Hierarchy and Competition to Create Successful Groups/Businesses

Here is a little something I found that business owners should find of interest. In evolution there is a concept known as "group selection," which should be of interest to anyone who runs a business. If you understand your business to be a "group" competing in the market environment, you definitely want your group to have the traits that will allow for positive selection and not negative selection.

So what makes for the most successful social groups? Hierarchical structures and inequality among members. Strong competition within the organization at the top benefits the group by reducing the number of free riders who benefit from collective action, but do not contribute to that action. The worst thing that can happen to a for-profit business is for free riders to take over.

Certainly sometimes you need people to work together in groups. However, you also need to create the conditions such that people will neither free ride nor succumb to group-think. Both are anathema to creativity and health. Competitive groups would be a good way to encourage creativity and healthy growth in your company. The key there is to only reward the winner and to not in any way punish the loser. Desperation results in bad ideas -- scandal-creating ideas. Good-natured competition where there are only winners and there are not losers, where people are not concerned about losing their jobs if they don't come up with the best ideas, is how you keep the good ideas coming. Even if you have two groups and only one group (A) ever succeeds, that group will be kept sharp by the very presence of the other group (B). It is probably worth the money to pay B to keep A sharp.