The Flaw of the Game Metaphor

In my reading about strategy, I constantly encounter metaphors to games.  I'm fond of metaphors, and can see how a real-life situation in which multiple individuals are seeking to achieve the same goal is analogous to a physical or intellectual competition - but I'm also increasingly wary of the way in which the game metaphor is a Trojan horse and suspect that thinking in terms of this metaphor can be limiting and even debilitating.

The obvious flaw of the game metaphor is that a game is a construct.  A game an artificial situation that is defined, even contrived, to challenge players to succeed in pre-defined ways: to accomplish the goal that the game designer has provided according to the rules the designer has provided and using the pieces and space that the designer has provided.

This all works very well for an industry that is well defined and heavily regulated, and in which there is no room for innovation - because competitors have accepted a goal, must work with the known, and have little ability to play outside the rules that have been placed upon them by an external source.   But in an evolving marketplace, none of these things exist.

The goal of a business is variously defined: different organizations choose different goals to pursue and the rules change along the way.   A person starts a company because he recognizes there is a need among a large enough number of people that he can earn rewards (profit) by satisfying that need.  Or a person starts a company because he is fascinated by a thing (product or technology) and wishes to have the resources to perfect it, the profits of which are incidental or a necessary evil to achieving technical goals.   Or a person starts merely with a desire for profit and will do whatever it takes to gain it, which makes the object and the operations of little consequence.

The "rules" by which a business plays are also variously defined.  There are regulations that must be obeyed (or the penalties for disobedience accepted), common practices that can be followed, and even arbitrary restrictions that are placed upon oneself that, when considered, have no correspondence to any external requirements.   Ultimately, there are very few things that must be done a certain way, or at all, though one who accepts the game metaphor seems to search for rules, invent them where they don't exist, and obey them without question.

The resources available to a business are also not limited to the pieces and spaces defined by a designer, though this does not seem to be as widespread an issue as the goals and rules mentioned before.  A firm may acquire more facilities, personnel, equipment, and such and expand into different markets, whether segments of the existing market or untapped markets.   While all of this is possible, and is sometimes done, it is more common for firms to attempt to make the best of what they have, and to be reluctant to pursue any idea that requires them to acquire additional resources

My sense is that it is this metaphor of game that leads many to assume that the goal is fixed, the rules must be obeyed, and they must use the equipment that is provided.   There's nothing inherently wrong with this, and for a few firms it is entirely possible to plot a winning strategy by being more efficient and effective within a limited scope.

But at the same time, accepting these arbitrary restrictions prevents success: choosing a different goal, doing things others are not doing, and acquiring whatever resources are not common practices for established firms - though it does seem to me that they are common practices for the giant-killers, small and young firms that do things that the large and established ones will not.

And it is "will not" rather than "can not" because the only thing that prevents a large and established firm from being nimble is its willingness to do so.   Sticking to the original plan, pursuing the existing goal, following industry best practices, and refusing to make additional capital investments are characteristic of stagnant industries in which innovation is unknown.

So perhaps it is for the best that those firms that wish to be innovative throw away the rulebook, though it might be better still for them to recognize that the rulebook is a work of fiction, written by those who seek to define the terms of competition - whether to rig them in their own favor or merely to avoid the onerous task of thinking outside a defined and constrained system in which things are known and comfortable.

Business and Personal Relationships

Four separate conversations with colleagues about my last blog post (customer neglect) took the same odd turn. It started out with a discussion of customer loyalty and, at some point, the conversation evolved or abruptly switched channels to a personal relationships - specifically, dating and marriage. And it struck me that there are many similarities, such that it is a natural metaphor.

A person who is unmarried and unattached puts a great deal of effort in making themselves appealing and announcing their availability and communicating their interest in pursuing a relationship. In the same way, companies spend a lot of money advertising their products and services to the general public, hoping to catch attention and get someone to pay attention them, as a precursor to making a sale.

After that, there is the first date, and the person goes all-out to present an attractive package and be on their best behavior to make a lasting positive impression that will lead to a second date, then a third, and so on. And in the same way, a company that has gotten the attention of a prospect will take pains to behave in a way that they feel will impress the customer that they will be well-treated if they enter into a long-term relationship with the company.

(And as one colleague was quick to mention, some companies are out for a one-time sale, much as some people are out for a one-night stand, with much the same consequences when the customer figures this out and tells other customers what will happen if they deal with this same company.)

Provided that all goers well on the first date, there will be a second, and a third, and so on, as the relationship develops to the point where the relationship becomes exclusive. And in business, the customer who is satisfied with the experience of dealing with a company will return to them, and decrease the amount of business they give to the competition.

And after a while, the couple's commitment to one another gets to the point where they are ready to make a formal commitment to a long term relationship: i.e., marriage. There doesn't seem to be an equivalent ritual in the customer-vendor relationship. Arguably, it could be the point at which the customer signs a long-term contract with a vendor - though this is sometimes required by the vendor even for a "first date" (and it's worth noting that many companies are abandoning term contracts in favor of pay-as-you go programs, with an option to sign a contract at a later time), or in other industries there is no contract at all (though a customer's repeated purchases over time might be considered to be the equivalent of a common-law marriage).

Problems can occur at any moment in a relationship: it may be that a person discovers that the other party misrepresented themselves in the early stages - they are not really the person they pretended to be when they were dating - or perhaps they merely feel neglected or taken for granted. The same can be said of customers, when a business makes promises it doesn't deliver on during the time when they're pursuing the business, or when the level of care and attention paid to the customer diminishes over time.

And in a troubled relationship, a person might consider whether they have made the right choice. The prospect of breaking up and starting a relationship with a different person (perhaps even someone who is pursuing them) becomes increasingly attractive, and they may eventually begin seeing someone else "on the side." In much the same way, a customer who is dissatisfied or feeling neglected is constantly subjected to the advertising of competing firms that seek to win them away with promises of better treatment, and they may eventually be convinced to try another product, and move some portion of their business to the other firm.

If the relationship isn't mended, it is eventually abandoned: the couple stops dating, breaks up, or gets divorced. From a business perspective, this is the point at which the customer stops purchasing from the firm. It is probably much less dramatic than the end of a personal relationship, but I expect that the ex-customer, much like an ex-spouse, harbors feelings of resentment.

But on the brighter side, not all marriages end in divorce - many people remain happily married "for life." And in these instances, it's generally found that both parties have worked at maintaining the relationship and sustaining the romance - it doesn't "just happen," but requires constant attention and effort. And I suspect that, in the world of business, a company that has managed to maintain long-term customers often does so not because of customer complacency, but as the result of constant effort to ensure that the customer is happy with them, all along.

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This has gone on a longer than I had imagined - and perhaps I'm chasing down a metaphor at this point - but because the exploration has sustained my interest and sparked additional parallels, I have the sense that it's an apt metaphor, and it may be worth looking into some of those insipid self-help titles on personal relationships with an eye toward their applicability to the vendor-customer relationship ... though it may be some time before I can muster the patience to undertake that task.