Just read an interesting post by Don Dodge where he makes the analogy that startups play poker, big companies play chess. He continues:
“Using a game analogy, startups are more like poker players. They take big risks, they bluff, they make quick decisions, change direction constantly, and they keep their competitors off balance. In poker you never have all the information, but you must make fast decisions. You never know if what you are seeing is a real threat, a bluff, or something that will soon disappear under the stress of the game.
Poker is an aggressive game where if you play your cards right you win big, and win fast, or totally wipe out in just a few hands. However, if you lose a hand on a reasonable bet, you can come back and double your money in the next hand. There is no time to wallow over a loss. You did your best. Move on and your luck will be better next time. Chess is a very different game. Both require incredible skill and talent.
Big companies think long term. Like chess players, big companies think four or five moves (years) ahead. They protect their assets, play defensively, think strategically, and carefully consider the options before making a move. Big companies have a lot to lose, while small companies don’t. No offense to Steve Ballmer of Microsoft, but big companies like Microsoft don’t go “all in”, risk everything, and bet the company on one thing. Big companies can lose a “pawn” or even a Rook in a strategy move, but they wont risk the King.
Big companies leverage their assets (conservatively) and flex their muscles where they can. They go for incremental improvements in position. Big company CEOs, like chess players, work a long term strategy. Each short term move plays a part in a longer term strategy that is not visible to the casual observer. In fact, their strategy is often kept secret, and they take care to make sure their short term moves don’t reveal their long term plan. Strategy is a competitive advantage.”
Instead of playing chess or poker, successful companies in the 21st century have to be more like MMOGs (Massively Multiplayer Online Games). It’s not enough to be skilled at chess or poker anymore, the complexity of systems, connections and networks in the 21st century requires different skills:
- 21st century companies will have an authentic mission that is transparent and believable.
- As a subset of a general mission, 21st century company will set out on various quests and missions.
- 21st century companies can’t focus on shareholder value alone. They need the community of all their stakeholders to succeed in their quests and missions.
- A culture of collaboration and co-creation between all stakeholders is required to succeed in the 21st century.
- 21st century companies will use game mechanics to reward their stakeholders by deploying various ranking and recognition systems. This proves to be a much better motivator than any bonus or salary increase.
- Incentive systems that allow to divide the winnings from a “quest” improves the connection between effort and reward.
- Hyper-transparent information with data-rich dashboards will be basic requirements for successful companies in the future.
Most importantly, you have to create “thick value”, defined by Umair Haque:
“(…) awesome stuff that makes people meaningfully better off.”
The creating of thick value will be the core of each successful company in the 21st century. Most of the bullet points are natural extensions and will develop organically if your mission is authentic and taps into the idea of thick value.
Poker and Chess were about beating the competitor at any cost, often just creating thin value. MMOGs are about co-creation and collaboration, delivering value throughout the stakeholder supply chain.
uwehook 