Zero-Sum Lunacy

April 22, 2007 by
Filed under: Leadership, Process 

It has been fashionable for quite a while in business circles to study competitive philosophy. Whether from the ancients such as Sun-Tsu’s The Art of War (I know my wife and I each had a copy before we met each other), Machiavelli’s The Prince, any of the hundreds of variations of these that are available, or some other source of military doctrine. There are all sorts of interpretations and translations to choose from, and I expect the niche will remain healthy in the future.

I’ve read my share of these books, and indeed found them fascinating and insightful. It’s pretty clear to me that those involved in warfare are best served by studying the insights of those that were successful in the past, and the strategies and tactics provided offer a wealth of information. I’d be surprised if there was a military power today that did not have these books on their required reading list.

Military strategy is one thing, but I have problems with books of this nature being considered important reading in a business setting.

Donald Trump recommends The Art of War, for what it is worth…

In military strategy, one of the basic premises is that you are in the game to win. That’s fine, I think the same is reasonable in business as well. The distinction I make between the two is that for one side to win in a war, there will be another side, the enemy, that loses. The overall result is zero-sum (or actually sub-zero, in most war situations).

While many business people tend to think in this manner, I disagree. If we think zero-sum for business, we are missing the point.

If business is indeed a zero-sum environment, who is the enemy? There are a number of possibilities, none of which are really that palatable.

Are other businesses in the sector the enemy? Here we are thinking about ‘the competition’, the ones we want to take market share from, the ones we are upset with when they beat us out to win the client. While this might be the case when the ‘winnable goods’ are limited, in many sectors (for both goods and services) there is a largely untapped market to draw from. There’s plenty of fish in the sea for everyone, and quite often collaborating to enlighten and expand the markets is in everyone’s best interest.

What about organizations that tout a particular technique or product for their market? The tendency here is to brand themselves as distinct and better from the competition, but these broad, sweeping strokes are dangerous. My daughter is at the stage these days where she constantly asks questions like “what’s the best car?”, or “what’s your favourite colour?”. My answer is always “that depends on the criteria.” As noted before, it’s tough to say your product is the best when you don’t understand the buyer’s needs.

In both these situations there is an external ‘enemy’ that takes the form of other businesses, and there is danger that the other guys will end up the winner.

We can take the competitive issues out of the situation, though, and there is still danger in playing the zero-sum game.

I have seen a number of businesses that treat the client as the enemy, even though it is not explicitly stated. These are the companies that are focused on short-term financial gain, and can often be seen overstating their capabilities or under delivering on their promises. The snake-oil salesmen. Just as in the old stories of these shysters, they are always busy reinventing their product space, trying to maintain their attraction with the latest and greatest craze. Unfortunately, this also means they must constantly work to gain new business from a diminishing supply of potential clients.

Even without thinking of clients, a zero-sum game can be played within an organization. Management will often treat employees as expendable items, attempting to drive the team to completion in a death march. The short-term gain, if any, is illusory. Apparently early wins will often give way to schedule delays, unmanageable product defects, and poor morale and high turnover.

In every case above, thinking of anyone you deal with in a business environment as the enemy (whether you use those terms or you simply behave that way) ends up looking a lot like war. While there may be tactical victories, it is pretty rare that there ever becomes a clear winner.

It is far better to seek out synergies with everyone involved, and in most situations it is easy for everyone to gain more value out of the transaction than what they see as the cost of their contribution. Everyone can win. – JB


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