Why Business is Like Yacht Racing

There are many sporting analogies used for the complexities of running a business, my preference is yacht racing. Why is running a business like yacht racing? To me, it is an apt analogy because both are very challenging, require a strategy, need effective bi-directional communication, a skilled team, and the ability to read a changing environment and adapt to it.

To be successful we have to do a better job than our competition of understanding the environment, communicating our intentions, reading our conditions, setting our strategy and executing our teamwork flawlessly. Also, just like in business, we have multiple competitors who are all doing their best to win as well. Then, despite all the best preparation in the world, when we show up at the start line, we don’t know how our strategy is going to prevail because the conditions will change throughout the race.

One of the biggest problems in trying to read the conditions in sailing is that we can’t directly see the wind. This is really important, because the wind is our energy we need to drive the boat forward, and we need to be the best at harnessing it. How does a crew read the wind? They look up out of the boat at our environment and study it intensely. They look at the clouds, the waves and we look at our competition and assimilate all that information. In business, reading the wind is like reading the market forces that our business is sailing in. Our clients and their needs, the problems they are willing to pay to have solved, and the buying processes are all parts of the forces that propel our business.

Some aspects of the environment in sailing can be very complex and deep understanding only comes from deep experience. For example, the wind is very three dimensional and clouds shed huge downdrafts of cooled air onto the ground. Depending on where you are in relation to the cloud, these downdrafts will make the wind change direction for you, which might be favorable or not. So on good teams, we have a strategy to position ourselves better than our competition relative to the clouds so we can take advantage of the conditions. In business we gain an advantage when we can read market forces and position ourselves for success better than our rivals.

To complicate matters further, yachts can’t sail directly into the wind because of the laws of physics: of lift and drag. Given that we can’t sail directly into the wind, we need to put a lot of focus into our strategy and tactics for how we are going to navigate from the start line to the finish, and get there first. While sailing upwind, we have to take a zig-zag course by sailing as close to the wind as we can and then changing direction by tacking the boat. In business, we might start off with a certain product in certain market, but then we may have to change direction to get to where we want to go. It is incredibly important to have a solid strategy in place to establish and defend our position in the competitive seascape and business environment, and maximize our ability to favorably harness the conditions as we tack back and forth.

Our strategy will need to be adjusted as we take account of the ever changing wind conditions, and our success comes from predicting changes and reacting to them faster and more effectively than the competition. I think looking at business as a sail boat race helps organizations to realize that the conditions we operate in don’t remain static, they change constantly and being tied to a fixed strategy won’t be successful for very long.

Great sailing teams develop their culture by training together. They know their roles on the team, understand the communication cadence and depend on each other. With experience comes trust and this allows the team’s attention to focusing outwards. Great teams devote their energy to intuiting what is going on in the competitive landscape and feeding that information back to guide strategic and tactical decision making.

I hope this brief post helps demonstrate the similarities of two of my passions: sailing and business. On a less serious not, now to answer the age old boating question of which is better a mono hull or catamaran? They both have their pluses and minuses, but as I have matured my preference has shifted to the catamaran. Due to its size it has more forces of nature to reckon with, but it is more stable in all weather conditions and more forgiving. Plus you can host land lubbers without the fear that the boom is going to send somebody overboard.