How Having a Rival Improves Performance

AI is transforming the world. And it starts with the right compute. ARM is the AI compute platform trusted by global leaders, proudly NASDAQ listed, Built for the future. Visit arm.com discover. Welcome to the hbr ideacast from harvard business review. I'm kurt nickish. Microsoft and Apple, Coke and Pepsi, Airbus and Boeing. The list of competitive arch rivals goes on and on. And rivals don't make up one of Porter's five forces for nothing. That framework shows that if you have few of them, you have more power to charge higher prices and. But if you have many rivals offering competing products and services, you have less power. Rivals hurt your bottom line. But our guest today says that having rivals doesn't have to be all bad. A growing body of research shows that they can even elevate performance, at least on the individual level, when you have successful people that you measure yourself against, but also in some cases on the organizational level. Adam Grant has been studying this. He's an organizational psychologist at the Wharton School at the of Pennsylvania. He's also an author and the host of the podcast Work Life. Adam, thanks for being here.

Thanks for having me.

You surveyed the research first on rivalries and kind of how they affect performance. And then you also went out into the field yourself and interviewed everyone from, like, food truck vendors in Texas to the Norwegian national ski team. And after all that, like, what do you think is the biggest misunderstanding that we have about rivalries?

I mean, I think the simple misunderstanding is that your rival is your enemy. I've kind of thought that for a good chunk of my career, which is why I tried really hard not to have rivals. I just tried to dismiss it and say, yeah, I want to be better than that and above that. And I was totally wrong. You know, your biggest rival can actually be your greatest ally. And there's value in approaching that relationship very differently than what I. What I assumed instinctively.

It's so funny because we hear so often that phrase, stay in your lane, you know, swim your own race. And you're, you're basically saying that that's not quite true. Not if you want to swim your best race.

Yeah, that's exactly right. I mean, I think part of it is you, you know, if you want, if you want to be the best, you have to train with the best, whether you're an athlete or a business professional or anything in between. That means, you know, often your direct competitors are the people who are going to push you the hardest and, you know, who have the drive and the knowledge and the skill to elevate your game. And so, you know, it was. It was fascinating to me to find out that, you know, Chelain Flanagan, who's one of the greatest distance runners in American history, she trains with her rivals, and they actually help each other during races. I never would have expected that.

Right.

Because running is supposed to be zero sum. And if you're going to help one of your opponents, that should be undermining your own shot at making the Olympics or winning a medal in the Olympics. And yet they really believe that that's the only way to achieve excellence.

And you see this in commercial spaces all the time. Right. Jim Cook at Boston Beer Company, Samuel Adams Beers, that company did a lot of work just to help push the craft beer revolution forward, because he understood that the more people who left kind of the big beer makers and started drinking craft beer, that was just going to help his bottom line as well. You could say it's easy, though, in those situations where you're not giving something up by helping a competitor. Does this really apply to places where, you know, where the ocean is more red than blue?

I think it does. I mean, you think. Of course, I think you have to be more careful if you're dealing with a market that's pretty crowded, where there's a lot of competition, where it seems to be fairly ruthless. But those are also the circumstances where, yeah, you have a lot to lose by banding together with your rivals. You also may have the most to gain because nobody else is collaborating, and everybody's trapped in sort of a fixed pie mentality. And so, you know, one of the. One of the places where I think about that immediately is in the airline industry. People always talk about airlines as being extremely cutthroat. You know, it's. It's known to be a very hard market to survive in, which is why Richard Branson said, if, you know, if you ever want to be a millionaire, it's really simple. Just be a billionaire and then buy an airline or start an airline.

Yeah. And Warren Buffett for a long time famously said, remind me if I ever make the mistake of investing in airlines again.

Yeah, exactly. Right. That's the. It's the easiest stock to short. And yet you can see some really interesting examples of, you know, people in the airline industry going out of their way to support one another. I. I came across recently a really fun one. So there's an entrepreneur named Wade Irely who decided that what was really needed in the airline industry was an airline that could help you in the California commuting situation, just fly right over awful traffic and so he started a little. A little airline called Surf Air. And the image was literally, you're going to surf over the traffic in California. He put down about a million dollars in non refundable deposits on a fleet of airplanes. And then, you know, he started fundraising, and he couldn't quite raise enough funds to deliver on the commitment that he'd made. And this is a guy who, you know, has been forewarned. This can be a cutthroat industry. And he's also a former spy. He was in the Department of Defense, he deployed to Iraq. And so, you know, reasonable to be wary of your enemies, but he's kind of desperate at this point. So he cold calls a board member at Jet Suite, which is a rival company. And the board member, within I think it was about an hour, had immediately led him to one of the founders of Jet Suite, this guy named Alex Wilcox. And in less than a week, Alex had actually made it possible for Wade to get the financing he need, he needed. And when I talked to Wade about this, he said, you know, basically, this is. Imagine that Wendy's is about to go bankrupt, and McDonald's says, hey, no, no, no, we don't want you to go out of business. Let us. Let us bail you out here, and we're gonna let you get bailed out by our investors. It's insane. And yet, you know, you look at that kind of support, and the idea is that, hey, wait a minute, you know, we're. We're in an industry where a lot of people are trying to stab each other in the back. We don't want to live that way. And if we pool our resources, maybe we can help a bunch of, you know, a bunch of small, you know, kind of scrappy airlines get. Get off the ground.

So is the lesson here that even in a really competitive industry that there are ways that you can collaborate and move ahead, and if you don't do that, somebody else will or some startup will, or there's just. There's still value to be gained, that if you stop trying to worry about your competitors doing poorly and figure out how they can help you do better, that that's the way to go?

I think so. I mean, I think that too often people don't even start that conversation because they're terrified of the risks.

Yeah. How do you explain that to your boss?

Yeah, exactly. You know, hey, I. I just shared some trade secrets with our biggest competitor. Probably not an easy conversation to have, but I would just say there are also risks of, you know, of not giving That a shot. And you know, I think those expectations that we have of our rivals often become self fulfilling prophecies. So, you know, if you assume that every one of your rivals is out to get you, then you're going to have pretty adversarial relationships with those rivals. If on the other hand, you assume that they might be out to help you, or at least that there are places where your interests overlap or, you know, maybe you're the only people qualified to help one another, then, you know, sometimes opportunities open up that you don't expect. And you can always test the waters and share a piece of information with a rival that if they were to exploit you, wouldn't hurt you and see whether they do or not. And that's a little bit of a, you know, it doesn't feel like a big risk, but it's a way to run the experiment and then figure out whether it's safe to, you know, to try out a little bit more serious back and forth.

Yeah, it's a lot easier than doing a joint venture. Right? You just start with some information, look for trust and reciprocity and try to work it up from there.

That's exactly right. But Kurt, I would also say I don't think you have to, you don't have to team up with your rivals in order to get the benefits of, of rivalry. Sometimes it's even motivating just to know that your rival is out there. And I know you're familiar with the evidence on this, but I've just been floored by Gavin Kilduff's research on how much your rival success can, can affect your own. And I think that, that, you know, that's something that everyone should be aware of. So, you know, the first example at the team level is if you look at any of the major sports, whether it's NBA basketball or Major League Baseball or NHL hockey or NFL football, and this is also true in NCAA basketball. The better your rival does in the postseason this year, the more likely you are to succeed next year. And so, you know, if you really want your team to win the super bowl next year or to win March Madness next year, you should, you should root for your biggest rival this year. And that, you know, that seems to fire up motivation that, you know, when UNC sees Duke win a championship, when, you know, when the Lakers watched the Celtics win, they became much more driven than they otherwise would have been. And that happens at an individual level too. Gavin finds that if you're a runner and your biggest rival is in a race you run significantly faster.

I read this post by a venture capitalist who had gone to Istanbul and went to the bazaar and saw rug sellers in action. And he made some really interesting observations about the place where you would expect. I mean, it is a zero sum game there, you would think, and there's a limited number of tourists who are coming through to buy rugs. But he wrote that one thing no rug seller would do was to criticize somebody else's wares. That they had a code of conduct that helped them be competitive and try to get each other's sales, but in a way that just did not hurt their reputation as a place where you got the best quality things.

That's fascinating. I think that happens in a lot of industries and sometimes it's a written code. But the understanding that exists in many industries that, hey, you don't undermine your rival, you play fair and square. You know, it's a little bit like I play ultimate Frisbee and there's never, I've never played an ultimate game that had a referee.

Yeah.

And everybody agrees they're going to play by the rules and they're going to call their own fouls and their own, you know, out of bounds calls. And, you know, there's very rarely disagreement. And, you know, people are really motivated to win.

Yeah.

And yet they've agreed to play by a set of rules that everybody wants to honor and respect. And I think that's true in many different fields of business. I've seen it consistently in the tech industry, where it's almost taboo to leave your employer and jump ship for a major rival. And the reason that you don't want to do that is because you feel like it's not just that you don't want to hurt your current company, you also want to allow them to maintain the, you know, the kind of friendly rivalry that they have between these, these two firms.

Let's talk about people at companies who have rivals in other departments or in their department, because that might be the closest comparison to sports. When you talk about, you know, the Norwegian national ski team, where your rival is somebody else on your team, so you're actually a teammate and a rival at the same time. And of course, in sports, it's very easy. Sports is so great because, you know, the psyche of each competitor really gets exposed in competition. It's very clear what's being measured. You lose by 200ths of a second to your rival. And like, everybody knows that you lost where in a work environment, maybe if a rival gets promoted, it's not so clear that, you know, they really were better. So let's talk about how rivalries in the workplace can be a little muddier and harder to. To nurture and also appreciate.

Yeah, I think. I mean, this is, this is, to me, one of the biggest challenges of all of our work lives is you work with people who are simultaneously your collaborators and your competitors. And I really enjoy Michael Johnson, John Hollenbeck and their colleagues research on this, which shows that you can evolve either a pattern of friendly competition where you support one another, or a pattern that they call cutthroat cooperation, which is, you know, one version of that is you pretend to get along, but then you're really stabbing each other in the back.

Yeah, we all know those places.

Yeah, yeah. Try to. You try to have as few of those as possible, but they find that the order really matters. So that if you start out competing with somebody who's in your. In your company, and then you try to build a cooperative relationship, and it's really hard to undo the competitive starting point. And so that's when you often see cutthroat cooperation emerge. Whereas if you can build a cooperative relationship and then add in competition, people are much more likely to, To. To continue that foundation of saying, look, we trust one another. We have some mutual respect. And so, you know, let's. Let's try to beat each other, but, you know, the, the loser will buy the winner dinner, or we'll still root for each other and be glad that, you know, that one of us won't, as opposed to some people in another company. That's the pattern you want to get to. And I think what that evidence suggests is that, you know, beginnings really matter. It's not impossible, but it's an uphill battle to undo the beginning of a relationship.

So who determines that beginning? Because you may come in and have a rival who's already been in the workplace for, you know, years before you get there. The culture of the workplace is set before you're there. I feel like in so many organizations, we have so much to offer each other, but there is that sense of competition that ends up stifling that. Yeah.

I think the reality is that structure influences culture here. So if you have an organization that only measures and rewards and promotes on individual results, it's awfully hard to see your competitors as potential allies. Whereas if you work in an organization that says, look, we're going to take seriously the idea that we don't just care about individual results, we care about the impact of your results on your team, then you can start to say, okay, well, if this rival of mine is successful and I'm successful, and we can make the team more successful, and that actually helps us perform better, that creates more promotion opportunities. And, you know, the people who ultimately get promoted are the ones who make their teams better and drive great collective results. Then, you know, there's. You take away the disincentive to collaboration. And so, you know, it's so easy to use sports examples in rivalry because we. We have so many vivid ones. But in basketball, one of the things I've seen over and over again with great coaches and teams that end up becoming extraordinary is the coaches always find a way to make the team's accomplishments more important than the individual accomplishments. You know, if you think about what made Phil Jackson such a genius of a coach when he went over to the Bulls and started working with Michael Jordan, I'm sure he had brilliant strategy. But I think one of the things he did most effectively was he convinced Michael Jordan that the ultimate measuring stick was not how many points he personally scored in a game. It was his ability to build a team and lead a team that was going to win games. And I think that, that, that's fundamentally what you have to do when you're trying to. To build a team or an organization where rivalry is going to. To become collaborative or friendly. You have to put team performance on par with or above individual performance.

You also argue that not only can rivals be good for you, but that you should also be friendly with them, not just see them as competitors that you're sort of measuring yourself against all the time, but also, you know, you have a friendly relationship with. Why does that matter?

Well, I think it matters because one, it's just more fun, right? It's. At the end of the day, if you have a friendly rivalry, then if you lose, you've got another shot at, you know, at somebody to be happy for and another chance at, you know, at feeling some joy afterward. It's like you've. You've been able to put two different bets on the race as opposed to just one. But I think the other. The other thing it does is it just creates a reservoir of, you know, positive emotions and goodwill that go into the relationship. And they make the whole idea of. Of competing against each other, you know, more intrinsically motivating and less like something that you want to avoid because it feels. It feels, you know, sort of aggressive or confrontational or counterproductive.

Have you ever heard about this backfiring for anyone? Like, you know, having a rival can make you better, but it also can cause you a lot of stress and make you like, stay up at night. And maybe not everybody is as ultra competitive as their rivals are. So I don't know, are there times when maybe just swimming in your own lane and running your own race are better than giving so much attention to, to a competitor, whether or not you're friendly with them?

Yeah, I think so. I think there are a few situations where that certainly applies and there are probably many more that I haven't thought about. But the first one for me is I think about this through the lens of the work I've done on givers and takers. And I think it's critical that if your potential rival has a reputation or a history of selfish behavior, not just toward you, but toward other people, and so they're, you know, they seem to have a character tendency to be more of a taker than a giver, then that's someone you want to approach cautiously and may not want to start a collaborative relationship with you. You might be putting yourself at risk there. You know, more broadly, I think it's pretty hard to sustain your motivation for the long haul if, you know, if your primary goal is just to beat somebody else. Right. Or to crush your competition. I think if you look at the decades of evidence on what sustains intrinsic motivation, what you want is a larger sense of purpose, that you're accomplishing something that's greater than yourself, that benefits others, and also that gives you a real sense of personal mastery or excellence as opposed to just saying I want to be better than others. And if your primary goal is to, is to outdo everybody else, it ends up becoming pretty empty and hollow over time. It's one of the reasons you see a lot of Olympic gold medalists who have, you know, kind of peaked in their career and they feel like, okay, well now what? I have nothing left to prove or achieve. And that, that can be a pretty sad road. I think. You know, very frequently it's the, it's the silver medalists who are the most motivated. But, you know, that's again, it's a short term source of energy as opposed to one that will carry you through multiple years or multiple projects.

Yeah, you can only look in the trophies in your trophy case so long.

That's right.

What would you tell somebody who's listening to this to think about if they're, if they're actually now looking around their office saying, wow, who is my rival? Or who are the people who I'm competing against, you know, to Name them and figure out how I'm going to do better. Like how. How would you recommend somebody kind of approach that in their. In their own workplace if they haven't really thought about it so deliberately or consciously up until now?

Well, I think you probably want to start by looking at the people who are your toughest competition, who, you know, maybe are working towards similar goals and maybe achieving similar or slightly better levels of performance. You also, you want to pay attention to your own emotional reaction when other people succeed. So, you know, there. There are times when, you know, when it just hurts a little bit extra when somebody else achieves something great or when you catch somebody else's, you know, social media post or humble brag, you're like, oh, man, that person again.

Yeah, that's. If you're still following them. Maybe you've already unfollowed them by now.

Exactly. You might have blocked them by now. But, you know, I think sometimes that's. That's a reaction that, you know, that captures, oh, that person is a taker, or, you know, there's some injustice there, and that person hasn't earned their success. But sometimes it's okay, you know, that person is just a real challenge for me to beat, or, you know, I envy that person because they're better at something than I am. And I think when you have that reaction, that's an opportunity to say, okay, is that someone I can learn from?

And.

And is that someone who maybe I could even be supportive of, too?

Now that you've done this look at competition and rivalry in sports and in commerce, what other big lessons are you thinking about from sports that we can apply at work in the competitive commercial space?

Oh, I mean, I think the easy answer to that is it's stunning to me that no one who plays sports even half seriously does it without a coach. And yet most of us lack a coach in our professional lives.

At work, you could say that, you know, the job of the coach is the manager. In fact, in some European soccer teams, the word for coach is manager. It's not coach.

Yeah. You know, I think, Kurt, at some level, every manager does coaching, but I think sometimes it's hard for a manager to be a highly effective coach because, you know, at the end of the day, your manager is judging you. Your manager hired you. Your manager could fire you. So I. I was a diver in high school and college, and I had this incredible coach, Eric Best. And one of the things that. That just defined that relationship was I never doubted in any moment of the six years that that I trained with Eric that he wanted anything other than my success.

Yeah.

And whatever he said, I knew every sentence was geared toward trying to help me achieve my potential or exceed what I thought was my potential. And I think it's very hard to create that in a lot of managerial relationships because the manager also has a responsibility to the organization, whereas the coach's whole job is to make you better. And so I would love to see more systematic evidence about what what coaching lessons translate from sports to business and how coaching ought to be approached differently.

Well, Adam, I'm looking forward to that research or that episode or that book, whatever it is on coaching that comes next. Thanks so much for taking the time today to talk about competition and how we can think about it differently to help help us be better at work.

My pleasure. It's fun to be here.

That's Adam Grant, a professor of psychology at the Wharton School at the University of Pennsylvania. He's also an author and the host of the podcast Work Life. If you like the show and want to hear more, please subscribe so that you get our next episode automatically. This episode was produced by Mary Dew. We get technical help from Rob Eckhart. Adam Buchholz is our audio product manager. Thanks for listening to the HBR IdeaCast. I'm Kurt Nickish.