INTRODUCTION
The book “Scacchi e strategie aziendali” (Chess and Corporate Strategy) is an effective tool for companies, managers and entrepreneurs looking for new approaches in the current context of economic downturn: a practical handbook to sharpen the decision-making mechanisms in complex situations, based on an innovative approach to strategic thinking.
Chess and Corporate Strategy combines the contents of an MBA strategy course with the analysis of world chess champions’ brilliant minds, drawing from cognitive psychology, negotiation theory, finance and paradoxes of decision-making theory.
The contents of the book are based on Luca Desiata’s Chess and Corporate Strategy course, offered by Polytechnic of Milan Business School and, soon, by LUISS Business School. Each chapter (strategic thinking, planning, finance, strategic marketing, decision theory, negotiations, leadership) is complemented with a business case from Sabelli’s experience as CEO of Alitalia and Piaggio and with a contribution by Anatoly Karpov interviewed by Bachar Kouatly.
Karpov’s interviews hinge on a systematic analysis of the strategic thinking mechanisms adopted by a great chess champion in top-level games and tournaments: strategic vision, depth of calculation, role of experience, intuition, personal motivation and perseverance. The titanic challenge that opposed him to Kasparov in the ‘80s is re-examined by Karpov as a repeated negotiation with alternate dramatic events, theoretical novelties, treacherous political intrigues.
CONTENTS
The link between Chess and Corporate Strategy is intuitive though it has never been explored further. Chess has been used and abused throughout history for the most extravagant parallels but, strangely enough, never for corporate strategy. Chess has contributed to the progress of information technology and artificial intelligence, it has been used to test war strategies and psychological theories, even Santa Teresa back in 1550 in its book “Cammino di Perfezione “ (Path to perfection) used chess as a metaphor for prayer.
The idea to develop the link between Chess and Corporate Strategy came in 2010 to Luca Desiata, a corporate strategy expert with a passion for chess. An MBA from Insead and several executive programs (including Harvard), several years with the strategy consultancy Bain and, more recently, as Head of International Strategy in Enel, allowed him to develop the contents and methodology of Chess and Corporate Strategy.
Some relevant examples of the course’s content are as follows:
Advanced strategic thinking:
In the 50’ and 60’ of the last century, experiments were conducted on the functioning mechanisms of the greatest chess champions’ minds. Chess Champions were asked to verbally expose the process of strategy elaboration behind a move. A team of psychologists observed and described some categories of strategic thinking that are surprisingly similar to the business strategic thinking. Awareness of these mechanisms allows to correct decision-making biases and to avoid pitfalls in the process of strategy elaboration.
Negotiation tournament
Like in a chess tournament, participants are divided into pairs to negotiate on a business case. The negotiations are repeated by changing the pairs until, after a certain number of runs, the winner of the “tournament” emerges. The tournament dynamics highlight the transaction prize forming process, which in the last rounds, tends to converge towards an equilibrium value determined by different elements such as negotiation techniques, motivation and preparation of the negotiators, information provided in the business case.
Approach to risk and uncertainty management
Risk-return matrices applied to chess and to financial and industrial portfolios. The risk attitude of a chess player for choosing a variation is compared to the risk attitude of an investor: a quantitative parallel between chess and finance.
Decision Theory.
Decision trees, game theory, matrices, in their qualitative, quantitative deterministic and statistical features: these are some of the tools used to study the theory of decision-making including its controversial St. Petersburg paradox.
Great book!