Holiday Special – The Myth of the Zero Sum Game

Competition has been a major force in the  “Animal Spirits” that have shaped the modern world.  The business world is full of sporting analogies and metaphors.  While a healthy competitive spirit is extremely important; this has given birth to what I call as the myth of the Zero Sum game.

When we play football, for us to win the other team necessarily loses.  This need not be the case in every day life.  The technology world is full of examples where focus on creating value for the customer has enabled multiple companies and ideas to succeed.  The very word Eco-system that is so popular in our industry alludes to this trend.

One other place where this myth has been strongly propagated is between countries.  As one followed the debates happening during the presidential elections; there was many a moment when I said; “Wait a minute, why should it be that a rising China mean a diminished role and opportunity for the United States?”  Just think about it – in the last 10 years or so China has lifted close to 250 Million people from absolute poverty to a global definition of a middle class (or close).  These folks would love to drive Cadillacs, keep their Coca – Cola’s cool in a whirlpool refrigerator and even stand in long lines for a cup of Starbucks coffee – a huge opportunity for US companies – 250 Million more middle class folks means literally doubling the North America market!!

With a similar perspective, this excellent article on the debacle of the Monitor group throws a critical eye on the limitations of Porter’s 5 forces theory – a favorite of B School attendees and professors alike – and many a strategy meeting.

While I do believe that Porters’ thinking is very relevant and useful for managers world wide; it is a refreshing perspective.

The bottom line is that, there is a much bigger world to discover out there if we do not limit over selves with competitive perspectives alone.

The world is not, thankfully a Zero Sum Game.  

Wish all my readers a very happy Thanksgiving Day!

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