Chess and the Art of Business Strategy

Chess is a fascinating ancient war sport (also an art and science) combining the excitement of tactics with the intricacies of long-range strategy. Those strategists able to distinguish the subtle transitions between the different phases of battle (opening, middlegame and endgame) will certainly maintain a tangible advantage over the opponent. In fact, this is what separates a chief strategist apart from others. The idea of when to conduct a direct frontal assault, defend a strategic post, or launch a surprise counterattack appear to be simple concepts but each involves a constant assessment of resources, timing and planning.

“During the game of chess, maybe the most important job of any player is position analysis. Believe it or not, a lot of the time a grandmaster spends thinking during a game is not dedicated to the future. Rather, it is dedicated to the present. You see, finding the right plans and moves can only happen if you are very aware of the current situation.” (Schwartzman, July 1998)

The unique strategic characteristics of chess are certainly applicable to both military science and business dynamics allowing the implementation of its principles. In chess, it is important to understand the terrain (or position) and adapt to both gradual and abrupt changes. It is also just as important to understand the opponent and his characteristics and tendencies.

“And so it is in business, before devising the strategy of how to compete in the marketplace, it is absolutely vital to understand that marketplace perfectly. This involves realizing what the strengths and weaknesses of the company are, who the competition happens to be, what their strengths and weakness are, what market characteristics stand out, and many other pieces of information that the business review process is meant to reveal.” (Schwartzman, July 1998)

“Knowing the opponent and understanding him as a human being enables one’s own strategy with greater accuracy. To be successful a chessplayer must have the ability to understand his opponent’s intentions.” (Krogius, 1976)

In the annals of warfare (i.e., business, chess and martial arts), it is common knowledge to strike the opponent at his weakest point with maximum efficiency of force. Of course, one wants to appear near to the opponent when actually far; appear far when actually near. This tactic keeps the opponent confused. “The enemy must not know where I intend to give battle. For if he does not know where I intend to give battle he must prepare in a great many places.” (Sun Tzu)

“Hewlett-Packard’s philosophy to remain ahead of the competition in printers is to carry out preemptive moves to make its own products obsolete. Offering improved products with new features that replace still successful products allows Hewlett-Packard to continually seize the high ground even as the technology terrain causes it to shift.” (McNeilly, 1996)

The diversionary tactic (i.e., sacrifice) above is designed to cause the opponent to divert resources from a strategic point and weaken his position. If a business begins to expand to defend their position, resources (financial, personnel, material) become overloaded and eventually the mechanism begins to break down. In chess, we understand the danger of having overloaded pieces which hold the position together by a mere thread. When that defending piece takes a direct hit, the position collapses… such is also true in business.

Chess also teaches one not to relax once an advantageous position has been attained. Such lapses result in brutal punishment. The parallels in chess are striking. “It is quite clear that one can well achieve a winning position, but as a result of relaxing the tension, or failing to pay attention even for a second, turn the won game into a lost one.” (Krogius) In a business sense, the market leader is always hunted and cannot relax for one moment lest a favorable market position is lost quickly. Chess is a simulation of the business cycle employing many of the same tactics and strategies. Serious study of this ancient sport serves as an instructive method for appreciating business dynamics.

Kotov, Alexander. Think Like a Grandmaster. Dallas: Chess Digest, 1971.
________. Play Like a Grandmaster. London: Batsford, 1978.
Krogius, Nicholai. Psychology in Chess. New York: RHM Press, 1976.
Porter, Michael. Competitive Advantage. New York: Free Press, 1985.
McNeilly, Mark. Sun Tzu and the Art of Business. New York: Oxford, 1996.
Schwartzman, Gabriel. “Chess and Business.” Chess Life, May 1998, 12-13.
________. “Management and Chess.” Chess Life, June 1998, 10-11.
________. “Competing in Chess and Business.” Chess Life, July 1998, 10-11.
Sun Tzu. The Art of War. Edited by Samuel B. Griffith. London: Oxford, 1963.