27 April 2009

Management

What Will Be Your Next Move?

Jack Kazmierski
kaz@cogeco.ca

 

Although you may not realize it, your company is currently engaged in a corporate version of chess with your future prosperity on the line. Will you get to ‘check mate’ before your competition does?

The corporate world has often been compared to a game of chess. In his book, “Three Moves Ahead: What chess can teach you about business (even if you’ve never played),” author Bob Rice explains how all businesspeople all engaged in a corporate game of chess, even though they may not realize it. He also shows business owners and managers how to take advantage of chess strategies when running their companies.

Conventional business wisdom dictates that every company needs a detailed business plan that forecasts well into the future. But in today’s fast-paced and ever-changing business environment, Rice argues that the traditional business plan no longer works as well as it once did. There are simply too many unknowns, and forecasting sales numbers even three months ahead, he argues, in more of a challenge than most can handle.

That’s where the game of chess comes into play. “World class chess,” Rice writes, “is about having a plan to generate an advantage but prosecuting it in a flexible way; at the right moment swapping that advantage for one of a different sort; then doing it again; moving quickly even when you’re not exactly sure what to do; making intelligent sacrifices; taking risks; believing in yourself and dealing with the present, not the past.”

Sound a lot like our business world today, doesn’t it?

The more you examine our business world, Rice believes, the more you’ll notice that  successful businesses and the people who run them use chess strategies (knowingly or not) to create a plan of action, manage people, make decisions, and cope with the rapid rate of change and an unknowable future.

If, as Rice argues, we are all truly engaged in a life-altering game of chess it only makes sense to understand and even master the game in order to better take advantage of these strategies and gain control of our destinies.

Scarifying pieces

In chess, every player begins with two bishops, one of which remains on the white squares and one destined to spend the game on the black squares. Although both bishops are equally powerful, one of them could end up completely useless. How so? Well, if the opponent’s pieces are mostly on the black squares, then the bishop who can only stay on the white squares becomes useless (or vice versa).

The question the player must then ask himself is will he get rid of the useless bishop, or hold onto him because he doesn’t want to get rid of a powerful (although completely useless) piece.

This is also the question we must ask ourselves in the business world when deciding the fate of a valuable employee who suddenly becomes useless due to a change in the market or an adjustment in the direction of the company. Rice gives the example of a software salesperson who might have been great at explaining the benefits of his company’s pre-packaged technology, but when the company evolved to the point where they wanted to be more service-oriented and less technical, they would wisely get rid of that salesperson (even if he’s the best they have) because he simply is not longer right for the new more people-oriented approach to sales.

Getting back to the bishops for a moment, the above-mentioned bishops can work well as a team in some instances since they specialize in completely opposite areas of expertise (white squares vs. Black squares). In like manner, Rice recommends putting opposites together when tackling a complex business problem. Two executives with completely opposite strengths and points of view will be better able to find a more complete solution to a given problem than two executives who are very much alike. The strength in opposites comes from their ability to see a problem from two completely different angles. Each will approach the same problem from two very unique perspectives, and the solution will fall into the “best of both worlds” category.

Finding a niche

Just as a chess player can gain a significant advantage by completely dominating and controlling at least one square on the board, companies can gain a strong advantage over the competition by completely dominating and controlling a niche, no matter how small.

But don’t confuse your company’s “strong square” with a core competency. Rice argues that a strong-square strategy demands that you control some niche, no matter how narrow, and that your dominance of that niche must be so overwhelming that your competition can’t realistically think about taking it over.

Rice points to niche owners like Victoria’s Secret (underwear), Godiva (chocolate) and Tobasco (hot sauce) as shining examples of strong squares that competitors can’t seriously think about overtaking.

Does your company have a niche it can claim as its own? If not, Rice offers the following advice: “Remember, strong squares aren’t necessarily what you do best. They’re where you have a distinct advantage over the rest of the market. Many companies have core competencies; few have strong squares.”

Behind on the clock

World championship chess is played with a chess clock limiting the amount of time each player can spend contemplating and making moves. Rice argues that in this information age all businesses are on the clock and that the pace of business is constantly increasing, which means businesspeople need to learn how to make decisions faster than ever before.

In fact, companies that see the need to regenerate strategy only when their profit margins go south are behind on the clock. The old motto “if it ain’t broke, don’t fix it,” may have worked fine in the 1950s, but in our fast-paced information age you’re always on the clock, and making business moves quickly if you don’t want to leave your organization exposed.

Rice recognizes that having to make a business move before you’re sure exactly what that move should be can be a problem. “But if you wait to move until the perfect answer has been found,” he writes, “you won’t be the one to find it. Then, while you chase your competitors’ approach they’ll have more experience and better customer feedback. You’ll have to run twice as fast just to stay in the same place, and you probably won’t ever catch up.”

Today’s business world is filled with fastpaced zigs and zags and the future is anything but certain. That’s why managers and business owners who are concerned about the future will want to take a closer look at this book. As Rice puts it, “The principles derived from a millennium of chess play provide wonderful models for prospering in the most uncertain business times in history.”