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Business is NOT a Zero Sum Game

Let's say the kids in the neighborhood get together to play baseball. You know, like they did in the days before Little League, when it was all just for fun. They divide into teams, but before they can start playing, someone says, "Hey, I know, lets limit the points. Let's say that there are only 20 points available. No matter which team earns the points, no matter how hard we play, we can only total 20 between both the teams, so if one team earns a point, that is one less point that the other team can earn."

THAT is a Zero Sum Game.

Another way of putting it is to offer the winning team a pie to divide up between all the players on the team. They'll get a very small piece.

How many kids do you think would be on board with that plan? Or do you think maybe they'll come up with a way for the players who earn more points to get more pie, and those who earn fewer points to get less?

That is also a zero sum game. No matter how you divide it, it is just one pie.

Business is NOT a zero sum game. It is like real baseball. Each team can earn as many points as they are able to earn, in spite of the competition. Each PLAYER can earn their OWN pie. Or MORE than one pie if they have the energy and gumption to do so.

There is not a finite amount of wealth. Wealth is infinite. The more we practice good business principles (which are NOT selfish principles), and the more we seek to make sure that everybody in the picture has a chance to profit well from their efforts, the better EVERYBODY earns.

We have very negative attitudes about both competition, and pay hierarchy that get in the way of true prosperity. Those attitudes put us into a business mindset of the Zero Sum Game.

The backlash is that when a person views business in this way, they LIMIT THEMSELVES right along with limiting everyone else that they deal with.

The lack of meaningful merit based pay in most major companies is one of the things that inhibits prosperity both at the bottom of the pay hierarchy, AND for the entire company. When each person is motivated to EARN more, by more hard work, they work harder. EVERYBODY in the company, all the way to the top, profits MORE, not less.

The lack of cooperation with competitors and complimentary businesses is another inhibiting factor. Rather than saying, "I'll take this segment, you take that segment, and we'll refer each other and BOTH do better.", companies fight over the same customers, which hurts them both. There is far more scope for cooperation among competitors than is ever utilized.

We have a competitor whose supplier violated their customer confidence, and told us some inside information about our competitor. We would have liked to have informed the competitor so they could address the issue with their supplier - the information we were given has the potential to harm our competitor in the long term, if we choose to use it against them. We cannot contact the competitor though - they are so negative about their competition that they'd be rude to me if I tried to warn them. Their fear stands in the way of our being able to help them. We would be happy to cooperate with this competitor in other ways as well, but they would not ever be open to doing so.

This concept applies to the economy as a whole. When individuals are both allowed to profit from their efforts, and required to do so, the economy grows without limits, and personal prosperity is increased for the entire nation. When we think of wealth as ONLY equating to more dollars, we get into a trap that makes us think that if we do not have MORE dollars than someone else, we are not as wealthy. Wealth has more to do with how far the dollars stretch, and the kinds of comforts one can attain than it has to do with numbers. This kind of thinking equates to chopping up the pie into smaller and smaller pieces, and calling each piece a whole pie.

When we get into the trap of thinking that we have to grab a bigger piece of the pie than our competitors, or when we think that if WE earn more, that someone else has to earn LESS to compensate, we limit ourselves to a rather pathetic portion of what is possible when we stop fighting over a piece of someone else's pie, and start earning our OWN pie.

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Helpful Books

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Disclaimer

We are business professionals, offering suggestions and skills training for traditional business operations methods. We are not lawyers, and we do not offer legal advice. We are not accountants, and we do not offer financial advice. We do share information for some business practices that are sometimes handled by a lawyer or accountant, but which many business owners choose to handle themselves.

Business is a risky thing, and no one can provide a magic formula for success. The concepts, skills, and strategies taught by us are sound, and have the potential to yield significant benefits, but individual results will vary, and positive outcomes are not assured. Your success may be influenced by your attitude, your understanding of the material taught, political or economic factors, or even natural disasters. We strive to present accurate and helpful information, but offer no guarantees.

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