A vice president for a large financial services company asked me about internal competition.

He was thinking about creating a scoreboard to show branch managers how their particular location stacked up against other branches. The scoreboard would contain metrics from a variety of categories such as customer satisfaction.

The idea was to motivate managers to find innovative ways to improve the performance of their branch.

My answer surprised him. I told him I thought the scoreboard would lower performance by causing three problems. Here's my explanation.

1. Scoreboards reward selfishness

A branch manager might come up with new ideas to earn a spot at the top. But she might be reluctant to share those innovations with another manager she views as a competitor.

Managers are incentivized to keep good ideas to themselves.

2. Scoreboards discourage laggards

What if a branch manager sees his branch is far behind on the scoreboard? He might feel embarrassment that his branch is performing so poorly, but that embarrassment might not cause him to try harder as intended.

It may make him feel uncomfortable, disengaged, and defensive. Or he might just stop trying.

3. Scoreboards create inconsistency

Customers might be delighted at a high-performing branch, but what happens when they visit a low-performing branch? A service failure might happen just because best practices aren’t shared internally.

It’s hard to trust a brand when the experience varies widely.

Raise the Bar Higher Instead

The vice president would be better off encouraging all branches to elevate to the same high standard. Customers are more likely to do business with a company that offers a consistently good experience.

Starbucks earns loyal customers with remarkable consistency. Here are the Yelp ratings for the 10 Starbucks locations that are closest to my house:

Every single one is 3.5 or 4 stars.

Very few people would say Starbucks is their favorite coffee shop or serves the best coffee. But Starbucks is incredibly consistent and dependable. No matter where you are in town, you can expect a similar experience.

The opportunity for Starbucks in my neighborhood is also clear. The chain would have an even stronger presence if they could get all of their stores to a 4 star rating.

My advice to the financial services branch manager was the same advice that seems obvious for Starbucks when you look at this graph: raise the bar at all locations.

The competition isn't against other locations. It's against external competitors. And the way to do better is to raise the performance of all locations while maintaining consistency.

Here are a few ways to do that:

Discover what top-rated locations are doing differently and share those best practices.
Uncover what low-rated locations are doing differently and help them improve.
Encourage all locations to raise their level of service together.

I call this process “finding your Betty.” It’s named after a customer service rep named Betty who helped an entire team improve its performance by sharing a best practice.

Take Action

The best solutions are often counterintuitive.

Lots of companies use leaderboards and contests to motivate employees. That doesn’t make it a good idea. Customer-focused teams rely on collaboration and continuous improvement to help everyone do better.

Here are two resources to help you find more counterintuitive solutions: