Tuesday, May 22, 2007

Cui bono?

I dusted off my copy of Co-opetition this weekend. Though it was a too-many-years-in-the-making reunion, skimming the pages was like settling into a cozy, neglected chair: It felt familiar but remorseful, the latter because of my deprivation.

Co-opetition is a must-read business strategy book. It embraces business as a game, systematically diving into a no-nonsense, pragmatic and useful analysis of value. It synthesizes game theory into a clear and usable framework, anecdotally levered by a collection of cool case studies.

Three Co-opetition memories remain since my first read a decade ago:

  • The introduction of complementors, one of the game’s four players. 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.
  • An awkward at-the-urinal-during-a-class-break conversation with my professor where he turned to his right and opined, “Chris, Chapter 4, the ValueNet. It’s really good.” (The ValueNet is a cool tool to map the game’s players [customers, complementors, competitors and suppliers].)
  • Cui bono?
Cui bono? It is a Latin adage, coined by Cicero and employed by Co-opetition’s authors, Brandenburger and Nalebuff, to query, “Who stands to gain?”, "To whose benefit?", or more literally, "(being) good to whom?"

To me, it is a fundamental question for all businesses, particularly when combined with two follow-on questions: How? And, Why?

First, identify all players who stand to gain from your business: customers, suppliers, distributors, service providers, employees, shareholders, manufacturers, etc. Second, clearly state how each player stands to gain (i.e., what is the relationship – the exchange of value – between your company and the constituent). Third, encapsulate why each player seeks to do business with you.

Basic analytical blocking and tackling, eh? Here’s where it gets fun: As your understanding of your playing field (your game) crystallizes, you can maximize the value exchanged with each player, identify additional beneficiaries (players who stand to gain from playing the game), and cross-fertilize relationships between disparate players.

If the purpose of the corporation is to make money through the creation and delivery of value, playing the cui bono? game is a terrific catalytic tool.

1 comment:

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