Competing to win is an essential part of a business leader's mindset. A winning competitive mindset starts with setting an ambitious goal, takes action to achieve that goal, and begins again by setting an even more ambitious goal. The process repeats until the goal is beyond what the business leader's skills allow.
Seen in that light, Jeopardy! -- the televised game show that presents contestants with answers and challenges them to come up with the right questions -- is a fitting metaphor for business competition. Each player is like the CEO of a business that is competing to offer the customer the right answer to their specific problem faster than rivals can.
This is illustrated by the case of the recently dethroned Matt Amodio, who won 38 straight games and a total of $1.5 million through an easily understood strategy.
In the first Jeopardy! round, Amodio aimed to come up with the right answer for all the clues with the highest rewards ($1,000) before going to the $800 clues. His goal was to rack up as many points as possible before hitting the Daily Double.
If that happened, he would bet his entire winnings. His very frequent correct responses gave him a lead that he would keep building until final Jeopardy! -- by which point he was so far ahead that he could make a big bet and surpass his rivals -- even if he answered incorrectly.
Rivals could not copy his strategy because he had much broader knowledge and could remember it quickly.
Here are three lessons for business leaders from Amodio's winning streak.
1. Understand your strengths and weaknesses.
My guess is that Amodio's successful strategy was based on his awareness of his strengths, which likely emerged from the amazing analytical abilities he demonstrated in his studies in actuarial science and machine learning.
Knowing your strengths and weaknesses as a leader and as a company is a crucial first step to successful business strategy. To find out, ask and answer the following questions based on objective data:
- Do you excel at product innovation or at attracting and motivating talent?
- When customers consider whether to buy your product or one from your competitors, what criteria -- e.g., price, quality, service, selection -- do they use?
- How well does your company perform on those customer purchase criteria compared with rivals?
- In which activities -- such as product development, manufacturing, service -- do customers perceive your company to be strong compared with rivals? Where do they see you as relatively weak?
The answers to these questions can help you identify your strengths and weaknesses relative to rivals.
2. Follow a strategy that arrays your strengths against rivals' weaknesses.
While Amodio could not have known his strengths and weaknesses relative to each of the players he competed against, my sense is that he had studied the strategies of the most successful Jeopardy! players. For example, he followed many of the strategies of James Holzhauer, who won more money than Amodio by betting more aggressively on Daily Doubles, according to the New York Times.
As a business leader, you should use a strategy that arrays your strengths against your rivals' weaknesses.
For example, I have spoken with many founders whose startups have grown much faster than large incumbents by offering a single product that solves the customer's problem much more effectively at a lower price. The incumbent cannot match the startup's strategy because doing so would cost it a significant amount of revenue.
The lesson for business strategists is simple: The firm that offers the customer the most benefit for the price always wins. Incumbents that stick to selling high priced bundles of products that don't work well ring their own death knells.
3. Adapt quickly and cleverly if your strategy can't work.
Amodio's strategy of accumulating a big pile, hitting the Daily Double, and getting an insurmountable lead did not always work. If a rival player got to the Daily Double ahead of him, he did not panic. Instead, he calmly made up the difference in the Double Jeopardy! round.
Successful business leaders are similarly good at reacting quickly when their strategy can't work. A case in point is Toast -- a provider of restaurant point of sale systems -- that adapted effectively to the pandemic and is now a public company valued at $28 billion.
In April 2020, Toast cut costs -- including layoffs of 50 percent of its staff -- after its revenues plunged by 80 percent. It then introduced new products to help restaurants survive the pandemic -- enabling consumers to pick up meals to-go and restaurants to sell gift cards.
Apply Amodio's three winning strategies and your business will grow faster.