Friday, June 26, 2009

How business can learn from Sun Tzu THE ART OF WAR. Learn about Responsiveness and Agility from military experience.

Business is certainly not war; business is about creation whereas war is about destruction. Business happens when we find constructive ways to meet our needs; war happens when we do not. Yet there are useful analogies and lessons to be learned about responsiveness and agility from military experience.

Sometimes people in the military are forced to learn lessons faster than people in business because the consequences of failure in combat are so severe. And military organizations all over the world have learned that strategies and tactics emphasizing the use of responsiveness and agility deliver the best results at the lowest cost in casualties and destruction. Here, we will take a look at some of the approaches they have found to be effective in situations analogous to situations that businesses encounter.


In any discussion of military strategy, one book in particular often comes up as a source for concepts and ideas. This book, written in China about 2,500 years ago by a Taoist philosopher named Sun Tzu, is called The Art of War. It is not so much a book about war as it is a book about the art of competition and collaboration—whether in business, politics, the military, or even sports. This book has become required reading in the officer training programs of many of the world’s military organizations (and it can also be found on reading lists at many fine business schools).

Sun Tzu’s book embodies a spirit and approach to warfare and business that emphasizes responsiveness and agility. I have selected five themes that speak to issues of strategy and tactics.For each of these themes, I quote a relevant statement from Sun Tzu and then provide a few comments to illustrate how these statements relate to business. The five themes are:
1. Win Without Fighting
2. Avoid Strength, Attack Weakness
3. Know Truth, Sow Deception
4. Organize for Speed, Build Momentum
5. Shape Your Opponent, Choose Your Battles

Win Without Fighting
... those who win every battle are not really skillful—those who render others’ armies helpless without fighting are the best of all.
In business we compete with each other for customers by offering attractive products at good prices. When companies differentiate themselves from their competitors and offer unique and desirable products at profitable prices, they capture a market that is profitable. When they get into a price war with each other simply by offering products similar to their competitors at lower prices, they destroy the markets they are trying to capture. Whoever wins after a lengthy price war will capture a market that has little profit left in it, so it will not be worth much.

Avoid Strength, Attack Weakness
Military formation is like water—the form of water is to avoid the high and go to the low, the form of a military force is to avoid the full and attack the empty; the flow of water is determined by the earth, the victory of a military force is determined by the opponent.
All too often companies attack each other head on. All too often they make the obvious moves. Because those moves are so obvious, they are also easier to prepare for and easier for competitors to fend off. This is what happens in price wars or when companies launch copycat me too products and services. If a company instead finds an unexpected new way to attract customers or a way to disrupt a competitor’s supply chain, those actions are far more likely to succeed. And those successes will happen faster and cost much less than a direct frontal attack on a competitor’s entrenched market position.

Know Truth, Sow Deception
... it is said that if you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others but know yourself, you win one and lose one; if you do not know others and do not know yourself, you will be imperiled in every single battle.
Companies do not take the time to collect information and truly understand their situation and that of their competitors. Because the business world is awash in data, we feel overwhelmed by it all. We filter or summarize it, or we simply don’t bother. But in that process, we often miss important information that could improve our chances of success. There are also tremendous competitive advantages to be gained by deceiving opponents and causing them to believe in and act on one assumption while we move in a different direction to attack them at an advantageous and unexpected location. Avoid making obvious and predictable moves.

Organize for Speed, Build Momentum
Order and disorder are a matter of organization, courage and cowardice are a matter of momentum, strength and weakness are a matter of formation.
The energy and commitment needed within a company to maintain speed and momentum require that the company be well organized and that its people enjoy the positive effects and rewards that this momentum can provide them. Once an advantage is perceived, companies must move quickly to capitalize on it. Once an advantage is gained, companies must keep moving to capitalize on new opportunities that appear. When companies pause, when they fail to follow up on opportunities in a timely manner, they lose their business advantage as competitors catch up with them.



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