- September 21, 2014
- Posted by: Treadstone Management Partners
- Category: Strategy
Written around 500 b.c. The Art of War by Sun Tzu has been one of the most coveted pieces of literature in history. The simplistic structure and detailed content has allowed for this piece to survive and thrive over the years and entrench itself as one of the most important readings for all military advisors. However, the strategy and content written by Sun Tzu has countless parallels to many different subjects outside of just war. In today’s society, the business world is becoming more and more like a battlefield and the knowledge set forth by Sun Tzu has been a cornerstone for current business strategy. The 13 chapters of The Art of War, in their own way, parallel key fundamentals in strategy today. From my analysis of the Art of War, I extrapolated what I believe to be some of the most prevalent similarities between The Art of War and what I now call The Art of Strategy.
If you are familiar with the Art of War you know the 13 chapters all relate to crucial militaristic issues ranging from the laying of plans to the use of spies. From these 13 chapters I analyzed a few of the chapters that seem to be the most pressing in today’s market landscape. Chapter 6 called, The Weak Points and Strong, stuck out the must because the foundation for developing a successful strategy depends on the knowledge you have about not only your enemies strengths and weaknesses, but also your companies internal strengths and weaknesses. The first sentence of this chapter lays out one of the most fundamental strategies in today’s business landscape, the first mover’s advantage. Sun Tzu says:
“Whoever is first in the field and awaits the coming of the enemy, will be fresh for the fight; whoever is second in field and has to hasten to battle will arrive exhausted.”
Relating that quote to business today, it explains that if you are a company that continuously pioneers new products or services you will reap the benefit while your competitors will have to exhaust their resources in the attempt to mimic you. This strategy is seen through many examples today one of which is eBay. Since their start in 1995, eBay has pioneered the online auction world and has shown first hand the ability to capture market and monopolize and industry through the first mover advantage. The first mover advantage will never go away, it was prevalent in Sun Tzu time in reference to war and it is still prevalent today in reference to new industries and markets yet to be realized.
Another segment within chapter 6 that business strategy today is based on is the knowledge you have on you competitors. Possessing knowledge on your competitors, or enemies in Sun Tzu’z case, is pivotal in developing a successful strategic course of action. Sun Tzu explains, in reference to his opponents, one must,
“Rouse him, and learn the principle of his activity or inactivity. Force him to reveal himself, so as to find out his vulnerable spots.”
When companies are dueling for market share within an industry it is easy to portray that as a battlefield. By implementing a strategy of small actions and gauging your competitor’s response, you will be able to deduce the direction and focus your rival is taking in the “battle”. The next line of The Art of War describes that to win the battle you must take the knowledge you now possess about your enemy and compare it to your own so you know where your strengths and core competencies lineup against their weaknesses and thus exploit the difference to achieve successes.
The sheer amount of similarities between a piece of war literature written in 500 b.c. and the business environment we see ourselves in today is overwhelming. Besides chapter 6, as mentioned above, chapter 5 on Energy shows uncanny amounts of similarity between modern business strategy and war strategy. Sun Tzu describes in his chapter on Energy that there are only two cardinal forms of attack, direct and indirect. Sun Tzu states that,
“In battle there are no more than two forms of attack – the direct and the indirect; yet these two in combination give rise to an endless series of maneuvers.”
This approach parallels the thinking of business executives today in their decisions in whether they want to pursue direct forms of strategy and competition like a frontal assault, a flanking attack, or preemptive strikes or if they want to engage in a more indirect approach using strategies like baiting and blocking. Within the two cardinal forms of attack, Sun Tzu describes the definition behind one of the most used business buzzwords we hear today, synergy. Synergy is the use of multiple elements so that their sum is more powerful than their division. Sun Tzu describes this within chapter 5 as by saying,
“A clever combatant looks to the effect of combined energy, and does not require too much from individuals. Hence his ability to pick out the right men and utilize combined energy.”
A clever business strategist understands their strength and knows that when synergy is achieved between all entities of your business it is like how Sun Tzu put it in 500 b.c, “a round stone rolled down a mountain thousands of feet in height.”
When it comes to implementing Sun Tzu’s tactics of war in business today, it might seem that carrying out these strategies would vary based on the size of your organization. Your choice in strategy may differ based on resources on hand; however, the execution is similar no matter the size. Whether you’re implementing these strategies for a fortune 500 company, a middle-market company, or a small family business Sun Tzu states that implementation is not dependent on size, rather he states in the first line of chapter 5,