Checkers or Chess; What’s Your Game? Choosing the Right Strategy for Business.
“Board games are the art of strategy and chance, wrapped in a world of imagination.” — Unknown
Long long ago, in ancient civilizations across the world, three games were born: Checkers, Chess, and Go. These games, each emerging from different corners of the globe, have stood the test of time, evolving into not just pastimes but powerful metaphors for strategic thinking.
Checkers, with origins tracing back to 3000 B.C. in Mesopotamia, is a game of straightforward moves but hidden complexities. Chess, believed to have originated in India around the 6th century, is renowned for its intricate strategies and deep tactical battles. Go, the oldest of the three, originating over 4,000 years ago in China, is a game of immense depth, with more possible moves than atoms in the universe.
These games have influenced not just the cultures they originated from but also the way people think about strategy, decision-making, and competition. They serve as profound illustrations of how strategic thinking has been valued across ages and civilizations.
“Although the drama of games of strategy is strongly linked with the psychological aspects of the conflict, game theory is not concerned with these aspects. Game theory, so to speak, plays the board. It is concerned only with the logical aspects of strategy.”
— Anatol Rapoport (American mathematical psychologist.)
MY GAME THEORY
Now, why did I start this piece with these three games? I have a personal theory (and if you’re an avid reader of my writeups, you know that I have many theories) that these games hold great value to us in understanding the systems that govern our world, especially in the world of business.
“The beauty of a game lies not in its pieces but in the minds of those who play it.” — Unknown
I was first introduced to Checkers in the village (Yes, I’m a village boy — a story for another day) by my group of old men buddies who couldn’t go a day without playing. I was fascinated with their play and the outcomes. One thing that intrigued me so much was how an ordinary piece could surge forward and double to become a very important piece whose movement was not limited. From Ordinary to Extra-Ordinary.
Years later as I got into business, I clearly could see this phenomenon at play, an ordinary person starting a business and then over time, this person becomes a magnate/mogul with endless resources. That’s the Free Market evidently on display in a game of checkers. I’m certain you might be curious which is my favourite of the three. I will leave that to you to make a guess but I may reveal it at the end of this writeup.
Similarly, as I have come to love and embrace the other two games of Go and Chess, I have rationalized the play of world systems within these games.
“All the world’s a stage, and all the men and women merely players.”
— William Shakespeare
Philosophical Understanding and Practicality of the Triune Games in a Free Market.
In the ever-dynamic arena of the free market, businesses are constantly engaged in a battle of wits akin to these triad games. Each move a company makes can be seen through the lens of Checkers, Chess, or Go.
Checkers: Simplicity and Execution
In Checkers, success often comes from simple, well-executed strategies. Similarly, in business, companies that thrive on operational excellence and efficiency often find themselves ahead. Businesses operating in highly competitive but straightforward markets benefit from the Checkers approach, focusing on streamlined operations and quick, decisive actions.
Chess: Tactical Depth and Strategic Vision
Chess, with its complex interplay of pieces and moves, mirrors industries where long-term planning and strategic foresight are paramount. Businesses in technology, pharmaceuticals, and finance often find themselves in a Chess-like environment where anticipating competitors’ moves and understanding the broader landscape is crucial. Here, strategic vision and tactical execution must go hand in hand.
Go: Flexibility and Influence
Go teaches the value of flexibility and influence over brute force. In today’s interconnected world, businesses that can adapt quickly, influence market trends and create networks of value often find success. Companies in fast-evolving sectors like social media, renewable energy, and global trade embody the principles of Go, thriving on adaptability and strategic positioning.
“Every game tells a story, and every story is worth playing.
When you’re playing a game, you’re playing a story, and
the best stories are the ones you can’t predict.”
The Work of Strategy: Why You Need a Consultant
Strategy is not merely a plan; it is the art of navigating complexity and uncertainty. While anyone can draft a plan, strategizing requires a deep understanding of the market, competition, and one’s strengths and weaknesses. This is where a consultant becomes invaluable.
“The future is uncertain… but this uncertainty is at the very heart of
human creativity.”
— Ilya Prigogine (Belgian physical chemist of Russian-Jewish origin)
Risk and Uncertainty; Is there a difference?
In his best international seller book, “The Personal MBA”, Josh Kaufman dedicates a section to writing on the topic of Uncertainty. In there, he gives the distinction between risk and uncertainty summarized succinctly with the following quote attributed to Donald Rumsfeld, former US Secretary
of Defense:
“Reports that say that something hasn’t happened are always interesting to me because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”
Risks are known unknowns while Uncertainties are unknown unknowns.
1. Risk: Risk refers to situations where the potential outcomes and probabilities are known. It involves measurable variables and known unknowns. In these cases, you can assign probabilities and make informed decisions based on expected value calculations.
2. Uncertainty: Uncertainty, on the other hand, arises when the outcomes and probabilities are not known. It involves unknown unknowns, where variables are not easily measurable or predictable. Decision-making under uncertainty requires judgment, intuition, and adaptability rather than relying solely on probabilistic calculations.
In essence, while risk can be managed through analysis and probability assessment, uncertainty requires a different approach, often involving flexibility, scenario planning, and readiness to adapt to unforeseen changes.
“To win a game, you must first learn to embrace the uncertainty.”
— Unknown
The job of a consultant is to help you navigate and deal with the Uncertainties as opposed to Risks.
Risk:
- Financial Investments: Investing in stocks where historical data provides probabilities of return.
- Product Development: Launching a new product based on market research and customer feedback, where potential sales and costs can be estimated.
Uncertainty:
- Emerging Technologies: Investing in a new technology that could disrupt existing markets, where outcomes are highly uncertain and not easily predictable.
- Global Pandemics: Dealing with the economic and social impacts of a pandemic like COVID-19, where the full extent of consequences and timelines for recovery are uncertain.
In these examples:
- Risk involves situations where probabilities can be estimated based on historical data or analysis of known variables.
- Uncertainty involves situations where outcomes are unpredictable or where key variables are unknown or unknowable, requiring adaptive strategies rather than relying on probabilistic assessments alone.
“Our success as consultants will depend upon the essential rightness of the advice we give and our capacity for convincing those in authority that it is good.”
Andrew Thomas (Consultant and Author)
The Role of a Consultant
A consultant brings an external perspective, free from internal biases. They possess expertise in various strategic frameworks and tools, enabling them to analyze the situation comprehensively and recommend the best course of action. Their role is to help businesses see beyond immediate challenges and craft strategies that ensure success (particularly long-term).
Strategy vs. Plan: Understanding the Difference
In a piece written by Igor Buinevici, he writes about how many people confuse these terms and Jeroen Kraaijenbrink (Writer, Advisor and Lecturer on leadership and strategy.) has a great explanation of the differences. The confusion around the concept of strategy largely arises from its misuse. People often use the term “strategy” to describe something special, like “strategic marketing” or “strategic finance.” They also use it casually in everyday conversations to talk about their plans to achieve goals, such as “my strategy to get better grades is to study 10% more every day.”
However, in business or organizations, strategy means something specific. If every plan, approach, or process could be called a strategy, it would lead to confusion.
Here’s the key difference:
→ Strategy is the logic behind how an organization creates and captures value, while planning is the process.
To put it differently:
→ Strategy defines goals, while planning helps achieve them.
A strategy delineates the rationale behind an organization’s value creation and capture process.
In Jeroen’s book, “The One-Hour Strategy,” it is described that strategy encompasses:
- The identification of target customers and competitors (Market),
- The selection of products and services offered (Magic),
- The utilization of assets and capabilities (Means),
- The methods employed to generate revenues (Money),
- The strategies for leveraging the environment (Momentum),
- The underlying reasons for pursuing these actions (Meaning).
This can describe an organization’s current strategy, intended strategy for the future, and realized strategy based on implementation.
None of this directly relates to a plan. A plan details the steps, resources, and timeline needed to achieve specific goals. While a plan may be developed to implement a strategy, it’s not the strategy itself. Goals stem from the logic of the strategy and guide planned actions.
It’s crucial because many organizations claim to have a strategy but lack the overarching logic behind value creation. They may have plans and goals but lack the derived strategy.
Now, the essential question remains: Does your organization genuinely operate with a strategy, or is it primarily driven by plans alone?
A plan is a set of steps designed to achieve a specific goal, while a strategy is a broader approach that takes into account the changing environment and competitive landscape. Plans are static; strategies are dynamic.
Planning:
- Definition: Planning is a list of activities or steps aimed at achieving specific short-term goals.
Characteristics:
- Focuses on controlling costs and maintaining comfort.
- Often involves tangible, measurable actions that can be controlled internally.
- Does not necessarily require coherence or a clear path to achieving broader goals.
- Typically aims to ensure operational efficiency and predictable outcomes.
Strategy:
- Definition: Strategy is an integrative set of choices that position an organization to win in a chosen market or playing field.
Characteristics:
- Involves making choices about where and how to compete to create sustainable value.
- Requires a coherent theory about how to be better than competitors in serving specific customer segments.
- Focuses on creating and capturing value through innovation, differentiation, or market positioning.
- Emphasizes adaptability and continuous refinement based on market dynamics and customer feedback.
Key Differences:
Outcome Orientation:
- Planning: Aims to achieve specific, often internal, goals such as cost control and operational efficiency.
- Strategy: Aims to create value for customers and stakeholders, positioning the organization for competitive advantage and long-term success.
Approach to Uncertainty:
- Planning: Typically avoids uncertainty by focusing on controllable variables and predictable outcomes.
- Strategy: Embraces uncertainty as it involves making informed bets on future market conditions and customer needs, with a willingness to adapt and evolve based on ongoing feedback and learning.
Focus:
- Planning: Focuses on near-term activities and operational execution.
- Strategy: Focuses on long-term vision, market positioning, and competitive advantage, guiding the organization’s overall direction and resource allocation.
In essence, while planning is essential for operational efficiency and short-term goals, strategy provides the framework for creating value, fostering innovation, and achieving sustainable competitive advantage in dynamic market environments.
“Strategy is not the consequence of planning, but the opposite: its starting point,” the great Henry Mintzberg (Canadian academic and author on business and management) argues. The best strategic plans set a direction without binding the organization to specific actions.
Strategy, therefore, is the art and science of utilizing resources efficiently to achieve long-term goals. It involves setting objectives, understanding the competitive landscape, and making informed decisions to navigate challenges and seize opportunities.
The Need for Strategy
“A strategy is necessary because the future is unpredictable.”
— Robert Waterman (Author and expert on business management practices)
In the unpredictable world of business, a well-crafted strategy provides direction and purpose. It helps companies stay focused on their goals, adapt to changes, and make informed decisions. Without a strategy, businesses risk being reactive rather than proactive, often leading to missed opportunities and costly mistakes.
How Do We Strategize?
John Naisbitt (American author and public speaker in the area of futures studies) says, “Strategic planning is worthless — unless there is first a strategic vision.” Having a strong vision is the basis for creating what you want.
Strategizing involves several key steps:
- Analysis: Understanding the internal and external environment.
- Goal Setting: Defining clear, achievable objectives.
- Resource Allocation: Determining how best to use available resources.
- Execution: Implementing the strategy through coordinated actions.
- Evaluation: Continuously monitoring and adjusting the strategy as needed.
When Do We Strategize?
Strategizing is not a one-time event; it is a continuous process. Businesses need to strategize at critical junctures, such as market entry, product launches, mergers and acquisitions, and during times of crisis or significant market changes. In a writing by David C. Spencer Hickman, he mentions how most strategic plans are not strategic, or even plans. Most strategic plans often fall short of being truly strategic or comprehensive plans. Instead, they frequently consist of brief lists of desired actions, activities, and objectives, or sometimes vague descriptions of work.
For instance, such plans might include actions like “launch a new service,” which, while ambitious, lacks the strategic depth needed to explain why this service will succeed in the market. Activities such as “market our products through appropriate channels” are important but don’t specify how these channels will be chosen to maximize customer reach and engagement. Objectives like “achieve $100 million in net revenue” are clear goals but may not encompass the strategic initiatives necessary to sustain growth over the long term. Meanwhile, descriptions of work such as “manage the planning process for product development” or “engage stakeholders effectively” outline tasks without providing a strategic rationale for their prioritization or integration into larger organizational goals.
Given these typical responses, a genuine strategy would need to encompass a more integrated and coherent approach. For example:
· Action: Instead of merely “launching a new service,” a strategic approach would define the unique value proposition of the service, identify target customer segments, and outline a phased rollout plan based on market analysis and customer feedback.
· Activity: Rather than generic marketing activities, a strategic plan would specify how to leverage market research and customer insights to select the most effective channels and messaging strategies tailored to different customer segments.
· Objective: Beyond revenue targets, a strategic objective might include diversifying revenue streams, improving profitability through cost efficiencies, or enhancing customer lifetime value through service excellence.
· Description of Work: Strategic descriptions would outline not just tasks but the strategic reasoning behind them, such as aligning product development processes with emerging market trends or fostering collaborative relationships with stakeholders to drive innovation and market leadership.
In essence, a true strategy goes beyond a checklist of tasks; it involves a well-thought-out plan that not only guides immediate actions but also shapes long-term goals and ensures organizational resilience and success in a competitive landscape.
Example 1: Launching a New Service
Typical Plan Approach:
- Plan: Launch a new service to expand market reach.
- Action: Develop and release the new service by Q4.
- Objective: Achieve $5 million in revenue from the new service within the first year.
- Description of Work: Coordinate with product development, marketing, and sales teams to execute the launch.
Strategic Approach:
- Strategy: Introduce a premium subscription service targeting high-income demographics seeking personalized financial advice.
- Action: Conduct market research to identify underserved customer needs and preferences.
- Objective: Secure 10,000 paying subscribers within the first six months.
- Description of Work: Collaborate with fintech experts to develop AI-driven algorithms for personalized financial planning, establish partnerships with leading financial institutions for credibility, and implement a phased marketing strategy emphasizing exclusivity and benefits tailored to subscriber needs.
Example 2: Marketing Strategy
Typical Plan Approach:
- Plan: Increase market share by enhancing marketing efforts.
- Action: Increase social media presence and email marketing campaigns.
- Objective: Boost brand awareness by 20% in the next quarter.
- Description of Work: Hire additional marketing personnel to manage campaigns and analyze metrics.
Strategic Approach:
- Strategy: Establish a thought leadership position in the renewable energy sector through content marketing.
- Action: Conduct industry research to identify key trends and pain points among target audiences.
- Objective: Become the top industry resource for renewable energy insights, increasing website traffic by 50% within a year.
- Description of Work: Develop a content calendar aligned with industry events and regulatory updates, collaborate with industry influencers and academics for guest contributions, and leverage SEO strategies to optimize content reach and engagement.
Example 3: Product Development
Typical Plan Approach:
- Plan: Enhance product features to meet customer demands.
- Action: Upgrade software capabilities and improve user interface.
- Objective: Achieve 95% customer satisfaction rating in post-launch surveys.
- Description of Work: Conduct usability testing and gather customer feedback for iterative improvements.
Strategic Approach:
- Strategy: Position the product as a market leader in smart home automation.
- Action: Conduct ethnographic research to understand daily user interactions and pain points.
- Objective: Capture 30% market share in the smart home automation sector within three years.
- Description of Work: Collaborate with design thinking experts to create a seamless user experience, integrate IoT technology for scalability and future-proofing, and establish strategic partnerships with leading home appliance manufacturers for interoperability and customer value.
In these examples, the strategic approach involves not just setting goals and outlining tasks but also integrating market insights, competitive positioning, and specific actions aimed at achieving sustainable competitive advantage and long-term growth. This contrasts with typical plans that may focus more narrowly on immediate actions and short-term objectives without the broader strategic context.
Strategic Frameworks
“Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.” — Michael Porter
1. SWOT Analysis
Purpose: SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis helps organizations assess internal strengths and weaknesses and external opportunities and threats.
- Example: A technology startup conducts a SWOT analysis to identify its innovative technology (strength), lack of brand recognition (weakness), emerging market opportunities in AI (opportunity), and potential regulatory challenges (threat).
2. Porter’s Five Forces
Purpose: Porter’s Five Forces framework analyzes industry structure to assess competitive intensity and attractiveness.
- Example: An automotive manufacturer uses Porter’s Five Forces to evaluate the bargaining power of suppliers (high due to specialized components), threat of new entrants (low due to high capital requirements), and rivalry among existing competitors (intense due to market saturation).
3. PESTEL Analysis
Purpose: PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis examines macro-environmental factors impacting business operations.
- Example: A global pharmaceutical company conducts a PESTEL analysis to assess regulatory changes (political), economic trends (economic), demographic shifts (social), advancements in biotechnology (technological), sustainability initiatives (environmental), and intellectual property laws (legal).
4. Balanced Scorecard
Purpose: The Balanced Scorecard aligns business activities with organizational vision and strategy, focusing on four perspectives: financial, customer, internal processes, and learning and growth.
- Example: A retail chain uses the Balanced Scorecard to measure financial performance (revenue growth), customer satisfaction (Net Promoter Score), operational efficiency (inventory turnover), and employee development (training hours).
5. Blue Ocean Strategy
Purpose: Blue Ocean Strategy encourages organizations to create uncontested market spaces (blue oceans) rather than compete in existing market spaces (red oceans).
- Example: Cirque du Soleil transformed the circus industry by combining elements of theater and circus arts, creating a unique entertainment experience that appealed to a new audience segment not served by traditional circuses.
6. Ansoff Matrix
Purpose: The Ansoff Matrix helps organizations identify growth strategies by assessing market penetration, product development, market development, and diversification.
- Example: A consumer goods company uses the Ansoff Matrix to decide whether to launch a new product line in existing markets (product development) or enter new geographic markets (market development).
These frameworks provide structured approaches to strategic analysis and decision-making, helping organizations navigate complexities, identify opportunities, mitigate risks, and achieve sustainable competitive advantage in their respective industries.
The Importance of Strategy in Business Culture
“Culture eats strategy for breakfast.” — Peter Drucker
The saying “Culture eats Strategy for Breakfast” suggests that culture is more powerful than strategy. However, this view underestimates the integral role of strategy in shaping and sustaining a strong culture.
Strategy as the Foundation of Culture
A well-defined strategy provides a clear vision and direction, which is essential for cultivating a cohesive and motivated workforce. When employees understand the strategic goals of the organization, they are more likely to align their efforts and embrace a culture that supports those objectives.
Strategy vs. Culture: A Symbiotic Relationship
While culture is crucial, it is a strategy that defines the path to achieving business goals. A robust strategy fosters a culture of innovation, accountability, and continuous improvement. It sets the tone for how decisions are made and how the organization responds to challenges and opportunities.
Therefore, culture certainly does not eat strategy for breakfast. In any case, strategy cooks the meal for culture to eat. Bite on that Culture! Lol
Books Worth Considering on the Subject of Strategy
Here are some notable books on strategy that provide valuable insights and frameworks for understanding and implementing effective strategies:
“Competitive Strategy: Techniques for Analyzing Industries and Competitors” by Michael E. Porter. A seminal work that introduces Porter’s Five Forces framework and other key concepts for understanding competitive advantage.
“Good Strategy Bad Strategy: The Difference and Why It Matters” by Richard Rumelt. This book distinguishes between good and bad strategy, emphasizing the importance of clear, actionable strategies.
“The Art of War” by Sun Tzu. The classic masterpiece on Strategy. An ancient military treatise that provides timeless wisdom on strategy, leadership, and tactics. It emphasizes the importance of flexibility, preparation, and understanding the competitive landscape.
“Lords of Strategy: The Secret Intellectual History of the New Corporate World” by Walter Kiechel. It chronicles the development of strategic consulting and the influential thinkers who shaped modern corporate strategy.
“The McKinsey Way: Using the Techniques of the World’s Top Strategic Consultants to Help You and Your Business” by Ethan M. Rasiel. The book provides insights into the methods and approaches used by McKinsey & Company, one of the world’s leading consulting firms.
Your Game Play at the End.
Having established these points, it becomes clear that strategy is fundamentally pivotal to business success. Understanding the essence of strategy and selecting the appropriate strategy are crucial steps in integrating strategic approaches into your business. It’s important to dispel the myth of a universal, one-size-fits-all strategy. The effectiveness of a strategy is contextual, requiring the insights of a strategic consultant to uncover the optimal approach for a given situation.
To illustrate, consider the insignia of a crown atop each piece in a game of checkers, symbolizing the potential for each piece to become a king, thus, each checker was created to become a king. I am biased towards Checkers due to its early influence in my life (it was my first introduction to strategic board games at a very young age maybe 5 or 6 in a village somewhere in Keta). I perceive it as embodying individualism and the ethos of a free enterprise economy — a philosophy that many begin their life journeys with. In contrast, Go embodies competitive market dynamics and aspirations for global dominance, while Chess symbolizes strategic monarchy.
My personal formula — Checkers — Go — Chess — reflects my approach to life: starting with building from a capitalist perspective (Checkers), advancing to competition and global reach (Go), and finally, achieving mastery and strategic dominance (Chess). This perspective may evolve as I progress through different phases of life, as might yours — perhaps with a different sequence like Go, Chess, Checkers, or Chess, Checkers, Go. The essence lies in recognizing this phenomenon and considering how it applies to the stages of one’s life.
As a friend aptly remarked, “All of this actually makes sense; Checkers sets the stage for greatness — taking risks, investing, experiencing losses and gains.”
“In the game of life, the most important piece is the one you control.”
Unknown
Ultimately, in the grand game of business, strategy serves not merely as a plan but as the guiding compass that navigates organizations through the complexities of the market. By embracing and leveraging strategic thinking, businesses can navigate their competitive landscapes with clarity and confidence, ensuring sustained success and longevity. Remember, choosing the right game to play is integral to crafting an effective strategy. Just as in games like Checkers, Chess, or Go, the right strategy makes all the difference.
PS: Not having a strategy is the best way to strategize…for failure! Without a strategy, you’re not even in the game. So, if you’re feeling lost or unsure, call a consultant! Ask me how? Don’t be the joker in your own story! — get a strategy and start winning!