Lessons for strategists
Modern board games like “Die Siedler von Catan” are introductions to entrepreneurial thinking and action. Even seasoned managers can still learn a thing or two at the gaming table.
Note: This article first appeared in Wirtschaftswoche 5/2013 and then on zuspieler.de
Kai-Oliver Brand is desperate. The Associate Director of DZ Bank is searching for clay. Only with it can he build a new production facility and expand. He’s already found the perfect location: the mountains by the forest. Construction workers have driven a tunnel into the mountains and discovered a huge ore deposit. But without clay, there’s no production building and no ore. Brand looks at his competitor. He could supply clay. But the rival shakes his head. The negotiation is over before it even began. Brand still has one ace up his sleeve. He plays his contacts in the underworld. Robbers, acting on Brand’s orders, sabotage the opponent’s clay pit and halt production. The victim nods in recognition. Not a fine move, but a good, rule-compliant one.
Economic thinking at the living room table
In the board game “Die Siedler von Catan”, experienced players fight with tough tactics. Catan is one of the most successful games of recent years – and a lesson in economics. This week, the fourth major Catan expansion is being released at the Nuremberg Toy Fair. It’s called “Entdecker und Piraten” and makes the game even more complex. Digital versions for laptops, tablets and mobile phones have long been available. Other publishers are also presenting games in Nuremberg that help managers train strategic thinking or hone their negotiation skills. “In games, you learn a lot about how other people behave. That also has advantages in real life,” says Klaus Teuber, the creator of Catan.
In his game, participants collect clay, ore, wood, wool and grain. With these raw materials, they build settlements or invest in technological progress. The base game was invented by the trained dental technician in 1995. It is Teuber’s masterpiece and has sold over 18 million copies worldwide. Catan is, so to speak, the “Monopoly” of modern times. Among German managers, it has already overtaken the classic. On the online platform Xing, 228 people admit to liking “Die Siedler von Catan”. These include managing directors, management consultants and project managers. “Monopoly” only has 72 fans. Catan is also popular with American managers, especially in Silicon Valley. Facebook CEO Mark Zuckerberg plays it, reports the “Washington Post”. And LinkedIn co-founder Reid Hoffman raves in the “Wall Street Journal”: “The different dice rolls constantly force players to adapt their strategy to changing circumstances. It’s like running a startup.”
Time to Expand
Brand is happy. He’s been waiting for this moment. Finally, the sum of the two white dice is a six. Finally, his settlement produces clay. This is shown by a chip on the clay pit, which also displays a six. Whenever the dice result matches the number on the chip, Brand can take raw materials into his hand. His storage is full. Time to expand. The banker builds another settlement. Ore production can begin. A smart decision: “The biggest beginner’s mistake is to neglect building settlements at the start and only invest in the victory point card ‘Longest Road’,” says Teuber. “It’s like a company making investments that boost its reputation in the short term but don’t generate sustainable returns.”
The similarities to everyday life in the bank or office aren’t always obvious in board games. Many games take players to fantasy worlds instead. Most people don’t want to be reminded of their daily work when playing. That’s why publishers often dress up economic games in historical settings. “Popular locations are Northern Italy during the Renaissance or the Netherlands during the Reformation. Many of the economic principles still valid today first emerged back then,” says Ulrich Blum, spokesperson for the Game Authors’ Guild. And there’s another thing many games have in common: in almost all of them, capitalism works like in a textbook. Financial crises or consumer boycotts are foreign concepts. “No one wants to deal with crises at the gaming table,” says Blum. Games with pure economic themes struggle. They’re either published by small publishers or disappear from the market after a few years. Like “Schwarzer Freitag” by Friedemann Friese, which Kosmos released in 2010. The game is about a stock market crash. But sales apparently plummeted as fast as stock prices during an economic crisis. Today, Kosmos only sells remaining stock.
The Success of Catan
It’s different with “Die Siedler von Catan”. Kosmos regularly releases expansions or variants. Catan’s success has several reasons: the game board is much more variable than in “Monopoly”. Also, players have to constantly negotiate with each other. They haggle over scarce resources. And they have to decide on a winning strategy right from the start – just like in business. “If you define your goal vaguely, you’ll fail. At the same time, the strategy must be flexible enough to withstand disruptive moves by competitors,” says Brand. The behaviour at the gaming table also reminds the Associate Director of how things work in the bank.
Brand is relieved. Just moments ago, the banker was sending robbers to his competitor’s clay pit, and now he’s offering wool. In return, Brand would like two grain. Once again, the opponent shakes his head. Brand raises the offer to two wool cards. His rival laughs. At three wool cards for two grain cards, the trade is perfect. “The odd rule-compliant move can harm your opponent. At the same time, you mustn’t alienate your fellow players. You’ll need them as trading partners,” says Brand. He invests the raw materials in a city. This increases his production. Instead of one, he now receives two resources when the dice roll matches.
Science has long since taken an interest in Catan. Martin Horsten examined the game in his diploma thesis. His conclusion: students learn in “Die Siedler von Catan” how rising supply or falling demand affects prices. The game also shows why a company’s location is an important success factor. Only those who place their settlements in the right spots produce the necessary resources.
Young people learn these and other economic connections not only through board games but also through computer games. In “Anno 2070”, players explore islands on screen and build economic cycles. Since the computer handles the administrative work, these cycles are much more complex than in Catan. A similar principle applies to the PC game “Die Siedler”, which coincidentally shares its name with “Die Siedler von Catan”. The cultural historian Johan Huizinga describes the connection between games and economics in his book “Homo Ludens”: “The element of passion, the prospect of gain, the willingness to take risks is as much a part of economic enterprise as it is of play.”
Risk and Reward
This also applies to “Airlines Europe” by Alan R. Moon. The board game was first released over 20 years ago by Abacusspiele. In 2011, the publisher released a revised version. In the game, participants trade in airline stocks. And over five years ago, Lokout Spiele released a modern classic: “Agricola” by Uwe Rosenberg received numerous awards for its complexity. Players take on the role of farmers and manage a farm. Only those who diversify their production and breed cattle, sheep and pigs have a chance of winning. Provided, of course, they’ve also modernised their house and remembered to grow vegetables and grain.
Games like “Agricola” or “Die Siedler von Catan” demand more economic understanding from players than the supposed economic game par excellence: “Monopoly” is comparatively simple. Still, some politicians feared the game. In the Eastern Bloc, “Monopoly” officially existed only from the late 1980s. The powers that be agreed: the game of rents and money incited greed.
East German citizens were not impressed. They smuggled “Monopoly” into East Germany and played it in secret. With “Die Siedler von Catan”, the need for secrecy was gone. When Catan appeared in 1995, the Wall had long since fallen and the market economy was everyday life – on the gaming table and in real life.