Art of War

The Art of War by Sun Tzu A Summation and it’s modern day business application Written about 2500 years ago by a man in China named Sun Tzu, this book has survived and thrived to become one the premier literary musts for those who engage in military and marketplace battle. Sun Tzu was part of a disenfranchised elite who was employed by the minor state of Woo…. Once Sun Tzu was hired, thereafter, Woo became the dominant state in China. After Sun Tzu, the state of Woo diminished, but The Art of War lived on. Since the time of Sun Tzu many military leaders have studied and followed the principles documented by Sun Tzu. In todays modern world, leaders in politics and business use its stratagems to achieve great victories in the marketplace. The Art of War is only 13 chapters however, it is a difficult read. Thus, here I summarize it’s message for you so that you get the a feel for it. After you read, you may feel compelled to sit down and read this masterpiece in all it’s complexity and glory. Enjoy! The Role of Competition In any competition, our opponents play a key role in our strategy. We must watch and keep up with our opposition. In other words, we must know what they do and copy their best practices. While doing so, we look for ways in which we can surpass our competitors. Sun Tzu teaches that we cannot create the opportunity for success. Our opponents create the opportunity. We can only recognize the opportunity when it occurs. This demands special skill and training. When we see an opportunity, we must take advantage of it. Competition is not a fistfight. It is a game of chess. We keep up with the competition until they leave us an advantage. Techniques for Surpassing the Competition In The Art of War Sun Tzu says: It is the same in all battles. You use a direct approach to engage the enemy. You use surprise to win. Sun Tzu teaches five forms of attack. Two of them are direct action and surprise. In sales, we use traditional methods to contact a prospect. We want them comfortable at the beginning of the process. However, we plan to use creativity to win the sale. In Management, "doing what you know" and copying the best practices makes us competitive, but it is innovation -- that is, going beyond standard methods -- that gives us a competitive advantage. Sun Tzu wants us to balance proven practices against creative approaches. We must understand and use established practices. These methods are the launching point for real competition. We then must go beyond standard methods and do something extraordinary. Whether we know it or not, we always have the opportunity to create powerful new ways of selling, marketing, or managing an organization. We have opportunities because the world is far from perfect. Sun Tzu talks about how sloppy, messy, and confused competition is. All "battlegrounds" for competition are full of opportunities. In more general business terms, one can say: 1. 2. 3. 4. 5. Customers are complicated and confused. Industries are uncertain. Your decisions must create order. Processes are ineffective and inefficient. Innovation outmodes them. Nevertheless, you must never be at a loss. Your customer’s confusion demands your clarity. Your Industry’s uncertainty demands your confidence. Your problems create your opportunities. No matter how good business or the market is, problems always remain. Customers are always complicated and confused. Industries are always uncertain. Processes are always ineffective and inefficient to one extent or another. New innovations will and must always outdate what exists today. The real world has infinite room for improvement. This weakness is the source of our competitive opportunity. The idea of problems creating opportunities is explained in many different ways throughout The Art of War. It is a central concept and focus of one whole chapter on "Strengths and Weaknesses." The message is that we shouldn't hate our problems. Sun Tzu teaches us how to see them as sources of potential innovation. It Comes Down to People Most of the lessons from The Art of War end in talking about psychology. In discussing competitive advantage, the text talks about the need for creativity, momentum, and understanding our opportunities. In the end, these concepts only work if they live in the minds of real people in the real world. We as individuals must learn the skills that create the mind of the strategist. The more people within our organization that master these skills, the more likely we are to see opportunities and create innovations. Sun Tzu puts this in terms of his soldiers: 1. 2. 3. 4. 5. 6. 7. 8. You must create momentum. You create it with your men during battle. This is comparable to rolling trees and stones. Trees and stones roll because of their shape and weight. Offer men safety and they will stay calm. Endanger them and they will act. Give them a place and they will hold. Round them up and they will march. We need to shape the people we work with. We need to challenge them. We have to move them to a new place so that they can move us to new places. Sun Tzu believed strongly that we must use positive and negative incentives to emotionally engage people and get them to act. Without action, all of this philosophy is a waste of time. Before we can train our people, we must first train ourselves. Real creativity, momentum, and competitive advantage take place in our actions. They only exist to the degree that we move people in the real world. -The difference between a warrior and an ordinary person is that the warrior sees everything as a challenge while an ordinary person sees everything as a blessing or a curse.-- Anonymous It is easy to say we must be creative to win in competition, but Sun Tzu says more than that. He explains that creativity is simpler and less mysterious than it looks. In the original text, he does this through a series of examples from other arts: There are only a few notes in the scale. Yet, you can always rearrange them. You can never hear every song of victory. There are only a few basic colors. Yet, you can always mix them. You can never see all the shades of victory. There are only a few flavors. Yet, you can always blend them. You can never taste all the flavors of victory. Though poetic, the teaching is practical. No matter what our "art," it has only a few elements. Sun Tzu teaches that there are only five key elements in competition. Creativity means rearranging these components in a new way. Competitive advantage comes from using what already exists. We must first understand what those elements are; then we can arrange them. In sales, marketing, and management, The Art of War can provide us with lesson. In Sales, one can examine the few types of sales techniques, human needs, and concepts of value that go into making a sale. In rearranging our sales thinking, we can reinvent our sales process. In reexamining human needs, we can shift our product appeal. In redefining value, we can revolutionize our sales offers. Each business area is a target for innovation. On the smallest scale, we can rearrange steps endlessly to improve business processes. We can also rearrange our business processes to redefine our flow of business. Or we can rearrange our use of resources -- for example, replacing labor with machines -- to create entirely new types of business. Sun Tzu spends dozens of pages examining ways in which we can define competitive processes for innovation. He trains us in understanding the elements of competition so we know how to rearrange them to create a new idea. To find success, inventiveness is not enough. We must create something both new and powerful. Sun Tzu calls this creating momentum. It is a key technique in his approach to creating competitive advantage. In describing momentum in The Art of War, Sun Tzu says that it arises like waters flowing together, but as an analogy in business The Art of War can translate it more directly as different trends reinforce each other. One can use the force of market trends to wash away resistance. This is momentum. Fashion trends, technological trends, and social trends are all part of this thinking. In marketing, we use them all. We Cannot Control, So We Must See... Conditions in the environment are going to reinforce some innovations and make them powerful. These conditions are beyond our control. They are not beyond our observation. We must "see" them to discover momentum. Sun Tzu tells us where to look for signs of these trends. In sales and marketing, the power of an idea is demonstrated by people buying things. The secret to finding momentum is hidden in our sales reports. In management, it is demonstrated by reducing cycle time or improving productivity. It is hidden in our management reports. We must identify what is working in a meaningful way. Creativity Leverages Momentum If we are going to be successful, we have to change the standard ways people do things. We must create a new approach. We must also find momentum in the trends of the environment. These trends should reinforce our innovations. They must make our changes important and valuable. For example, how does a stock become popular on the stock market? The idea of selling stock with a "story" is as old as the stock market itself. Every successful stock has a story behind it. Today, many of those selling stock are attempting to leverage the momentum of the Internet story. People everywhere are talking about rearranging the components of their business around the Internet. Some are really doing this. Many more simply claim to be doing it to create a "story." They can leverage the "story" (and the stock price) even if they can't leverage the real trend. The deeper reality is that most people don't know how to do this. They don't understand their competitive situation well enough to truly take advantage of the trend. Competitive Intelligence Gathering Techniques from The Art of War In Sun Tzu's The Art of War, competitive success comes from competitive intelligence. You can only understand your competitive situation if you know how to gather the right intelligence. The Importance of Gathering Competitive Intelligence Sun Tzu makes it clear how important the gathering of competitive intelligence is. In The Art of War, Sun Tzu writes: You can watch and guard for years. Then a single battle can determine victory in a day. Despite this, bureaucrats hold onto their salary money too dearly. They remain ignorant of the enemy’s condition. The result is cruel. In competitive markets, we are constantly making decisions. Those decisions can be no more effective than the information they are based on. In management, marketing, and sales, we must constantly understand our position relative to the competition in order to make the right decisions. Sun Tzu predicts that those who do not make the time and effort to gather the five types of information that he considers critical will fail. If you want to be successful in business, you must be willing to spend your time gathering current, hard information. People have a tendency to want to rely on past experience, general theory, or old information rather than doing the work necessary to keep themselves well informed. Sun Tzu warns about these mistakes and tells you what you must do. In The Art of Management, one can translate his advices as: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. You must be a creative and productive manager. You must put your resources in the right places to be productive. You must survive in a competitive environment. This requires information. You can get this information. You won’t get it from theory. You won’t get it from past experience. You can’t reason it out. You can only get it by collecting it from other people. You must always know your organization’s competitive situation. Using Spies The title of Sun Tzu's original chapter on competitive intelligence was "Using Spies." The distinction between "spies" and general information is important. Sun Tzu realized that people were the ultimate source of all information. Today, we may think that we rely on publications, studies, and reports, but what we are really relying upon is people. The modern distilling process that information goes through can easily destroy its freshness and potency. Sun Tzu wants you to remember that the ultimate source of all information is people. The closer you are to them and the better your contacts, the better your information. The Five Types of Competitive Intelligence In the original text, Sun Tzu describes the five types of spies that you need, but what he is really describing is the five categories of information you need to be effective. He labels spies as; 1. 2. 3. 4. local spies inside spies double agents doomed spies 5. surviving spies. He then goes on to describe each of these types of spies and what kind of information you get from them. Local spies provide information on the battleground; inside spies provide information on the competition; double agents play both sides; doomed spies provide misinformation to the competition; and surviving spies provide real-time information on current battles. This is one of the areas in which one might effect a translation to specific areas of business make Sun Tzu's lessons a lot more relevant. For example, in sales, one may instead of talking about spies, one might talk about the five types of questions that one needs to use. For example: 1. 2. 3. 4. 5. There are qualifying questions. There are identifying questions. There are value questions. There are leading questions. There are closing questions. In terms of marketing, we might use Sun Tzu to talk about the five types of competitive research that you need to do: 1. 2. 3. 4. 5. There is research on the target customer. There is research on your competition. There is research on distribution channels. There is research on the products themselves. There is research on specific customers. In management, we might discuss the need for information focuses on the need to improve the internal organization, so we interpret Sun Tzu's types of information more generally to describe the broader view of the competitive environment: 1. 2. 3. 4. 5. You need process information. You need personnel information. You need competitor information. You need market information. You need customer information. In each case, we use Sun Tzu's approach to build a well-rounded view of the specific situation by identifying the types of information you need and where you get it. Using Competitive Intelligence Collecting information is just the first step. You must also know how to use it. Sun Tzu sees this as more of an art than a science. In Management, one may interpret his warning in modern terminology: 1. 2. 3. 4. 5. You must be smart enough to correlate data. You must be open and unbiased to evaluate it. If you aren’t sensitive to subtleties, you won’t find the truth in information. You must pay close attention to small details. Information is helpful in every area. Again, you work in a competitive environment. If you want your decisions to be better than the competition's, your information must be better than the competition's. In the first chapter, Sun Tzu describes the art of war as the art of deception. If you want to make better decisions than the competition, you must make sure that the competition doesn't get your information. Gathering information can be a double-edged sword. In gathering information, you must be careful not to divulge what your plans are. This is especially important in marketing. As in marketing, one ought to say: • • Your market research gathers information but it must not spread it. Research that divulges your plans or position to the competition can destroy you. Acquiring and using competitive intelligence is a circular process. From general information, we generate more specific plans. The more specific your plans are, the more specific the information you require. In other words, the information you start with is never enough. As you sharpen your strategy, you must also sharpen the currency of your intelligence. As Sun Tzu says in the original Art of War; 1. 2. 3. 4. 5. 6. 7. 8. 9. You may want to attack an army’s position. You may want to attack a certain fortification. You may want to kill people in a certain place. You must first know the guarding general. You must know his left and right flanks. You must know his hierarchy. You must know the way in. You must know where different people are stationed. We must demand this information from our spies. Sun Tzu didn't want you to take anything for granted in the process. Specific plans require specific competitive information. Focus on the Competition Sun Tzu's approach totally focuses on the competition. Good information is not an absolute. Your information is only "good" if it is better than your competition's. Information must not only be relevant to the specific problem at hand, it must be relatively better than the competition's. Feeding the competition false information through double agents, or what Sun Tzu calls "doomed spies," makes perfect sense in this view. Sun Tzu realizes that success doesn't require perfection; you only need to be better than your competitors in order to outperform them. This focus on the competition identifies people who work for or do business with your competition as one of your best sources of information. The Art of War says: 1. 2. 3. 4. I want to know the enemy spies in order to convert new spies into my men. You find a source of information and bribe them. You must bring them in with you. You must obtain them as double agents and use them as your emissaries. As a salesperson, this means that you want to find out the competition's sales pitch and use it against them. As a sales manager, you might want to find the competition's best salespeople and hire them away. As a marketing person, you may want to find out their most effective distributors and win them way. As a manager, you might want to hire away the competition's best people and duplicate their best practices. Again, notice how Sun Tzu's thinking always comes down to people. Information can come in many forms, but the most expensive and difficult form of information is what is in people's heads. This is why Sun Tzu advises us to use our best people to collect information for us. He realizes that the best minds are the best at recognizing what is relevant and important. As we translate it in the last stanza in The Art of Management you must always be careful of your success. Learn from the history of success. You must be an informed and capable manager. You must use your best and brightest people to gather information. This is how you achieve the greatest success. This is how you satisfy the needs of the organization. Your management practices and ability to produce depend on information. Competitive Analysis from The Art of War The first chapter of Sun Tzu's The Art of War teaches you how to analyze your competition and evaluate your chances of success against them. You can learn how to do specific competitive analyses for sales, marketing, and management by extrapolating into a modern day translation. The Five Factors Sun Tzu says that your success comes from understanding five basic factors. He describes them this way: "You must insist on knowing the nature of: 1. Military philosophy; 2. The weather; 3. The ground; 4. The commander; 5. And military methods. In more general terms, we describe these five factors as your basic approach 1. 2. 3. 4. 5. The Mission statement The business climate The competitive battleground Your leadership and the processes that you use. In identifying the most critical factors, notice what Sun Tzu doesn't consider of prime importance. He doesn't say that the size of the enemy is of primary importance. In later chapters, he discusses the use of force and the importance of having more force in a given area, but size in and of itself is never of strategic importance. Size or power in a given area is a tactical issue, not a strategic one. A small force can always beat a larger one, given the right tactics. He also doesn't say that your opponent's wealth or history are important. Once again, these are tactical issues. Wealthy, experienced organizations are continually beaten by poor new ones. Philosophy According to Sun Tzu, everything starts with your basic philosophy or approach to solving problems and winning. His book was aimed at teaching a basic philosophy of success. But in competitive analysis, his view is more specific. "You must ask: Which government has the right philosophy?" In other words, how does your approach compare to that of your competition? In competition, everything is relative. It is not how good your philosophy is, but how much better it is than that of the competition. Are you more careful with your resources? Do you work harder at getting information? Are you more concerned about being creative? All of these are key elements in his philosophy of success. You must know where your relative strengths are versus your competition in order to be successful. The Business Climate Sun Tzu saw the world as moving in cycles -- day and night, hot and cold, bright or overcast. In business terms, we talk about these changing factors in much the same way. We talk about high seasons and low, fast markets and slow, and hot products and cold. Using these cycles to your advantage is a key element in Sun Tzu's strategy. In terms of competitive analyses, you have to ask, Which season and place has the advantage? Some aspects of the business cycle favor your competition; others favor you. You have to do the competitive analysis to know where your advantage lies and where you are in the business cycle. What you can and should do depends on this analysis. The Competitive Battleground Sun Tzu spends more time discussing the importance of knowing the terrain or the competitive battleground than any other subject. He devotes two different chapters to it. He has a number of questions that you have to ask yourself in doing competitive analysis. Perhaps the most important is, Which group of forces has the strength? His first and central concern is always the balance of power. One of his primary methods is to focus your strength where the competition is weak. Where is your competition weak? How can you develop strength there? He saw the balance of power coming from who could get the most resources to a specific place. This is the basis for choosing your battleground. Whether you are in sales, marketing, and management, you have to ask yourself similar questions about how you must focus your energy to win dominance in a certain area. Leadership Many of the lessons in The Art of War focus on leadership. You have to first ask the basic questions about organization. Which commander has the skill? Which officers and men have the training? Different leaders create different types of organizations. You compete against different organizations in different ways. Leaders can also create faults in their organizations that have nothing to do with their overall position. Processes and Methods Finally, The Art of War is concerned with methods, procedures, and processes. Today we might call this a concern about best practices. Sun Tzu asked the question a little differently: Which method of command works? Which rewards and punishments make sense? Whether you are in sales, marketing, and management, you have to understand what the competition is doing and what works. You must copy their successful innovations and find ways to improve on their weaknesses. This is the source of all competitive advantage. Our book on management especially focuses on the process side of business, though the importance of processes are probably more often overlooked in sales and marketing. The Big Secret? Deception! In doing competitive analysis, you must search for the truth about your competition while you hide your own abilities and position. Sun Tzu thought that misleading the competition was largely the key to success. You must recognize that while you are analyzing the competition, they are also analyzing you. Markets are dynamic because your competitors are adjusting to you just as you try to adjust to them. Competition is a moving target. You don't want to aim at where competitors are weak now, but where they will be weak in the future. To do this, you have to guide them with misinformation. We will end this discussion of competitive analysis with Sun Tzu's words on the importance of deception. Warfare is one thing. It is a philosophy of deception. • • • • • • • • • • • • • • When you are ready, you try to appear incapacitated. When active, you pretend inactivity. When you are close to the enemy, you appear distant. When far away, pretend that you are near. If the enemy has a strong position, entice him away from it. If the enemy is confused, be decisive. If the enemy is solid, prepare against him. If the enemy is strong, avoid him. If the enemy is angry, frustrate him. If the enemy is weaker, make him arrogant. If the enemy is relaxed, make him work. If the enemy is united, break him apart. Attack him when he is unprepared. Leave when he least expects it. Competitive Thinking from The Art of War Thinking competitively requires looking at the marketplace as a battlefield. Competitive Thinking about Resources For example, are you thinking competitively about resources? We want sales but we often win customers by first winning the best employees. Are you thinking competitively about financing? We compete for distribution, but sometimes we win distribution because we already won the battle for financing. Sun Tzu teaches that winning resources away from the enemy is better than fighting the enemy in market battles. He calls this form of competitive thinking "beating the competition while growing stronger." Undermining a competitor's resources was, in Sun Tzu's mind, one of the key forms of competitive thinking. Competitive Thinking Requires Perspective 1. Perspective comes from knowing who you are and where you are on the battlefield. What are your skills? Which key competitive elements are you strong in? Many big, smart companies fail because they don't understand what they are or where they are. 2. You have to know what your objective is. What position are you trying to capture in the market and why? 3. You have to know who the other relevant players are. Who can impact your plans and how? Who and where are your enemies and potential allies? What are their skills and the elements of their business? Answer these questions and you have started thinking strategically.