Making the most of constructive competition

Trends change over time, beliefs evolve and, as a result, approaches are modified. This is true in any aspect of life; however, in the business environment, it's not uncommon to discover that viewpoints must adapt in order to be progressive. Beliefs relating to the competitive aspect of doing business are constantly transforming. While constructive competition may have a variety of meanings, there are some distinctive attributes of it that can be applied.

Attributes of constructive competition

Umair Haque outlines four rules of constructive competition in his blog entry for Harvard Business Review, which include concepts such as higher-order innovation, "thick value, not thin value," a willingness to be progressive, and ethics.

Organizations that become stagnant run into problematic issues that ultimately may affect their ability to be innovative and progressive. However, businesses that can engage in higher-order innovation tend to create new opportunities. In regard to "thick vs. thin value," Haque states "thin value cannot hold in an interdependent world." Being today's world is rooted in global enterprises, businesses often have to rely upon one another in order to thrive. In recent decades, it's not uncommon to find different companies—even competitors—partnering with one another for a mutually beneficial return.

Traditional business models do not necessarily apply in all facets of today's business environments. Haque further describes, "Yesterday, entire industries spent fortunes conceiving 'business models,' cleverer and cleverer ways to profit from locking buyers and suppliers in, and locking competitors out. That's just another word for economic tyranny." Constructive competition aligns with healthy competition, not a focus on pushing competitors out of the market. Haque also states, in regard to lobbyists, that "asking to be insulated from competition saps incentives for innovation—and sharpens incentives for disruption."

Companies and entire industries that go to the extremes to control the market may end up harming themselves in the end. With healthy competition, businesses are able to compete in a fashion that pushes innovation rather than domination, avoiding stagnancy. The end result is a more desirable market.

Greed and self-interest do not last forever, as companies such as Enron can attest; however, current trends seem to indicate that businesses firmly entrenched in socially responsible initiatives can attain sustainability. A corporation's social responsibility may not reap high profitability on its own, but companies that are noted to be ethically irresponsible are likely to have their financial numbers affected.

Harnessing constructive competition

iGuides.org states, "It is important to understand however that competition in the workplace need not be destructive at all times. Being competitive can be done constructively, and what’s even better is that it can even put you ahead of the corporate game." There are many components that can be integrated in routine business practices to complement constructive competition.

Leaders who communicate, listen, are observant, able to problem solve and are proactive, can place themselves in a good position competitively. Denis R. Rhoden, Jr., research associate at the Kirwan Institute states, "Although vaguely defined, for our purposes, constructive capitalism reflects an attempt to make room for social equity and market efficiency as succinct, equal, and measurable goals."

Competition doesn't have to be considered negative. Businesses that are able to embrace healthy competition, and include it as a part of their overall business strategy, have a potential to yield good results.

Competition is an innate component of capitalism; businesses that function within a society that works upon a capitalistic foundation can flourish under competitive conditions, but must be amenable to change at the same time. In decades past, business competition has been perceived as being 'cut-throat' in nature, but in today's environment this philosophy does not always work as well given the global component. It is the businesses which embrace healthy competition—and even forge partnerships with competitors when feasible—that often find themselves thriving.

Competition ultimately drives advancement. And by bringing stimulating innovative ideas to market, companies can take advantage of constructive competition.