Le Veneur

One of the most common mistakes in business is generalizing experiences, whether positive or negative.

Imagine that you succeeded at something in the past. Now you tell yourself: “We succeeded at X in the past. So let’s try it again now, and it’s sure to be a success.”

Typical examples might include:

“At Company X, we tried A and it worked. Let’s try it here.”

“In the past, we did B and it worked. Let’s try it again.”

The problem is that business isn’t a single-player game. Market conditions are constantly changing, and more importantly, your opponents are changing too.

From a game theory perspective, your past success worked because it was the best possible response to the market and competition at the time.

But the competition learns. If you won last time with tactic A, other players have adapted. Or perhaps entirely new players have entered the game. The market equilibrium has shifted, and you’re now playing a completely new game.

Why is this “copy-paste” approach harmful?

1.) You’ll spend a lot of money on a solution that no longer works in the new payoff matrix.
2.) It will take you a lot of time.
3.) You’ll lose out to the competition.

Your opponents likely already know your old strategy and have a counterstrategy ready for it. You’ll end up investing resources and energy into a predictable and ineffective solution.

What’s a better approach? Don’t blindly copy the action; instead, examine WHY it worked in the past and map out the current game plan. Ask yourself:

* Are we playing with different players now? (New competition, different customer expectations)

* Have the rules of the game changed? (New technologies, different legislation)

* Have the payouts changed? (Is this solution still as profitable?)

And most importantly: How will the other players react if we make this move today?

From a certain perspective, the ability to seek solutions may become more important than experience.

Don’t play yesterday’s game with today’s opponents.

— Robert A. Le Veneur