Tuesday, September 30, 2014

Define the Game

"Change the game" you'll hear people say. In fact, we often define the game we play when we choose how to play it. But only some of us realize this fact. I was taught this lesson in Moscow by the French chess master, Joel Lautier.

Joel and the rest of the team had to solve the problem before morning. Vladimir Kramnik would sleep, of course. He would need to be rested fully, and even then it would be a long shot to beat Garry Kasparov. The dominant world chess champion was unlikely to lose. But the team had an idea. Even if it worked just once - there were many games in the match - it might open up the smallest of chances.

The team were all wiz kids, each a chess master in his own right. No one person could fully prepare alone for the many possibilities of a match at this level. So each of the grand masters had his team of trainers assigned to work out the best solution to a particular situation that might arise. By morning, each team member needed to have solved his problem and prepared the result of his analysis for presentation to Kramnik himself, who would scan the analysis and commit it to his marvelous mind. Few words were needed.

Joel Lautier was on the team because he is one of the few to ever beat Kasparov. Lautier’s job was key: Formulate Kramnik’s best “black” opening. Many readers will know about the most well-known chess openings. But, in fact, there are many more possible openings than the common ones, and by its nature chess allows for the invention of new openings to this day. But in such an old and storied game, the chances of inventing an effective new opening are not great. That was Lautier’s task.

What made Lautier’s job especially important was that Kasparov was especially good at the attack. Key for Kramnik would be to find a way to improve his chances in the games where he started as “black”- second - since those games would favor Kasparov’s attacking ability. And he would need to be able to repeat the opening over several games as black, a tough job once the opening was revealed.

Working into the night, Lautier formulated a risky approach for Kramnik. The opening was not ideal, but it might work given Kasparov’s strengths relative to Kramnik. It involved an odd series of moves, quickly leading to the trading of queens. When complete, the strategy - which has come to be known as the "Berlin" opening - left Kasparov, as white, with a slight positional advantage (with his players in slightly better places on the board). But the opening hurt Kasparov too, by skipping the complicated “mid game” where Kasparov famously had an advantage. The strategy worked. The opening shifted the edge enough for Kramnik to draw games that he would have otherwise lost.

Several years later, when I was lecturing in Moscow, Joel Lautier was in the audience and he asked me this question: “There may be many possible winning business strategies. How do we know which is best?” The answer comes from Mr. Lautier's example. The best strategy plays to your strengths, and away from the other’s. Don't just play the game as defined; define the game you play.

Research on "metacompetition," defining the game you play, appears in my book on Red Queen competition.

Monday, September 15, 2014

Why You Should Turn Down That Well-Paying Job

I remember being young and broke, going to an interview for an internal auditor job at a bank. The bankers who interviewed me were enthusiastic; they were authentic bankers. I did my best to pose as a banker, but as often happens to posers I was found out. The bankers asked me for a “writing sample.” I showed them my poetry. It was not to be.

Some people become accountants because they want a secure job. There is much to be said for pragmatism; better to be an employed accountant than a wanna-be actor. But is that the right comparison? Here is the issue: Somewhere tonight, maybe around 3 AM, some guy will be laying awake thinking about accounting. He lives and breathes accounting; it occupies his thinking even in his spare time. If things get competitive for accountants, he is going to dominate. His rivals are acting like accountants; he is the real thing.

Competitive advantage goes to the authentic. Their job is their avocation. They would do it, if need be, without pay. The authentic persist at getting through the tough parts of their vocation. They ponder it during the quiet times, so the magic of insight makes their work more creative. The gardener out on a cold morning; the writer typing away when she should be sleeping. Such people will take their vocation as far as it can be taken. By contrast, those who merely pose will not. As in the old adage “you cannot coach passion,” no amount of posturing can outdo authentic dedication.

The practical reader is objecting at this point, noting that there is a big economic difference between being an authentic accountant and an authentic writer. This contrast brings to mind a corollary adage: “Every person has a special gift.” As each of us grew up, we searched for that gift – the activity that seemed authentic to us. Our parents hoped that it might also be an activity that pays. How fortunate is the authentic accountant! His passion lines up well with economic gain. Meanwhile there goes the authentic musician, waiting on the accountant as he dines. Don’t get me wrong; I love the arts and admire the authentic artists. But though all of us may have a gift, some gifts pay better than others.

Does this mean that only some of us can follow our calling? That depends on how long we search. My failed attempt to be a banker left me broke still, but the upside was that I kept searching. Life is a “sequential search” process. We search, one by one, trying to match our gifts with the opportunities of the world. When we settle on an occupation, we also stop our search. If we stop the search at the first pragmatic job, then we are posing - and will surely be out-competed by the authentic. But if we keep searching, we increase the chances of matching our gifts with opportunity. Of course not all jobs pay the same. But better to keep searching for a way to remain authentic, than to settle early for mediocrity. Search enables authenticity.

The lesson: Ask “what do you do well?” and then search to see how that ability fits the opportunities of the world. You will have failures along the way if your search is thorough. But the upside of each failure is that you'll be required to keep searching, again increasing your chances of finding a match between your passion and the opportunities of the world.

More dangerous than failure is that you might, early on, score a well-paying job for which you are not authentic. Turn it down. Search enables authenticity.

For an academic treatment of the sequential search strategy, see Levinthal and March’s paper.