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GAME OF GO AND CORPORATE STRATEGY

In this fourth article, I would like to share with you a more personal topic. Indeed, when you spend around 15 years working for Japanese conglomerates as I did (5 years in Canon, 8 years in Hitachi and 2 years in Toyota Group), you learn 2 things:

  1. Learning Japanese, unless you are in total immersion in the country, is a full time job. This was hardly compatible with my busy agenda at the time. As a consequence, my Japanese skills remain very limited. I can find my way in Tokyo, but I cannot sustain a conversation or be part of a meeting in Japanese. A bit frustrating, but this is the way it is…
  2. Getting used to the Japanese corporate strategy approach, on the other hand, is pretty easy. It is indeed really intricate with the Japanese culture, based on respect and harmony. To that extent, the game of Go is a model of the Japanese corporate strategy, and that’s not new…

Originally from China, Go is probably the oldest cerebral sport in the world.

Several legends tell of its invention: according to one of them, Emperor Shun, who reigned a little over four thousand years ago, invented this game to develop the intelligence of his son Sheng Kien; according to another, a vassal of Emperor Ketsu imagined it in the 18th century B.C. to entertain his suzerain.

It was then imported into Japan in 735 of our era. At first aristocratic and reserved for the entertainment of people of the court of the Emperor, it was quickly appreciated by Samurai and Buddhist monks. From the 13th century, it spread to all classes of society.

In 1603, Shogun Iyeyasu Tokugawa founded the Go-in, or Go Academy, and entrusted its direction to the famous Honinbo Sansha. The game became one of the four major arts of the Empire of the Rising Sun.

The goal of the game is to occupy as much space as possible (territories) using a very simple material: a grid, called a Go-ban, and pieces, called stones, which are black or white, that are placed alternately on the intersections of the grid.

Learn Go in 15mn

The Go-ban is a checker board on which is drawn a grid of 19 rows and 19 columns, or 361 intersections.

The rules can be learned in a few minutes and allow the beginner to quickly obtain a significant game level.

Two players of very different strength can play on equal opportunities thanks to a clever handicap system, and this without distorting the game’s mechanisms in any way.

Playing Go requires players to “write” and “read” on three levels:

  1. The whole game represents a global image perceived by both players. It is a question of creating together an aesthetic form, while keeping in mind a “global and strategic” vision of the game. This level of apprehension is close to that demanded by the reading of the Japanese kanji characters;
  2. The development of the territories over the course of the game requires the players to “write” in a way that is close to the sketch (moyo) and to “read” the stone groups, which could be similar to the symbolization of the two syllabic scripts (hiragana and katakana);
  3. Finally, in tactical combat, the player must count each stone embedded in the joseki (tactical game sequences, during which each player is required to count the number of stones involved in the local fight, as well as the number of freedoms of each of the parties involved) one by one. The “reading” of the problems raised requires a more analytical vision, close to our alphabetical writing (romaji).

Thus, the game of Go makes it possible to apprehend reality in a global and synthetic way, while requiring a more analytical vision during the tactical phases.

These various reading modes are also interdependent. This requires harmonizing the three levels of reading.

ANALOGY between the game of Go and corporate strategies

Go teaches to control a territory or a market through influence, without having to occupy it.

The lightness of the connections is preferable to the heaviness of the groups. Preference is given to :

  • Small units over “heavy machinery”, SMEs over heavy industries, etc.
  • The struggle for sometimes microscopic benefits, but with a long-term impact.
  • Development of R&D within companies, among other things.
  • The mobility of groups that facilitates an easy change at the strategic level, as well as at the production level.
  • The economy of means.
  • The importance of the most complete information possible to carry out your strategy.
  • The meaning of relative victory in relation to the whole conflict.
  • Conquering territories or market shares, and not destroying at any cost the competitor or opponent.

The development of a safe territory or market can serve as a basis for further development.

Tactical mistakes are not fatal: it is always possible to change your strategy. Never persist in making mistakes or losing. Victory is decided on the periphery, then in the centre.

This is also true in economics. Access to peripheral markets, both geographically and in terms of products, is less demanding and less costly, and often serves as a basis for a hegemonic policy that will eventually take shape at the centre, formed geographically by the Europe-USA-Japan triangle, and at the product level by those with high added value such as new technologies.

Stones, like money, are at the beginning abstract values: it is their investment, their use that make them real values.

Regional and non-centralised division, although centre and periphery form a whole.

Go is a deferred game: victory and defeat are relativie epiphenomena. The loss or acquisition of stones (market shares, capital,…) does not mean defeat or irreparable victory.

It is by convention that the partner with the most territories is qualified as the winner. The loser often retains one or more inviolable territories to his credit and is therefore not annihilated.

Local successes are no guarantee against a strategic debacle. In Go, as in trade, the front is discontinuous.

There are no starting positions or materialized camps. First, there are zones of influence, then territories. Vital points are determined only by the interrelation of forces at a given time, which is an effect of their dissemination.

A group whose importance was previously considered to be fundamental can then be sacrificed with impunity. In economics, this is the case of the steel sector, which, at the beginning of the century, was considered as a central branch, and has now become a branch of lesser importance that can eventually be abandoned, at least in industrial countries.

Two continuous lines of stones create a stable, productive model of peaceful coexistence. The dimension of the conflict is not the scope of a duel to death driven by a desire to destroy the other, but the meaning of economic competition for the maximization of the survival of territorial groups.

Any attempt to encircle and create an area of potential influence is proportionally responded to the magnitude of the challenge.

Whether it is a question of geopolitics, commercial strategy, social conflicts, management, advertising, organisation, investment policy, location problems, innovation or expansion, the Go can provide a model for analysing these situations, thus contributing to their control.

Indeed, each time it is a conflict situation for which it is necessary to develop a strategy in order to solve a problem. These various processes can be interpreted in terms of Go.

The structure of the game, and more specifically its abstraction, makes possible an in-depth analogy that has nothing in common with the relatively superficial comparisons between forms of business strategy and chess or poker.

The following table gives detailed comparison between the corporate strategy and the one of Go:

Generic term Go Concept Sectorial level Global level
Conflictual system Go game Competition or Growth
Actor Camp (White or Black) Corporate Multinational or country
Conflictual space Go-ban Product-specific market Global market
Unit of conflictual space Intersection Market share Markets
Force unit Stone Product or service Legal entity
Conflict boundary Edge of Go-ban Marginal market segment Periphery of developing countries et Third World
Sectorial zone Corners Primary sector Developing countries
Edge Secondary area Newly industrialized countries
Centre Tertiary and quaternary Industrialized counties member of OECD
Control area Territory and influence Owned market share and growth Owned market and growth
Elimination of force units Stone capture Elimination, purchasing a majority of shares or acquisition of a competitor Acquisition of a competitor or taking a majority stake in a competitor or, occupation, colonization, friendship treaty or annexation of a region.

It is possible to draw the same table concerning financial investments, political, social or commercial negotiations, intellectual property rights, …

Any comment?

Stéphane Amarger

Innovator by nature...

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