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How to create constructive internal competition
16.07.2019

I'm sure you've all heard that competition is a very useful thing in theory. It stimulates development, service quality, cost reduction and many other positive effects. It would be logical to take advantage of this opportunity in the retail network, creating conditions for competition between its stores.

At first, such an approach may encourage directors to do their job better in order to become leaders and gain preferences. But the effect can be exactly the opposite if the competition proves to be destructive.

How to avoid destructive domestic competition

Imagine a general meeting at the central office of the retail network, where the CEO publicly discusses the financial performance of each store. He praises outstanding directors emotionally, shakes hands with them, presents awards and jokes that they will take his place from day to day. And then he takes on the low-performing staff and no less emotionally, without hesitation, describes their poor performance. 

CEO's goal is simple: to make the "underdogs" work better. Some may be affected, but others may find the management's decision unfair and will not change anything, some may simply quit. As you can see, the harm to the retail network from such domestic competition will be greater than good. Because it demotivates.

How to make internal competition constructive

It's impossible without your involvement. The aim in this case should not be to fit the "underdogs", but to increase the performance of the entire network so that the "weak" reach out to the leaders and the "strong" work even better. It is necessary to create such conditions, in which it would be possible to win not by hindering others, but only by increasing personal efficiency.

To create constructive competition, several conditions must be met:

  1. The appeal of victory.
  2. Insignificance of defeat.
  3. No "victory of one = defeat of the other" dependency.
  4. Transparent conditions.
  5. Availability of results information.
  6. Modern constructive feedback from the manager.

In general, the conditions are obvious, but we will consider paragraphs 4 and 5 in more detail.

Transparent conditions

Imagine a sporting event in which participants do not know what rules are used to score points. Even if they do get involved in the game with excitement, they will quickly cool down to it, because their actions give unpredictable results.

The same way in the competition within the retail network. Managers should have a good understanding of the criteria against which they will be compared and be able to influence these criteria. For example, comparing stores by absolute sales volume is not correct, because it is highly dependent on the size, location and many other factors that the store manager cannot influence. But to estimate the Close Rate index is correct, because it significantly depends on the work of the store.

Availability of results information

Let's draw an analogy with sports. Imagine a football match where you can't know the current result. The teams play, try, score goals, but do not know who is winning and who is losing. Only after the final whistle the score is on the board. That's absurd.

Therefore, it is equally important to provide all store managers with information on interim results. In this way, they will be able to assess the success of their actions and, if necessary, adjust their behavioral strategies. This, in turn, will add a gamification element to the competition, spurring excitement and the desire to win.

Use MD Audit to create a constructive internal competition

Our system has everything you need for this:

  • uniform criterion for performance evaluation — checklist is the same for all;
  • wide analytical possibilities for comparison of stores with each other on a number of features;
  • availability of analytics at any time.

For example, you are organizing a contest for the cleanest shop, the winner of which you promise a prize. To do this, create a checklist with questions that assess the cleanliness of the sales floor and assign its regular assessment. Such competition will be constructive, because all conditions are met:

  • winning the competition depends only on the work of the store itself;

  • conditions of participation and evaluation criteria are transparent — the checklist is available for viewing and execution by all participants of the contest and it is the same for all;

  • at any time, the store manager can see a report on the execution of the checklist and compare their performance with the results of other stores.

Thus, constructive competition is organized, which ultimately benefits the entire retail network.

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