Because of the high speed of business today, it's easy for departments to get wrapped up in their own success metrics and adopt a competitive approach in relation to other departments.

Although healthy competition can be motivating, it can also create hidden challenges when teams prioritize individual goals over shared organizational objectives. Over time, such a focus on internal competition can lead to silos—where departments work in isolation, unintentionally slowing down collaboration and hindering growth.

Although a competitive culture might yield some short-term results, the long-term costs are often substantial: growth plateaus, innovation stalls, and sustainable success becomes harder to achieve.

Many leaders today are therefore shifting away from a "growth at all costs" mentality, instead embracing sustainable, cooperative approaches that align departments with the organization's larger vision.

True success isn't just about high-performing teams hitting their own targets; it's about fostering a culture in which collaboration drives growth across the entire organization.

As Scott O'Neil, former CEO of the Philadelphia 76ers, aptly put it, "Culture is what you celebrate and what you tolerate." When organizations tolerate or even encourage siloed behaviors, they unintentionally set a precedent that internal competition is acceptable. Conversely, a culture that celebrates cooperation and shared goals can unlock success holistically.

The Ripple Effect of Internal Competition on Company Culture

At its core, company culture is simply the way people work together every day. It's shaped by daily interactions, shared goals, and the behaviors that organizations either celebrate or allow.

A healthy culture fosters collaboration and shared purpose: Teams across departments work toward overarching goals. However, when internal competition takes hold and divisive actions are tolerated or implicitly rewarded, it can erode the sense of unity and collaboration.

Unchecked, internal competition has a "ripple effect" that leads to lasting discord. It might begin subtly—perhaps one department prioritizes its own success metrics over the company's strategy, or an individual seeks recognition for their team at others' expense. Without intervention, those behaviors become normalized.

A common example of that dynamic occurs between Sales and Marketing. Both share the goal of driving revenue, but their immediate objectives differ. Sales might prioritize hitting short-term targets, while Marketing focuses on brand awareness and long-term customer relationships. Without alignment, those objectives can create tension, with each department viewing the other's approach as conflicting.

And that tension impact not just the two departments; it ripples across the organization, affecting customer experience, product development, and team morale.

Ultimately, those silos cost the organization—productivity declines, innovation stalls, and the company's vision becomes diluted.

Building a Collaborative Culture: Leadership's Role

Leadership is pivotal to setting the tone for a collaborative culture.

When leaders emphasize trust, empowerment, and open communication, collaboration thrives. Still, when leaders fall into behaviors prioritizing control and oversight, they risk stifling the innovation and cohesion they seek to foster.

Leaders must shift from common pitfalls to practices that empower teams and prioritize psychological safety to encourage a collaborative, high-performance culture.

Micromanagement is one of the most common barriers to collaboration. When leaders focus on controlling every detail, they undermine team autonomy and confidence, creating a culture of dependency and compliance rather than creative problem-solving.

Empowerment, in contrast, involves giving teams the tools, resources, and autonomy they need to thrive. Leaders who act as facilitators rather than gatekeepers allow employees to bring their best ideas to the table. That approach inspires collaboration and unlocks innovative potential across the organization.

Psychological safety is foundational for effective cross-functional alignment. When employees feel safe expressing ideas, asking questions, and admitting mistakes, they are more likely to share insights and collaborate.