What Is the Catfish Effect?

The catfish effect originally refers to how catfish, by stirring up the living environment of smaller fish, activate their survival instincts.

Norwegians particularly enjoy eating sardines, especially live ones, making live sardines more valuable in the market. However, sardines often suffocate and die during transportation. Legend has it that only one ship managed to bring back live sardines, and the captain kept the method a secret. After the captain's death, people discovered a catfish in the ship's fish tank.

Catfish are predatory fish. As they swim around hunting, the sardines frantically evade them, becoming highly active. This increases oxygen levels in the water, effectively preventing the sardines from suffocating and allowing them to survive the long journey. In this process, the catfish acts as a motivator for the sardines. The "catfish effect" later came to describe a situation where introducing a strong competitor can stimulate the weaker party to improve—i.e., a formidable rival forces the weaker side to strengthen itself.

How Is the Catfish Effect Applied?

The "catfish effect" is one of the effective strategies for corporate leaders to invigorate employees. Companies must continually infuse fresh talent by bringing in energetic, quick-thinking young recruits—even into management—to create competitive pressure on complacent, conservative, and lazy employees or bureaucrats. This awakens the survival instincts and competitive drive of the "sardines."

Typically, leaders themselves should be lively "catfish." By enforcing discipline, standardizing systems, optimizing processes, and rationally allocating roles, resources, and personnel, they can weed out incompetent "sardines" and positively motivate capable ones, fostering a thriving organizational environment.

The same applies to industry development. When an industry is stagnant, it often needs an activator. The presence of a "catfish company" in the sector stirs up the stagnant waters, driving sustained growth, enhancing survival capabilities, and boosting innovation. The vitality of the entire industry depends on the "catfish" stirring the waters.

For example, after Company M entered the smartphone market, other domestic brands didn't collapse but grew stronger. It was as if a "catfish" had been introduced into a stable pond, spurring progress across the entire industry. This energized other domestic manufacturers, creating a healthy growth model for China's smartphone market and fostering a harmonious, thriving ecosystem.