Wednesday, April 7, 2010

The Prisoner's Dilemma. Or, doing the wrong thing to do the right thing.

Some time ago, I went to a management course the company I worked for at the time was holding. This company has extremely high ethical ideals, which made one of the sessions in this course even more interesting.

If you're not familiar with the Prisoner's Dilemma, check it out:'s_dilemma

This was converted into a game the facilitators called "red chip."

The way the game worked is that everyone was given a red chip and 10 white chips. The goal was to accrue more white chips.
1. If each team put in a white chip, the bank (trainer) paid everyone one white chip
2. If any team put in a red chip, each other team paid that team one white chip.
3. Teams were not allowed to collaborate with other teams.

You can see where this is going, right?

Round 1
I'm a collaborator by nature, and I've always felt that working together gets us further than working alone. I managed to convince my team to do the right thing and play white chips, in the hope that other teams would recognize that collaboration was in our best interests, and our altruism would be recognized by the game leaders. While no one would get substantially ahead of others, we would all be profitable at a constant pace.

In retrospect, if we all have the same # of chips, maybe we're not profiting. BUT, if we're all in one company, if every team profits, the company profits.

Teams were not allowed to discuss with each other what they were going to play.

As you can imagine, our team got shut out very quickly. We then learned that the teams with the most chips were being rewarded over and above the other teams. Wow, none of that worked the way I expected! Yep, I must've just fallen from the turnip truck!

Round 2
Lesson soundly learned, soon each and every team was playing red chips, resulting in a no-sum game.

Round 3
Teams were allowed to negotiate with each other (remove rule 3). And, sure enough, some of them... lied! Gasp! Soon the game degraded to all red chips again, but some teams were burned. Our team actually did well as we perceived that we were being misled and were able to foresee that other teams were going to play red chips when they assured us they'd play white chips.

Take away

The take-away is that, in a closed environment like a company, playing red chips is a zero-sum game for the organization as a whole and leaders need to be sensitive to this behavior and not just avoid rewarding it, but actively strive to quash it.

In the bigger world, like the stock market, the landscape is so broad that red chippers often get away with their behaviour, at a cost to others. We see that all the time and many hope Karma will catch up with them. 

So what?
The next part of the exercise was to reflect on past work situations to find items where this lesson could have applied.

Surprisingly, I was able to look back over my employment history and clearly SEE situations where I got burned playing WHITE chips! It was a shocking revelation and shook my beliefs around collaboration pretty soundly.

It really took me quite a while to come to grips with the lesson since it goes against the grain of my internal beliefs. Once I got through that, I was able to start to apply it to situations at work.

Playing a red chip against someone else's red chip still feels like I'm fundamentally doing the wrong thing, but the I have to say that the outcomes have been far more positive than any prior alternatives I'd tried.

I'm still quite surprised that people play red chips when white chips would work better for everyone, which probably tells you a lot about what I expect from my fellow man. :)