Most of us have heard about the book The Art of War – or maybe it’s even on your bookshelf. Chinese General Sun Tzu is the reported author. I say reported because everything about him is not clearly identified in history – there is a lot of ambiguity of who he was – no one knows for sure who wrote the book, or who Sun Tzu really was. But for simplicity, Sun Tzu was a Chinese general who lived around 400 BC.
The Art of War is a treatise on military strategy that contains 13 chapters.
Attack by stratagem
Weak points and strong
Variation in tactics
Army on the march
The nine situations
The attack by fire
The use of spies
The book outlines key areas on the philosophy of war. It presents guidelines to control conflict and defeat an opponent in battle. It has been translated in hundreds of languages and is the de facto Bible of strategy. Sun Tzu outlined five essential learnings for victory:
He will win who knows when to fight and when not to fight
He will win who knows how to handle both superior and inferior forces
He will win whose army is animated by the same spirit throughout all its ranks
He will win who, prepared himself, waits to take the enemy unprepared
He will win who has military capacity and is not interfered with by the sovereign
A famous story about Sun Tzu is when the King of Wu gave him a test. To test his abilities as a general, the King challenged him to command his harem of concubines. The King wanted to see Sun Tzu’s abilities in leadership. Sun Tzu organized the concubines and made the King’s two most favorite the commanders of the group. Then, Sun Tzu ordered them to turn left, the concubines laughed. He ordered them again and again they laughed.
Sun Tzu informed the King that leadership and the actions of the army is the general’s responsibility. Since Sun Tzu was the acting general, he ordered the two favorite concubines beheaded for not obeying the orders. The King tried to intervene, but Sun Tzu executed them.
He then assigned two more concubines as company commanders and all the concubines quickly obeyed his orders. He told the King that since he was appointed the general, it was his responsibility to carry out the King’s orders. Though the King was deeply upset by the death of his favorite concubines, he realized the ability of Sun Tzu and let him lead his armies to many victories. This example showed how serious Sun Tzu was with the aspect of leadership and achieving objectives.
The Art of War and Business
The majority of military practitioners and leaders have studied The Art of War. It has been used by many historical military figures such as Napoleon and also for many successful guerilla campaigns such as Mao Tse Tung and General Giap during the Vietnam War. The lessons learned have been applied in many battles. The teachings have also been referenced for business and politics.
In the 1987 movie Wall Street, Michael Douglas’ character referenced the book as he taught Charlie Sheen’s character, quoting the phrase, “Every battle is won before it’s ever fought”. So how can business leaders utilize Sun Tzu’s teachings? First, read The Art of War and read it again. Take your time, read it carefully and think about it. It is written simply, it’s easy-to-read, but has deep meanings and multiple ways of interpretation. There are many ways to use the teachings in every area of the organization.
Some key areas that can be used in business are:
Waging war (Protracted Campaigns are Doomed)
Attack by stratagem (Know your enemy and yourself)
Weak points and strong
The use of spies (Use deception)
Laying plans can be directly applied to business. This section focuses on the commander and his method of leadership. A strong commander is sincere, honest, ethical, and courageous. Within businesses a strong leader is critical to the success of the organization. An example of poor leadership negatively affecting the organization is the current issues with Uber. Former CEO Travis Kalanick and executive leadership’s ongoing poor behavior, sexual harassment issues, and overall immature actions have provided an opening for competitor Lyft and ongoing backlash from the public and customers. After months of ongoing issues, Kalanick finally resigned on June 21 due to ongoing pressure from investors and Uber’s lagging performance. Sun Tzu noted five areas that weaken leaders. These will result in decline as seen by Uber and Kalanick.
Sensitive to shame
Too close to his men
The waging war section notes the danger of protracted campaigns. In terms of military actions, protracted campaigns waste resources, destroy morale, and are doomed to failure. Military examples of doomed protracted campaigns were the Vietnam War and the current Afghanistan War. Within business prolonged campaigns can result in devastating financial situations and potential bankruptcy. For example, the famous Honda-Yamaha War of the 1980s resulted in heavy losses and large stockpiles of inventories for Yamaha as the company could not maintain the sustained and ferocious pace against the stronger and more aggressive Honda.
The attack by stratagem section is famous for the importance of knowing your enemy and yourself to win battles. A key for any military or business is a strong understanding of the market environment, customers, competitors, the internal organization, etc. A painful lesson for the U.S. is the limited understanding of the results of invading Iraq and the aftermath of all combatants. Similarly in business, U.S. auto manufacturers ignored the Japanese auto manufacturers as they slowly built market share through a deep understanding of customers and improved product quality. The Japanese auto manufacturers are now experiencing a similar fate from Korean and soon-to-be Chinese competitors.
Another business example is Southwest Airlines. The company clearly understood the large airlines and their business models. Southwest realized key advantages to compete against the incumbents were lower prices and faster turnaround of planes. Operating in smaller markets, using one model of airplane, and relentlessly training crews, the company was able to out-flank the incumbents with lower prices and quick turnarounds to attract short distant business travelers.
Weak and Strong
Sun Tzu focused heavily on the importance on understanding weak and strong points. Attacking an enemy that is stronger head-on, is a sure way to lose. You must avoid attacking a stronger opponent directly. It is better to hit the flanks or rear of a stronger opponent. Wal-Mart is an example within business for avoiding strengths and attacking weaknesses. Wal-Mart avoided large towns and major retailers like K-Mart, Sears, and Woolworth. The company focused on small, rural towns to build strength, resources, and customer loyalty. It was not until the company had the size and resources to properly attack the large national brands that they entered major markets and successfully defeated the incumbents.
The terrain section is critical for armies as the need to understand where and how to attack or engage an enemy is vital for military success. Dependent on the terrain will determine an army’s approach and use of resources, etc. Within business, the terrain is physical and mental. The physical market environment of retail stores, online presence, or geographic locations. The mental side is in the consumer’s mind. Understanding what consumers need, want, and which companies they feel are market leaders, etc. Business leaders need to understand the physical and mental market terrains.
The use of spies section focuses on deception. Deception is critical in military and business. A classic example was during the planning for the Normandy invasion in WWII. Hitler was focused on General Patton and had his spies watching him closely. The allied forces convinced Patton to stay in England to deceive the Germans that his army was planning to invade Calais, not Normandy. The allies built dummy aircraft, airfields, and buildings. In addition, false messages were continually sent and the use of double-agents to mislead the Germans on the actual invasion site. This deception caused the Germans to spread out their forces and not focus on Normandy, mainly focusing on Calais resulting in a critical victory for the Allies.
Any business leader must become familiar with The Art of War. A leader needs to develop an agile organization similar to the shuai-jan snake. Organizations need to act like the shuai-jan; when the tail is attacked the head strikes, when the head is attacked, the tail is attacks, when the body is attacked, the head and tail strike. Proper planning and a deep and thorough knowledge of yourself, your competitors, customers, and the market environment is critical for long-term success. The learnings from Sun Tzu are critical for military and business success.
Win Before Battle
Sun Tzu focused on the importance of defeating the enemy before battle. He noted that planning and proper use of information and tactics can lead to victory with minimal conflict, the ultimate goal for victory. During the Iraqi War in 1991 (Operation Desert Storm), General Schwarzkopf and his U.S. forces used maneuver strategy (based heavily on Sun Tzu’s teachings) to invade Iraq. The allies bombed Iraqi forces for six weeks, and then the Marines engaged the Republican Guard, deceiving the Iraqis that this was the main attack. This feint allowed the allies to conduct a land invasion with minimal casualties and a complete defeat of the Iraqi army in approximately 100 hours.
Similarly, General MacArthur surprised the North Koreans by invading Korea via Inchon through the hazardous mud flats in 1950. MacArthur’s detailed planning and knowledge of the environment resulted in a fast and unexpected victory with minimal casualties. Similarly to the Iraqi War, the allies used aerial bombings to weaken and distract the Koreans, then landed in the most unexpected location.
A similar use of defeating an enemy without battle is Polaris Industries dominating the off-road four-wheel vehicle segment against the incumbent Japanese manufacturers (Honda, Kawasaki, Suzuki, and Yamaha). Polaris found a white-space in the U.S. powersports industry that the Japanese were avoiding. Customers wanted high speed, long wheel travel suspension vehicles. The conservative Japanese avoided the high-speed off-road market due to fears of the U.S. government intervening. Polaris took the risk resulting in decades of strong growth, share price moving from under $20 to over $100, and approximately 70% market share.
The goal of business success is to put the organization beyond the possibility of defeat and then wait for an opportunity to defeat the enemy. Business is not war. In war, it is typically one opponent against another, involving killing, in a relatively short time period. In business, there are typically multiple competitors, no one gets physically hurt, and the battles continue for long periods of time – the same main competitors battling one another. Study Sun Tzu’s The Art of War and apply the learning to differentiate your organization and dominate you market.