How to turn rivalries into a competitive advantage

by Elisa Operti , 27.02.23

This year, the Palio di Siena returned after two years’ absence due to the COVID-19 pandemic. The historic horse race dates back to medieval times - while the race itself only lasts 90 seconds, there’s days of festivities in the lead-up, with the city’s competing 17 contrade (neighborhoods) treating their respective horses like royalty. The whole city turns out to watch the race, packing into Il Campo, where the celebration will continue into the night long after the 90-second race has been won. With such high stakes, it’s no wonder rivalries and conflicts will pop up. Elisa Operti (ESSEC Business School) and her colleagues Stoyan V. Sgourev and Shemuel Y. Lampronti examined rivalry networks in the Palio (1), exploring and explaining how managers can harness rivalry.

Learning how to take advantage of rivalries can also be useful today as part of a talent management strategy. The job market remains a tough nut to crack for employers and companies still in throes of a 'talent war' must offer flexible working conditions and higher salaries to recruit and retain top talent. How does this link to a legendary horse race? Managers need to think of new ways to manage this mobility. One way is by managing rivalries between companies, as these rivalries are a constraint that reduces competition for talent. For this, we can look to the jockeys of the Palio.

Choose your friends wisely - and your enemies even more wisely

If love is a tale as old as time, so is rivalry. It’s present everywhere - famous rivalries include Coke and Pepsi, Cambridge and Oxford, McDonald’s and Burger King. But rivalry is not the same thing as competition; while competition refers to a situation in which actors’ goals are opposed to each other (2), rivalry consists of a more personal antagonism between players. In other words, rivalry is personal and based on social relationships, and competition is impersonal.

Rivalry in the Palio

The Palio di Siena is founded on rivalry: held on July 2nd and August 16th, horses representing the city’s contrade (neighborhoods) race three times around the main city square. Each contrada has its own culture and community, and the Sienese are fiercely proud of their contrada. During the Palio, they proudly wear their colors, sing their songs and mock their rivals - rivalries they’ve been exposed to since they were born. Most contrade also have historical allies. For example, Aquila is allied to the Civetta and the Drago contrade, and its rival is the Pantera.

During the race itself, jockeys do their best to win the Palio or prevent the victory of their rival, going so far as to unhorse another jockey or whip another horse. In the lead-up, key players will plot about how they will foil their rival’s race to victory, forming pacts and identifying who their jockey will be. These jockeys aren’t necessarily locals representing the contrada they grew up in: they’re paid professionals providing their services to a contrasa. While they’re expected to show loyalty to their employer, and are paid like a top athlete, they are able to race for another contrada in the future if they so choose. As such, leaders work hard to strengthen ties with them, given the intense talent competition in the market.

A study of rivalry

Just how do these rivalries impact the careers of the jockeys themselves? The researchers examined the careers of 480 jockeys between 1743 and 2011 and conducted interviews with key players including captains, jockeys, Palio experts, and journalists, seeking to understand the drivers of career mobility.

They found that while jockeys have represented different contrade, it’s in less than 2% of cases that they left one to compete for a direct fierce rival. What’s more, jockeys were also less likely to move to the allies of their rival or to the rival of their allies, showing that these ties run deep.

To highlight this, one jockey stated that “You won’t go to the other camp, to the rival, or the contrada that is close to the rival. This is because of the relationships you develop and the emotional bonds. You can’t go on one side and then on the other”.

In the rare situations where jockeys did move to a rival, there were certain characteristics that stood out about the individual. As the labor market became more developed and salaries increased, rivalries were more salient in career choices, as jockeys wanted to manage their reputation and appear reliable to their employers.

Where the jockey was from also played a role. Jockeys who switched teams were more likely to come from the region around Siena, but not from Siena itself or another part of the country. These people may hit the sweet spot between being a Sienese citizen, and the tendency to abide by societal norms that accompanies that, and the suspicion cast upon outsiders that also leads said outsiders to conform to social norms.

Another key factor was their success rate: jockeys with a less stellar track record were more likely to switch allegiances. This may be because they know they have less of a shot at winning, so they are more willing to go to the highest bidder. On the flipside, the top jockeys may also be tempted if they feel the financial reward will outweigh the reputational cost. Comparatively, the average performers are much less likely to go work for a rival.

Framework for managers: Using rivalry for a competitive advantage

These findings can be extrapolated to a more general talent management strategy, with tips on how to retain talent and boost employee commitment. The researchers suggest a three-step framework toMap, Manage, and Leverage interorganizational rivalries (3).

Mapping rivalries

Map the rivalries and allegiances your company has to understand the possibilities. Consider factors like proximity and shared history.
Add information on the rivals and allies of those in your network to better understand the broader competitive landscape.
Identify individuals who may be more vulnerable to competition, using information like past performance, location, and professionalism.

Managing rivalries

Come up with actions to boost employee commitment and loyalty. In Siena, this includes narrative story-telling, cheers, and songs - in a company, this could take the form of narratives and socialization techniques that include all employees.
Encourage bonding between employees.
Communicate about the importance of loyalty.
While these tactics should include all employees, pay special attention to those previously identified as being more sensitive to the challenges and opportunities offered by rivalries.

Leveraging rivalries

Savvy managers can use rivalries to retain employees or even recruit top talent from a rival. How? Strong social bonds can be one effective tool.
In recruitment, managers could look at, for example, new hires in an undesirable location or those feeling unappreciated, perhaps offering these people a bonus to move.
Allied firms can also establish agreements for offering advantages to those who move between their firms.
Establish strategies for when things don’t go your way and you lose an employee to a rival. They can be used as a bridge between companies, and create a network of company alumni.
In recruitment, another strategy is to fish in talent pools that aren’t associated with your rival: perhaps in another area, or those that come from firms that haven’t previously collaborated with your rival.

While these strategies are based on rivalries between organizations, they can also be applied within organizations. Many of us are familiar with having a competitive work environment, and a Monster study suggests that a whopping 46% of participants have left or considered leaving a job because of a workplace rival. In other words, even rivalries within a company can shape employee behavior, meaning managers should pay attention to these internal rivalry networks as well.

With an increasingly competitive labor market and an ensuing war for talent, managers need to pay attention to how these rivalries impact their company and how they can be used “for good”. These competitive markets are still marked by social bonds that shape people’s careers, and by leveraging these rivalries, companies can recruit and retain talent more effectively.

References

Sgourev, S. V., & Operti, E. (2019). From Montagues to Capulets: Analyzing the systemic nature of rivalry in career mobility. Academy of Management Journal, 62(5), 1333-1357.
Kilduff, G.J., Elfenbein, H.A., Staw, B.M. (2010). The psychology of rivalry: A relationally dependent analysis of competition. Academy of Management Journal, 53(5), 943–969.
Operti, E., Sgourev, S. V., & Lampronti, S. Y. (2021). Choose Your Enemies Well: Mapping, Managing, and Leveraging Rivalry. California Management Review, 64(1), 29-46.