DOES
COMPETITION MAKE US MORE CREATIVE?
Competition can bring out the best in many
people in many jobs, but can it make employees more creative? The answer lies
in the Goldilocks Zone.
Competition
can bring out the best in salespeople, athletes, and participants in hot dog
eating contests—but can it make employees more creative?
A recent working paper by Daniel P. Gross finds that
competition can motivate creative types to produce radically novel, untested
ideas, but that too much competition pushes them in the opposite direction.
The findings
could help organizations generate more innovative ideas, sharpen R&D, and
even improve “bake-off” competitions between vendors used to award contracts.
Gross, a
postdoctoral fellow at Harvard Business School and the National Bureau of
Economic Research, reports his findings in Creativity Under Fire: The Effects of
Competition on Creative Production. (Gross will join the HBS faculty as an
assistant professor in the Strategy unit in fall 2016.)
“We tend to
study innovation in terms of inputs like R&D spending or outcomes like
patents,” says Gross, “but creativity is really about what happens in between.
It’s really about this process of exploring new and untested ideas.”
Peering
inside that black box to observe the creative process and then understand how
it works is very difficult, however. Gross showed some creativity in finding an
innovative way to do just that.
His study
looked at graphic design competitions that take place via online platforms that
help companies commission custom logos and other commercial graphics. After
providing information about its business and goals, a company sponsors a
tournament of successive rounds where designers submit proposals to capture the
winner-take-all award. Following each round, designers can modify their
submissions by a little or by a lot after feedback by the sponsor.
As Gross
analyzed data from one of these websites, he noticed a pattern.
“You could
see very clearly when participants were tweaking a single idea, over and over,”
he says. “Other times, they [would] branch out and completely change course. I
wanted to understand what was driving that decision.”
Software was
used to compare multiple submissions and numerically calculate their
similarity. At the same time, Gross was able to view the ratings—from one to
five stars—that sponsors had given to different designs throughout each round
of the tournament.
By
understanding how participants changed their designs in response to feedback,
Gross had a better understanding of the incentives driving their creative
choices and what spurred them to try out new ideas.
“Think of
them as having a choice between three options,” says Gross. “They can try
something incrementally different by making a minor modification; they can try
something radically different by making a fundamental departure; or they can
stop investing, stop trying to improve their product.”
Analyzing
data from 122 tournaments on the website, Gross found that designers with high
positive feedback scores were more apt to follow the first course, discarding
creativity in favor of playing it safe by sticking with the design that was
highly rated. Why mess with success?
“Once they
get their first five-star review, they generally make a full transition from
experimenting to tweaking,” Gross says. “The similarity to their previous work
basically goes from 0 to 100.”
THE COMPETITIVE EDGE
Where the
story gets interesting, however, is when a participant faced competition from
other top-rated designs. Going up against just one other five-star designer
shook off the participant’s complacency by about half, Gross says, spurring him
or her to once again experiment with substantively different ideas rather than
producing incremental variations. “It’s more like a 50,” he says.
As the
number of top-rated competitors increased, however, a discouragement effect
kicked in. And once they were up against four to six high-rated competitors,
they were likely to stop investing altogether.
Overall,
Gross found that participants were most given to produce designs that were at
least 70 percent original when they faced just one or two competitors—the
“Goldilocks” zone where competitive pressure is neither too low nor too hot,
just right, and creativity shines forth.
Gross sees
this as a very clear indication of the relative risks and rewards of the
creative process.
“Taking a
chance on an untested, new idea is risky, and if the [potential] payoffs are
too low—in the probability that it will either improve on your existing
product, or produce incremental market share in a crowded market—then it’s not
worth pursuing,” he says.
IMPLICATIONS FOR MANAGERS
The
implication for managers is that sharp incentives can be effective in eliciting
creative effort from employees—but require balanced competition to function
most effectively.
“As a
professor of mine once put it, you want to scatter your seeds widely to see
what sprouts,” says Gross. “But you ought not try to make a thousand flowers
bloom, or else they will all turn out weak. To get a few beautiful blossoms,
you have to thin the flowers to allow the strong ones to grow.”
Gross
suggests tasking a group of employees with a problem to see what solutions they
develop, but then focusing the competition to just a few people with the most
powerful ideas, transitioning the other employees to projects where they might
have comparative advantage.
Similarly,
when soliciting bids from suppliers to procure a new product or service, it may
be most effective to cast a wide net at first, but then bound the competition
to a smaller bake-off to spur the most original results.
“In a
procurement setting, you want to manage the intensity of the competition,” says
Gross, “eliminating the low-performing bids and limiting the competition to
only a few high-quality contenders—fortunately, that’s what we often see in practice.”
While we may
never be able to completely understand the kind of creative energy that goes
into creating an artistic masterpiece or a hit new song, we may at least be
able to spur individuals to become their best creative selves.
BY MICHAEL
BLANDING
http://hbswk.hbs.edu/item/does-competition-make-us-more-creative?cid=spmailing-12435478-WK%20Newsletter%2011-18-2015%20(1)-November%2018,%202015
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