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Is running your company like playing a game of chess?

By Mark Birchall FCCA on 05/05/2017 - 0 Comments

I remember being taught the basics of chess many years ago. Playing chess is a game of strategy and can be compared to running a business as there are optimal moves that can be taken that maximise the chances of success.

The game of chess shows how something with 64 spaces and 32 pieces can become very complicated. A bit like a setting up and running a growing business. Looking at the game of chess in more detail, there are only 64 spaces and there are 16 pieces each. How many possible move combinations are there?

Chess is infinite: There are 400 different positions after each player makes one move a piece. There are 72,084 positions after two moves a piece. There are 9+ million positions after three moves a piece. There are 288+ billion different possible positions after four moves a piece. There are more 40-move games on Level-1 than the number of electrons in our universe.

There are more game-trees of Chess than the number of galaxies (100+ billion), and more openings, defences, gambits, etc. than the number of quarks in our universe! –Chesmayne. (http://www.bernmedical.com/blog/how-many-possible-move-combinations-are-there-in-chess)

Before being able to play, you need the determination and confidence for success, the resources to deliver, and the finance to get you started. As the business grows, you will need processes, systems and procedures to be introduced. These will be revisited during growth cycles of the business for a variety of reasons.  

The intended strategy is to learn and win the game. The multiple game plans test the battles of the minds, wits, nerves and resources. By way of example, I did a brief internet search for the shortest, average and longest chess game with some surprising results being revealed;
The shortest decisive, non-forfeited world championship game occurred between Viswanathan Anand and Boris Gelfand in game 8 of the World Chess Championship 2012. Gelfand resigned after Anand's 17th move, 17.Qf2

I found that the average length of a game (played by humans) is roughly 40 moves. Based on the statistics provided by Chess games database (685,801) games, the average number of moves is 40.04 (26th Jun 2013). The business owner doesn’t have the generosity of making a “0.4 decision.” The owner must commit 100% to either a Yes “proceed”, or No “reject.” The decision may even be made on their behalf. Deferring the decision is also an appropriate response. Sometimes the decision will go away. Sometimes the owner makes the decision later when time permits. An internal/external event may force their hand for a response and game manoeuvre to be played.

The longest tournament chess game (in terms of moves) ever to be played was Nikolić–Arsović, Belgrade 1989, which lasted for 269 moves and took 20 hours and 15 minutes to complete a drawn game.

Chess is clearly a game of strategy not luck. Understanding, logic and experience can increase chances of success as they can in business.

What is surprising is the sheer number of moves, the time taken when comparing the shortest game, average game and longest game with the latter being a mere draw! Were the players procrastinating? Would the outcome have been different if the moves were discussed with another expert or computer modelled before commitment.

What was the tipping point that caused the game to alter from being an assured win to a mere draw with 20 hours and 269 moves (enjoyment or punishment) for both parties with the audience watching? Was this a deliberate game strategy by the players from the start or did this strategy emerge as the game progressed. Did it just happen?

To function effectively, business owners look at the pieces they have, assess the competition and consider the next 3 to 4 moves to succeed. If the moves are mastered well, the player removes the opponent’s pieces. Be warned, the early quick wins may help or destroy the end game strategy. If the next move is wrong, the cost is losing that chess piece and future ability to use this. This means you have less resources to achieve the same intended strategy of winning. In business, you also have limited resources of TIME and MONEY. Usually the business owner will continue with the chosen path until they either loose, forfeit, draw, go bust or WIN.

Let’s examine what may happen in a typical business. What happens when new people join? Do people abdicate responsibility, delegate, or get feedback through results and appraisals? Do business owners set out with a clear path and strategy to achieve their goals, and if they do, are they able to respond effectively to what is happening with internal and external pressures such as staffing, competition, increased regulation etc. Is the business strategy designed to deliver positive cash flow and growth with a clear exit plan.

This is the path of a clear winner. Chess masters would study moves in detail to know how to respond to their opponent to ensure success. This adversarial activity is clearly comparable to the strategy a business owner must develop. Failure to learn as they proceed will compound a bad situation leaving it impossible to recover from. In chess the loss of the key pieces may make it impossible to win.

During my business career, I remembered this quote during the highs, lows and challenges faced:

"the past is history, the future is a mystery, which is why we live in the present today.”

Ever had that feeling that the present is not what you want. For example, the customer slips his promised payment causing you grief to pay the wages or vat bill. Could this have been pre-empted by thinking three steps ahead on the chess board. What about the scenario of someone knocking your chess board causing confusion or damage? This could a subsidence claim, virus attack or an unplanned event such as a fire, flood or key employee moving to a competitor.

As a business owner and player, you need to “work on” the business (using a helicopter vision of the game) rather than working deep within the business (resulting in being sucked into the quicksand) requiring life line support. The more you struggle, the quicker you sink. Owners need to master the fast-paced society that businesses operate in. The game will not play itself and may even be played around you. Ask yourself the following:

In playing chess, you have the chess table and pieces, and you will know the rules. The difference comes in the skill the player has to make the right moves most or all of the time. In comparing this to business – do you have the knowledge to make the right moves? Do your employees know the regulations and what is expected of them, are there clear goals, and review processes for the business.

Just like business strategy, there are many books and experts on the game of chess. I am not an expert on chess. However, the ICON business model and advisors have used their success model on 7000 clients with proven results. Don’t procrastinate like the longest chess game with a draw result, take the decisive action FAST like the short game and enjoy the benefits of winning.

ICON and their experienced advisors can work with you to design and implement specific business strategies to achieve your personal and financial goals by working with you through the chess board of opportunity. Start today!

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