On the theories of a game, and strategies of winning.

Last year, I wrote about the exponential nature of growth today, and shared with you the cognitive transformation matrix, a tool to make strategic and investment decisions.

This year, I've previously written about stepping back, and using first-principle thinking as the driving mindset within your organization in order to be strategically effective.

This post explores how your vision and your risk appetite defines your strategy and the way you execute it, through the lens of one of my other great loves: football.

I will say here, that this post is definitely about having a bit of fun, and also to give you an excuse to look at some of the best moments in competitive sports in the past couple of decades.

In my note on first-principle thinking, I briefly mentioned the approach of "full-stack" strategy. It is important to understand your own approach, as your approach is the first "constraint" you place on yourself: and your constraints will, barring sheer dumb luck, always define your outcomes.

Rather than being a specialist in any one approach, full-stack strategy is about understanding the fundamental principles that govern phenomena or systems, and training oneself to identify and influence the contingent variables within them.

It is an approach built not upon knowledge but experimentation: it does not look to understand a static truth, but rather to influence and shape a dynamic reality through experimentation.

Before we jump in to the various footballing approaches, a little note from Bruce Pandolfini, one of the great teachers of chess, to set your expectations:

People believe that the better you are, the faster you should win. Chess doesn’t work that way. When people tell me that they just won a game in three or four moves, I usually conclude that they’re not a very good player — and that their opponent is a terrible player.

Great players want to build their position and to increase their power — so that, when they strike, there is no defense. You can’t do that in only a few moves. Trying to win a game in the fewest number of moves means hoping that your opponent is incompetent.

I don’t teach students to base their play on hope. I teach them to play for control.

Which brings us to football.

All competitive team sports are played within a field. Winning the game comes through different ways of acting upon the field through your players.

This is defined through variables like your team, your formation, your tactics; and the same of the opposition.

I won't go into the details of formations or tactics, or whether a double pivot 4-2-3-1 is better than a single pivot 4-1-2-3 formation. (You're free to send me a message if you want to go into that detail, though!)

What I will try to outline instead is four approaches to the game: to controlling the field of play in the way Pandolfini describes, and then link them back to how some organizations you will recognize often behave.

In the evolution of football strategy, you have two core approaches: that of playing to win, and that of playing to not-lose.

As managerial science and tactics evolved, you also add in the variable of the talent of your squad, and then, more importantly, their training.

At any level of performance, over time you will have an even distribution of talent. It is then the training, the strategy, the "organization" of your organization that defines their chances of success or failure.

The "organization" of your organization is generally built on your vision -- what it is you want to do; and your risk profile -- what you're willing to give up in order to get to where you want to go -- which will define what your employees feel they are expected to do (purpose) and what they feel their are enabled to do (support).

Four football clubs whose styles of play you could look at to understand the difference in these approaches would be vintage teams of Manchester United, Barcelona, Real Madrid, and Inter Milan.

Here's a short presentation that shows you how your strategic organization (and therefore how you set up your teams) affects how you perform.

So you see that different football clubs, and different managerial organizations take different approaches to managing risk.

Part of this comes from the vision of your organization, and part of it comes from the ambition and risk profiles of your leaders, managers and employees.

In recent times, the upper-left and bottom-right quadrants have seen the most evolution in the game of football: with the two managers who have done the most to define it in this period: Pep Guardiola and Jose Mourinho coming from two distinctive worldviews.

The worldview of the Pep Guardiola's style of play at Barcelona was of attack through possession. That if your team had the ball, the other team couldn't score. And that you would inevitably find a way through.

The criticism often placed on this approach was that it was a way of winning by "boring ones opponents to death."

The style of play was based on stringing together long sequences of short passes - short passes because you're less likely to lose the ball.

The firm I compared to this approach in the real World was Amazon.com, because Amazon's approach is also gradual: there is the core of the "product" which is the ecommerce website / app in itself, but Amazon makes many "short-passes," -- small interventions -- which it then looks to scale based on user response.

In doing so, it also reduces its exposure to losses, by controlling as much of the board as possible.

This is why it's in the upper-right quadrant: that's the way Amazon plays to "control the board" -- with a high-level vision, implemented through a multitude of comparatively low-risk models.

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The worldview of Jose Mourinho was defined long before he went to Real Madrid, and it was always that the team that wins is the team that commits the fewest errors.

In Mourinho's world, strategy is about absorbing opponent pressure and drawing them into your half. This creates an open space in the opposing half. This is when you force your opponent to commit an error, and you transform the game into a race between your fastest attacking players and the opposition's.

Forcing your opponents into errors and having the speed and efficiency to capitalize on them is another approach to winning.

The firm I'd say operates most in this mold today is Facebook. Back when Facebook was a rising star, its motto was "move fast and break things". It then evolved to "move fast and stable infra". As the number of users increases, you can take fewer risks with your core product offering.

The market it operates within is a difficult one: on the one hand, Facebook needs to maximise the times users spend on it, and this requires a high degree of stability in service and reliability in what to expect when I'm on it. On the other hand, social has a high velocity of innovation, and is a field where you can lose your position quickly to up-and-comers.

Facebook has had to deal with challenges from microblogging (twitter,) messaging (Whatsapp,) and AR feeds (Snap) -- and it has had to do so by disrupting service-as-usual enough in order to implement new features -- thus increasing cognitive loads for users and the risk of users leaving the platform, in order to compete with the very services the users might leave the platform for.

This is why Facebook lives in the bottom-right quadrant of the model: it needs to respond to users and occasionally make large visible changes, that naturally increases its risk exposure.

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The more traditional approaches, purely of attack or defense were based on the worldviews of two vintage managers: Sir Alex Ferguson of Manchester United, and Helenio Herrera of Inter Milan.

Herrera's principle was known as 'catenaccio,' Italian for 'door-bolt'. It is a technique the Italian national team and Italian football clubs have implemented with some success. It's never pretty but it is effective. And when your approach is to not-lose, then the approach makes sense.

N.B. No video on Herrera since it's all from 50+ years ago, but the last team that used the catenaccio effectively, all the way to a title was Greece back in 2004.

This is the approach Microsoft has historically maintained, scaling new businesses around its core offerings in OS and Productivity.

This is not just the organization though, but also its customers: enterprise customers fundamentally demand low-risk, high-stability service organizations: and most other firms with large B2B footprints will also operate in similar fashion.

This is why Microsoft sits on the bottom-left of the quadrant, and how it plays to "control the board."

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Sir Alex Ferguson on the other hand is renowned for his uncompromising attacking philosophy, and indeed, even though he holds the most major trophies of any football manager in history, also lost the opportunity to win a few trophies along the way because of his unwillingness to play defense.

The attacking belief he gave his team led to the dying minutes of games being frequently referred to as "Fergie time," as his teams converted losses into draws, and draws into wins at the death of games: the difference between 2nd place and titles.

The firm I compare most with Manchester United's approach is that of Apple.

Today as much a part of Apple's organizational drive as it is about market and consumer expectation: the firm is expected to lead the market, to create the new use-case, or new industry.

This implies inviting a much higher degree of risk than any of the other firms operating in this space. Given the 1 year lead times on new products, it makes it critical to get it right. (Think of the other firm on the "high risk" side of the grid: Facebook.

Facebook likely have upwards of 10 small or large "editions" of parts of their products -- from the newsfeed to various smaller features) running at any given time to test user behavior.

Apple does not and will never have that luxury in the market space within which it operates. It is expected to win, it is expected to sit on that upper right-hand corner of the model, and to lead: to tell consumers what the next big thing is and give them no other alternatives.

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This post, as I mentioned, is both to have a bit of fun, and to also impress upon you the need to understand your own organization's strategic approach, and that of your competitors'.

It is really about exploring 2x2 MECEs in various fields, to impose frameworks that help you understand yourselves, your organizations, your competitors, and your markets better.

The MECE used here tries to factor in ambition and vision versus risk (expected and needed) in order to describe how certain organizations work (along with many of their close competitors).

And understanding the cultures that organizations come from is an important step to understanding how they will behave, what they will or won't do, and how you need to "organize" your organization in order respond to them.

This one looks at four very different but successful organizations to draw clearer distinctions: but you could very well draw out a similar grid for your firm, within your market.

(You could draw out a similar grid for various teams within your organization to better shape their KPIs, too.)

I hope you enjoyed the read (and the football!) -- I know I did putting it together.

Have a great week ahead!