The New York Times
A BIGGER PRIZE
How We Can Do Better Than the Competition
By Nancy Koehn, NY Times
Review Publication Date: April 11, 2014
In this bold sociology of organizations, Heffernan sets her sights on an issue that cuts across industries, nations and individuals: Why is our obsession with winning not only failing to deliver the benefits we expect, but leaving us ill equipped to solve the problems competition creates?
A former BBC producer and multimedia chief executive, Heffernan is the author of several previous books. Here, she argues that our faith in competition as a tool to promote efficiency, creativity and innovation is both misplaced and costly. She marshals a range of evidence - some relevant, some less so - to support this thesis. For example, as competition increases to get into top-ranked colleges, so does cheating among high school students. As sports become fiercer and more lucrative, injuries and doping rise even as careers shorten. And as meatpackers race to dominate global markets through lower prices, falling standards cause terrible cruelty, environmental degradation and dangerous, dead-end work.
In her overview of the recent mortgage market, Heffernan makes a serious case that competition greatly exacerbated the 2008 financial crisis. Sales representatives competed for commissions; large banks fought for business and loosened their loan requirements (Countrywide, Heffernan notes, would match any competitor's offer "even if it was reckless or extravagant?); and ratings agencies, keen to keep financial institutions as clients, were reluctant to downgrade asset bundles. "Classic economic theory turned out to be wrong," she writes. "A competitive market had not diversified risk but concentrated it... When the market crashed, there were no safe havens left."
Heffernan laces her book with counterexamples of educators, companies and scientists who have found ways to encourage collaboration instead of competition. She might have benefited from fewer, more in-depth examples of both the costs of competition and the viable alternatives. Still, ?A Bigger Prize? is an important call to build more collaborative, trustworthy and enduring institutions.