vs our internal IT apparatus who has infinite money and can spin up temp teams with the push of a button.

And 'round and 'round it goes.

And then any action taken on that would feel like a sword falling at any moment on groups, often disbanding them or redirecting them in what feels like an unfair and politically motivated moment.

Remember that people in corporations gain some degree of emotional investment in what they are working on simply due to the economic reasons that they are getting paid to do that, and getting paid is survival, especially in the layoff-happy no-universal-healthcare no-social-safety-net American economy. You work or your life falls apart.

So when I say knife fight, of course it isn't literal knives, but the motivations and survival instincts are the same. People can feel like this is life and death.

Probably why back in the day places like DEC and IBM didn't fire people. You can alleviate some of the life-and-death paranoia underscoring budgetary knife fights with the knowledge that you won't be fired and you can work somewhere else in the company.

Of course that doesn't really exist anymore.

Something "free markets" provide over planned economies is free(er) flow of information.

Markets/economies are often incredibly complex. Allowing individual actors to signal information through pricing and competition, and allowing risk takers to exploit differences in these opinions of people to profit and simultaneously even out the differences in the direction that best corresponds to reality builds a system where it's much more likely the right things are done by the right people for the right reasons. It's just too complex to plan for. And besides, without the free markets there to give you feedback, you won't know what it is you're planning for.

A (socially fair) free market is also a proper scoring rule for forecasts. It rewards people who are good at seeing into the future, and punishes those who are bad at it, in proportion to the costs of their errors. (This goes back to de Finetti's operational definition of probability.)

Note that this is rather abstractly, in some sort of perfect microcosm. In practise, all free markets are distorted by privileged rent-seeking and other inefficiencies. I fully understand anyone who would be offended when I say that a free market punishes people who are bad at seeing into the future (hell, just reading that offends me!) because in reality, it also punishes all sorts of people, and often people who are great forecasters are precluded from exploiting their abilities in the free market, and so on and so forth. Please read my message not as social commentary or political bias, but the mathematical/cybernetic principles underlying this stuff, if executed well.

And obviously, this doesn't even begin to explain the Sears/Walmart story, so I suspect there are other factors underlying that, too.

If that doesn’t work well then what does that say about the wider free market approach? If it’s better to deal with internal department dysfunction in a different way why isn’t that process applicable to a wider planned economy?

Inside an organisation there’s no real mechanism equivalent to a market within which these alternatives can compete. It almost entirely comes down to politics, not relative cost, features and technical suitability. If a team’s solution is adopted by another department does their revenue go up? Do they get extra resources? How do they advertise their product? What’s their incentive to provide customer service and support? If they get a new project or strategic direction and this ‘product’ doesn’t fit their vision anymore what’s to stop them just dropping it? After all none of their budget actually comes from this ‘product’ no matter how many other teams use it.

It’s not that these problems can’t be solved, but there’s no real market or real revenue stream there so market forces have to be consciously emulated by management fiat. If enough layers of management lose focus on that, or management changes, it all breaks down.

It’s basically the same problem as with planned economies.

Look at the pipeline shortages of the past year. A chip shortage screws up many industries because all eggs are in one basket. Farmers have government incentives to overproduce for to prevent food instability.

A company always has competition due to promotions, by the way. Competing at a team level makes sense for R&D, since products can end up different. But I’m not sure how it makes sense for a big, resource heavy project.