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      ‘Tis all a Chequer-board of Nights and Days

      Where Destiny with Men for Pieces plays:

      Hither and thither moves, and mates and slays,

      And one by one back in the Closet lays.

      RUBÁIYÁT OF OMAR KHAYYÁM

      There is a royal and ancient game that for centuries was the enviable pursuit of princes and noblemen, but which has, over the past hundred years, found a home in the heart of the common man (and woman). It demands of the player a passion and precision of movement that can become all-encompassing. The game is, in essence, played as an individual pursuit. However, there is a regular occasion when a team from America finds itself up against the might of Europe, when old hands play shoulder to shoulder with future stars in a genial, yet ruthless, display of mastery of this seemingly genteel game. Each time these teams compete against each other, the battlefield is littered with the stripped confidence of icons and the shattered aspirations of Young Turks; and it is virtually guaranteed that the Americans will lose.

      No, it’s not the Ryder Cup and golf. It’s that other courteous blood sport – chess. Not in the same league you might say when it comes to capturing public attention; but the event we are about to describe made it to the front page of the Wall Street Journal. Every year since 1978, member countries of the North Atlantic Treaty Organisation have converged on a venue to compete in the ultimate game of strategy and tactics. Soldiers and civilians, representing some of the finest minds of the Western military establishment, battle it out in what is the only international military chess competition in the world. To some people this may sound a little quaint; but the fact remains that the current world economic, social and political landscape has been shaped by centuries of conflict, often driven by leaders who honed their strategic and tactical abilities playing chess. Napoleon, for example, was a strong player of the game, and Prince Grigori Potemkin, whose conquests expanded the borders of the Russian empire in the eighteenth century, was so addicted to the game that he often commanded junior officers to engage in games of chess in front of him so that he could study the strategies that unfolded.

      What is interesting about this annual NATO military chess tournament is that America, which dominates the alliance in most other ways, never seems to do all that well, and Germany invariably emerges the victor. The success of Germany is normally attributed to that country’s universal conscription of eighteen-year-old males into its armed forces. Their diverse background provides a wide range of playing strategies. The failure of the American military chess team to win has generally been explained by the relative unpopularity of chess in that country, and the fact that most of its leading players are involved in real combat around the world. However, Germany’s dominance in the tournament is about to be challenged by the inclusion of former Warsaw Pact countries into NATO. This move will introduce exciting new teams of players who promise to raise the level of the game, because they grew up under the shadow of the Russian chess superpower next door. Against that, America and Britain’s performance will probably improve over time. Why’s that? Madonna and Harry Potter have taken up the game and increased its popularity among children.

      The Ancient Greek term strategos originally denoted a commander-in-chief (or chief magistrate) in Athens. Its meaning then mutated into the art that person was supposed to possess, namely the art of projecting and directing the larger military movements and operations of a campaign. Strategy, as the word is known in English today, is very much part of the vocabulary of military leaders. On one occasion, George W. Bush described his job of Commander-in-Chief of the US Armed Forces as setting the strategic direction in Iraq and ensuring that the generals were given the resources they estimated were required for the job. Strategy has also developed into a corporate buzzword used by CEOs.

      Strangely though, the chess analogy has not crossed from the war room to the boardroom. Nor has the concept of games generally.

      For example, we talk of war games but seldom if ever mention business games – and certainly not business chess. Perhaps the reason for this is that generals know before they go into battle that there are a whole set of conditions over which they have no control and about which they have little knowledge other than what military intelligence has gathered (and we know how reliable that can be!) So they play games and simulate the different paths the battle can take. If the enemy does this, we’ll respond in this way, and if the enemy does that, we’ll respond with a different tactic. Alternatively, if we initiate a particular battle plan, how will the enemy respond and what are the consequences of each response and how will we counter-respond?

      Maybe the cause of the lack of this kind of reasoning (or rather imagination) in the boardroom is that businesses are out to make money, and prefer to do their own thing in meeting this goal. They see themselves as an island in the sea of the market. They aren’t overly adversarial to other players unless they have to be, and it is not a matter of life and death. Yes, they may have to take out a few competitors on the way; but it is not the prime purpose of business to defeat the enemy. So, unlike the military, they feel no need to play games to figure out the nature of the competitors’ response. CEOs, moreover, feel much more in control in the business world than generals in a war situation because they are not subject to the extremely rude awakenings that war sometimes has to offer. They don’t have thousands of unnecessary casualties to contend with if their strategy proves incorrect. They lead relatively pampered lives away from the field of operations. In fact, the nearest they get to a declaration of war is a hostile takeover bid.

      The control paradigm in business is further intensified by the linear strategic planning techniques offered by many of the great business schools in America and Europe. The common thread running through these techniques is: select a single set of assumptions; base your plan on those assumptions; then mobilise your troops in support of the plan. Such an approach is actually far removed from the methods now taught at West Point and Sandhurst to cope with today’s security threats. On top of that, management consultancies tend to make control and certainty a centrepiece of the particular formula they want to peddle, on the basis that clients pay for precise answers to their problems. They know, like doctors, that their clients don’t want ‘iffy’ advice. Then, overlaying the business schools and consultancies are the ‘Billy Grahams’ of business – the immaculately frightful televangelists who twice a year conduct global seminars by satellite and whose stock in trade is oozing confidence about their particular message.

      Gurus can’t appear doubtful about the future – at least not in public!

      The ironic result of all this is that military personnel are much better trained to handle surprises and uncertainty than their business executive counterparts. They are humbler in their expectations but nimbler in their responses. Business whiz kids often think of themselves as smarter than the stuffy breed of person who joins the army, particularly as the former are paid so much more. In reality, many of those kids – particularly the ones who have MBAs – simply don’t possess the degree of flexibility (or mental agility) required in war games. The more confident they are, the more linear their approach tends to be in assessing the future. They don’t change their minds. Instead, they focus on the short term because that’s where their bonuses direct them to look. They forget the old acronym: one battle does not win the war (though it’s a heck of a lot better than losing the battle).

      Hence the reason for this book – to introduce military-type thinking to business people. Not of the command/control kind, which is the stuff of the thousands of motivational epics which land on the bookshelves each year. No, we’re more interested in the games, the scenarios, the risks, the show-stopping discontinuities that are now part and parcel of the world at war as well as the world at peace. Think of the American Marines and the British Special Air Services or the SAS. When they’re called in for an assault on an enemy position, they have scale models, they have an understanding of the modus operandi and probable behaviour of the enemy, they visit every scenario over and over again in their game plan. Nevertheless, they know the limits to their knowledge and are ready to adapt spontaneously to any completely unexpected development.

      We are qualified to give this alternative picture. In our last book, The Mind of a Fox, published in June 2001, we offered a very specific world-view to George W. Bush in the first months of his first term as US president.

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