There are plenty of rivalries between companies, but a company that fights tooth and nail for the upper hand isn’t always the winner. It’s the same in the workplace: A dog-eat-dog culture within your workforce isn’t very productive. If you want to inspire teams to work together and spark peak performance, you need an approach that provides team members with mutually beneficial objectives—and game theory offers a great solution.
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Game theory is a mathematical principle of decision-making that involves situations between parties in which a decision must be made without their knowing all the details. At its core, it requires the participation of two parties: Each tries to secure the best outcome for itself, but the outcome is dependent on the decisions of both.
Combining strategy, probability, psychology, and other factors, game theory was first developed by economist Oskar Morgenstern and mathematician John Von Neumann. It was further improved upon by the brilliant John Nash, the Princeton mathematician at the center of the movie A Beautiful Mind. Nash’s equilibrium theory proved that by defining the rules of engagement, we can all get what we want.
When applied to workforce teams, game theory can empower them to make the right decisions, collaborate optimally, and see tremendous results. Here are four ways to do it:
Using game theory for the mutual benefit of everyone on the team requires co-creation: You must create shared values with every party you work with. Otherwise, there is no motivation for contributing to the group goal. Each interaction should be a partnership, and each person on the team—and each team involved in the endeavor—has to be seen as a partner, not an enemy. Having all departments, each with different interests, embark on the common goal of completing a task and driving results is a useful way to encourage collaboration, and each department benefits from considering the goals of the parties working alongside it.
Arguably, one of the hardest parts of game theory is holding up your end of the deal because there is always a chance that someone will change his or her mind. Game theory only works when all parties stay true to the plan, so it is crucial that everyone on the team remain faithful to the agreed-upon strategy, which also protects everyone from unnecessary risks. Building trust among teammates can help everyone grow and allow for mutual profits.
Organizational communication is crucial to the success of game theory in the workplace. Those involved with pursuing the goal should frequently discuss it and check in with thoughts and concerns, especially if the team effort consists of people from multiple departments with different perspectives and agendas. Keeping everyone on the same page helps to ensure honesty and dedication to the strategy, so communication is imperative for a functioning partnership.
Game theory is simple, but it has far-reaching consequences. When you partner well with others and follow the principles of game theory, you have a better chance of succeeding in your efforts. You can support the goals of others while you reach your own goals and build relationships that eliminate stressful competitions. Ensure strong performances and productivity in your workforce by establishing stronger partnerships and better wins.
When individuals work together to pursue a common goal, the mutual benefit they receive drives better results, encourages collaboration and honesty, creates deeper trust, and ensures the best outcome. These alone can be a win for your teams—one that can be leveraged for further collaborations.
Louis Carter, MA, is the author of more than 10 books on best practices in leadership and management, including Change Champion’s Field Guide and Best Practices in Talent Management. He was named one of Global Gurus Top 10 Organizational Culture gurus in the world and is one of the top advisers to C-level executives, helping them and their organizations achieve measurable results. His newest book is In Great Company: How to Spark Peak Performance by Creating an Emotionally Connected Workplace.
