Why do otherwise intelligent leaders sometime chose near-sighted strategies that are not to their long-term benefit... and how can you avoid stepping into the same pitfalls? An illuminating answer to this question can be found in a beautiful Stephen Sondheim song from Into the Woods. (It's kind of like Schoolhouse Rock for business majors.)

Before we zoom in on the strategic insights, here's a brief plot summary in case you're not already familiar with the musical Into the Woods: Composer and lyricist Sondheim and book writer James Lapine took the characters of several classic fairy tales (including Little Red Riding Hood, Rapunzel, Cinderella, and Jack and the Beanstalk) and twisted them together into a single narrative. The source material may be "kid's stuff," but Sondheim and Lapine transformed the simple stories into a witty, moving, and morally complex piece of theater.

In the first act, all of the story lines reach their familiar conclusions: Little Red Riding Hood and her Grandma escape the belly of the Wolf, Rapunzel and Cinderella both win a Prince, and poor Jack comes down from the beanstalk with a hen that lays the proverbial golden egg. And they all, as the saying goes, lived happily ever after.

At least until the second act.

In the world of Into the Woods, the moves we make in act one always have repercussions in act two. And, as is often the case, the reactions to our actions come in unpleasant forms. I won't spoil anything for those of you who haven't seen it, but not everybody makes it out of the woods alive. (Far from it.)

Here's where strategy comes into it: In the original fairy tale, Jack escapes down the beanstalk and kills the Giant. In the second act of Into the Woods, the Giant's Wife comes down to earth to seek revenge on Jack. On her hunt for the boy who killed her husband, she leaves a trail of bodies in her path. The surviving "heroes" decide they will have to kill the Giant's Wife to restore peace to the kingdom. In the moments before they do battle, the younger characters (Jack and Little Red Riding Hood) are angry, frightened, and confused. Two of the adults (Cinderella and the Baker) sing them a song called "No One is Alone."

It is a gorgeous song and it's hard to not find comfort in the words every time you hear Cinderella and the Baker sing lines like this:

"No one is alone. Truly.

No one is alone."

However, that's not what the song is about at all. The words are not simply meant to comfort, they are meant as a warning. As the song builds to a climax, the adults sing:

"Just remember:

Someone is on your side..."

And the children join them hopefully singing:

"Our side, Our side..."

But just as soon as the song lifts, the adults soberly cut the anthem-like music short by singing:

"Someone else is not."

The same glimmer of entitlement is again tempered with a warning when they sing:

"While we're seeing our side

Our side! Our side!

Maybe we forgot: they are not alone.

No one is alone."

The warning is more complex than simply noting that you are competing against other players. Sondheim goes beyond pointing out that actions can inspire retaliations. He's also giving a lesson in what economists call negative externalities. The exchanges between two parties can cause pain and suffering to a third party who wasn't involved in (or even aware of) the initial interaction. As the song says:

"Everybody makes

One another's terrible mistakes."

It's not just that our opponents have interests that are in conflict with our own. Rather, it's that our ill-considered actions can cause our opponents to take actions that we do not want them to.

I submit to you that this is the essence of strategy. It's certainly the heart of game theory. The actions of one player can change the nature of the game for all of the players. It's such a simple point, it feels silly to even bother saying it... and yet, there is no shortage of examples of shortsighted strategies that are executed by corporations and governments alike.

Why do people fall into this trap? How can adults fail to see that their actions will have consequences? I think listening to "No One Is Alone" will shine a little light on the mystery. We know that there is an enemy out there in the woods, but the melody -- the beautiful melody -- lulls us back into believing what we want to believe. The melody seems to say we are not alone, we have each other, we are on the right side... And so we willfully fool ourselves into ignoring the wisdom of the lyrics. And so, too often, emotional considerations overwhelm logical strategy.