Understanding power dynamics is an essential skill in senior business management. Game theory is a tool increasingly used by economists and other social scientists that allows mathematical models of interaction between people or groups of people. Game theory offers lessons for understanding power dynamics and using them to advance our goals.
The US Central Intelligence Agency (CIA) believes that the predictions of Bruce Bueno de Mesquita, a professor of political science at New York University, are more than 90% accurate. How was this level of accuracy achieved in predicting international political outcomes? He does this through a game theory model that he developed himself.
Bueno de Mesquita recounts in his book Predictor game How he realized the value of his model. In 1979, the US State Department wanted to know who could be the next Prime Minister of India, so it consulted Bueno de Mesquita. He thought Jagjivan Ram would win, but decided to ask his model. He claimed that Charan Singh would win, and he actually did, surprising even the model’s creator.
What is behind the model? The most important thing is to identify all the actors who have some level of decision or influence on the outcome and know their interests. The form highlights each person or association with an interest in a particular issue, qualifies the extent of their influence, and clearly identifies what they want and how much they care about that issue. The model then goes through rounds of “negotiation” that lead to a certain result.
What I want to highlight is that forecasting an event in international politics, economics or business requires clarity about who has influence on decisions and what they are looking for. But the most important thing is that knowing this can also allow us to influence the outcome and achieve our goals.
Paola Santilli (CEO of PepsiCo Latin America), Monica Power (Vice President of Corporate Affairs at PepsiCo) and Marty Seldman (co-founder of Optimum Associates) in their book The power of the force It includes 12 practical tips for growing within organizations. The first of these rules is “Know Power Dynamics” and highlights the importance of knowing who has decision-making power in companies.
Santilli, Bauer, and Seldman recommend starting by examining the company’s organizational structure. However, they recognize that it is necessary to go beyond the formal and understand the map of influences that can be informal but important. They highlight that people in positions of power have little time on their hands, but have an intimate circle of people with whom they have frequent contact and who are easily accessible.
In addition to having a clear idea of the influence map, my authors The power of the force They recommend discovering what leaders value. All people have certain values and goals that they give importance to. Knowing this can provide an important point of contact with leaders and a way to get their attention.
Even if you have high decision-making authority in the organization and the necessary relationships, you know that you depend on other actors, both internal and external, to achieve your goals. A clear understanding of who influences decisions, how powerful they are, and what they are looking for can make the difference between achieving an important goal or not.
It seems to me that knowing the networks of influences and, above all, the motives and interests of each of the people involved in a given decision, is more important, the more responsibility the individual has in the organization. Achieving your goals requires knowing who can help, who will stand in the way, and how to persuade and inspire people to work toward those goals.
It may seem trivial to know who has decision-making power and what their interests are, but often we will encounter obstacles if we do not take the time to study this. Achieving your goals depends on the actions of others. It’s a useful lesson to learn from game theory that it’s important to know the other players and “predict” how they will act to maximize your chances of success.