Why Growing a Business is like Learning to Play Four-dimensional Chess

Some CEOs like to play golf. It is a good way to exercise and socialise. And, there are several ways to measure success: you can compare your score to your partner’s, or against your personal best. And, like all games, it can be a good way to get to know your partner: whether they are laid-back, aggressive, or competitive? Do they move the ball a little in their favour? Do you enjoy being with them throughout 18 holes of golf?

Chess, on the other hand, is a mental game. You sit in a chair, staring at a chess board and make a series of proactive and reactive moves, depending on what your opponent does. You win by blocking all escape routes and capturing the king. Every move changes the game. Taking an opponent’s piece can open up an opportunity for you to strike deep in their territory, just like winning a big contract can negatively impact your competitors. Every move needs to increase the chances of winning the game.

Chess has many parallels to business. You play against an opponent under the same set of rules, with identical pieces that have specified moves. Throughout the game, you need to sacrifice some of your own pieces, make pre-emptive moves to block your opponent’s progress, capture your opponent’s key pieces, and make some defensive moves to protect your own king. You need to have a plan, but your opponent’s moves will require you to revisit and modify your strategy.

One of the awards we hand out to business upon graduation from the Business Growth Program is the Knight Award, which we give to the company that makes the best strategic move during the program. We chose this chess piece because a knight can leap forward two squares and one to the side, or two to the side and one forward. I recently visited the company that had received our first Knight Award. There, in the middle of their product display, was a chess board and chess pieces. I asked who played and the CEO said, “Everyone plays, and often when we look at the board, pieces have moved or are gone – just like in business.” They went on to tell me about a whole new opportunity that had opened up which required them to pivot from their current strategy and move quickly to capitalise on a hole in the market. “We can move quickly because we have spent the last two years building competitive advantage, a secure supply chain, innovative and extremely efficient manufacturing processes, and secure distribution channels.”

A Calculated Strategic Approach

This kind of thoughtful, calculated strategic approach is quite different from the “ready, fire, aim” or “something’s coming, better duck” approach. The ability to look at your company, your strategy, products, policies and your people from several perspectives, then calculating the impact of a potential decision – before making one – is a vastly underrated skill required of a CEO. To create a “win-win” and grow big fast, you need to look at your strategic options from the perspective of each of the parties-at-interest. This is like looking at the “chess board” from the perspective of your competitors, your customers, your employees – and other stakeholders –  anyone who’s likely to be substantially impacted by the decision. Holding all those perspectives in mind, the CEO then needs to do a mental trade-off analysis to determine which move will maximise the company’s financial position and brand.

For instance, consider your sales strategy. Do you want to sell your products online exclusively, in stores exclusively, or is it better to have a website that displays your products, but sends customers to stores to buy them? Is it better to work through value-added resellers or hire your own sales staff? Before making a decision, pretend to be one of your competitors. How would each one respond if you made that decision? Pretend you are your key customer. How would you respond to that move?

Three and Four-dimensional Business Chess

Chess is a game between two people, but in business there are multiple players. Imagine a room full of CEOs, all playing their own games of chess, where the outcomes of each game will impact your company. In effect, you are playing three-dimensional chess. Instead of trying to outmanoeuvre a single opponent, you have to take into account the moves of hundreds of opponents. These opponents – your competitors – are moving in and out of the game, as their fortunes wax and wane.

And because all this is happening at an accelerated pace and all over the world, time becomes the critical fourth dimension. While you are sleeping, someone in Mumbai or Cambridge or Buenos Aires could be introducing a product that could make yours obsolete. While you are trying to check-mate a competitor, new competitors are coming into the game, new technologies are emerging which will require you to change your strategy, and customers are changing their buying preferences. Time is of the essence. It sounds daunting – and it is. Nobody said growing a company would be easy, and success in chess and in business comes to those who understand how to develop and execute a winning strategy.

The fundamentals of chess – and business — take time to learn, but the need to anticipate your competitors’ next move is essential, and something a good executive team can do. It is not enough to look at your own competitive position. You need to consider your opponents’ positions as well. Market research is important but understanding your key competitors’ strategies is essential. Force yourself to take the time to mentally walk around and look at the chessboard from each competitor’s position. Ask yourself, “If I were the CEO, playing against our company, what moves would maximise my success?” The more of your opponents’ moves you can  anticipate and counter, the more control you will have over the game, and the greater the chance you have of winning – in business or in chess.

Dr Jana Matthews is the ANZ Chair in Business Growth, Professor, and Director of the Australian Centre for Business Growth at the University of South Australia’s Business School.

This article was first published by Entrepreneur.com

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