Let Employees “Have At It” When It Comes to Using Competitor Products

This post is part of a series on Stakeholder Engagement sponsored by Jurat Software.
Image from www.torbenrick.eu

Intuitively, it would seem to be a good thing when a company has a band of loyal employees who diligently use the products they make over those of their competitors. Employees who “fly the company flag” show their solidarity by demonstrating a healthy belief in the collective mission to promote the products that they work long and hard to create.

But what happens when such loyalty engenders a myopic worldview, insulating employees from the realities of the competitive market in which they operate? The dangers of encouraging such a corporate monoculture is the subject of a Harvard Business Review article, that warns companies against “criminalizing” employees who move to the “dark side”  by adopting competitor products.

The article uses Nokia as an example of a company that has missed a key market development within its industry – the trend away from traditional handsets towards smart phones, hitting the company hard. According to Gartner, Nokia held 40% of global market share for handsets in late 2008, falling precipitously to just 25% in Q1 2011. The story goes that Nokia’s new CEO, Stephen Elop, was disappointed to see how few hands went up when he asked how many employees used Android or iPhones. The reason for his disappointment is that he’d like his staff to exhibit the intellectual curiosity to see what they are up against. Elop has only been at the helm of the company since September 2010, so maybe before his time, using competitor products was frowned upon. If so, Nokia is not alone.

Daily Tech wrote last year about Microsoft’s culture of discouraging the use of competitor products, claiming that in June 2009, the company introduced a policy of not covering employee cell phone bills unless they used a Microsoft powered device. Furthermore, it was reported some employees went to the length of disguising their Iphones with generic cases, such was the sense of needing to keep things in-house.  Doesn’t this approach create a  head-in-sand culture, while stifling the ability to recognize competitor innovation?

Wouldn’t it be better for companies to engage with their employees on an open and transparent basis, rather than enforce such loyalty to company products and stimulate clandestine behavior? Both Nokia and Microsoft are established industry giants struggling to maintain their dominance and maybe young and agile start-ups can show them the way.

For example, Marc Pincus, the CEO of wildly successful gaming company Zynga, appears to impress upon his staff the value of embracing competitor products. SF Weekly reported last year that a former employee claims he was told by Pincus, “I don’t f*****g want innovation…..You’re not smarter than your competitor. Just copy what they do and do it until you get their numbers.” OK, maybe an extreme example! The potential for copyright infringement aside, it’s probably not the best message to warn the employee away from innovation altogether, and not exactly sensitively put – but you get the point. You can best learn from your competition if you don’t put the barriers up. How much better would Detroit auto makers have fared if their executives had been given a car allowance to buy whatever vehicle they wanted, rather than being furnished with one of their own increasingly uncompetitive products back in the ’80s?

Many company’s claim their employees are their most valuable stakeholder group. They are the engine that keeps the wheels turning – and in fast changing markets, they are the company’s brain-trust that can spot the green shoots of innovation – the company culture should be set-up in such a way that hands-on competitor curiosity is just part of doing business.

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Phil Covington holds an MBA in Sustainable Management from Presidio Graduate School. In the past, he spent 16 years in the freight transportation and logistics industry. Today, Phil's writing focuses on transportation, forestry, technology and matters of sustainability in business.

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