The ambition of team members has the tendency to lead to rivalry. If left unchecked, it can capsize the boat of leadership. Having ambition is not wrong, but when it becomes inordinate, it can be catastrophic.
The fall of Lehman Brothers offers an example of the starkest warning of what happens when internal competition runs unchecked. In the years leading to its collapse, departments became siloed fortresses, information was hoarded as power, and individual profit centres prioritised their gains over the firm’s stability. There was a power struggle between Richard Fuld, the CEO, and Chris Pettit, the president, based on their different visions for the organization. This led to a lack of clear direction and decision-making in the firm. To make matters worse, departments such as investment banking, fixed income, and equities were working in silos. These internal conflicts hindered Lehman Brothers’ ability to respond effectively to the growing financial crisis, and unfortunately, this led to the largest bankruptcy in U.S. history, and what followed was widespread job losses and a global credit crisis.
Another similar scenario happened in Microsoft under Steve Ballmer’s leadership in the 2000s. This period could be termed Microsoft’s “lost decade.” The company’s notorious stack-ranking system, which forced managers to rate some employees as underperforming regardless of actual performance, created a culture where employees competed against each other rather than competing against external challenges. There was a lack of coordination and silo mentality such that the company was slow to respond to emerging technologies. In contrast, when Satya Nadella took over as CEO, he deliberately dismantled this system and fostered a culture of collaboration and innovation. The results speak for themselves: Microsoft revenue increased from $86.8B in 2014 to $211.92B in 2023. Microsoft stock price also moved from $38 in 2014 to $428.48 in 2024. The company regained its position as a tech leader.
“The moment internal rivalry rears its ugly head amongst your team members, the journey to the end of cohesion has begun.”
Leaders must get rid of every form of bitterness and internal competition in the team. The moment internal rivalry rears its ugly head amongst your team members, the journey to the end of cohesion has begun. Team members are allowed to be ambitious, but it must not be to the detriment of the team. Nothing destroys a team faster than when every member of the team begins to have an inordinate ambition that can rock the boat. It is your responsibility as a leader to manage the diverse interests of the group members to prevent them from bringing down your leadership. There are signs in a team that can indicate that all is not well, and this must be tackled immediately when it is noticed. One such sign is information hoarding. During the decline that led to the Nokia crisis, it was discovered that different divisions started withholding crucial market information from one another. Each one was trying to protect its “territory.” This fragmentation contributed significantly to the company’s inability to respond effectively to the iPhone’s emergence. When departments operate in silos, it disrupts the organisation’s ability to respond to competitors’ threats.
A similar situation occurred during Yahoo’s decline in the market. Market reports indicated that the crisis in Yahoo was partially attributed to what became known as “empire building,” where executives focused more on expanding their internal influence than on creating value for customers. The moment a leader realises that executives are building a fiefdom around themselves, he should deal with it immediately. Another way individuals in an organisation can allow their rivalry to cost the company a great loss is sabotage through inaction. Sometimes, these individuals, due to a feeling of being ignored or overlooked, may decide to withhold their best efforts or important information for a project.
To solve this problem, a combination of firmness and emotional intelligence is required to deal with it. You must ensure that the goal of the team is the most important and communicate a clear message to everyone that they must be subject to the overall objective of the team. Alan Mulally was able to create shared goals when he took over at Ford. He introduced a colour-coding system for project status reports. Initially, executives only showed green (all good) status, fearing negative perception. Mulally celebrated the first executive to show red (problems), creating a culture where transparency trumped personal protection.
For Google, a compensation system that rewards collective success was created. This includes significant components tied to company-wide performance, not just individual or team achievements. This encourages employees to think beyond their immediate sphere. Leaders should encourage a reward system that makes every department see themselves as part of the corporate goal. Jeff Weiner of LinkedIn instituted “All Hands” meetings where any employee can ask questions directly to leadership, reducing the fertile ground for rumours and politics. This fostered transparent communication.
In closing, we must remember the words of the legendary management consultant Peter Drucker, who said, “Culture eats strategy for breakfast.” The most brilliant business plan will fail if executed by a team torn apart by internal politics.
Oluwole Dada is the General Manager at SecureID Limited, Africa’s largest smart card manufacturing plant in Lagos, Nigeria.
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