What Can SimCity Teach Us About the Art of War?

Can our CEOs and leaders could receive a first-class business education by playing video games?  The surprising answer is that lessons learned in games like SimCity can be applied in the boardroom, minus the nuclear meltdowns.  Each year, millions of dollars are spent by businesses training their employees in management truths that are thousands of years old.  Meanwhile, students not yet employed go 10’s of thousands of dollars into debt to get their business knowledge.  What lessons are actually being taught for these princely sums of money?

For as long as leaders have controlled resources beyond what they can see and hold, they’ve devised strategies with which to do so successfully. 

Management philosophy is nothing new.  For as long as leaders have controlled resources beyond what they can see and hold, they've devised strategies with which to do so successfully.  Sun Tzu’s “The Art of War” is one early example of management philosophy, while the Greek philosophers contributed endlessly to management advancement as well.  In 1989, Kazuo Ishiguro wrote “Remains of the Day,” which became an instant classic in lessons of corporate loyalty, its limitations, and its consequences.  While it’s tempting to dedicate ourselves to dry, dusty textbooks full of bullet point lists and their associated PowerPoint presentations, the Case Study Method remains, next to real life experience, the single most effective method of business education.

Are these Cases only to be revealed through the tutelage of a college professor or a highly paid corporate trainer?  Sun Tzu opens with a Case about two female servants who are asked to command an army, Ishiguro use the English aristocracy as his example, and a generation of America’s children honed their corporate management skills on the mean streets of SimCity.  In fact, Ishiguro’s “Remains of the Day” and the computer game SimCity have something surprising in common: They both debuted in 1989.

Now, over a quarter-century later, what business skills can be learned by playing SimCity?  It turns out that the answers are as timeless as the management stylings of “The Art of War” author, Sun Tzu, and can be found throughout a session of gameplay.

Knowing Wright from Wrong

Know thy enemy, know thyself, and you need not fear defeat in a hundred battles. ~Sun Tzu, The Art of War

It would be a grievous mistake to believe that SimCity is a city simulator.  It is that, but it is also, much more so, a utopia simulator.  In Fall of 1980 Will Wright, the creator of SimCity, found himself attending The New School in Manhattan.  That was just months before the film “Escape from New York,” would debut, as a reflection of the endemic violence that had been building in the city throughout the 1970’s (the script was penned in ‘76 by the way).  Wright left New York  quickly, but not before the city could make an impression on him.  Eventually, New York’s increasing violence would culminate in events such as Bernie Goetz’s subway vigilantism just 3 short years later.  Wright reflected that worst case scenario well when creating SimCity.

Most players believe that they are competing to build their SimCity against a computer, or perhaps the disasters that the computer periodically spawns.  In reality, they are struggling to design a utopia, to Wright’s specifications, against the expectations of Wright himself.  Failing to realize this puts you at a distinct disadvantage and indeed, once you realize this, your playing experience changes dramatically.

Take for example the warren of tiny streets scattered throughout Manhattan with their gridlock, alternating one-ways, and every misery that can be imagined.  You won’t find any of that in Wright’s SimCity.  In order to make any serious headway in the game, you have to eschew even the most efficiently designed grid of streets for a few main roads and a robust public transport system.  Any robust system of gridded streets in SimCity will inevitably lead to traffic jams and calls for more public transportation.

Wright’s utopia better resembles experimental implementations of the Oglethorpe Plan than any suburb or city we are familiar with.  Oglethorpe envisioned a series of wards composed of homes around a streetless central green.  These wards were then connected by streets along the outer edge.  Indeed here you can see an implementation of the Oglethorpe Plan in Darien, Georgia.

Compared to a SimCity “donut-zone” with a park at the center.

The challenge of SimCity becomes not overcoming the game through blind luck and brute force, but by learning the strategy of your opponent (Wright) so that you can overcome it.  While SimCity has been enjoyed by 2 generations of schoolchildren and counting, it is undeniable that success within the game depends largely upon knowing the criteria for winning (which in turn relies heavily upon public transportation and donut-zones).  Wright would eventually state in an interview that he was strongly influenced by architect Christopher Alexander, whose planning work frequently included large outdoor common spaces and the donut strategy would make it into a number of SimCity tips publications.

How then does this apply to business?  Imagine that your boss assigns you to find 3 new prospective suppliers.  If you do not know your boss’s preferences, you are unlikely to please your boss with your choices.  However, you cannot simply follow the instructions that have been provided; you should endeavor to discover what your leader is seeking, even if they themselves do not realize it.  For example, do they require lower prices, but are really seeking high quality parts with value-added support services?  It is a common mistake to presume that lowered costs are the key when an increase in quality and service at the same cost might be more desirable.

Equally, in our scenario, you can neglect neither the suppliers negotiating on their own behalf, nor the other B2B purchasers with whom you are competing.  To fail to thoroughly research either would leave you with a list of companies which can provide parts to your specifications, but with no power to negotiating the price which you require.  SimCity teaches this, and more.  While many view resorting to a video game tips book as cheating, that is perhaps the greatest strategy of all: in business, information superiority is always of the utmost priority.  Sun Tzu, Apple, and Warren Buffett know this lesson well.  Buffett provides his own version of the rule, have stated on multiple occasions that he will not invest in a company which he does not understand.

Resilience, Urban Planning, and 100ft Salamanders

The key to our own success is within ourselves, but the key to the enemy’s defeat is within them. ~Sun Tzu

In SimCity, there are no flood barriers.  Waters rush in, tornadoes and fire rip through urban centers (even through fire departments themselves), and 100ft salamanders frolic endlessly through carefully planned power grids.  There is no “bigger boat” or National Guard, you simply move on and eat the cost of the rebuild.  SimCity even charges you for the demolition, much like in real life.

Since these attacks on civilization are random, there is no method by which to prevent them.  Basic Risk Management theory provides that what is likely and what is preventable, you work to prevent.  What is likely and unpreventable, you prepare for.  What is unlikely, you prepare for only when the other two categories have been satisfied.  SimCity disasters are random, but they are nearly guaranteed to happen at some point.  Since there is no form of insurance, your only recourse is to insure against the loss of the game by building back-up power grids and even back-up cities.  Rather than focus on a single city center, it is better to plan several, far away from each other, simultaneously.

This also embodies another of Sun Tzu’s principles, which holds that your plans should be a mystery and your movements like lightening.  This is an exhortation to attack in many places at once and fade away, a central tenet of guerilla warfare.  Equally applicable in SimCity, we must provide the random chance of the game many targets to attack and none of them vital.

How do you challenge the 100ft salamanders in the boardroom?  There are leaders and co-workers who have also read Sun Tzu and who will make an art of being inscrutable in their actions.  Just as in SimCity, you must have the confidence to build anyway and the flexibility fade away from an attack and be ready to recommence on another front when you meet too much resistance.  You cannot waste resources and time attempting to occupy territory which you cannot hold, something that the average MNC is well acquainted with.  When McDonald’s found itself paying $1.50 in ads for every $1 of business taken from Burger King and Wendys, it went to the Middle East and made vast profits in untapped markets.  Economists call this the Point of Marginal Utility, wherein you produce where the greatest profit lies.  SimCity makes this point anew every time your carefully planned city is burnt to ash by a neon orange salamander.

Strategic Leadership of the One Man Corporation

Every worker is a one man corporation, selling the product of his labors, resources, knowledge and skills for the wages which afford him the lifestyle of his choosing.  Sun Tzu is attributed several quotes that expound on the necessity of planning, as though at the time of his writing, it were something of a novelty that one should think before doing.  Indeed, among feudal warlords living and fighting in a world where power was often hereditary and violence a tool to intimidate foes into compliance, Sun Tzu’s admonition to actually bother to plan may have been well-founded.  Surely today though everyone is aware that success is not a happy accident, but a the result of a well orchestrated set of long term goals?

Were that true we would not see the rich and famous routinely fall from grace, often delving into tax evasion, because they failed to live within their extraordinarily robust means.  Were planning the norm, companies like Enron who borrow and scam their way through bad economic times would actually pay back their ill-gotten gains before federal agents kicked in the door.  The truth is, the majority of the population still fails to plan adequately for success.  This applies to the average American who lacks sufficient emergency savings to make it through a period of illness as well as to companies across the globe who are focused on quarterly profits and start each meeting with the mantra “well, it could never happen to us.”  History is filled with tales of those who failed to plan and always as cautionary tales, never success stories.

Wright’s video game masterpiece is very nearly a vehicle designed exclusively to drive the importance of planning home.  On top of the fact that, let’s face it, SimCity is a municipal planning simulator, SimCity is virtually unwinnable without a well thought out strategy.  Residential zones placed next to a powerplant will stay vacant for years and seldom achieve the highest level of development.  Coal powerplants cause pollution and brownouts, while nuclear powerplants almost inevitably have meltdowns.  Thinking about building a huge industrial complex in order to keep factories from driving down the value of adjacent residential properties?  Good luck!  Very quickly you’ll have a huge number of factories in a crime-ridden part of town that the addition of multiple police departments does little to remedy.

As a side-note, Wright was unapologetic about visions of a consumerist society in his designs for the game.  Why else would you be encouraged to build massive residential blocks with only the occasional factory or store?  Clearly SimCity’s inhabitants have full access to Amazon and UPS and are all either white-collar professionals or else taking rather long commutes to some more urban environment (probably Grand Theft Auto’s Vice City if I had to guess).

Sun Tzu would approve as would some of the world’s most successful businesspeople.  Try playing a couple rounds of SimCity and it will make a planner out of you as well.  Good corporations are staffed by great employees following great strategies.  Great employees are happy employees who are compensated competitively for their labors and who have a clear idea of both what their place is in the company and how their current position works to fulfill their longtime career goals.

This is turn brings us to a final lesson, found throughout both “The Art of War” and Simcity:  Sun Tzu advises “Regard your soldiers as your children, and they will follow you into the deepest valleys; look on them as your own beloved sons, and they will stand by you even unto death.”  In SimCity, it’s all about the “sims,” who no one actually met until they got their own game 11 years later in 2000.  When you plan your city in accordance with Wright’s criteria, your sims are happy, they build residences, and your tax revenues increase.  Happy sims are willing to pay more taxes and less likely to move away.

Likewise in business, employees are the foot soldiers who will carry out even the most daring and vital corporate strategies on a day to day basis.  Should you find yourself a foot soldier in the corporate army, make sure that your career goals and those of the corporation are aligned.  Should you find yourself a general, ensure that your employees have the skills and resources necessary to meet their own goals as well as the companies, otherwise they’ll move on to greener pastures as soon as they are able.  ...should you find yourself in SimCity, build donuts, lay railroad tracks, and prepare for salamanders.

In 2014, SimCity Classic turned 25.  A few years before that, in 2009 SimCity Classic was released for free under the name Micropolis.  Today you, and hopefully your employees as well, can play and train on the quintessential strategic management tool at no cost.  Visit http://micropolisonline.com/ for details.

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