The Great Management Paradox: More Competition Demands More Cooperation

Tom Peters

I’ve used this column as a bully pulpit time and again to rail about the need for unfettered competition—to spur the necessary, once-a-century revolution in management practice. This week I want to introduce a paradox: Much more competition demands much more cooperation.

Cooperation is not our instinct. We have always had an adversarial bent. James Madison may have inadvertently started it in political affairs with the Federalist Papers. Our fragile democracy survives by maintaining dynamic tension between the executive, judicial, and legislative branches; the competitive assertion of interest-group rights comes naturally to us. Likewise, in economic affairs, Americans are the ultimate proponents of Adam Smith’s unbridled competitive capitalism.

I hardly mean to challenge the overall efficacy of the American system. But Americans’ adversarial attitude toward anything (for instance, we have 655,000 lawyers, while Japan, with half our population, has 13,000) is causing us untold harm in the changing commercial sphere.

Our enterprises are at war. Outside the firm we go at it with suppliers. Our arms-length, contractual dealings aim to induce rival vendors to engage in bloody price wars with quality often suffering. But now, the most innovative firms, such as Harley-Davidson, are preaching heresy: supplier partnerships and sole-source arrangements. Suppliers and buyers are becoming teammates, dedicated to constant, joint projects aimed at quality and productivity improvement.

Most firms also have long engaged in warlike relationships with customers—the ultimate user of the product or service (witness the auto industry’s approach to warranty claim adjudication), and especially the wholesaler, retailer, franchisee, or manufacturing rep. Yet in today’s more competitive setting, developing lifelong customer relationships is paramount. For instance, teams of company and franchisees, company and distributors, and company and end users must continually be formed to exchange information and rapidly create new products. Only partnership with all members of the distribution-user channel will promote world-class competitiveness.

Joint ventures are a final type of external relationship that must change its adversarial coloring. More and more big firms are turning to small companies to fill voids in their product lines. And everyone is sub-contracting literally everything. Working together with such outsiders as partners is a must today.

But sadly, we reserve our most virulent adversarial behavior for people inside our firms: management versus the union; function versus function. And, once again, it will not do. To be sure, the expert views of people in different functions remain vital; and the union certainly has a legitimate role in numerous firms. But partnership must become the dominant mode of daily dealings. For example, manufacturers, marketers, designers, accountants, salespeople, service people (as well as vendors and distributors) must work together from the inception of every project, to cut the product-development cycle by the 90 percent necessary to survive. Likewise, management and labor must sit on the same, not opposite, sides of the table, to induce rapid quality and productivity improvement.

So what can you and I do? My advice is homely. In the past several months, I’ve been working on a public television program about leadership. I’ve therefore had the privilege of hanging out with some real heroes, such as Pat Carrigan, the first woman ever to manage a General Motors assembly plant; and Winchester, N.H., high school principal Dennis Littky. Both were initially beset with American adversarialism at its worst. But both have prevailed, turning a myopic school board and a testy, local union into full-blown partners.

Both worked like the devil to overcome their tumultuous inheritance, proceeding from bone-deep and eerily parallel beliefs: patience, constant and informal communication, good will, trust, straight-shooting, and radical power sharing.

I call their sagas “tales of unilateral disarmament.” Unilateral disarmament may be a questionable approach in big power affairs, but not in organizational settings. Both leaders intuitively reject an adversarial stance toward anyone. Carrigan and Littky openly admit that they genuinely like people. Carrigan warmly cheers her colleagues’ (union workers’) smallest successes; and Littky celebrates even the tiniest sign of a recalcitrant student’s improvement or a skeptical teacher’s heightened involvement.

Neither spins theories about partnership. Both just live it moment to moment, on the oddball assumption that it’s normal for people to share goals, dreams, and aspirations. They instinctively sit on the same side of the table with any person or group to bring about those goals.

I can’t leave you with a formula. To succeed in our organizational environments, school, or factory, I devoutly believe that we must replace antagonism with partnership. We have to begin by examining our own attitudes and embracing the belief that sharing power and working together is natural and productive, not “soft” and counterproductive.

If there is a first step, it’s hanging out with the other guy, with lips sealed and ears open, to get a feel for his or her attitudes and constraints. Then start talking, laughing, and enthusiastically sharing small successes.

I have not an iota of sympathy for managers. Our role is to garner maximum efficiency and effectiveness in our work places. And that will come only from partnership. It is our job unilaterally—to start making that happen this afternoon.