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The Piece Your Business is Missing, or the End of the Zero-Sum Game By Art Radtke

The conversation happens every day: the sales department whines that if it wasn’t for sales the company wouldn’t even exist and operations complains that they are the reason that the company even exists. So what percentage of a company’s success is because of the sales department? For what percentage is the operations department responsible? Ultimately, those questions become  “Which one is more important?”

This debate is carried on all the time between groups that work together: from employees to referral partners, from suppliers to outside service companies.  The debate is driven by pride, not logic.

The question is similar to asking which piece of a six-piece puzzle is more important in the completion of that puzzle. The answer is that each piece is one hundred percent responsible for the completion of the puzzle. It doesn’t matter if one piece is bigger than the others, or if one is the easiest to start with.  The fact is, if you don’t have all the pieces, the puzzle is not complete.

This situation played out recently for a business owner I know. He was talking to one of his strategic partners when he noticed himself getting annoyed that this partner seemed to be taking credit for his success. He reacted as if the fact that his strategic partner felt she deserved credit would take somehow credit away from him. He had just made his business a zero-sum (game).

According to Wikipedia, in game theory and economic theory, “zero-sum describes a situation in which a participant’s gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero.” Zero-sum games are strictly competitive.

In this case, he felt that giving her credit would in effect be taking credit away from someone else. But what if we think about it this way:  Credit does not have to be a zero-sum game. Credit can increase to whatever amount we want or need—a non-zero-sum game.

This phenomenon plays out every day.   I know a company that recently made a very substantial improvement in its employees’ productivity and job satisfaction. But who was responsible for this improvement? Was it the new operations manager who spear-headed the changes, or the human resource person who had championed the need, or the strategic partner who introduced them to the recruiter, or the recruiter who found the operations manager, or the business advisor who helped work out this solution or the business owner who not only agreed to it but funded it with his resources. What percentage of the credit would you give to each party? I would give each of them one hundred percent! If you remove any one of them, this solution would not have happened. I am not saying some solution wouldn’t have presented itself, but that this one wouldn’t have happened.

What about between customers and suppliers?  Would a non-zero-sum game work there? The answer is yes!  Recently I talked with a co-owner of a web-based company that sells its products on the Internet. They use a fulfillment company in Europe to ship product to their international customers. They loved the fulfillment company but found its technology wanting.

A common approach would be to either put up with the inconvenience or tell the company to solve it. The challenge is that the zero-sum model is so prevalent, that even when we glimpse the potential of non-zero-sum thinking, we are often suspicious and avoid it.

This particular businessman, however, is a consummate non-zero-sum practitioner. He and a friend, both skilled programmers, went to Europe and spent 20 days setting up a custom software solution for the fulfillment company. While there, they also trained the staff and strengthened their relationship with them. It sounds crazy that a customer would do this for a suppler if you look at it from a zero-sum perspective.  It looks brilliant from a non-zero-sum perspective.

Here are the results so far:
1. The web-based company has a supplier able to give them what they need to expand their international market,
2. The fulfillment company has doubled its capacity to both handle orders and to procure new clients, and
3. The friend has six companies that want to purchase the use of the software.  He could start a business that is profitable from Day One if he chooses.

The best well-known example of non-zero-sum playing I am aware of is John Wooden.  He was the men’s basketball coach of the UCLA Bruins from 1948 to 1975. In his tenure he won ten national championships, had four undefeated seasons, won 88 games in a row and was named by ESPN as the greatest coach in any sport of all time. To gain understanding of how significant these accomplishments are, let’s look at the gap between his accomplishment and the number two in those categories of Men’s Division I college basketball. In national championships, the next highest number is four; in undefeated seasons, the next most is one; the next longest winning streak, 60. So what allowed him such success? I believe it’s because he viewed coaching as a non-zero-sum activity.

There are numerous examples of how he acted on this. In 1947, while Wooden coached the Indiana State University team, they received an invitation to the national championship. There was a stipulation that no black players could participate. No one else believed this would be a problem because none of their players of consequence was black. Wooden turned down the invitation, not on civil rights grounds, but in order to be true to his philosophy: that each member of the team had credit for how the team did. They had a young man warming the bench who happened to be black. He played no role of consequence during games but contributed the best he could. Wooden believed that each player’s efforts contributed to the team’s results. Thus, it would be unethical to suggest that the team deserved the invitation without each team member being invited.

Wooden also never retired a player’s number: he believed no one could achieve greatness without the support of others.  Thus, to retire one player’s number wouldn’t acknowledge the role everyone else had played in his success.

He never talked in terms of winning a game.  He would simply report the score, because his definition of winning was how close to your potential you had come. With this philosophy, it became possible for both teams to win.  In effect, he had taken a zero-sum game, and made it a non-zero-sum game.

Now you need to ask yourself, “What would happen if I approached my business as a non-zero-sum game? What would I do differently and what opportunities does that create?”