Edgeware - Principles


Mix cooperation with competition.

It’s not one or the other.


Trillion Dollar


Nature competes. If you have ever glimpsed a lion stalking and devouring an elk on a PBS program before quickly changing the channel, you know this to be true.

Nature cooperates, too. Observe members of an ant colony working together to produce intricate ant-mound societies.

These dynamics are not mutually exclusive. Natural and biological systems display both cooperation and competition. And so can corporate, business and sociological systems.

Perhaps no one has explored this paradox with more vigor – or success – than Dee Hock, former chief executive officer of Visa International. The corporation’s growth averages around 20 percent annually; it serves around a half-billion clients in more than 200 countries; sales volume is now passing $1 trillion.

In the massive, sprawling Visa system, the cooperation-competition paradox is a fundamental part of the structure. Fierce competition occurs among member institutions and banks that issue Visa cards, set prices and develop services … all while going after each other’s customers. But these institutions must also cooperate: for the system to work, merchants and vendors must be able to accept any Visa card anywhere in the world, regardless of who issued the card. This mixture of cooperation and competition has allowed the system to grow globally, seemingly immune to traditional constraints of language, culture, currencies, politics or legal codes.

"We are used to thinking about competitions in which there is only one winner, competitions such as football or chess. But the world is rarely like that. In a vast range of situations, mutual cooperation can be better for both sides than mutual defection.The key to doing well lies not in overcoming others, but in eliciting their cooperation."

"A scan of history shows that technical innovations almost always arise as a particular combination of well-known building blocks. "

One popular expression of the competition-cooperation paradox is the “tit-for-tat” strategy. It came about when political scientist Robert Axelrod tested a variety of competitive strategies using computer simulations. Time and again, the simplest strategy of all took the prize in this complex contest: University of Toronto psychologist Anatol Rapport’s “Tit-for-Tat” program started out by cooperating on the first move, and then simply did exactly what the other program had done on the move before. The program was “nice” in the sense that it would never defect first. It was “tough” in the sense that it would punish uncooperative behavior by competing on the next move. It was “forgiving” in that it returned to cooperation once the other party demonstrated cooperation. And it was “clear” in the sense that it was very easy for the opposing programs to figure out exactly what it would do next. Thus, some have proposed the heuristic that “nice, tough, forgiving and clear guys finish first.”

In his 1984 book, The Evolution of Cooperation, Robert Axelrod showed the profound nature of this simple strategy in its application to all sorts of complex adaptive systems – trench warfare in WW1, politics and even fungus growth on rocks. Commenting on this strategy, Waldrop said, “Consider the magical fact that competition can produce a very strong incentive for cooperation, as certain players forge alliances and symbiotic relationships with each other for mutual support. It happens at every level of, and in every kind of, complex adaptive system, from biology, to economics, to politics.”

"It’s against the interests of either predator or prey to eliminate the enemy. That’s clearly irrational, yet that is clearly a force that drives nature."

A good leader would be one who knows how to, and prefers to, cooperate, but is also a skillful competitor when provoked to competition (that is, a nice, forgiving, tough and clear person). Note that this strategy rejects both extremes as a singular strategy. While much is said these days about the importance of being cooperative and positive-thinking in business dealings, the always-cooperative leader may find his or her proverbial lunch is being eaten by others. Similarly, while sports and warrior metaphors are also popular in some leadership circles, the always-competitive leader may find himself or herself on the outside looking in as alliances are formed.

"“[A] concept that is deeply ingrained in biology is competition.This is often described as the driving force of evolution … . However, there is as much cooperation in biology as there is competition. Mutualism and symbiosis, organisms living in a state of mutual dependency … are an equally universal feature of the biological realm.Why not argue that cooperation is the great source of innovation in evolution?”"


Next | Previous | Return to Contents List

All Components of Edgeware Principles Copyright 2000, Curt
Lindberg, Complexity Management, VHA Inc. Permission to copy for educational
purposes only. All other rights reserved.