Pegasystems' Trefler on leadership and strategy - learned from chess

NEW YORK (Reuters) - To lead a business in the midst of a pandemic, Alan Trefler, CEO of software company Pegasystems, is using strategies he learned from chess.

Alan Trefler, CEO of Pegasystems, poses in an undated handout photo obtained December 5, 2020. Courtesy Pegasystems/Handout via REUTERS

The Boston-based Trefler in 1975 tied, at the age of 19, for first place in the World Open chess tournament in New York with grandmaster Pal Benko. When it came to building Pegasystems, which he founded in 1983, Trefler turned to chess.

“You need to be able to learn from losing and even to learn from your mistakes when you win,” said Trefler, who is 64. “Chess is a very transparent game. It’s fully disclosed at all moments, and it’s not enough to either win or lose. It’s whether you’ve earned it.”

Trefler had a chat with Reuters about how chess shapes his business decisions at Pegasystems, a provider of strategic applications with nearly 4,500 employees in 30 global offices. Edited excerpts are below.

Q. What did you learn from your first job?

A. My first job was as a teenager, working in the family business. My father survived World War Two in Europe (moving from Poland to the United States) and created his family business, Trefler’s, which restored art and important objects. We were taking things that people value that have been damaged and restoring them.

I learned restoration, but, as I grew older, I had the chance to interact with customers. You can think you’ve done as good a job as you want, but what really matters is if the customer thinks you did a good job.

Q. What did you buy with your first big paycheck?

A. When I was a sophomore in college, I won co-champion of the World Open chess tournament. It was a very unlikely thing. I was rated 114th at the start of the tournament. My prize was $2,250. I still have a picture of that check as it was by far the biggest check I’d ever seen.

I really, really wanted to buy this incredible calculator on sale. I came within inches of spending $240, and I hesitated.

The next year when you suddenly could get a way better one for $20, I felt really smart.

I learned that timing and choosing when to invest your money is important.

Q. What was your toughest job?

A. In my first computer science job out of college, I was hired on a Wednesday, flying to meet with a major New York bank with my boss on Thursday, where I was introduced as the leader of the project that I then learned was six months late. That was my second day.

On the third day, my boss had a conflict and didn’t show up, so it was me and 18 customers. Sometimes you need not make excuses and to tell people, “Sorry we’re not going to make the deadline, but I’m here to do the best we can.”

And it worked out.

Q. What can business leaders learn from chess?

A. There are three basic lessons. The first is pattern recognition -- look at the pieces on the board, the control of the different squares. What I recognize will clue me in on what the strategic approach should be.

Next is the “If, Then, Else” stage. Deep analysis of: If I do this, what do I anticipate as a countermeasure, and what will I then do?

It’s really mapping out the sequences of alternatives: If you’re looking at buying a company or investing in a particular area, you’re thinking of what moves you can make but also what your competition might do. And what’s holistically happening in the ecosystem that can affect you.

Finally, before you make your move, you want to step back and ask the question, ‘Did I miss something obvious?’

It’s really dangerous in chess and in life to get wrapped up in an analytical vector and you forget that there’s something that you might stumble into at the end. This is a very healthy framework for decision-making.

Editing by Lauren Young and Sonya Hepinstall