Say you are competing in a fast-growing industry. How much do you care about profits versus market share?

It’s a common rule of thumb that businesses should go for market share in fast-growing in­dustries. It’s conventional wisdom, though, not a law of physics; you don’t have to go for share.

Whether to pursue profits or share is one of the questions posed in an ongoing tournament I conduct that uses computer simulation to test strategic decision-making among executives, students, and other management enthusiasts. Over 700 people have entered pricing strategies in the tournament.

A good strategy decision gets you what you want, so the tournament asks entrants what they want. That’s where the profits-versus-share question comes in: allocate 100 points between profits and market share as your goal. On average, those 700+ people allocated 55 of their preference points to market share and 45 to profits in the tournament’s “fast growth” industry. That means they clearly, though not unanimously, intended their strategies to gain market share. In the tournament industries with much slower growth, people put markedly more emphasis on profits. That’s just as conventional wisdom would advise.

And yet in over 173 million tournament simulations – every unique combination of the 700+ strategies for the three competitors in the fast-growth industry – the quest for market share led to price wars 90% of the time, subtracting value from the industry. In other words, following the “rule” produced results worse than if the participants had taken naps and done nothing at all.

It’s hardly surprising that tournament strategists would compete ruinously on price, since price was the only lever they could pull. But that’s not the point. The point is that they cut price because they obeyed the common-practice rule of going for market share in fast-growing indus­tries. They made different decisions in the other tournament industries, where growth was slow or negative.

Here’s a law-of-physics rule: there is only, always, exactly 100% market share in any market. That’s why, despite the vigorous price-warring, tournament strategists gained little or no share. (No one gets ahead when everyone moves in the same direction.) What they got, 90% of the time, was mutually assured destruction. The only way to win a price war is to be the only one fighting, and that’s not much of a war.

Knowing that, and knowing that your competitors know that, would you change your preference for profits or market share? Would you challenge the go-for-share rule?

Perhaps you would, perhaps you wouldn’t. Cogent arguments can be made either way. But I hope you now see go-for-share less as a hard-and-fast rule and more as an assumption to be assessed thoughtfully and critically.

Here’s another rule: we must keep our strategy secret from competitors.

When I conduct business war games for companies and when I run other games in workshops on strategic thinking, groups always hide their thinking and strategies from the other groups. I don’t tell them to do that. Real-life collusion is illegal and it’s explicitly forbidden in those games, but nothing (as in real life) prevents groups from signaling or taking action visible to other groups. I’m not saying that they should or shouldn’t do those things. I’m saying that by reflexively hiding they obey a rule that isn’t there. They treat a common practice as an immutable law, and they hold themselves back because they limit their options.

Fortunes are made by noticing such practices and challenging the assumptions behind them. Companies are lost by hardening common practices into shackles.

Fortunately, breaking rules is free. All you need is curiosity, attentiveness, and the courage to challenge conventional wisdom.

Switch mindsets and mentally place yourself outside your company as a dispassionate analyst. Observe the company’s people. What rules are they following?

When you hear advice containing “obviously”, ask the speaker whether that advice is based on evidence. Is the speaker obeying a law of physics or coasting with common prac­tice?

Think of famous rule-breakers. What would they say to your company?

Extra credit: apply all of the above to yourself.

Author’s note: You can enter the Top Pricer Tournament. It’s free and confidential, and you’ll get a report on your strategies’ performance. Please write to TopPricer@decisiontournaments.com.