Constraints, Choices, Game Theory and, Leadership
LEADERSHIP TODAY, Episode 3
In Episode 1, we said leadership exists because life has limits, limited energy, limited resources, limited time, even limited intelligence. So decisions and actions that maximize what we have, move us from point A to C or to Z, and minimize waste and destruction become necessary, hence the need for leadership.
In Episode 2, we said that knowing we must choose and act in a way that maximizes returns and minimize cost or waste, does not tell us what to choose or how to act, and this is where many leaders fail. We explored diagnosis (or situational analysis): understanding the cause-and-effect relationships of problems, challenges, and needs before trying to solve them. We talked a bit about the need for balancing loops against reinforcing loops in systems.
Today, we pull those threads together and face a harder question:
Now what? We know the need for leadership. We understand the problem through proper diagnosis or situational analysis. Then what? Do we fix it?
No, not yet. We need to understand the environment in which the situation is occurring.
Often, it is not intelligence that decides outcomes. It is the game we are not aware we are in.
Most people do not wake up and say, "Today, I will play a zero-sum game." We simply inherit a story about life: If a mate or peer is rising, I am behind. If they are winning, I am losing. If they have something, I must have it too, or else I lose status. If another party succeeds, mine fails. Before we notice, that hidden story becomes our strategy and our way of life, governing our emotions, choices, and actions.
So even before we take action, no matter how well we have done our situational analysis or our diagnosis of the status quo or the problem, we must incorporate into our strategy "Game Theory".
Game theory gives us language for these hidden games
- Zero-sum games, If you win, I lose. So for me to win, you must lose.
- Negative-sum games, We both lose. While fighting for status or position or power, we destroy value for everyone.
- Positive-sum games, We both win. We find ways to grow the pie instead of only fighting over it.
When we assume life is zero-sum, we act in ways that make everyone lose.
This is Africa's story too often. We have 54 nations, 1.4 billion people, and incredible natural resources and talents. But we work in isolation when we could build together and grow our pie. The result: we are poor, not respected, with a few enriching themselves while many struggle in poverty.
The American example
In 1776, thirteen American colonies faced a choice: remain separate and vulnerable, or unite.
They were not natural allies. Different economies, different values, different interests. But they chose cooperation and oneness. They created a federation, shared defense, currency, and trade policy while retaining state autonomy.
The result? They are the world's largest economy and most powerful nation.
When we cooperate and work as one people, we don't just add capacity. We multiply it.
So why is cooperation and oneness never our strategy?
In 1950, mathematician Merrill Flood and economist Melvin Dresher were studying nuclear strategy during the Cold War. They conducted an experiment at the RAND Corporation to test "The Nash Equilibrium", a scenario designed to understand why rational people often fail to cooperate even when cooperation clearly benefits everyone.
The Prisoner's Dilemma
Their colleague, Albert Tucker, later formalized it as the Prisoner's Dilemma in Game Theory:
Two suspects are arrested and interrogated separately. The prosecutor lacks evidence to convict either on the main charge, so they offer each prisoner a deal:
- If both stay silent, both get 1 year (minor charges)
- If one testifies against the other while the other stays silent, the betrayer goes free and the silent one gets 10 years
- If both betray each other, both get 5 years
From each prisoner's isolated perspective, betrayal looks rational: if your partner stays silent, you go free. If your partner betrays you, at least you avoid the worst outcome. So both betray. Both get 5 years, far worse than the 1 year they would have served by cooperating.
The dilemma reveals a hard truth: individual rationality, or self-interest, can produce collective disaster when trust is absent and oneness is never the goal.
The question for leaders
So what am I saying? Before we take action, ask: Who can we collaborate with to achieve better results?
You are a good speaker. Partner with a video editor and animator, alone, you have a voice; together, you have a production studio. You are a good sales person or marketer, partner with the person with innovative solutions and build together and sell. Specialize in what you have comparative advantage in, and collaborate with others to build great things.
This is positive-sum thinking: when we pool strengths, we multiply. We grow the pie. And human behaviour, we can use systems to manage them and ensure good actions are rewarded and bad actions are prevented or punished. I will talk more about that in the next episode.
The pie is not fixed. We can grow it together through oneness and collaboration.
Until the next one, lead yourself and lead others. We are TGLC.