The issue with that approach is that incentives are not always aligned. Not everyone is an altruist willing to give up their personal self-interest for the good of the company.

For example, you might have a legacy team whose future headcount growth is negatively impacted by a new team. Whether because this new team is automating tasks of the legacy team, or building a product that will cannibalize sales.

From the perspective of the company, the legacy team should embrace the future and allow themselves to be creatively destroyed.

But in reality, you have some leaders who do not want to give up power and will try to hold on, optimizing for personal incentives.

That's not a problem if the people in the old team understand that their security is tied up with the success of the organisation. I.e. if the new team does well, the organisation does well, and all employees are cared for.

If somehow the people in the old team get into their heads the idea that organisation-wide success stands in conflict with their security, then you have a problem.

But the problem is with management, not the people on the teams.

Edit: in general, it's a common disease in companies to associate people with teams rather than the organisation. People don't become useless because their previous roles are obsoleted. Those are still valuable people and sure, there's a cost to retraining them, but the cost to letting them go (in terms of what it teaches the rest of your employees) is so much greater. (Though unfortunately harder to measure.)

We can thank Jack Welch of GE for that attitude. I thought the same thing in the 80’s when GE was shedding thousands of employees. That those employees should be useable for new endeavors. Turns out retraining is a cost the company can externalize with firings

I’d say that the logical conclusion is that KPI’s are the problem here.

Let the team measure themselves, bit give them a clear mandate and shared purpose.

When teams are incomparable, no such rivalry can make sense.

Each “step” reduces an individual’s power in determining the outcome, and thus their responsibility and commitment. People also know some intuitive game theory; They won’t take an excessive burden for a shared prize, as that will ultimately burn them out in the long run.