Second guessing the opposition
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If you want to be in the best possible shape for business success, I recommend you try a game that’s entirely free to play: it’s called ‘What if?’
The game involves constantly playing out scenarios of what might happen when you take a certain action. I’m obsessive about it and see it as a form of intense training – it gets you ready for the battle. And because I do it a lot, I’ve become better at it and this means I tend to go into the war zone well prepared and rarely am I caught off guard.
Say you’re about to enter tough negotiations, it makes sense to postulate: ‘What if they offer this?’ ‘What if they reject that?’
It doesn’t matter if you’re selling batteries, newspapers or your entire company, the principle is the same.
You can use this approach in a variety of ways and it doesn’t always have to be a heavy-duty, analytical process. A couple of weeks ago, a good friend suddenly needed a job and had to put together a CV for the first time in 20 years. I looked at it, knew what job he was after and that he would be facing a small panel.
Interviewers are braver in a group, so I attacked him quite aggressively over the one clear weakness in his CV. He was quite shocked at this almost too-realistic role playing and floundered momentarily, but then gradually he gathered his thoughts and came back strongly. He was ready for battle!
However, the real benefit of this technique comes when dealing with your competitors:
- ‘I’m going to launch a proprietary process we’ve just developed. How will they respond?’
- ‘What if I lower my price, how will they respond?’
- ‘What if I launch this range extension?’
The top investment banks are outstanding at this. There is this view that they’re good at strategy in the City, but not in my book. It is incredibly rare to get a vision or a great insight into a market from an investment bank, but they approach tactics and negotiating in an entirely strategic way and they ‘What if?’ endlessly.
They’ll have explored every imaginable option before making a phone call and will have played ‘What if’ on the next three steps.
Having been embroiled in a long-running, high-profile takeover battle, I was hugely impressed by both the approach the investment banks took and the end result.
Of course, if you play this game really well, then you’re less likely to get involved in a takeover in the first place – unless you choose to.
I ceaselessly asked myself: ‘How would I take us on if I were a competitor? Would I bad-mouth us to our clients about our lack of such-and-such?’ If you really get into the role you can frighten yourself quite easily, but the great thing is that you tighten up your act as a result.
Attacking Goliath
When I was building CIA, we almost always had competitors in our sector that were vastly bigger than us, so one of my key motivations was fear.
Initially the big players noticed us because I was very loud, trying to draw attention to us. But their attitude was: ‘They’re too small to bother about.’
As we grew, their attitude became: ‘CIA is a nice little business, but it’ll never become a threat.’ I even heard in a London wine bar once as I went past a group of loud-mouthed ad execs: ‘CIA? We’ll buy them once they get to an interesting size!’ Since at that time I had 51 per cent of the company, I regarded this assertion as a tad presumptuous.
We were soon more than a minor irritation. With our highly specialised, focused approach and dramatic growth rate, we weren’t just a competitor, we were a significant threat to their whole system.
I thought through how we could deal with arguments such as: ‘How can CIA’s service be better when there are only 55 of them in the company?’ or ‘How can they promise lower prices when they have only a fraction of our buying power?’ (Having buying power and using it to maximum effect are, of course, two entirely different things.)
Nightmare propositions
However, there were two scenarios that kept me awake at night: one was the way in which agency groups were able to package their services to the client, in which the media service (our part) was offered for free. The big agencies did exactly that.
We were prepared, but also lucky. Lucky, because at that time there were customers suspicious of getting a service totally free. We lost some clients, but nowhere near as many as one would in today’s far more price-obsessed world.
In fact, my real nightmare was predatory pricing: the threat of the big agencies cutting their prices to drive me and our sector out of business.
It was the only ‘What if?’ I didn’t have an answer to but, in 95 per cent of cases, playing the game will make you hardened even before the battle begins.