Competition Is Good–Except When It Isn’t

It’s understandable why tire company CEO Richard Smallwood has such a competitive nature.

His upbringing was the Northern Californian equivalent of a Charles Dickens novel. When he was 12, his parents divorced. Smallwood went to live with his mother, who began to suffer from schizophrenia. His father soon had his mother declared unfit and took away Smallwood’s two youngest brothers. Smallwood and his sister remained with their mother, living off $350 per month in child support. Occasionally, they didn’t have a home of their own to stay in, and depended on the charity of friends. To this day, he sometimes wakes up from a nightmare that he is homeless.

In the early ’80s, when he was around 20, Smallwood took a break from college and got a job at the local sawmill, lifting enormous, wet pieces of lumber for 12 dollars an hour. “The worst job at the mill,” he recalls. He would lose seven pounds of sweat in the first two hours of his shift, he says.

The experience left him scared. Smallwood realized this could be his future: backbreaking, low-wage labor. And it reinforced something he had long had in him: a hypercompetitive nature. “I didn’t ever want to be poor again,” he recalls, “since it wasn’t much fun the first time.”

So he went back to college, took up debate, and applied himself to his studies. “I had to win at every single thing I did,” he recalls. “If I was good at three things but then someone was better than me at the fourth, then I was loser. I had to be the best at everything, and if I couldn’t be the best, I wouldn’t do it.” He got a 4.0, graduated, and took a job at a tire company called Yokohama, which he pursued concurrently with an MBA.

In business, his competitive streak naturally served Smallwood very well. He entered Yokohama in the high-performance tires marketing department. At work, if there was anyone to compete with in public speaking, he had to out-public-speak them. If there was anyone who seemed squeamish about getting their hands dirty, Smallwood would dive in and drag tires across an airport. Soon enough, he was promoted to account manager, then regional salesman, then sales management. (Today, as CEO of the tire company Falken, he gives the highest-performing sales team a trip for dinner anywhere in the world.)

But at the same time Smallwood was building his successful career, he also began to build something at least as important: his family. He met his wife, Bari, in an early-morning math class in 1984. “I figured any girl that looks that good at 7 a.m., I like,” he recalls. They married, giving birth to two sons: Cody in 1993, Jeff in 1996.

At first, it seemed that there were ways in which Smallwood’s competitive nature suited his new job as husband and father. He made sure to make time to coach their soccer teams. Despite the fact that he traveled often for work, he made sure to be home for every possible dinner he could. He recalled his own mother’s devotion; even while struggling with schizophrenia and working low-wage, part-time jobs, she had managed to save up enough money to buy her son a suit for his college debate activities.

But a few years into Smallwood’s marriage, he discovered how his hypercompetitive nature might not always suit the domestic arena. It was New Year’s Eve, and he was playing Monopoly with his wife and mother-in-law. At one point, he and his mother-in-law made a verbal agreement around some aspect of the game: “If you do this, I’ll sell you a hotel.” But then, when the moment came, his mother-in-law changed her mind.

“She was in breach of verbal contract!” he says now. He was furious. “I felt it was a violation of the rules.” It was just shy of midnight on New Year’s Eve, and to make a point, he decided he’d drive home in a huff, 50 miles, rather than spend the night at the in-laws.

The next morning, he felt like an idiot. He drove all the way back, and apologized.

Yet competition is so ingrained in his nature, he wasn’t able to promise he wouldn’t do it again. “It takes just as much energy to play a board game as it does to run a company,” he says now. “Honest to goodness, the competition for me is the same between the two. In order to win, you have to think deeply, do all these multiple scenarios, and it’s the same thing when you run a company. I literally can’t distinguish between the two, the energy required to do one or the other is so darn similar.”

So he came to an agreement with his wife and in-laws: When the family plays a game, he’ll simply sit them out. He reads a book or goes into the garage to build something.

The garage, too, though, has become a nexus of sometimes toxic competition, he admits. All through the youths of his two sons, Smallwood invited Cody and Jeff into the garage to learn how to use various tools: a table saw, a band saw, a lathe. Cody loved working in the shop; Jeff seemed to prefer to hang out indoors with his mom.

Only about three years ago, though, did Smallwood learn why. He brought up with Jeff that he was somewhat disappointed by how little time he spent in the shop with his dad. “I’m sick of competing with Cody,” said Jeff.

Smallwood had had no idea that what was supposed to be an enjoyable pastime had become an arena of unpleasant competition for his younger son—and that it had driven him away from something that should have been pleasurable. “It shocked me,” he says now. “How’d I miss that one?”

Managing his competitive impulse has been something of a lifelong lesson for Smallwood, and he admits he’s still learning it. “For me, competition is good. It helps create the best result, ultimately,” he says, taking the broad view. “But at the same time, you can’t let that competition get out of hand. That’s when you see people cheating. That’s when you see people get ruined. So it’s good, but it has to be kept carefully within check.”

A good leader, and a good parent, should have an attuned radar to when competition crosses the line from something healthy into something else. “When it becomes toxic, you have to see it, and you have to stop it,” says Smallwood.