Three Moves Ahead

There is also a helpful wrap-up section at the end of each chapter that outlines the main points that are covered. For all you impatient skimmers out there, this is where you'll want to head first.

So what business tactics can you expect to learn from this book? Well, one lesson many readers will enjoy learning about is called The Exchange Sacrifice. In chess, it's when you surrender one valuable piece to get another, less valuable one. At first, readers will be scratching their heads over this. Why would anyone, in chess or business, do something like that? Well, it's a brilliant move, and you'll learn all about in Chapter Eight.Another fascinating tactic the author talks about is called the Ruy Lopez. It's probably the most popular chess opening of all time, but when it's used in the business world it can make all the difference between success and failure of a new start-up. This strategy is broken down in Chapter Three.

So who, exactly, will be interested in reading Three Moves Ahead? In short, pretty much anyone interested in either business or chess. Business leaders, and in particular entrepreneurs, upper-level managers, and strategists, will find a treasure trove of valuable tactics here, while chess enthusiasts will enjoy seeing how modern-day companies are using these classic strategies to succeed in the world beyond the checkered board.

This book is fresh, insightful, and really fun to read. Another bonus is that even if you don't play chess right now, by the time you're done, you'll want to start. And if you do, you'll already have several winning strategies from a master player in your back pocket!

The author, a lawyer turned business mogul, helped found the Wall Street Chess Club, a group that brings together Grand Masters and CEOs for games. It was his experience there that first made him realize that there were similarities between the chess world and the business world. And that's how this book was born.

So, keep listening to find out how to use the chess strategy of Castling Early to protect your company's "big idea"; what strategies a new start-up can use to get a jump on the competition; and why having a bad plan is infinitely better than having no plan at all.

The book is divided into ten chapters. The first one to cover strategy is Chapter Three, which covers the importance of making the first move, whether in chess or in business.

In chess, White always moves first, which gives that player first mover advantage. This allows White to dictate how the game develops; in other words, they're the ones pushing the envelope.

In the business world you have first mover advantage every time you introduce a new product or service to the market. So, in this situation, think of yourself as playing White.

The author stresses that there are two varieties of first mover advantage. Both are very effective when they're done well, but fatal when they're not. Knowing which edge you've got and how to exploit it is vital to your success.

Need proof? Well, businesses like eBay, Skype, and YouTube all exploited their first mover advantage perfectly. On the other hand, the innovative makers of the two-wheeled Segway Personal Transporter did not. If you want to avoid their fate, keep listening. Now, one type of first mover advantage concerns businesses that rely on networks. The author says that networks become valuable only when many users become part of the system. Think about eBay here. Users both buy and sell on the site, which grows the business exponentially.

The way this first mover advantage is played is with sheer force, full speed ahead. The author calls this the King's Gambit. With the King's Gambit, players throw all caution to the wind and attack mercilessly. Heavy losses may be sustained in this move, but the idea is to get to checkmate long before you run out of pieces.

With this variety of first mover advantage, a business needs sheer numbers in order to succeed. If a program or service is still lacking features or has bugs when it's time to launch, it's worth going ahead anyway.

If you're starting a business that relies on a huge number of people to succeed, then you've got to throw caution to the wind and start moving as fast as possible. YouTube mastered the King's Gambit, and that's why it's so dominant today.

The other variety is called Classic First Mover. Here, a business uses the classic chess opening Ruy Lopez to exploit its first mover advantage. In the Ruy Lopez, players move forward on the board rhythmically, constantly adjusting to what their opponents are doing with a nice, well-paced tempo.

In business, using the Ruy Lopez would mean using feedback loops from customers and critics so that it can constantly refine its strategy or product, and change course when needed.

The author points out that most new businesses never take the time to discover what type of first mover advantage they have. Having one of them, but playing the other, is a recipe for disaster.

In the hands of a less-skilled writer, these concepts could have gotten a bit confusing, but the author does a masterful job keeping things simple and easy to understand. There are several other wonderful strategies that he brings up here. One is called Playing the Fool's Mate. In this chess strategy, you mimic your opponent's moves – play for play. But this is basically an unsound practice, and can be disastrous in business. The author goes into detail about this strategy and tells us why replicating someone else's idea seldom works.

Another tactic is called The Sicilian. When you use The Sicilian, you attack your competition from a different angle than what they might be expecting. The author explains this strategy well, and highlights several companies that are using similar tactics to boost their sales and market share.

Readers will also find the section on Castling Early insightful. In chess, Castling Early means that you get your King to a well-defended spot on the board early on in the game. In the business world, Castling Early means you start protecting your "big idea" from your competition as quickly as you can. This can be done in several ways. One good example is having a great URL. Weather.com and Business.com are prime examples of this strategy, and as a result they continue to have a powerful edge over their competition.

Other ways to Castle Early involve locking in key talent and patenting products. If you wait to do these things, then you might find yourself left behind in the dust.

Now, most people think that chess is one of the slowest games ever thought up. But, that's not quite true. In championship games, each player gets 120 minutes to make their first 40 moves. Now, this may sound like a long time, but that's only an average of three minutes per move. If players spend too much time deciding on plays early in the game, they stand a real risk of falling behind. Later on, as the clock ticks down, they'll be rushed to make decisions. Mistakes, at this point, are practically unavoidable.

It's similar in the business world, even though many people don't know it. Many CEOs and entrepreneurs spend ages on a decision and never realize that they're falling further and further behind until it's too late. In chess, this is called being behind on the clock. Because leaders spend so much time on one decision or strategy, their competition gets a major jump. Many times, this is a major blow to an organization.

Need an example? Well then, consider Polaroid. At one time, its brand name was a synonym for innovation. But the author argues it's fallen well "behind on the clock," as the age of digital photography has become firmly established and superseded the original Polaroid technology.

Palm handheld computers also once led their field, but they're no longer the best-of-breed gadget they once were, with integrated devices like the iPhone surging ahead. Companies like Apple are playing speed chess by constantly coming out with innovative, fun products. They're making moves and using feedback to readjust and change as the market tells them what it wants.

One thing the author urges all of us to do is to go out and buy a chess clock for our desks. Why? To start and stop the clock, which is really just a type of stopwatch, every time we begin or end a real work task. He says that by tracking our productive time versus our unproductive time, we get a clear picture of how much actual work we do during an average day. The results may shock you.

If you want to avoid falling behind on the clock, then you've got to maximize your time. But, you can only do that if you know where your time is going during the day.

When we spend time unproductively, we drift, and this concept leads into another important point the author brings up in this book; why having a bad plan is better than having no plan at all. In chess, beginners often drift through the game. They have no plan, and end up simply reacting to whatever their opponent does. However, this is more effective than falling behind on the clock trying to think up the perfect plan. Beginners often feel they can't do anything until the plan is just right. The problem is that few plans are ever just right, so valuable time is lost.

The author points out that in business, just like in chess, plans and movement are good things, even if they're not perfect. The reason is simple: when you move, things happen. Even when they make the wrong move, companies can still learn from the experience, if they stay open to change. They can adjust and re-strategize based on new information. If they sit and wait for a flash of inspiration, the game will surely be lost.

There are several other helpful strategies covered here; one is called Controlling Strong Squares. This tactic demands that a business control its market niche. The author goes over why this control is so vital, how you can go about finding your own Strong Square, and why apparently overprotecting your square can actually lead to some pretty amazing opportunities.

The author also brings up a chess tactic called a Pawn Chain. Pawn Chains are a terror to face on the board, because they control huge chunks of it and are very difficult to break up. The key here, he states, is to go after the base of the pawn chain and work your way up. This is the only way to destroy your opposition when they use this tactic.

In business, this would relate to a competitor that controls a huge share of your target market. Your best bet in trying to capture some of that market share is to start at the base and work your way up. How? Well, a good example would be marketing your lower-end products to this company's low-value customers. The company doesn't care much about these customers, and because of this, they're often undervalued. But, these customers are the start of the attack, and they're how you get your foot in the door. It's a brilliant move that's often overlooked in the business world.

So, does Three Moves Ahead fulfill its promises? You bet it does. There are so many strategies covered here that there's no way we could talk about all of them. But you can be sure that they're all fascinating, all relevant, and all incredibly useful in a business setting. And we'll say it again; this book is really fun to read. You'll find yourself flying through the pages, and wishing for more when you're done.

"Three Moves Ahead – What Chess Can Teach You About Business" by Bob Rice is published by Jossey-Bass, an imprint of Wiley.

That's the end of this episode of Book Insights.