Picture yourself on the edge of a cliff, looking down on a battlefield. That is the marketplace. You are an army general, surveying your troops below on a wide, empty plain. Your capabilities are your troops, arrayed on the foothills below next to the shore of a vast ocean. Your opponent’s troops are gathering on the horizon at the far edge of your vision. Of course, in the real marketplace you will have many opponents, but let’s keep this model simple before we start adding complexities.

What do you need to know before you go into battle to secure the best chance at winning? What can you do at this moment to shift the odds in your favor?

At the very least, a general needs to know how many troops are down there, what resources are available to those troops, and what sort of equipment they carry. The general must make snap decisions based on the most updated information on his infantry, cavalry, artillery, naval support, and special forces. I picked those five units because they match the five powers you control in the game of chess. Pawns are infantry, knights are cavalry, rooks are artillery, bishops are naval support, and the queen oversees special forces.

Now chess is complex but far less complex than running a company, so you must listen carefully to the current world chess champion, Norway’s Magnus Carlsen, when he advises: “In competitions, you have to find the right balance between analytical thought and inspired creativity to perform at your best. When it works, it feels natural, and I can’t even imagine losing.”

That balance is precisely what you must develop to save your organization – and it starts with a culture of innovation. That is where you will find the right balance between analytical thought and inspired creativity. However, in business it’s much more important to get it right the first time. When you lose in chess, you just try again or you swear, I’m never playing this stupid game again. When a business fails, there is far more on the line, perhaps even lives are at stake.

Chess metaphors were common in business schools in the 1990s, which is why people got tired of them and no one uses them anymore. The fact remains, though, that chess has been an excellent training ground for innovators for 1 500 years. Maybe a bit more. It trains you to think a few moves ahead and imagine the competitor’s most likely responses to your moves. Only when you factor in your opponent’s probable response before you make a move will you ever have any possibility of winning. The only luck you will find in chess is when you are lucky enough to play someone worse than you.

On a tiny eight by eight checkerboard, you and your opponent have all the same pieces with all the same movements. Even though there are a limited number of possible responses your opponent can make after each move, the total number of possible games of chess is functionally infinite.

After the first four moves in the opening, there are 288 billion possible positions in chess. That is still manageable for a chess master because most positions don’t make any sense if you want to win. However, after 40 moves, the number of distinct possibilities is estimated to be larger than the total number of electrons in the observable universe – roughly 10 to the power of 120. That number is so large that is impossible to picture, yet chess masters win consistently, just as some business leaders consistently deliver brilliant innovations to their customers. In the business world, after you win three times, it’s not luck anymore.

Chess is complex and running is business is many times more complex, but it is possible to become a master at both. However, they cannot be mastered with a series of hard rules like “knights before bishops” or “scale before you fail.” You will not win by studying the games of masters, either. Innovation and chess can only be mastered with an adaptive, flexible, individualized strategy that combines deep analytics with creativity on the fly.

Read all parts 1-6

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