Manifesto of Drama theory and Leadership - Explains Dr. Suman R Sensarma, Partner-CLA Global IVC

'What strategy choice will lead to the best outcome'; this quest naturally brings us into the territory of game theory. The conventional game theory implicitly assumes that every player always tries to maximize their payoff. The traditional profit maximization assumption is based on the player's short-term strategy in an orthodox rationality context. Here, player's options, preferences, and rules are fixed; we can't change the game. Traditional leadership strategies have been heavily influenced by rational choice and game theory, emphasizing calculated decisions aimed at maximizing outcomes within a competitive framework.

But what happens if we ‘suddenly’ change the game? Our argument is that we need a paradigm shift of our business strategy from the traditional win-lose status quo. A great leader with an infinite mind set can change the game and make an actual win-win situation for both the company and its employees. In organizational dynamics, the advent of drama theory presents a novel paradigm for understanding and navigating crises.

Why Drama theory?

The fundamental difference between game theory and drama theory is that, in drama theory the rules are not fixed, and drama allows for the possibility of changing the game even though the environment remains informationally closed. This phenomenal theory manifests the winning not as one short game; it folds and unfolds the episodes in a continuous rational-irrational argument process. The party redefines its game in terms of its threats and promises. Emotion manifests to expand the options and choices instead of just following the course of action within a fixed frame of the game. As Bryant says, "Emotion helps parties to recognize new possibilities—to see things and to show things differently.”

Assertion in Real-life: Leader who changed the Game

During the 2008 recession, Barry-Wehmiller Company, had about US$3 billion in revenue, and 8000 employees, lost 30 percent of its orders. The immediate reaction of the Board was to suggest the lay off to maintain the financial equilibrium.

The employees faced an intense threat dilemma (the Board desperately wants the lay off to maximize their Profit). This approach leads the employees towards a relapse situation. A legal challenge might be unsuccessful (even they doubt whether they will carry out this action). It seems that the Board has the authority to do and intends to take such an aggressive move. Both parties face the rejection dilemma. 

But the situation became dramatic when Chairman Bob Chapman refused the Board's proposal. Bob believes in heart counts, not headcounts. He came up with a solution where every employee had to take four weeks of unpaid vacation whenever they wanted so that everyone could suffer little instead of a few employees forced to leave their job, and their morale went up dramatically. Bob announced, "It was better that we all suffer a little rather than any of us should have to suffer a lot. "This  move was triggered by positive ‘emotion’ that irreversibly changes the situation, creating a new set of options and choices and thus, the plot unfolds dramatically.

As drama allows changing the frame by character, the Chairman (leader) transferred the game to promise everyone's mutual benefit. Thus, neither party has any dilemma rather than carrying the belonging of cooperation. As a result, the business gets improved. The company subsequently gave them back the contributions they had lost over the next three quarters. Bob's incredible approach shows excellent use of the drama theory as an episodic transformation in an economic downturn. Bob saved the company and made the workforce's morale stronger, which is genuinely ‘A Humane Leadership.’

What Drama theory teaches us

Flexibility in Business :  Recognize that the ‘game’ of business can bechanged and create new pathways to success.

Embrace the Emotional Journey :  View challenges as opportunities to craft a compelling story with your team, where empathy, innovation, and mutual support are key characters.

Lead with Heart : Take a page from Bob Chapman and prioritize the well-being of your team to foster a culture of shared sacrifice which can lead to greater resilience and loyalty.

A Broader View of Success :  Drama Theory encourages infinite  minded leaders to look beyond immediate financial gains and prioritize long-term benefits. 

The Takeaway

Drama theory manifests that winning in business is not one short game, rather far-sighted. We can win collectively based upon a strategy of cooperation and trusting each other instead of the traditional myopic look of immediate profit fixing. This offers a fresh perspective on leadership, emphasizing the importance of adaptability, flexibility, empathy, and collective moves in overcoming challenges. Simon Sinek rightly said – “the inspiration, innovation, cooperation, brand loyalty and profits that result from infinite  minded leadership serve companies not just in times of stability but also in times of instability.”
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