A few days ago, Russia national Chess team with Daniil Dubov on the squad took home the Gold Medal in FIDE 2021 Online Olympiad. In the finals,Team Russia managed to defeat Team USA in two successive matches. 

FIDE was compelled to introduce the given form of the tournament due to COVID-19 pandemic. Nevertheless, according to chess players themselves, it is better to play online, than to not to play at all.

There are so many similarities between chess and business. The momentum of change plays a pivotal role both in business and chess. It is necessary to predict the direction of this change and to react quickly. It is important to follow your opponent’s every move to remain one step ahead and as the leader. In chess is winning as in business, winning is critical to creating value on the board and in the boardroom. Our objective as consultants is to help our clients solve for complex problems to maximize value. 

Grasping the Situation in Business and on the Chess Board  

One of the key skills in chess is reading the board in order to predict your opponent’s next steps and reacting in time, once you identify their intentions.

Similarly, there are multiple parties involved in business restructuring. The ability to see the big picture and know the stakeholders’ interests and motivations is key. The balance of power and resources in business mirrors that on a chess board. 

For example, a complex restructuring can involve several creditor banks, each with its own agenda and negotiating position, one or more shareholder groups, company executives, trade unions, and public authorities. Understanding the capacities and desires of numerous players is the key to success. 

The Right Strategy and Calculated Decisions 

Chess seems to be a game without any ambiguity, but that’s not the case. There is ambiguity in your opponent’s ambitions, motivations, and intentions. Therefore, time for strategizing helps drive important decisions that are made with every move. 

The same approach applies to business. Strategy should always be calibrated to the situation. You need to monitor reactions and results, along with receiving feedback from a changing environment. Being alert to a shifting landscape is not an option, but a requirement. When launching a project, you need to consider environmental fluctuations, to mitigate against failure. Each decision should be considerate, measured and targeted to results.  Inaction and the inability  to make decisions can be catastrophic for the business. 

Alvarez & Marsal’s key competence is its bias towards action, operational excellence, and ability to drive change. Sometimes a decision and solution are obvious. Other times identifying the right course of action can be a highly complicated process with multiple considerations.  In either scenario our mission to provide leadership, action and results economically profitable for the client remains the constant. 

Companies in crisis must confront many elements often hidden by the “fog of war.” Yet, at the root of many problems is a lack of decision making and the unrealistic hope that the situation will naturally resolve itself.  We have found that quickly gathering necessary facts helps enable decision making even when the information is not as complete as we or the client would prefer. 

The Ability to Foresee and Be One Step Ahead 

In chess, every move on the board brings changes. A player must foresee potential outcomes and assess how best to win based upon these outcomes, while remaining one step ahead their opponent. Risks can’t be eliminated, but an optimal risk/reward balance should be established. At some point, it is important to acknowledge that managing complications may increase chances for the final win. 

In business, rapidly changing situations should be closely monitored, including  unexpected changes such as legislative development and/or shifting consumer behavior. Trends should be tracked, to stay ahead of the competition. 

All too often, we see companies face turbulence because they underestimated the level, rate or impact of market changes, such as the tax maneuver in oil refining, and were unable to adapt their investment and operational plans to the new reality.  

Plan and Tactics in Place 

In chess, it is crucial to make the right first move that will set the stage for the rest of the game. Opponents can play evenly in the beginning, but it will not ensure victory, and will most likely end in a tie. In chess winning is everything. Tactics need to be considered in advance, and the willingness  to take risks confirmed. 

The same is true in business. There is a current course of events, and we need to either prevent a sudden negative impact or pivot it to a more positive trajectory. In either case, something must be proactively altered, or the change will occur of its own volition. Every decision has elements of risk that must be accounted for. Businesses’ need a comprehensive plan that provides the framework for the tactical implementation.

Very few companies check the strength of their plans and test them against various scenarios of future events. We always recommend a backup plan, based on the most conservative assumptions, and that’s ready to launch if something goes wrong. 

Authors

Alexei Evgenev - Managing Director, Head of Alvarez & Marsal Russia 
Mr. Evgenev is a unique specialist in restructuring and managing large businesses with completed projects in various industries, incl. retail trade, the banking sector, metallurgy, engineering, and mechanical engineering. In one of his latest timely projects Alexei headed the distressed assets management division of one of Russia’s top 10 largest banks.
 
Daniil Dubov - Chess Grandmaster
Mr. Dubov is one of Russia’s strongest chess grandmasters, the 2018 world rapid chess champion, as part of the Russian chess team – winner of the 2019 European Team Championship and 2020 Online Chess Olympiad. Seeded in Top 30 world chess players. Since 2020, he is an ambassador for Alvarez & Marsal.