Adam Brandenburger, a distinguished professor and authority on game theory and business strategy, has significantly influenced modern strategic thinking. His work, most notably the concept of "Co-opetition" and the "Value Net" model, challenges traditional competitive mindsets and offers a more collaborative and creative approach to business.
On Co-opetition: A Revolutionary Mindset
Brandenburger, along with Barry Nalebuff, introduced the groundbreaking concept of "co-opetition," the idea that businesses can benefit from a blend of competition and cooperation.[1][2]
Quotes:
- "Co-opetition is the concept of cooperating with competitors to achieve mutual benefits, while also competing to win individual gains."[3]
- "In a rapidly changing business environment, co-opetition allows organizations to adapt and innovate more effectively."[3]
- "Co-opetition requires a shift in mindset from a zero-sum game to a positive-sum game, where all parties can benefit from working together."[3]
- "The best way to win in co-opetition is to create a bigger pie, rather than simply fighting for a larger slice."[4]
- "In co-opetition, competitors can become partners and partners can become competitors, depending on the specific situation."[4]
- "Business is not war and it is not peace. It is both." (A central tenet of Co-opetition).
- "Real success comes from actively shaping the game you play—from making the game you want, not taking the game you find."[5]
- "Co-opetition is not just a strategy, but a mindset that can transform the way organizations think about competition and collaboration in the business world."[3]
- "Even the hypercompetitive Jeff Bezos and Elon Musk once met to discuss combining their Blue Origin and SpaceX ventures." (Illustrating the potential of co-opetition at the highest levels).[1]
- "The moon landing just over 50 years ago is remembered as the culmination of a fierce competition between the United States and the USSR. But in fact, space exploration almost started with cooperation."[1][6]
Learnings:
- Beyond a Zero-Sum Game: Traditional business strategy often views competition as a zero-sum game, where one company's gain is another's loss. Co-opetition suggests that by collaborating, companies can grow the entire market, creating more value for everyone.[7]
- Simultaneous Competition and Cooperation: It's possible and often beneficial to compete and cooperate with the same companies at the same time.[4] For example, automakers may compete fiercely in showrooms but collaborate on developing new technologies like electric vehicles.[8]
- Focus on "Growing the Pie": Instead of battling for a larger share of the existing market, co-opetition encourages businesses to work together to expand the overall market size.[4][7]
- Flexibility is Key: The business landscape is dynamic. A competitor today could be a partner tomorrow, and vice versa.[4]
- Mutual Benefit is the Goal: Successful co-opetition leads to win-win scenarios where all collaborating parties gain some advantage.[3]
The Value Net: A New Framework for Strategy
To operationalize co-opetition, Brandenburger and Nalebuff developed the Value Net model, which provides a framework for analyzing the key players in any business.
Quotes:
- On the players in the Value Net: "Customers, Suppliers, Competitors, and Complementors." (These are the four key player types in the Value Net).
- "A player is your complementor if customers value your product more when they have the other player's product than when they have your product alone." (Defining a key and often overlooked player).
- "A player is your competitor if customers value your product less when they have the other player's product than when they have your product alone." (The traditional view of a rival).
- "It's not enough to be a good player. You also have to play the right game." (Emphasizing the importance of understanding the strategic landscape).
- "The most basic mistake in strategy is to focus on your own company and ignore the other players."
Learnings:
- Identify All the Players: The Value Net expands the traditional view of business relationships beyond just customers, suppliers, and competitors to include "complementors."[9]
- The Power of Complementors: Complementors are businesses that offer products or services that make your own more attractive. For example, apps are complementors to smartphones. Recognizing and collaborating with complementors can be a powerful strategic move.[9]
- Interdependence is Everywhere: The Value Net highlights the interconnectedness of all players in a business ecosystem. The success of one player is often tied to the actions of others.[9]
- Change the Game: The PARTS framework (Players, Added Value, Rules, Tactics, and Scope) associated with the Value Net provides a systematic way to think about how you can actively change the business environment to your advantage.[7]
- Value Creation and Capture: The ultimate goal is to understand how value is created and captured by all the players in the Value Net, and then to strategize how your company can increase its share of that value.
On Strategy and Creativity
Brandenburger argues that true breakthrough strategies are not born from analysis alone but require a creative leap.
Quotes:
- "Game-changing strategies […] are born of creative thinking: a spark of intuition, a connection between different ways of thinking, a leap into the unexpected."[10]
- "Strategy Needs Creativity: An analytical framework alone won't reinvent your business."[10]
- "Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn't really do it, they just saw something." (Quoting Steve Jobs to emphasize his point).[11]
- "We need them to be rigorous, but we need to be creative and at the same time."[12]
- "Business success requires being different. To succeed, a business needs to stand out from the competition."[13]
- "In this environment, the key to being different becomes one's ability to think differently."[13]
- "Out-thinking others in this way is the job of the business strategist."[13]
- "I would have liked to have been told that I practice creativity from combination — and that's okay."[8]
- "Nothing in my education explored the idea of creativity from combination. It would have been nice to have been encouraged to understand this aspect of myself earlier in my career."[8]
- "You can only get to breakthrough strategy if you overlay strategic thinking and tools with creative thinking."[10]
Learnings:
- Strategy as a Creative Act: Brandenburger emphasizes that while analytical tools are important, they are insufficient for creating truly innovative strategies.[10][12]
- The Four "C"s of Creativity: He proposes a framework for creative strategic thinking based on four concepts:[12][14]
- Contrast: Challenge the conventional wisdom and assumptions of your industry.[12][14]
- Combination: Connect products, services, or ideas that have traditionally been separate.[12][14]
- Constraint: Turn your limitations and liabilities into strengths and opportunities.[12][14]
- Context: Apply lessons and ideas from entirely different industries or disciplines to your own.[12][14]
- Think Differently to Be Different: Sustainable competitive advantage comes from being able to think in ways that your competitors do not.[13]
- Combine and Recombine: Many breakthroughs come from new combinations of existing elements.[11]
- Embrace the Unexpected: Don't be afraid to take intuitive leaps and explore unconventional ideas.[10]
On Game Theory and Business
Brandenburger is a leading authority on the application of game theory to business strategy.[15]
Quotes:
- On the inspiration for Co-opetition: "It seemed to me that the basic premise of game theory, going all the way back to its beginning in 1928, was that interactions among players are both competitive and cooperative. Yet, the field of business strategy at the time was usually called just “competitive strategy.” So, it was important to bring more balance into the field."[8]
- "What intrigued me about game theory was the idea that one might be able to understand interactions between the players in a game who might be people or organisms or other such entities."[8]
- "The three-person game is essentially di¤erent from a game between two persons... A new element enters, which is entirely foreign to the stereotyped and well-balanced two-person game: struggle." (Quoting John von Neumann and Oskar Morgenstern).[16]
- "The magnitude of the work that a group of [players] can perform under all varying possible conditions that may present themselves ... is an index of the ... value of that group." (Quoting Emanuel Lasker).[16]
- "To date, game theory has been a language — a very useful language — to use in many fields. To become a full theory, it needs to be built on facts about behavior."[8]
Learnings:
- Business as a Game: Game theory provides a powerful framework for understanding business as a series of interactions between different players, each with their own objectives and strategies.
- Anticipate Others' Moves: A key aspect of game theory is thinking ahead and anticipating how other players will react to your moves, and how you should then respond.
- Look for Win-Win Opportunities: Game theory is not just about winning at the expense of others; it also provides tools for identifying and creating mutually beneficial outcomes.
- The Importance of Rules: Understanding the explicit and implicit rules of the "game" of your industry is crucial. A powerful strategic move can be to change the rules.[7]
- From Theory to Practice: Brandenburger's work has been instrumental in bridging the gap between the abstract concepts of game theory and their practical application in the world of business strategy.[8]
Sources and Links:
The primary source for many of these quotes and learnings is the book "Co-opetition," co-authored by Adam Brandenburger and Barry Nalebuff. Further insights can be found in their articles in the Harvard Business Review, such as "The Rules of Co-opetition."[1][6][13][17] Interviews and academic writings by Adam Brandenburger also provide a wealth of information on his strategic thinking. You can find more about his work on his page on the NYU Stern School of Business website.[18]
Sources
