Most organizations assume the path to better performance is straightforward: Motivate individuals. Reward top performers. Rank employees. Offer incentives for beating targets. At first glance, the logic seems sound. If individuals push harder, the organization should perform better.
But many leaders eventually discover an unintended consequence. Systems designed to reward individuals often create internal competition that quietly weakens the organization itself. People begin protecting their own results. Information flows more slowly. Cooperation becomes optional instead of natural.
W. Edwards Deming warned leaders about this dynamic decades ago. He argued that organizations are not collections of independent performers—they are systems. As Deming explained, “A system is a network of interdependent components that work together to try to accomplish the aim of the system.”
A system is a network of interdependent components that work together to try to accomplish the aim of the system.
— W. Edwards Deming
When leaders forget that truth, incentives can pull people apart instead of bringing them together. The shift from “Me” thinking to “We” thinking is often the difference between an organization that struggles internally and one that improves steadily over time.
A retail store that learned the difference
Karen owned a small clothing boutique on a busy downtown street. Her store had loyal customers and a hardworking team of associates. Like many business owners, Karen believed motivation was the key to growth. To encourage stronger sales, she introduced commissions and a monthly leaderboard recognizing the store’s top sellers.
At first, the results looked promising. Sales increased slightly. Associates competed enthusiastically. The leaderboard created excitement on the sales floor.
But slowly, subtle problems began appearing. Customers sometimes waited longer for help even when several employees were nearby. Associates quietly argued about who greeted a shopper first. Employees hesitated to assist customers who were already speaking with another associate.
One evening after closing, Karen sat down with her store manager, Miguel.
“I thought commissions would motivate everyone,” Karen said. “But lately the store feels tense.”
Miguel nodded. “I’ve noticed it too,” he replied. “Everyone’s watching their own numbers. If someone else starts helping a customer, the rest of the team just stays back.”
Karen began reviewing the previous three months of store data. Sales had increased slightly. But other indicators were moving in the wrong direction. Returns were rising. Customers were buying fewer items per visit. A few online reviews mentioned inconsistent service.
Karen leaned back in her chair. “Maybe we’ve built a system where everyone is competing inside the same store,” she said.
Miguel shrugged. “That’s how retail usually works.”
Karen paused for a moment. “Maybe that’s the problem.”
The moment the system became visible
Deming warned leaders about systems that reward individual competition. “The merit rating nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, and nourishes rivalry and politics,” he wrote.
The merit rating nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, and nourishes rivalry and politics.
— W. Edwards Deming
Karen suddenly saw her commission system differently. The leaderboard rewarded individual wins—even when those wins hurt the customer experience or the team. In other words, the system encouraged employees to think “Me” instead of “We”.
Rather than reacting quickly, Karen decided to try a small experiment. First, she removed the leaderboard ranking associates against one another. Second, she replaced individual commissions with a shared store bonus tied to overall performance and customer satisfaction. Finally, she changed the question she asked during team meetings. Instead of asking who made the most sales, she began asking something different: “How well did we serve customers together?”
Within weeks, Miguel noticed subtle changes across the store. Associates stepped in to help each other without hesitation. Customers were greeted faster. Product knowledge began flowing more freely between employees. The tension that had crept into the store started to fade.
And the results followed. Average purchase size increased. Customer reviews improved. Repeat customers returned more often. Sales rose—not because individuals competed harder, but because the system itself worked better.
Where managers often get misled
When results decline, many of us instinctively focus on individuals. We assume people need more motivation, clearer goals, or stronger incentives.
But Deming taught that most performance differences come from the system people work within. When we create systems that reward individual victories, people naturally begin protecting their own results. Collaboration becomes risky. Helping a colleague can feel like sacrificing personal success.
From the outside, these behaviors may look like personality issues or poor attitudes. In reality, they are predictable responses to the environment we created. When we design systems that reward “Me,” we should not be surprised when people act that way.
The alternative is to design systems that make cooperation the easiest and most natural choice.
Actionable Takeaways
Leaders who want to move from Me to We do not need dramatic changes. Small adjustments in how work is designed can dramatically shift behavior.
Examine your incentives. Ask whether your current rewards encourage people to outperform colleagues—or to improve the results of the entire organization.
Look at how success is discussed. If conversations focus primarily on ranking people, the system may be encouraging competition rather than cooperation.
Encourage shared responsibility. When employees help one another succeed, recognize the behavior as valuable to the whole system.
Focus on improving the system. Instead of asking who performed best, ask what changes would help everyone perform better.
These small shifts begin moving an organization away from individual victories and toward a shared aim.
The power of “We”
When organizations shift from Me thinking to We thinking, something remarkable happens. Cooperation becomes normal. Problems surface earlier. Learning spreads faster. Customers feel the difference because they are served by a coordinated team rather than disconnected individuals. The organization becomes calmer, more capable, and more resilient—qualities that, over time, can become a genuine competitive advantage.
The lesson is simple. When leaders design systems that reward Me, they get competition. When leaders design systems that encourage We, they get cooperation.
And cooperation is where the real strength of an organization begins.
