The CEO Game

How would you decide what is better, more important or will get you to where you want faster? How can you make your decisions better and better for you?

When you want to reach a given goal, there is usually more than one way to achieve it. There can be more than one good way to act and they might all help you to get to where you want, but for certain there is always one way which is better than the rest.

Which way to go?

You have to decide not only which ways to take, but also how much effort should you invest in each step. How would you know how to decide what’s better or more effective? Well to do so you’ll have to rank your alternatives. To rank most effectively and reach the right decisions you will have to compare the options in front of you with the main goal.

The ranking is fairly simple, the more each action assists you in reaching the main goal the more it’s important. You will have to find a link between each step and the main goal otherwise this step is simply useless. The more you will be able to connect each step to the main goal the more you will know how to rank the steps.

A right implementation of this approach will assist you in prioritizing task and in the ability to effectively choose which task or project are worth more effort and which are simply don’t. Knowing how to prioritize task is the corner stone in the CEO’s job.

Ailon.

The CEO Game.

Today I want to share with you a short video that i encountered. In this video is part of series of videos discussed what it means to be leader. This specific video shows the differences between the roles of the management and leadership.

Well are management and leadership the same? The fast and simple answer is NO.

One thing is sure, in order to become CEO of world leading organization you will be required to be both a great leader and great manager. We invite you to register for upcoming beta of our online business simulation “The CEO Game“ and start your training on your way to become a CEO.

Ailon.

The CEO Game.

From a young age we are exposed to many myths about money and wealth. Those myths may come from our family, relatives or even friends. The myths we grow up with will have a tremendous effect on how we manage our financial wealth when we reach maturity.

Today I want to discuss few of those myths.

Understand the Myths.

Myth #1: Work hard and you’ll be rich

Many of us believe that having a high-level position in a company or a company of our own assures us that we are on right track for financial wealth. With so many cut-backs and financial recessions, anybody can find himself out of job at any given moment. Working hard doesn’t assure you that you’ll ever be rich.

Myth #2: Saving is good

From the first day that we got our first nickel, we were taught that saving enough money will mean that one day they will gain financial wealth. Can saving assure a financial wealth?

Although saving might assure that you’ll have some money one day, it is definitely not the way to reach a true financial wealth. You should learn how to invest your money in different routes to achieve better and faster rates.

Myth #3: Being in debt is bad

Another myth we grow up on is that being in debt is bad and we should avoid it in any cost. Well, the truth is that not all debt is bad. It depends on what you do with the money you borrow. If you invest the money you owe in ways to gain more money then you actually use the debt to cover itself and even return an income, which is not bad at all.

Myth #4: Investments are a dangerous business

Many people live under the false assumption that investing in the stock market is equal to gambling in the casino; this couldn’t be farther from the truth. Investments are not as dangerous as long as you how to manage your risks.  If you truly understand the investment that you’re about to make than the risk is far lower and you know more or less what to expect.

Ailon.

The CEO Game.

In the last few years, more and more leading companies have started realizing that not taking advantage of possible business collaborations between them will harm their goals of gaining a strategic advantage and achieving rapid growth fast. The key for quick and substantial growth is first and foremost the ability to share strategically with other organizations, including rivals.
What made this change happen?

Sharing Resources

The Global Economy- means that wares, ideas, people, cultures and services are moving freely across national borders. When you look closely at the factors that caused globalization to spread so rapidly in the last decades, you find that technology was the main factor. Technology has shortened distances, created large communication networks, allowed us to be exposed to different cultures and even improve our lifestyle. Dealing with this tremendous global space required collaboration between many business corporations around the globe, mainly to ease development and distribution efforts.

The Need For Knowledge – is growing rapidly and the knowledge to be gained is now more diverse, multidisciplinary, faster and complex. This need requires that we share with others in creating data sources that are needed in the business world. We need external feeds from different sources to enrich the organization’s knowledge, and without it the organization won’t survive in the modern business world.

The Demand for Immediacy- This is a critical factor in global economy. Everybody wants everything, faster, sooner, and quicker. In this age, when a technology can become dated faster than it was developed, it’s crucial for different organization to collaborate. A firm that insists on doing everything on its own will soon find out that it’s already too late and it missed the market. Companies that participate in these collaborations will always be faster in reaching the market, dealing with changes and empowering their synergy.

The complexity of Technology- This is the simple fact that, if we take a look at the products that we use today, we will find that most of them were not here in the same configuration only few years ago. Every product now has new features, new capabilities or is totally new. There is always a human hunger for newer and better technologies and that is why the complexity is always growing. So what is the easiest and fastest way to produce this new technology? You probably guessed it right: create business collaborations that allow the merging of different technologies and ideas to new and improved products.

Now one might ask what are the factors for a successful collaboration? The main factors are:
• Mutual interest in which each partner knows what he is getting from the collaboration.
• Organizational culture that embraces changes.
• Preliminary planning for setting the collaboration goals.

The same concept applies in the CEO game as well. It will prove to be very hard for one company to research new products, produce them, advertise them and sell them around the globe without the assistance of different companies in different ways.

Ailon.

The CEO Game.

In my last article I discussed the factors in life and business that we have no control over, but still affect us in significant ways. In this article, I want to go one step further and talk about “Luck” and how we can use it for our own benefit.

Creating Your Own Luck

Why do we need Luck?
Two people are applying for the same position. Both have about the same GPA from the same university. Both have a good background and experience. Only one will get the job–do you think that the interviewer will know which one is better skilled for the job? He`ll probably base his decision on factors that have nothing to do with the candidate’s skills. It might be gender, age, skin color, the ethnicity etc. You`ll never know what the final decision was based on.
People will tell you that you don’t need luck. They will also tell you that the only thing you need is ambition and hard work. I`ll give you all the time in the world, but you still won`t be able to convince me that the last person who won the lottery`s jackpot had high ambition and worked hard for that. I`m not trying to tell you to play the lottery now, but this extreme example can show us that luck is a factor in life that should be taken under consideration and for sure you want it to be on your side.
Turn your luck into calculated risk:
The lottery is not the place you want to put effort to increase your odds. This is because there is nothing legal you can actually do in order to change your odds of winning – every ticket you buy has the same odds of winning, but if you buy all of the possible tickets you will end up losing money – not a great deal. You need to increase the odds in scenarios which your actions can actually make this difference.
If you own a startup, and your main goal is to sell it to a big company, you`ll need to go out and meet with people. Make sure everybody in the industry knows you. The more people that know you, the bigger your chances are to make the big exit. There might be a chance of 1:1,000,000,000 (this number has no statistical evidence) that a stranger who has no idea who you are or what you`re doing will come up to you and ask you “Hello, is there a chance that you`re working on this startup and you want to sell it?” But if more people know what you are doing, the odds increase magnificently. Focus your efforts in the right directions and in the right places in order to maximize your chances. In this example you control your luck by letting people know about your business.

In a different example, I want to invest money in the stock market. There is a constant risk in the market; we never know what`s going to happen tomorrow, things changes constantly and rapidly. New information sends the stocks up and down without prior notice. If you`ll buy one stock, you`re relying mostly on luck. We have seen good stocks go down in good market and we have seen bad stocks flying in a bad market. Nothing we can do about it. If we want to control the luck and turn it into a calculated risk, we need to have a wide and diverse portfolio.
The statistical error:
I personally look at good luck and bad luck as statistical errors. If we`ll look at the normal distribution, I believe that if something occurs on the right side of the distribution that’s a result of good luck, if something occurs on the left side that’s a result of bad luck. The middle is where we expect the result under normal circumstances. At this point, we want to put our efforts in moving to the right side of the scale, creating, by doing so, more “good luck”.

Assaf Arie.

The CEO Game.

People have a hard time accepting changes. They hate change and usually they ignore and repress it until it surprises them.

Managing people in times of change is not easy. Here are some tips for making good organizational changes:

Change Management

1. The change is here to stay! As I stated, people don’t like changes, and because of that they are usually ignore it and deny its existence. Our employees treat organizational change as management caprice, which will vanish as soon as the big boss will come down. That is why the message must be clear, simple (no double meaning) and assertive. The earlier your people absorb the message the better the change will be accepted and managed. Let everyone (include yourself) understand that the change is here to stay.
2. Resistance to change is not true resistance Change is something that is forced onto the organization as a strategic management decision. The employees feel they have no real choice, which destabilize them and arouse emotional reactions such as anger, helplessness etc. The more one fears the upcoming change, the more one feels helpless, which makes one less likely to see the benefit of it and cooperate. It is easy to interpret those behaviors as resistance against the change and against the management. They are not. Those behaviors are emotional reactions and you should deal with them with the proper tools: empathy, patience and tolerance, understanding and open-mindedness.
3. Describe the future Saying goodbye to the past is very important in change processes. Suddenly, everyone remembers how good things were before the change. In retrospect everything was just perfect, and the management cannot understand it. Your employees are too busy to reconstruct the past. It is hard to give up on the present for a vague future. But a good, tangible, and realistic description of the future, emphasizing all the new opportunities and the motives for the change, will ease your people to accept the new situation and increase their commitment to the goals of change in the upcoming future.
4. Manage the adaptation period Organizational change does not happen once, especially when dealing with massive and complex changes, which effects firmly established habits or long-running, cross-method processes. Change requires adaptation, and adaptation takes time. Legitimate the adaptation process and don’t demand your people to achieve the most right from the start. Gradient achievement more likely guarantees that everyone accepts, understands and is willing to act toward the new order. Good organizational change plans set measured targets spread over some time (usually 3-6 months).
5. Don’t flounder- decide! Don’t be afraid to make hard decisions, even if the uncertainty that arises from them out is high. Since your people expect you to lead them to the journey of change, you rather have good decision now than Great decision later. If you’ll find out that your choice wasn’t as you’ve expected- don’t change it. Consistency is one of the principles in order to achieve stability in the process of change.

In conclusion, changes are blessed in every learning and growing organization. CEO must always be aware of the fact that it is also not that easy to assimilate changes.

Business simulations, such as The CEO Game, examine your ability to produce changes in your company. Of course, there is no simulation that 100% matches reality, but the more experienced you are the better you’ll manage the change.

Nimrod.

The CEO Game.

Traditional microeconomics teaches us that we should make decisions on the margin. That is, we should ignore sunk costs. Sunk costs are costs we have already been incurred and cannot be recovered regardless of your next time. In order to optimize revenue, theory of the firm states that, in perfect competition, marginal revenue should be equal to marginal cost. That is, how much you earn for selling the last unit of a product should be how much it costs you to produce that product (in this perfect world, that would also be the price on every unit). This also applies for people and their utility. You should assess both costs and benefits on the margin, in the next time period, on the next purchase, without thinking of everything that came before.

Logic In, Emotions Out.

Most of us, of course, don’t do this. How many times have you sat through a movie you hated because you paid for the ticket already? How many times have you waited for the subway an extra 20 minutes instead of just walking because you have already waited for 20 minutes? And how many times you have eaten that last slice of pie even though you were really incredibly full because you already heated up the whole thing and you didn’t want to throw it away? Enough times, I am sure, that you are aware of the phenomenon of, at the end of the movie, wait, or pie, being incredibly bored, late, or nauseous, and wondering why you just did that.

The reason you just did whatever irrational behavior it was that I just described (or a host of others) is that, unfortunately, you’re human. And that, as always, is the lesson from behavioral economics. Humans aren’t irrational! So why treat them that way? Now we come back to our good friend prospect theory, which was mentioned in the first article I wrote about behavioral economics. In addition to valuable insights on reference points, prospect theory states that people are inherently loss averse. Not only that, but they did to weigh losses twice as heavily as gains — that is, a loss of $1 is twice as painful as a gain of $1. The combination of a non-neutral reference point and loss aversion is what leads to irrational behavior.

Once you have decided to see the movie, wait for the subway, or eat that piece of pie, your reference point account for your doing those things. That is your neutral position. Not achieving these goals is a loss. This sort of mental accounting, as it is called, commits you to decisions that are less than ideal.

A good businessman, either online in a serious game such as The CEO Game or in real life, doesn’t let a misplaced sense of regret and loss stop him from making proper economic decisions. Recognize when you’re including sunk costs in your decision-making and put an end to it. Live life on the edge, or margin. You’ll be happier, and wealthier, for it.

Tamar.

The CEO Game.