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Understanding these interactions is critical to devising good influence strategies. Many influence games also have both value-net and public interest components. A merger, for example, needs government approval; it may also elicit the opposition of environmental groups. Thus it is often essential to understand and manage linked games. To diagnose the impact of government on your business, you will need to pinpoint the types of games in which you are involved, the roles governments play in these games, and the multiple levels of government that affect what you do.
You may also need to anticipate and shape linkages between value-net games and public interest games. But first we need to digress a bit to define these types of games and to explore the roles that government can play in them. Games that businesses play with each other in the course of their ordinary activities take place within what Barry Nalebuff and Adam Brandenburger call Value Net.
Along the vertical dimension of the Value Net are the company's customers and suppliers. Resources such as raw materials and labor flow from suppliers to the company, and products and services flow from the company to customers. Money flows in the reverse direction, from customers to the company and from the company to suppliers.
Along the horizontal dimension are the company's competitors and complementors. A player is your complementor if customers value your product more when they have the other player's product. A player is your competitor if customers value your product less when they have the other player's product than when they have your product alone.
Intel, for example, buys raw materials and processing technology from many sources, and sells microprocessors to computer makers such as Compaq and Dell. The company competes with chipmaker Advanced Microdevices and complements Microsoft's operating system and applications software. Businesses cooperate to create economic value; they compete to distribute or claim the value that gets created.
Consider, for example, a large manufacturer like Ford Motor Company.
Ford cooperates with its suppliers to design new vehicles even as it negotiates vigorously with them over the terms on which parts will be supplied. By cooperating to develop new cars, Ford and its dealers and suppliers create a valuable pie of economic value. By negotiating over price, quality and delivery terms, they divide that pie.
The players in the value net continually seek to change the game to create and claim more value. Ford carefully fosters competition among its suppliers and manufacturers critical components in-house to ensure that the company does not become too reliant on a single source for key parts. As part of its strategy to change the game, Ford announced in that it would cooperate with General Motors and Daimler Chrysler to create a huge new electronic procurement exchange to leverage electronic transfer of data and reduce procurement costs.
Its suppliers were understandably uneasy. Government rule makers and referees shape businesses' ability both to initiate and to defend against these strategies—to play offense or defense in value-net games.
Specifically, the ability to make game-changing moves is constrained by laws and regulations governing competition, antitrust, intellectual property, product approval processes, and technical standards. When governments review applications for mergers and acquisitions or hear legal cases concerning intellectual-property rights or takeover disputes, they are acting as rule makers and referees in value-net games between businesses.
Consider, for example, the debate about Napster, the online service for sharing digital and music files. Napster triggered a firestorm of outrage in the music industry about piracy of music. Dre and the heavy metal band Metallica sued Napster for copyright infringement late in But is was unclear how intellectual-property law applied to such an innovation, so Napster's opponents also pursued a legislative remedy and persuaded key senators to hold hearings in the summer of The results of the court case are still undetermined, but in November , Napster took a step toward legitimacy by arranging a deal with media giant Bertelsmann AG to develop a legal version of the music-sharing service.
Because governments can influence the outcomes of value-net games, many companies seek to involve rule makers and referees to gain advantage. Moves to influence government are commonplace when playing defense against others' strategic initiatives.
Sometimes businesses appeal to rule makers and referees not to win but to deter weaker players by disrupting or delaying their plans or imposing burdensome penalties. Delay is often a valuable side effect of government involvement in value-net games. Global Crossing, a small player in the telecommunications industry in , has recently emerged as a major force in the long-distance fiber-optic cable market.
One reason for its success is its savvy use of the government's refereeing function to slow down the competition. Such approvals normally take about two months.
Global Crossing, whose own fiber link across the Pacific was scheduled to begin service at about the same time, petitioned the FCC to delay approval of the cable and to investigate whether the consortium inhibited competition. The FCC finally approved the new cable in July , and also announced that it would launch a broad inquiry into the undersea-cable business. Sam took an important role in orchestrating financing for the Olympia Farmers Market Community 37kw Solar installation, one of a handful of Washington State's successful large scale solar installations financed by community members.
My colleague, Eileen V. Pictured here with his co-conspirators—Graeme Sackrison, Randy Zimmerman, Tom Crawford, and Stewart Henderson Sam at far left —she recalled Sam's impatience and passion about addressing climate change. After the Workshop and Action Plan were completed, he agitated for action, checking in regularly to see what had happened with all that came out of the two-day brainstorming session among Thurston's community leaders.
At the same time, he was busy getting himself educated about how to finance community solar and putting his money where he mouth was by helping to fund the Farmer's Market project. Sam and his wife Chris moved to Washington nine years ago and he immediately immersed himself in our community. As a relative newcomer to WA, Sam came to our attention when he organized 95 citizen volunteers to gather signatures for I He set a record, personally collecting 3, voter signatures and met the community of Washington State clean energy advocates in the process.
There are now 20 states with similar provisions. Garst brought experience and political savvy to his grassroots efforts because he had served the Carter Administration as a lead USDA lobbyist working for an energy bill, and it showed in his successes. His objective was to generate enough energy at their home to power both their Leaf and their plug-in Prius.
When I visited the Zelonedom this summer, Sam was excited about the completion of the rain gardens, beautiful landscaping fed by their roof which diverted stormwater from the sewer system. He believed in showing by doing.
My colleague, Joelle Robinson, had a unforgettable experience with Sam. She was mesmerized and inspired. When the next river trip came around, he graciously invited her to join his crew and Joelle had the journey of a lifetime. I am so grateful for his big beautiful heart, and all the good he has done in our world.