I’m one of the 500M+ people in the world who discovered the Monopoly real estate board game as a child.
And I’m thankful for that.
I still vividly remember these long nights spent with my grandparents, Isidore and Lucienne. I enjoyed methodically leading them into bankruptcy and winning it all!
For most of my life, I’ve played the French version. I got used to trading and developing Parisian streets from the working-class Belleville to the prestigious Champs-Elysées and Rue de la Paix.
Whether you played your own country’s version or got crazy with “Boston’opoly” – the Boston Terrier lovers’ version – the rule is the same:
The winner ends with the most assets and cash in hand.
It’s just a game. But it taught me key business lessons I ended up applying to my life as a leader. Here are the top three:
1 – Be patient and focused
Monopoly winners start with a specific plan in mind for the types of properties they’ll go after.
Luck – or lack thereof – will have them adjust their strategy based on the dice rolls.
But they don’t run aimlessly in all directions. They don’t try to buy everything only to find themselves quickly out of money. Instead, they methodically execute their plan and know to be patient.
Similarly, as a business leader, I quickly understood that it wasn’t worth chasing every opportunity, launching various products to see what would stick.
It takes a serious study of your market and customers and a disciplined approach to keep distractions out. As you learn, you keep adjusting and progressing.
Eventually, with a little luck and strong determination, your products – and, therefore, your business – can become sustainable successes.
2 – Reduce risk by diversifying
I often see other players anxious to own the most significant payout properties like Rue de la Paix (Boardwalk) or the Champs Elysées (Park Place). True, they bring nice cash flow when a competitor lands there.
But these assets are also the most expensive to maintain and will siphon your cash if you are not careful.
More strategic players will know how to create a balanced portfolio of owned properties. They’ll carefully grow their house and hotel investments while paying specific attention to their cash positions.
Similarly, in business, if you want to go after the most significant rewards, make sure you are mitigating the associated risks. I’ve learned to create diversified product portfolios and not depend on one big customer, partner, or supplier.
These sound like obvious choices. Yet, too many businesses still don’t manage such risk efficiently and end up out of cash.
3. Cash Flow is King
Talking of cash! To win at Monopoly, you must be the best at collecting rent from your properties. That’s how you generate your cash flow.
Interestingly enough, one of the best investments of the game is in the rail stations. If you own the four rail stations, you will collect a rent that is 25% of your investment each time someone lands on one. With the right dice rolls, it can turn into a pretty solid return on investment!
In real life, I’ve learned to apply similar rules and focus on investments or products that could generate the best cash flow. There are ways to optimize such cash flow, from tweaking pricing strategies to favoring distribution channels that provide the best investment return.
As importantly, such focus on cash flow generation helps prevent over-indebtedness and potential bankruptcy down the line.
I’m not saying you should only be conservative. You can have ambitious dreams as long as they’re backed with solid cash flow generation strategies.
OK, Monopoly is just a game. Leading a team, a business, or investing is more complex and has many subtleties.
Like in Monopoly, luck will always play an important role, but you know you can’t truly control it.
So, focus on generating enough cash flow and reducing risks through diversification. Be methodical and patient. And keep adjusting your plan as needed.
Chances are you’ll be ahead of most businesses competing against you.