The great tennis player Roger Federer gave a commencement speech to Dartmouth University students in June 2024. While athletes aren’t always recognized for their prowess in articulating life lessons outside of their own professions, Federer’s speech was one of incredible poignancy and relevance in multiple fields. His definition of success was inspiring, but there were many little nuggets of wisdom imparted by the legendary Swiss player.
The speech is worth watching in its entirety, but one can’t help noticing a statistic that Federer used to illustrate his success on the tennis court: Namely, that Federer won around 80% of the tennis matches he played in while only winning 54% of the points available across those games. It’s a startling statistic and one that throws up so many important lessons. Broadly, of course, it tells us that Federer knew how to score points when it mattered. But it also tells us that Federer knew how to lose (games and points) strategically, conserving energy for the opportune moment.
Game strategies can teach business lessons
It is certainly not uncommon to hear of applying the strategies of sports and games to teach business lessons. Some of the lessons are obvious – coping with failure, determination to succeed, hard work paying off, and so on. However, the idea of strategic failure as a means of (eventual) success is one that is not talked about often. Of course, we might argue that Federer never really failed, and it should also be noted that the structure of a tennis match, particularly men’s tennis, which favors the server, lends itself to that statistic. Yet, it still shows that the ability to accept minor defeats can accumulate to deliver unquestionable successes.
Two other games jump out with similar strategic failure lessons that can be applied to teach business lessons: Blackjack and chess. The latter is perhaps the easiest to understand, as there have been many examples of famous chess matches where a player has, for instance, sacrificed a queen in order to ultimately win a game. Can we think of real-world business examples of such a sacrifice? Perhaps something like IBM deciding to sell its PC business to Lenovo, Kodak exiting the digital camera market, or PayPal being spun off from eBay. It’s clear, though, that what looks like a sacrifice can ultimately be beneficial.
Blackjack is a game of attrition
In Blackjack, the examples are a little broader. However, one would argue that the process of strategic failure is more inherent in blackjack than in any other game. Indeed, an important part of learning blackjack strategy is to focus on the entire session, not any single round. It is a game of attrition, one where success is attained by winning more rounds, not a single round. As with the Federer “equation’ above, it is possible to walk away with 80% of the profits in blackjack by winning 54% of the games. Of course, that will entail using all the weapons at your disposal, such as doubling down, splitting, etc.
Yet, if we were to zero in on a specific variant of blackjack – blackjack surrender – we can perhaps highlight a style of game that has teach business lessons. If you weren’t aware, blackjack surrender offers players the chance to exit the game after the first draw. The cost of playing the surrender option is equal to half your stake. It sounds almost counterintuitive – why would anyone pay to exit the game? – but some blackjack purists love it, believing that they can work out the probability of cutting their losses when it makes sense.
Surrendering for later gains
This surrender strategy teaches an important business principle: sometimes, it’s wiser to accept a small loss to avoid a larger one. This approach can be applied to business decisions, such as discontinuing a failing product line early to prevent further financial drain, thereby freeing up resources for more promising ventures.
The broader lesson here is the value of adaptability and the willingness to pivot when necessary, as businesses that rigidly stick to their initial plans despite clear signs of failure are more likely to suffer significant losses. Call it cutting your losses, sacrificing your queen, surrendering your cards – whatever you like – games show us that strategic failure can lead to unparalleled success.
