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''Winning isn't everything; it's the only thing'': Great for football but not for creativity of workplace teams, new study suggests

October 1, 2010

For more information, contact: Benjamin Haimowitz,

Team competition may be common in companies today, but may also evoke reluctance among  executives through the images it conjures of turf wars. At a time when innovation is widely regarded as key to whole nations' future prosperity, how can firms use group rivalry to stimulate creativity while minimizing its potential for discord?
A new study provides some much-needed guidance on this tricky question -- although the answer isn't entirely simple. Competition between teams, the report finds, does spur creativity -- but only up to a point. And its effects turn out to be quite different depending whether groups have static or shifting memberships.
When team membership is stable, "some form of intergroup competition has clear benefits," concludes the study in the Academy of Management Journal. But "managers should keep in mind that only intermediate levels of competition are required to stimulate elevated creativity and that creating a fiercely competitive environment offers few added benefits (and perhaps even costs)."
"The notion that 'winning isn't everything; it's the only thing' may help win football games, but it may be counterproductive when the goal is fostering creativity through team competition in the workplace," comments Markus Baer, a management professor at Washington University St. Louis, who carried out the study with Greg R. Oldham of Tulane University, Roger Th. A. J. Leenders of the University of Groningen (Netherlands), and Abhijeet K. Vadera of the Indian School of Business. Highly intense competition, the study's authors surmise, not only has the potential to "constrict within-group collaboration and, potentially, creativity," but also to "undermine the free flow of information and other important resources" within the company.
To complicate matters, however, the report's findings suggest that an intense level of competition can be salutary when teams have shifting memberships, as frequently occurs in mergers or organizational shakeups.
"When a newcomer joins a team from a rival group, the result may be what scholars call 'cutthroat cooperation,' " Oldham explains. "This refers to the difficulty team members have in moving from a competitive to a cooperative mindset and the challenge they face in harvesting the creative benefits that typically result from the arrival of a newcomer. Low or middling levels of intergroup competition don't appear sufficient to dissipate cutthroat cooperation, but, if competition is fierce, the intensity provides the impetus to accommodate a newcomer and thereby reap the creative benefits that derive from doing so."
The findings emerge from an elaborate experiment involving 280 university undergraduates who were randomly assigned to 70 four-member groups and asked to generate original and practical ideas on two issues of student life -- 1) improving the transition from high school to college, and 2) improving the quality of life for students once they arrive on campus. Fifteen minutes was allotted to each idea, with two groups participating at a time in rooms adjacent to each other. 
The groups were subjected to one of three different levels of competition -- low, intermediate, or high. Low-competition teams were told at the outset that members of groups ranking in the top 50 percent in creativity would win a cash prize of $4 each and have their ideas forwarded to the associate dean of the college; intermediate-competition groups were told that members of the top ten most creative teams would receive $20 each and have their ideas forwarded; and high-competition groups were told that members of the single most creative team would each win a cash prize of $400 and receive a personal letter from the associate dean .
In all, there were 20 four-member groups at each of the three levels of competition plus 10 control groups who were in a non-competitive condition, being told simply that ideas generated by all groups would be combined and forwarded to the associate dean. In addition, the competitive groups were evenly divided between a closed and open condition, with the former having the same members for both idea exercises and the latter exchanging one member with the group in the adjacent room after the first exercise (a random switch carried out by an experimenter). Ideas were scored by three raters unaware of the study's purpose on a scale of 1 (not at all creative) to 9 (extremely creative) based on a combination of novelty and practicality.
The mean rating on the second exercise for closed groups in the low-competition and control conditions was 5.42, compared to 6.43 for intermediate-competition groups and 6.60 for high-competition teams. In other words, intermediate-competition groups in the closed condition scored almost 20 percent higher on creativity than those with low or no competition, while there was only a slight, statistically insignificant difference between intermediate-competition and high-competition teams.
For open groups, in contrast, the mean creativity score for the low- or no-competition groups was much higher than for the intermediate-competition teams -- 6.77 to 5.90. But the highest mean score for all groups, whether open and closed, was achieved by open groups that were in the high-competition condition, 6.83.
What accounts for the different scores of the various groups? In large part, the degree of collaboration among group members, the researchers concluded on the basis of ratings of video recordings of the teams in action. In open groups, the ratings indicate, collaboration (the extent to which all members actively participate in the groups' idea-generation effort) was significantly lower in low-competition than in intermediate-competition teams, and the latter groups proved significantly less collaborative than high-competition teams. For closed groups the pattern was just the opposite -- a sharp rise in collaboration from low-competition to intermediate-competition teams and an equally sharp drop from the intermediate-competition groups to those in the high-competition condition.
In fact, so low was the degree of collaboration when closed groups were subject to fierce competition that it led the professors to wonder why creativity didn't fall off sharply as well.
Says Prof. Baer, "Although our results indicate that there is little or no creative gain for closed groups when competition intensity rises beyond the intermediate level, we didn't see an actual fall-off. But perhaps that was because our experiment didn't replicate the anxiety that can accompany high levels of competition in the workplace.It well may be that, for closed groups, juicing the competition to a high level not only brings little or no gain in creativity but actually diminishes it."
The new study, entitled "Win or Lose the Battle for Creativity: The Power and Perils of Intergroup Competition," is in the current (August/September) issue of the The Academy of Management Journal.  This peer-reviewed publication is published every other month by the academy, which, with more than 19,000 members in 103 countries, is the largest organization in the world devoted to management research and teaching. The academy's other publications are the The Academy of Management Review, The Academy of Management Perspectives and Academy of Management Learning and Education.
Media Coverage:
The Globe & Mail. Beware of competition overload. (Saturday, October 09, 2010).

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