the art of war

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Tzu your business


How lessons of  ” The Art of War” by Tzu Sun are relevant to succeeding in the business world

Written more than 2,000 years ago, The Art of War by the Chinese warrior Sun-Tzu is still a text that’s well-regarded for its formula for victory. It is written with a mystical style of speech, and the choice of words help make it relatively easy to transfer the lessons to more than just the battlefield.


The ultimate purpose of the text is to show how a leader can use psychology to achieve his goals. For the purpose of this discussion, the word “psychology” has a few meanings, including how other people think, your own thought processes, as well as the situations that are created by  psychology and ultimately human nature. This thought process is as effective in business as in war situations because in both situations people make their moves and act based upon their own nature.

While there is no guaranteed formula for success or a guaranteed strategy to avoid defeat in either war or business, there are certain traits that lead to success. Leaders on the battlefield and in the boardroom are both able to adapt to certain situations.  For example, the game of negotiation isn’t won by arguing. Rather negations are won by planning and adapting; likewise, no two victories in war or business are the same, their form adapts to the factors of each specific situation.
Here are a few of Sun-Tzo’s principles, and how they relate to the business world.

Winning Without Battle
Sun-Tzo abhorred the idea of casualties being a byproduct of victory and wrote, “Thus those skilled in war subdue the enemy’s army without battle … . They conquer by strategy.”
In other words, even if you don’t have the same resources your competition has, you can still succeed. The key is to not pit yourself directly against a larger, stronger opponent.  Rather, use guile and learn to use your enemies’ strengths against them and to capitalize upon their efforts.

Knowledge
“Know the enemy and know yourself; in a hundred battles you will never be in peril. When you are ignorant of the enemy, but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and yourself, you are certain in every battle to be in peril.”
In business, it is vital that you know and understand the procedures, policies and tactics of your competition.  At the same time, it is crucial that you have an honest appraisal of your own strengths and weaknesses.  ASWOT analysis is aimed at providing precisely this perspective of both your business and your competitor’s.  SWOT stands for Strengths, Weaknesses, Opportunities and Threats.  You can learn about your competition by physically visiting them and using their products.  Take an honest look at what they do and compare it to what you do.  You can then capitalize on your strengths and take steps to fix your weaknesses to avoid any competitive threat.

Be Prepared
While this is a common lesson that many learn while growing up, it’s one that has been around for thousands of years. In fact, two centuries ago Sun-Tzu wrote:
“To … not prepare is the greatest of crimes; to be prepared beforehand for any contingency is the greatest of virtues.”
Whether speaking of warfare or business, unexpected events can cause the most damage. It’s important to commit time, capital, and people resources to planning and preparation. While the process may not seem very productive compared to just doing something, it is actually an investment in future success.  While planning in business is important, it’s just as important to plan and prepare as an individual with your own goals and one- to three-year plans.

Speed
“What is of the greatest importance in war is extraordinary speed: One cannot afford to neglect opportunity.”
Your customers want 24/7/365 service and instant gratification.  Asking a client to wait for you to complete a project, bring a product to market, or make yourself available to help them is akin to inviting them to visit your competitor.  Speed makes you a leader rather than a “me-too” follower in the competitive business environment.

Vision and Leadership
“The general must be first in the toils and fatigues of the army. In the heat of summer he does not spread his parasol, nor in the cold of winter don thick clothing… . He waits until the army’s wells have been dug and only then drinks; until the army’s food is cooked before he eats; until the army’s fortifications have been completed, to shelter himself.”
Leadership cannot be overrated.  The most successful businesses have strong leadership that can rally the troops, motivate greater achievement and command the kind of respect that inspires others to willingly follow.  In business, words that aren’t backed up by action are seen as nothing more than idle chatter. However, managers who lead by example set the tone for success.

Staffing And Delegation
“A sovereign of high character and intelligence must be able to know the right man, should place the responsibility on him, and expect results.”
Finding and hiring the best people is important; and providing them with the opportunity to excel cannot be ignored.  By hiring smart, talented professionals you can feel confident delegating, which in turn leads to those individuals continually stepping up to the plate to deliver their best work.

Allies
“If an enemy has alliances, the problem is grave and the enemy’s position strong; if he has no alliances, the problem is minor and the enemy’s position weak.”
With like-minded allies, you’ll have the ability to pool resources and work together to achieve business goals. The idea is that it’s better to own 25 percent of something than 100 percent of nothing.
As you can see there are many lessons that can be applied to the business world, making this old text well worth studying.


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Marketing warfare strategies

Marketing warfare strategies are a type of strategies, used in business and marketing, that try to draw parallels between business and warfare, and then apply the principles of military strategy to business situations, with competing firms considered as analogous to sides in a military conflict, and market share considered as analogous to the territory which is being fought over. It is argued that, in mature, low-growth markets, and when real GDP growth is negative or low, business operates as a zero-sum game. One person’s gain is possible only at another person’s expense. Success depends on battling competitors for market share.
The use of marketing warfare strategies
Strategy is the organized deployment of resources to achieve specific objectives, something that business and warfare have in common. In the 1980s business strategists realized that there was a vast knowledge base stretching back thousands of years that they had barely examined. They turned to military strategy for guidance. Military strategy books like The Art of War by Sun Tzu, On War by von Clausewitz, and The Little Red Book by Mao Zedong became business classics.
From Sun Tzu they learned the tactical side of military strategy and specific tactical prescriptions. In regard to what business strategists call “first-mover advantage”, Sun Tzu said: “Generally, he who occupies the field of battle first and awaits an enemy is at ease, he who comes later to the scene and rushes into the fight is weary.” From Von Clausewitz they learned the dynamic and unpredictable nature of military strategy. Clausewitz felt that in a situation of chaos and confusion, strategy should be based on flexible principles. Strategy comes not from formula or rules of engagement, but from adapting to what he called “friction” (minute by minute events). From Mao Zedong they learned the principles of guerrilla warfare.
The first major proponents of marketing warfare theories was Philip Kotler[1] and J. B. Quinn.[2] In an early description of business military strategy, Quinn claims that an effective strategy: “first probes and withdraws to determine opponents’ strengths, forces opponents to stretch their commitments, then concentrates resources, attacks a clear exposure, overwhelms a selected market segment, builds a bridgehead in that market, and then regroups and expands from that base to dominate a wider field.”
The main marketing warfare books were:
  • Business War Games by Barrie James, 1984
  • Marketing Warfare by Al Ries and Jack Trout, 1986
  • Leadership Secrets of Attila the Hun by Wess Roberts, 1987
By the turn of the century marketing warfare strategies had gone out of favour. It was felt that they were limiting. There were many situations in which non-confrontational approaches were more appropriate. The Strategy of the Dolphin was developed in the mid 1990s to give guidance as to when to use aggressive strategies and when to use passive strategies. Today most business strategists stress that considerable synergies and competitive advantage can be gained from collaboration, partnering, and co-operation. They stress not how to divide up the market, but how to grow the market. Such are the vicissitudes of business theories. At last, a recent contribution for understanding and using marketing warfare strategies is the visual business war game proposed by S. Goria[3].
Marketing Warfare Strategies
  • Offensive marketing warfare strategies – are used to secure competitive advantages; market leaders, runner-ups or struggling competitors are usually attacked
  • Defensive marketing warfare strategies – are used to defend competitive advantages; lessen risk of being attacked, decrease effects of attacks, strengthen position
  • Flanking marketing warfare strategies – Operate in areas of little importance to the competitor.
  • Guerrilla marketing warfare strategies – Attack, retreat, hide, then do it again, and again, until the competitor moves on to other markets.
  • Deterrence Strategies – Deterrence is a battle won in the minds of the enemy. You convince the competitor that it would be prudent to keep out of your markets.
  • Pre-emptive strike – Attack before you are attacked. (see Defensive marketing warfare strategies for a description)
  • Frontal Attack – A direct head-on confrontation. (see Offensive marketing warfare strategies for a description)
  • Flanking Attack – Attack the competitor’s flank. (see Flanking marketing warfare strategies for a description)
  • Sequential Strategies – A strategy that consists of a series of sub-strategies that must all be successfully carried out in the right order.
  • Alliance Strategies – The use of alliances and partnerships to build strength and stabilize situations.
  • Position Defense – The erection of fortifications. (see Defensive marketing warfare strategies for a description)
  • Mobile defense – Constantly changing positions. (see Defensive marketing warfare strategies for a description)
  • Encirclement strategy – Envelop the opponents position. (see Offensive marketing warfare strategies for a description)
  • Cumulative strategies – A collection of seemingly random operations that, when complete, obtain your objective.
  • Counter-offensive – When you are under attack, launch a counter-offensive at the attacker’s weak point. (see Defensive marketing warfare strategies for a description)
  • Strategic withdrawal – Retreat and regroup so you can live to fight another day. (see Defensive marketing warfare strategies for a description)
  • Flank positioning – Strengthen your flank. (see Defensive marketing warfare strategies for a description)
  • Leapfrog strategy – Avoid confrontation by bypassing enemy or competitive forces. (see Offensive marketing warfare strategies for a description)
Companies typically use many strategies concurrently, some defensive, some offensive, and always some deterrents. According to the business literature of the period, offensive strategies were more important that defensive one. Defensive strategies were used when needed, but an offensive strategy was requisite. Only by offensive strategies, were market gains made. Defensive strategies could at best keep you from falling too far behind.
The marketing warfare literature also examined leadership and motivation, intelligence gathering, types of marketing weapons, logistics, and communications.
Learning from Napoleon
To understand how business strategists used military strategies, we can look at the innovations of Napoleon and apply them to business situations. Napoleon made four key innovations. They were 1) increase his army’s marching rate, 2) organize the army into self contained units, 3) live off the country, and 4) attack the opponent’s lines of supply. All four provide lessons for business strategists:
1) By increasing the speed that the army marched and fought, they created a military advantage. They could implement their tactics faster than the enemy. Hitler used the same strategy with his Blitzkrieg. The enemy was overrun before they were able to organize a viable resistance. But once these innovations were used, other armies made adjustments and the nature of warfare changed. All armies had to increase their pace of operations to be effective. Businesses, like armies must operate at a faster pace than their competitors in order to have a competitive advantage. They must develop and introduce products faster, implement strategies faster, and respond to environmental factors faster. They must be proactive.
2) Napoleon returned to the cohort organization of the Greek phalanx. These were self contained fighting units of citizens that knew each other in daily life, and had a wide variety of skills and various skill levels. Under the Roman Empire the phalanx was replaced by specialized legions containing 100 fighters (centurion). Each legion had a specialized skill (such as the archer legions from Thrace). For more than 100 years, businesses have taken Adam Smith’s advice and organized by functional specialization, just like the Roman legions did. Accountants populated the finance department and technicians populated the operations department. According to Adam Smith this is the most efficient way of organizing. But as the speed of business increases we need a more flexible system. We use cross functional teams (like the Greek phalanx) that have enough breadth of knowledge to see the big picture, are objective enough to get accurate and unbiased perceptions of environmental factors, and are flexible enough to act quickly.
3) Napoleon’s armies lived off the country instead of bringing supplies with them. This allowed them to march faster. The disadvantage is that stealing from the local population created resentment. But this was a longer term problem. It could be dealt with when the time came. The short term advantage outweighed the long term disadvantage. In business we no longer stock inventory based on an EOQ model. We use a Just In Timemodel and this reduces costs considerably. However it makes us vulnerable to our supply channel partners. Just as Napoleon had to manage the local people that supplied him his provisions, businesses today have found supply chain management to be a critically important part of doing business.
4) Striking at the opponents lines of supply is known as a flanking strategy. It is effective because it eliminates the need to fight the enemy head-on. An attack on a poorly defended supply line can render the whole enemy army unable to fight. In business today we attempt to do this with exclusivity agreements with suppliers (if you sell Pepsi, you can’t sell Coke). If Pepsi has an exclusivity agreement with Pizza Hut, Coke will effectively be eliminated from that part of the market.
References
  1.  (Kotler, P. and Singh, R. (1981) “Marketing warfare in the 1980s”,Journal of Business Strategy, winter 1981, pp. 30-41
  2.  (Quinn, J. (1980) Strategies for change|Strategies for change: Logical Incrementalism, Irwin, Homewood Il
  3.  (Goria, S. (2011) “Information display from board wargame for marketing strategy identification”, International Competitive Intelligence Conference: Delivering excellence in Competitive Intelligence thinking and practice in a challenging environment, Bad Nauheim, Germany

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