Corporate rat race

Madan Sabnavis Posted online: Saturday, Jul 05, 2014 at 0000 hrs
We all remember Adele for the songs she sings. But little do we realise that there are 100—or maybe even 200—people in the background who make these songs possible. That’s the crux of anything great. Rarely do we stop to think of what lies behind success. What matters is collaboration, which takes place not just between individuals, but also organisations and countries, and takes them to higher levels of performance. This is what Margaret Heffernan argues and proves in her rather interesting book titled, A Bigger Prize.

She shows how we have become too competitive in every walk of life, which has had deleterious effects on us. Right from the time we are born, we are competitive with our siblings for attention. When we go to school, grades matter the most and we are constantly striving to get ahead of others. We cannot be blamed for this attitude because the system is such that it is necessary to stay at the top, as all the good jobs go to those who perform best. Therefore, there is tremendous competition as we move into management schools to get entry into these corporations. While we are in these companies, we compete to move up the echelon. In this rat race, which is finally what happens when economic Darwinism is practised, we lose our bearings and actually move out of sync with the better things in life, which can be quality or even being in touch with our families.

In fact, the author is critical of the competitiveness in sports, where there is early burnout, as everyone strives for victory and there is limited room at the top. The promise and romance for money and glory drive sportspersons really hard. Sports has lost its charm as every game has become ultra-competitive. If we look around at what happens in cricket, tennis, soccer, etc, we will see vindication of this theory.

When it comes to companies, they tend to get bigger, often straying from the path and indulging in all kinds of unethical practices to maintain leadership. But we have seen people like Jack Welch admitting that there could be better ways of doing things. Therefore, what we see at an individual’s level holds true for companies as well. The stress everywhere is on being the best and out-competing others—all in the name of delivering superior shareholder value.

Heffernan goes through several case studies to show how the private enterprise ethic does not quite provide the best solutions and, in the end, we do realise that what we need is team effort of a collaborative approach to move ahead. A long time back, Henry Ford actually paid higher wages to his employees and compromised on profit to ensure that the labour force stayed back. He recognised that we need to pay our employees if we have to keep a consuming class.

This is what several economies also experience when they follow the top-down approach and focus on making the rich richer—something Thomas Piketty has shown as being prevalent in western economies. But we need to provide equal opportunity and income to people at the lower ends to ensure that they provide the demand for capitalists. In fact, if one looks at the Indian schemes of providing income through the controversial NREGA programme, it did add to purchasing power and growth for everyone. Quite clearly, the author indicates that policymakers have to look everywhere to ensure there is prosperity or countries cannot progress.

Heffernan also addresses the issue of the ‘why’ of competition, which is quite interesting. It could be sheer testosterone and this explains why men tend to be more competitive. But still, one does not know why some men are more competitive than others. Similarly, it has been proved through experiments that the kind of society we live in could also drive this spirit. A female-dominated society will see women being more competitive. Risk-aversion is another factor, which determines the degree of competitiveness.

Power struggle or the quest for power is another factor, which has driven competition and, here, the author talks a bit on the champion of free thinking and capitalism, Ayn Rand. It all comes down to individuals, companies or societies craving for recognition, acceptance, attention and admiration, which force them to become more competitive at any cost.

What have we seen in the last few years on account of unbridled competition? Dilapidated institutions and ideas have crash-landed, driven excessively by competitive spirit. We have witnessed financial corrosion, financial crashes and stalled politics, which have been a result of the competitive spirit. Companies have worked their way up by pushing employees to increase the profit lines to make investors happy. It has become a mad dog-eat-dog world and what matters is to be at the top. The quest has been for infinite efficiency, miraculous economies, endless creativity and innovation. The result has been long working hours, burnout, sweat shops and price hikes. The situation now has been described by the author as one where we are gasping for air in a sea of corruption, dysfunction, environmental degradation, waste, disenchantment and inequality. The more we compete, the more unequal our society becomes.

The main takeaway is that relentless focus on winning always has costs. When siblings grow up in rivalry, they struggle to trust one another. When schools celebrate the top students of the class, they demotivate the rest. When the rich win tax cuts, inequality grows. As sports become fiercer, careers shorten and injuries abound. When executives compete for bonuses, they cheat and lose friendships and relations. Heffernan stresses that when work excludes all other aspects of life, the reality checks, questions and discontinuities that we need to test our thinking on disappear and there is no time for them.

What has to change is our approach to life, which is gradually happening. The new models being used are centred on pooling resources, sharing information, organising projects, etc, which replace existing rivalries. Even at a more rudimentary level, children are looking more at education rather than having a career. A positive consequence is that they are better able to understand what they are studying. The belief in the power of collaboration now underlies some of the most successful organisations where they depend on human capacity to create together. An empowered workforce works better and crowdsourcing is generally accepted as a more effective and pragmatic way to tackle problems.

This is a very thought-provoking book for us as individuals, as well as executives working in the government or any company. There are choices to make and while everyone wants to be ahead in the quest for power, money and recognition, there are strong tradeoffs along the way, which cannot be eschewed. There are alternatives but, as Heffernan shows, we need to open our minds and move out of this race and explore them. More importantly, there has to be a conscious attempt.

Madan Sabnavis is chief economist, CARE Ratings