Three key steps for CFOs in the AI era
CFOs in the AI era: design data-models and workflows that maximize value, redefine productivity, and establish transparent AI governance....
by Linus Dahlander , Henning Piezunka, Arne Thomas Published October 8, 2026 in Leadership ⢠9 min read ⢠Audio available
âOh, I hated him. And that hate carries even to this day.â This is how NBA legend Michael Jordan describes his rivalry with Isiah Thomas, the leader of the Detroit Pistons. Detroit, nicknamed âBad Boysâ for their tough defense, knocked Jordanâs Chicago Bulls out of the playoffs three years running. The Bad Boys built an entire aggressive (sometimes borderline violent) defensive scheme to stop one man â the so-called Jordan Rules. When the Bulls finally swept the Pistons in 1991, Thomas walked off the court without shaking hands.
A similar dynamic plays out among executives. When Bill Ackman bet a billion dollars against nutrition marketing brand Herbalife, the trade hardened into a personal duel with rival investor Carl Icahn, complete with a live shouting match on TV. Ackman staged ever more elaborate presentations to prove his rival wrong, even as the position bled money. It took his fund, Pershing Square Capital Management, years to close it.
Prior research on rivalry, from long-distance runners who shave seconds off their times when a rival is in the race to NCAA teams that play tougher defense against opponents they regard as rivals, suggests it makes people try harder, often leading to an increase in performance. But our research shows a less favorable outcome: employees who show up to fight a rival are, from the organizationâs perspective, a lesser version of themselves and tend to contribute less to team performance.
When players faced a personal rival, their individual scoring rose by about 5%. But their team's performance with them on the court fell by nearly a third.
Rivalry is less common and more personal than ordinary competition. The construct was first explored in the business context by Gavin Kilduff and colleagues to capture and comprehend a relational form of competition in which the stakes feel higher. Think of the analyst whose forecasts are benchmarked against one peer working for a competitor, or the law firm partner whose pitches keep coming down to the same opposing partner. Rivalry can lead to the itchy feeling that someone you compare yourself with is outperforming you.
Our research points to a dynamic that managers are unlikely to spot in the moment. Even if rivalry increases effort, as the research by Kilduff and colleagues suggests, it also shifts people toward individual performance goals: the desire to beat one specific person. It draws attention to the contributions that are seen and credited to a single name: closed deals for salespeople, published reports for analysts, and headline numbers for managers. Yet much of what creates value in an organization, away from the headline-grabbing outcomes of rivalries, goes unnoticed: a lead quietly passed to a colleague or a problem someone prevented so nobody ever knew it existed. How can we better understand this dynamic so that leaders can protect their organization from the unintended downsides of rivalries?
What looked like a more motivated player raising their game against a rival was, from the teamâs perspective, a worse player.
Studying the issue required a setting most companies canât offer. We needed to observe the same person in rival and non-rival situations and measure both their visible individual output and their contribution to the organization. In a regular company, that is close to impossible. You can observe what a salesperson sold, but you canât see what they would have contributed had they not been targeting a particular rival that quarter.
The NBA is one of the few places where the comparison can be made cleanly. Players face dozens of opponents over a season; some are personal rivals, but most are not. The same player can be tracked and compared across both situations. To identify rivalries, we used the leagueâs ranking of its 70 greatest player rivalries (think LeBron James vs. Stephen Curry, or Jordan vs. Thomas). The NBA also records a measure called net rating: a teamâs point differential per 100 possessions while a given player is on the court.
Suppose a team consistently outscores its opponents when a player is on the floor; then a high net rating captures this statistic. It credits the pass that sets up the assist and the sprint that drags a defender out of position, whether or not it appears next to his name in the overall match statistics âboxâ score. Over time, it shows who helps the team win. The net rating comes closer than any metric we know to capturing an individualâs total contribution to their organization.
We pulled data from 23 seasons and analyzed roughly 35,000 player-game observations. The finding was clear. When players faced a personal rival, their individual scoring rose by about 5%. But their teamsâ performance with them on the court fell by nearly a third, compared to regular, non-rivalry games. The same player, with the same training and skills, produced different results depending on whether a rival was across the court. The findings were robust across different statistical models and measures. What looked like a more motivated player raising their game against a rival was, from the teamâs perspective, a worse player.
Most executives hearing about underperformance picture a motivation problem: someone not trying hard enough. Rivalry produces the opposite effect: someone trying too hard at the wrong things.
A word on translation before carrying our findings into your organization. NBA players are stars, the games are zero-sum, the sample is all male, and every move is filmed and counted. Your workplace is none of those things. Rivalries among your people are quieter and harder to detect, and your measurement of individual contribution is weaker than that of any coachâs, so the gap between looking good and being good is harder to catch in a company than in an NBA arena. But psychology travels: an ongoing comparison with a rival, the desire to outshine them, and a pull toward whatever is visible.
Most executives hearing about underperformance picture a motivation problem: someone not trying hard enough. Rivalry produces the opposite effect: someone trying too hard at the wrong things.
Why is rivalry bad for the team? We found two mechanisms at play. The first is excessive risk-taking. Rivalrous players took more low-percentage shots, particularly contested ones where a defender was close enough to interfere. Translate this to a corporate setting, and you get the dealmaker who overpromises delivery dates to win a major account, the analyst who makes a bolder and riskier call to stand out, the executive who picks the visible acquisition over the quieter one that would have created more value. Christopher To and colleagues have shown that rivalry pushes people toward riskier choices to win. Some risk-taking is healthy. Rivalry, in our data, pushes it past that line.
The second mechanism is the one leaders most need to understand: organizational overreliance. Coaches gave rivalrous players roughly a minute and a half more court time. Because playing time is fixed, those minutes came at the cost of teammates who stood on the sideline, ready to step in. The focal player attempted about one extra shot per game; his teammates attempted fewer and scored less. The organization reorganized itself around the rivalry, handing more responsibility to the person locked in the personal contest and stepping back to let them shine, even to the detriment of the whole.
How would this play out in your organization? The salesperson who is âreally gunning for that accountâ gets a larger territory. The engineer who is âthe only one who can really go up againstâ a competitorâs lead architect gets the high-profile project. The colleague who is âin the zoneâ gets more airtime in client meetings while others quietly defer. Looking back at the duel with Icahn, Ackman did not unwind his fundâs position. The fight ran for five years and became Pershing Squareâs most visible campaign. We often see heightened motivation and amplify it without considering the costs.
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A common assumption among managers that we often hear in executive classrooms is that conflicts between individual incentives and organizational outcomes can be resolved by better measurement â better KPIs, tighter monitoring, or some new glossy system. This is a version of the agency problem economists Bengt HolmstrĂśm and Paul Milgrom diagnosed decades ago: when one task is easier to measure than another, sharper incentives on the measurable one quietly pull effort away from the rest. But the NBA setting questions that assumption. Coaches watch. Statisticians crunch the numbers. Performance is measured at a level of granularity most companies can only dream of. And yet the pattern still appears, even though the net rating for each player is available.
We donât know of a one-to-one equivalent of net rating for business, but one can be approximated by posing the following questions: How does the unit perform when a person is present versus absent? Do projects ship better, and do the colleagues around them grow or shrink? Relating staffing histories to team-level results is the corporate cousin of net rating. Research by JosĂŠ Uribe and colleagues suggests that managers already do this in subjective performance evaluations. Basketballâs net rating applies the same principle, but more precisely.
Companies amplify rivalry to push people to work harder. Name the competitor, point at the enemy. The assumption is that the energy is used to perform work that benefits the organization. Some of it does, but a share goes into outshining the rival without necessarily helping the organization. Before you reach for rivalry, ask what behavior it actually rewards. Whether rivalry helps or hurts seems to depend on horizon and level. Aimed at long-run capability, it can galvanize: Komatsu famously rallied a generation of engineers around the ambition to encircle Caterpillar and built world-class machines in the process. Point it at short-term individual contests instead, and it can backfire. When Sears was carved into dozens of units competing for capital, executives fought for visibility while shared functions decayed, and the company slid toward irrelevance.
Who got the bigger account, the keynote slot, or the high-profile project? Was it because of their personal motivation or âfireâ against a specific competitor? Ask whether you chose them because they were the best fit, or because the competitive narrative made the choice feel compelling. Then, follow the outcomes. What were the results for the organization? Did they match your expectations? What happened on the odd occasion you didnât choose that person?
Pick any KPI that impacts recognition, promotion, or pay. Does that KPI motivate individuals to deliver contributions your organization truly needs, or just ones that are easy to measure? The metrics that fail this test are likely ones that rivalry can exploit to the detriment of the organization and should be reconsidered or replaced. When measuring rewardable performance, add a question or two that a rivalrous employee cannot game by producing more visible output: how did the teams this person collaborated with perform? Would their colleagues choose to work with them again? If your annual review form is just a list of individually attributable outputs, you may miss other contributions that could make your organization excellent.
Professor of Strategy and the Lufthansa Group Chair in Innovation at ESMT Berlin
Linus Dahlander is Professor of Strategy and the Lufthansa Group Chair in Innovation at ESMT Berlin. He holds a PhD from Chalmers University of Technology and did a postdoc at Stanford. He studies how organizations generate and select ideas to innovate.
Professor of Management at the Wharton School of the University of Pennsylvania
Henning Piezunka is Professor of Management at the Wharton School of the University of Pennsylvania. He holds a PhD from Stanford University and studies how organizations compete, innovate, and scale through strategy, collaboration, and entrepreneurship.
Assistant Professor of Strategy at the Amsterdam Business School, University of Amsterdam.
Arne Thomas is an Assistant Professor of Strategy at the Amsterdam Business School, University of Amsterdam. He holds a PhD from TU Berlin and did a postdoc at ESMT Berlin. He studies the microfoundations of organizational strategy, innovation, and performance.
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