A useful analogy for thinking about business strategy is the game of chess. In chess, players compete in a shared playing area both trying to win. The strategy for winning is to position the playing pieces in a way that creates advantage over the other player, ultimately removing the other player from the game.
Great chess players take specific actions during the game. They survey the board from above and look for patterns that indicate the intent of their opponent, as well as identifying opportunities for themselves. They are willing to give up a weaker piece or position in one area to create advantage in another. They are constantly driven by a singular goal – to win the game. Further, in a competitive game, time is a factor and players need to chose when to take quick action and when to take more time to analyze the situation before making a decision.
In a similar way, smart business leaders take specific actions in leading their firms. They survey the competitive environment trying to identify the intent of competitors and anticipating changes in the market. They make strategic decisions to mitigate risk, take positions of advantage, and focus on areas of greatest opportunity. And ideally all decisions are made in the context of a longer-term objective.
As much as this analogy is instructive, it’s important for business leaders to also recognize how leading their companies is not like the game of chess.
- In chess the rules are set and players must play by the rules. In business the rules change all the time and savvy business leaders look for opportunities to change the game and disrupt the norms for advantage. There are many examples of industries that evolved quickly leaving the traditional players behind when new technology, regulations or market factors came into play.
- The game of chess is a zero sum game with only one winner and one loser. In business, there can be many winners and losers. In some industries, competitors collaborate to help grow the overall market opportunity or work together on certain projects to meet demand. Players may create strategic alliances or merge to strengthen their positions.
- On a chessboard the playing pieces always do exactly what you expect them to do. In business our people may or may not operate in a predictable way. Sometimes they underperform, while at other times they exceed our expectations.
- In chess, the winner is the better strategist. In business having a good strategy is just one element of success. In the words of Peter Drucker, “Culture eats strategy for breakfast”, and leaders must spend more time creating healthy and vibrant cultures than they do crafting smart strategy.
Analogy can help in understanding business. Whether we use the game of chess, sports or military analogies, all have their usefulness. However, we must recognize the limits of these comparisons and take them only as far as they serve us. In the end, the greatest leaders continually look for new perspectives to gain a deeper understanding of themselves, their people and their businesses.
Article by Tim O’Connor