One of the benefits of operating in the business advisory space is that it gives you great insight into people at all levels and assess their decision-making skills.
Much like what you see on the Flying Solo forums, we see highly capable individuals that have years of experience and wisdom all the way through to the very young and green (albeit highly motivated) – and everything in between.
Anecdotally, age and time seem to correlate with general knowledge (experience), but it certainly doesn’t seem to be the case that those more experienced people exercise overwhelmingly superior and objective business decision making skills or judgement. I’ve certainly observed over the years that the more skilled an individual is at objective business decision making and judgement, the greater the chance of them achieving the most common goal of business financial success.
So great strategic decision-making capability can probably offset relative business inexperience. Knowledge (information) is useless if you make bad decisions.
Let’s test this theory with an example. On a recent flight at the start of a holiday I decided to play some computer chess to counter in-flight boredom. I’d played a little when I was younger, but otherwise hadn’t looked at a chess board for at least 30 years. So, everything was relearned from scratch on computer level 1.
After a few games with plenty of failure and then some progressive success against higher levels and then human competitors, it occurred to me that chess and its premise of strategic decision-making shares a lot in common with business strategic decision making, planning and judgement. Back in the office I shared thoughts on this revelation around the team.
Fortunately for me a couple of guys are relative experts in both poker and chess, so the discussion was very insightful.
So, what did we conclude?
1. A defined objective before you start gives you a measurable goal.
In chess there is a clearly defined and understood goal to capture the King and defend your own. A clear mission.
2. If you aimlessly move pieces without a broad plan you will almost certainly fail.
Planning your moves in advance, several moves out, results in a much higher chance of success. Chess Grandmasters plan five moves out or more, predicting a range of possible outcomes and solutions for each. Their decision making is almost as effective as a powerful computer which is remarkable given the range of chess move outcomes is in the quadrillions.
3. The more pieces (options) you have relative the greater your chances.
Much the same as business resources, how are you going to win if you start a game with only a few minor pieces when your opponent starts with all sixteen? It’s basically impossible. As a matter of fact, in chess, if you are playing someone of the same level and are down even one major piece then your probability of winning declines significantly.
4. Don’t waste scarce resources or its game over.
Different pieces on the board (resources) have a different impact on the game. Some are more effective and of greater value than others, so they must be used wisely and protected. The same with scarce business resources – take good care of the valuable ones.
5. Faster decisions usually mean less analysis and a greater chance of error.
If you played a timed game or against the PC (instant moves) you will see significantly more ‘errors’ in your game. Don’t rush.
6. There are strategic fundamentals that must be followed to succeed.
For example, in chess you must plan. You must protect your king. You must exercise patience in decisions and consider the range of potential options and outcomes. In business, you must also plan, analyse and understand the basics such as financials and marketing – without those you will really struggle.
7. Above all, you must learn from mistakes and failure (lost games) to improve.
That requires post game analysis, which you can get online. Business is no different. If you keep repeating the same mistakes, then you will never learn and never succeed.
The moral of this story…
Apart from being a great game, playing chess will quickly teach you the value of careful planning and decision making.
Chess can create a planning mindset and teach you to be patient, to set goals, to plan, to be well resourced, to monitor your progress and to learn from your successes and mistakes and proceed to accomplish your objective.
Written by James Millar from 360 Partners Accountants & Advisers.