3 things chess champions can teach you about business strategy

Do you know what Mark Zuckerberg, Bill Gates and Peter Thiel have in common?

They have created Tech giants, for sure, but they are all passionate about chess… not surprisingly, since chess reproduces many situations where corporate decision-makers have to make strategic choices.

I have been able to observe it on many occasions since apart from my daily work as a strategy consultant, I am an International Chess Master as well.

That is why I suggest you 3 lessons that chess champions can teach you about business strategy.

Lesson 1: Competition doesn't exist

Every chess fan remembers when Robert James Fischer, 11th world champion, moved his bishop from g4 to e6 in his game against Donald Byrne. This decisive move allowed him to win a game that many consider to be the game of the century.

How to find those exceptional moves that make champions what they are? The answer is simple, you must ignore your opponent’s threats. In doing so, you often allow yourselves to go beyond appearances, be more creative and finally find moves that are so deep and powerful that they overshadow your opponent’s threats.

In the corporate world, this same mindset focused on oneself rather than on competitors is the hallmark of the greatest. For instance Jeff Bezos, who said about Amazon:

"The number one thing that has made us successful by far is obsessive compulsive focus on the customer as opposed to obsession over the competitor".

In today's digital economy, the boundaries between sectors of activity are becoming increasingly blurred. Thinking that you are competing with a bunch of large companies that make similar products, you may set the requirement level too low and make yourself vulnerable. The best way to prevent yourself from that is to pretend you don’t have any competitors to be able to focus fully on your customers.

Lesson 2: Value over price

In chess, each piece is traditionally associated with a value in points. Thus, a pawn is worth one point, a knight and a bishop are each worth three points, a rook is worth five points and a queen is worth ten points. This is often how we teach children to play chess so that they quickly get a scale of value. However, the latter is mostly indicative and therefore not very accurate.

Indeed, the true value of your pieces depends on the specific features of a given position. Thus, in a closed position, it is not uncommon for a knight to be more valuable than a rook. This is due to the fact that the knight is the only chess piece that is able to move by jumping over other pieces, so it has the ability to cross barriers in closed positions, something the rook cannot do.

Likewise, in the corporate world, it is too often the case that there is not enough questioning about the true value of things. Thus, the price of a product is often set on the basis of its costs, on which a reasonable margin is added while taking into account the prices of competitors. But more attention must be paid to the perceived value of your products, which depends on specific elements of the buying opportunity. By truly understanding the value customers assign to you, you will find the right price to maximize your revenues and profits.

Lesson 3: If you have always done it that way, it is probably wrong

In 2017, Garry Kasparov, the greatest chess player of all time, was asked what differentiated the world champion from other players. He replied:

"Somehow it's your ability to operate different kinds of positions. A very strong player can manage a thousand positions. So then you have the world champion who could do more. Any increase in numbers creates a new level of playing."

However, many chess players do not follow Garry Kasparov's advice, because as soon as they master a type of position, they will remain in this comfort zone, trying to constantly find this type of position during their competitions to set the same traps for 5, 10, 15 years and win games easily, thus putting aside real weaknesses from their game.

If these chess players had been companies, they would probably have been Kodak, eBay or Thomas Cook: companies that know what they were doing well, have benefited from their high margin profits for 5, 10, 15 years without ever fundamentally questioning the developments in their sector.

But today, technological innovation has compressed product life cycles, so companies can no longer afford to increase their competitive advantage only based on the experience curve concept. More than ever, companies must therefore think about how they create the conditions to generate breakthrough innovations through their organizational models, working methods and talent policies.

Key takeaways

These three lessons from chess champions on corporate strategy are examples, but in line with serious games, chess is generally a great tool for learning and putting corporate strategy into perspective.

Beyond that, it is also an excellent way to develop key skills among your employees through a fun and friendly approach.

#CorporateChess