The Art of Waging Business War

The Art of Waging Business War

Sun Tzu said:

Leaders Should Understand:

Sun Tzu, or Master Sun, was a Chinese general who was born around 572 BC. His treatise, TheArt of War is regarded as one of the greatest masterpieces of all time. It guided ancient Chinese military thought and is still studied worldwide by military strategists.

This Art of Waging Business War is a comparison of an ancient military masterpiece to modern business ventures. Obviously, the two time periods and endeavors could not be more opposite. I was, therefore, struck by the number of similarities.

I invite the reader to read The Art of Waging Business War actively and challenge the comparisons articulated. Compare the original text from The Art of War to your career, your company, your experiences, and this particular comparison. I hope you find the exercise as interesting as I did.

-Natalie Lynch

McNeilly, Mark R. (2001), Sun Tzu and the Art of Modern Warfare, Oxford University Press, ISBN 0-19-513340-4.Sawyer, Ralph D. (1994), The Art of War, Westview Press, ISBN 0-8133-1915-X.

AustinStartupAtttorney.com Lynchlf.com

http://www.austinstartupattorney.com/


Sun Tzu said:


The art of war, then, is governed by five constant factors1. The Moral Law: The Moral Law causes the people to be in complete accord with their ruler, so that they will follow him regardless of

their lives, undismayed by any danger2. Heaven: Heaven signifies night and day, cold and heat, times and seasons3. Earth: Earth comprises distances, great and small; danger and security; open ground and narrow passes; the chances of life and death4. The Commander: The Commander stands for the virtues of wisdom, sincerely, benevolence, courage and strictness5. Method and discipline: By method and discipline are to be understood the marshaling of the army in its proper subdivisions, the

graduations of rank among the officers, the maintenance of roads by which supplies may reach the army, and the control of military expenditure.

These five heads should be familiar to every general: he who knows them will be victorious; he who knows them not will fail.

Pillars of Operations

Heads of Business are governed by:1. Ethical Code. Act so justly and honorably that employees want to follow you;2. The Goal. This will represent the surges and spike of a company’s profitability and infrastructure;3. The Path. This signifies the bureaucratic, technical, logistical, and legal struggles to overcome;4. The Entrepreneur. You stand for wisdom, sincerely, benevolence, courage and discipline;5. Techniques. This should be understood as the marshaling of supplier chains, organizational hierarchies, and business protocols.

These five concepts should be familiar to every business owner. Those that understand them will be profitable and those who do not will fail.



Sun Tzu said:


When you engage in actual fighting, if victory is long in coming, then men's weapons will grow dull and their ardor will be damped. If you lay siege to a town, you will exhaust your strength.….Now, when your weapons are dulled, your ardor damped, your strength exhausted and your treasure spent, other chieftains will spring up to take advantage of your extremity. Then no man, however wise, will be able to avert the consequences that must ensue.

The Difficult Phases

When times are tough your tools, mental or physical, will wear down. Conflict with another, be it a vendor, a founder, or a competitor, will take an emotional toll on each individual and on the corporate energy.

These times of prolonged struggle must be endured; however, if a party adverse to your company becomes aware of the difficulty they will likely choose this time to strike.



Sun Tzu said:


The skillful soldier does not raise a second levy, neither are his supply-wagons loaded more than twice. Bring war material with you from home, but forage on the enemy. Thus the army will have food enough for its needs.

Investments, Supplies, and Cash Flow

It is never recommended to seek investments twice. Understand everything you need when you first ask for funds.

Only invest a prudent amount into your formation and then aggressively seek to develop a sleek and lean manner of procurement.



Sun Tzu said:


Therefore in chariot fighting, when ten or more chariots have been taken, those should be rewarded who took the first. Our own flags should be substituted for those of the enemy, and the chariots mingled and used in conjunction with ours. The captured soldiers should be kindly treated and kept. This is called, using the conquered foe to augment one's own strength. In war, then, let your great object be victory, not lengthy campaigns.

Winning Over A Competitor's Accounts

The representatives that secure the first sales to a customer previously loyal to a competitor should be cherished and praised. Those new customers should be incorporated into your own client systems and treated very well.

Each converted account creates momentum and adds to the company’s growth by more than one sale.

The goals of the company should be a profitable sale and the focus should not be on the process of converting the account.



Sun Tzu said:


Thus it may be known that the leader of armies is the arbiter of the people's fate, the man on whom it depends whether the nation shall be in peace or in peril.

On the Company’s Leader

The head of a company determines the fate of his employees and his employee’s families. He also determines the nature of the workplace and if it is stressful, hostile, collaborative, or methodical.



Sun Tzu said:


In the practical art of war, the best thing of all is to take the enemy's country whole and intact; to shatter and destroy it is not so good. So, too, it is better to recapture an army entire than to destroy it, to capture a regiment, a detachment or a company entire than to destroy them.

Taking over a Competitor

If your goal is to take over a competitor, take it over intact. Do not destroy its customer base, employee moral, or momentum.



Sun Tzu said:


Thus we may know that there are five essentials 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,Hence the saying: If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.

The Company Fight

There are five essentials for every business :Pick your battles wisely,You will be successful if you understand how to compete with the corporate giant and the new innovator,Hire passionate people for every job,Be proactive and understand when your competition is not well-positioned,Keep clean books and affairs so that complaints, scandals, and investigations do not interfere with success.

We should say: Know the competition and know yourself so your company will be secure. If you know yourself but not the enemy you will have a failure for every victory. If you know neither yourself nor the competition, your company will fail.



Sun Tzu said:


The control of a large force is the same principle as the control of a few men: it is merely a question of dividing up their numbers. Fighting with a large army under your command is nowise different from fighting with a small one: it is merely a question of instituting signs and signals.

Small Companies Fighting a Big War

Managing a small number of people requires the same leadership qualities as managing a large company: it is merely a questing of delegating appropriately.

Regardless of the size, institute processes, methods, and models of success that work and grow with your workforce.



Sun Tzu said:


The 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. When he utilizes combined energy, his fighting men become as it were like unto rolling logs or stones. For it is the nature of a log or stone to remain motionless on level ground, and to move when on a slope; if four-cornered, to come to a standstill, but if round-shaped, to go rolling down. Thus the energy developed by good fighting men is as the momentum of a round stone rolled down a mountain thousands of feet in height. So much on the subject of energy.

Hiring a Team

A good leader looks to the effect of combined energy and does not require too much from individuals. Hence, his ability to hire the right employees to create this combined energy.

When this good leader builds a team that create energy, his employees gain momentum. If the team is assembled with the right elements, it will propel forward. If the team does not have a spark of cohesion, the employees will cause the company to stagnate. And, if the company has even one employee that impedes progression, the company will stop moving in a direction.

Thus, the energy developed by good employees is as the momentum of a stone rolling down the hill. That is enough about that.



Sun Tzu said:


You can be sure of succeeding in your attacks if you only attack places which are undefended. You can ensure the safety of your defense if you only hold positions that cannot be attacked. Hence that general is skillful in attack whose opponent does not know what to defend; and he is skillful in defense whose opponent does not know what to attack.

Product Quality

You can be sure of your company’s success if your product satisfies an unsatisfied need. You can further ensure the safety of your company if you produce a quality product that cannot easily be reverse engineered or broken.

This way, your competitors will not be able to duplicate your product and will not know how to satisfy the market’s desire for your product.



Sun Tzu said:


In making tactical dispositions, the highest pitch you can attain is to conceal them; conceal your dispositions, and you will be safe from the prying of the subtlest spies, from the machinations of the wisest brains. …

All men can see the tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved. Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances.

…

He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain.

Company Weaknesses

The best way to address your weaknesses is to acknowledge them by concealing them; this way your vulnerabilities will be safe from the prying of even internal spies and from the machinations of the wisest brains.

Successful business people will tell you that outsiders have no idea what those leaders overcame to gain their success.

Do not repeat the tactics and concealment methods that helped you hide a company weakness. Always change your maneuvers and strategies.

Natural leaders are able to change strategies according to the current market.



Sun Tzu said:


Maneuvering with an army is advantageous; with an undisciplined multitude, most dangerous. If you set a fully equipped army in march in order to snatch an advantage, the chances are that you will be too late. … Thus, if you order your men to roll up their buff-coats, and make forced marches without halting day or night, covering double the usual distance at a stretch, doing a hundred LI in order to wrest an advantage, the leaders of all your three divisions will fall into the hands of the enemy.

The stronger men will be in front, the jaded ones will fall behind, and on this plan only one-tenth of your army will reach its destination.

The Employees at Startup

It is dangerous to initiate a project or company with neophytes and it is much bettor to have a seasoned team.

If anxiety leads you to launch a product or company before you are ready, that endeavor is likely to fail.

Forcing employees to work past exhaustion for the sake of a deadline will simply cause you to loose entire teams to the competition.

You may retain some of your more dedicated employees but only a small portion will be retained by the company.



Sun Tzu said:


Thus, if you order your men to roll up their buff-coats, and make forced marches without halting day or night, covering double the usual distance at a stretch, doing a hundred LI in order to wrest an advantage, the leaders of all your three divisions will fall into the hands of the enemy.

…

We may take it then that an army without its baggage-train is lost; without provisions it is lost; without bases of supply it is lost.

The Organization at Startup

It is dangerous to initiate a project or company with neophytes and it is much bettor to have a seasoned team.

If your personnel and supplies are not adequate your startup will fail. Similarly, you will fail without an established supply chain.



Sun Tzu said:


We cannot enter into alliances until we are acquainted with the designs of our neighbors.

We are not fit to lead an army on the march unless we are familiar with the face of the country--its mountains and forests, its pitfalls and precipices, its marshes and swamps. We shall be unable to turn natural advantage to account unless we make use of local guides. In war, practice dissimulation, and you will succeed.

Joint Ventures

Do not enter alliances with other companies or entrepreneurs until you have done a substantial amount of due diligence.

It is unwise to enter into alliances until you wholly understand the market place, labor pool, and supplier resources involved.

Use experts and tenured professionals because they have naturally learned from the mistakes they previously made.

Be stoic about your intentions, even with possible collaborators, and you will succeed.



Sun Tzu said:


The Book of Army Management says: On the field of battle, the spoken word does not carry far enough: hence the institution of gongs and drums. Nor can ordinary objects be seen clearly enough: hence the institution of banners and flags. Gongs and drums, banners and flags, are means whereby the ears and eyes of the host may be focused on one particular point. The host thus forming a single united body, is it impossible either for the brave to advance alone, or for the cowardly to retreat alone. This is the art of handling large masses of men. In night-fighting, then, make much use of signal-fires and drums, and in fighting by day, of flags and banners, as a means of influencing the ears and eyes of your army.

Creating Protocols

Have a protocol book because, during busy times, instruction may be misinterpreted. Make a usable series of instructions that show employees how to handle business affairs.

The use of protocols, manuals, and instructions provide a resource for employees to use when there are many distractions in the workplace.

These protocols also indicate the company is acting in an intentional fashion. This will help create good standardization without micromanagement when business is hectic or frantic.

Even during dark periods, employees can rely on well-laid protocols and understand their duties by referencing these protocols, instructions, and guidelines.



Sun Tzu said:


Now a soldier's spirit is keenest in the morning; by noonday it has begun to flag; and in the evening, his mind is bent only on returning to camp. A clever general, therefore, avoids an army when its spirit is keen, but attacks it when it is sluggish and inclined to return. This is the art of studying moods.

Scheduling Negotiations

Employee’s spirits are keenest in the morning. By noonday, employees begin to tire. In the evening, employee’s minds think about going home.

A clever leader, therefore, avoids competitive negotiations during the morning but may initiate them in the afternoon and intend to finish them in the evening. A clever leader also protects his own organization from allowing a competitor to use the clock to gain an advantage.



Sun Tzu said:


When you surround an army, leave an outlet free. Do not press a desperate foe too hard.

Winning with Integrity

When you have clearly out-maneuvered an enemy, win with grace. There is no reason to continue aggression beyond the win. Your competitor is a company of humans, who should be respected and will author your company’s reputation.



Sun Tzu said:


Reduce the hostile chiefs by inflicting damage on them; and make trouble for them, and keep them constantly engaged; hold out specious allurements, and make them rush to any given point. The art of war teaches us to rely not on the likelihood of the enemy's not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.

Patience with the Competition

Weaken the heads of your competition by inflecting pain on them. Make trouble for them, keep them constantly engaged with you rather than their customers, tease them unrealistic opportunities, and never rest long enough for your competition to collect their wits.

These teachings instruct us how to over-prepare ourselves for the competition and know that when they make a move in the market, your company will be prepared.



Sun Tzu said:


When you surround an army, leave an outlet free. Do not press a desperate foe too hard.

Winning with Integrity

When you have clearly out-maneuvered an enemy, win with grace. There is no reason to continue aggression beyond the win. Your competitor is a company of humans, who should be respected and will draft your community reputation.



Sun Tzu said:


There are five dangerous faults which may affect a general:• recklessness, which leads to destruction;• cowardice, which leads to capture;• a hasty temper, which can be provoked by insults;• a delicacy of honor which is sensitive to shame;• over-solicitude for his men, which exposes him to worry and trouble. These are the five besetting sins of a general, ruinous to the conduct of war. When an army is overthrown and its leader slain, the cause will surely be found among these five dangerous faults. Let them be a subject of meditation.

Characteristics of a Leader that a Competitor can Overcome

The dangerous character flaws of a leader are:• recklessness, which cause your company to deteriorate;• Cowardice, which leads to takeover;• A hasty temper, which competitors will use against you; • A delicacy of honor, that cannot admit or make corrections when he is wrong;• Over-solicitude for his team, which leads to worry about the team instead of the company supporting the team.

A leader who does not mediate these five characteristics will succumb to a competitor.

A reflection of other business failures will reveal that the leaders of those failures had these sins. Leaders should meditate onOvercoming these sins.



Sun Tzu said:


All armies prefer high ground to low and sunny places to dark. If you are careful of your men, and camp on hard ground, the army will be free from disease of every kind, and this will spell victory.

Making the Right Decision for Your Team

Employees prefer to work for a company that makes ethical decisions even if they themselves struggle to make the ethical decisions.

Be careful to lead your team to always make the right decision, which is often the hardest. This way, your company will not have the disease of a poor ethic and will lead to success.



Sun Tzu said:


Humble words and increased preparations are signs that the enemy is about to advance. Violent language and driving forward as if to the attack are signs that he will retreat.

…

Peace proposals unaccompanied by a sworn covenant indicate a plot.

Calling a Bluff

When someone suddenly becomes humble during negotiation or competition, they are about to make an attacking move. When someone suddenly becomes aggressive during negotiation or competition, they are making their last surge before quitting.

Do not trust hollow promises. Insist on documentation with any competitor.



Sun Tzu said:


When the soldiers stand leaning on their spears, they are faint from want of food. If those who are sent to draw water begin by drinking themselves, the army is suffering from thirst. If the enemy sees an advantage to be gained and makes no effort to secure it, the soldiers are exhausted. …

If the officers are angry, it means that the men are weary. …The sight of men whispering together in small knots or speaking in subdued tones points to disaffection amongst the rank and file. …

When envoys are sent with compliments in their mouths, it is a sign that the enemy wishes for a truce.

A Competitors Behavior

When you are able to observe a competitor's behavior, perhaps at a convention, pay attention. Watch to see if their expense budgets are restricted by how they enjoy free food and drinks. If individuals ignore opportunities to interact with customers, they may know the company is too far in decline.

If the competitor's management is angry, it is because the competitor's employees have already given up.

If a competitor's gossips cannot help opportunities to gossip, there is general dissatisfaction with their employer.

When a competitor approaches with compliments, it is likely they need a favor.



Sun Tzu said:


If in training soldiers commands are habitually enforced, the army will be well-disciplined; if not, its discipline will be bad.

Enforcing Company Policy

A company should enforce company policies without exception.



Sun Tzu said:


If a general shows confidence in his men but always insists on his orders being obeyed, the gain will be mutual.

Empowering People and Following Orders

Companies, leaders, and employees will all benefit from employees who are enabled and required to make decisions that consistently adhere to management instructions.



Sun Tzu said:


When the general is weak and without authority; when his orders are not clear and distinct; when there are no fixes duties assigned to officers and men, and the ranks are formed in a slovenly haphazard manner, the result is utter disorganization.

Ambiguous Leadership

When a leader’s decisions and instructions are inconsistent, his goals are insufficiently clear, when employees have unclear responsibilities, when the hierarchy is confusing, the company cannot move in a consorted manner.



Sun Tzu said:


The general who advances without coveting fame and retreats without fearing disgrace, whose only thought is to protect his country and do good service for his sovereign, is the jewel of the kingdom. Regard your soldiers as your children, and they will follow you into the deepest valleys; look upon them as your own beloved sons, and they will stand by you even unto death. If, however, you are indulgent, but unable to make your authority felt; kind-hearted, but unable to enforce your commands; and incapable, moreover, of quelling disorder: then your soldiers must be likened to spoilt children; they are useless for any practical purpose.

Employee Reverence

An employee who takes proactive actions without seeking attention and acknowledges mistakes without fearing reprimand, whose only thoughts are the benefit of his coworkers, leadership, and employer, this employee is the jewel of a company.

Act in servitude to your employees because their families and futures rely on your leadership. Treat them as beloved children. Those employees will stay with you through the difficult phases.

Reverence for employees must be genuine and distinguishable from doting. If you overly-reward employees without earning respect, they will become bureaucratic drains on your company.



Sun Tzu said:


If we know that our own men are in a condition to attack, but are unaware that the enemy is not open to attack, we have gone only halfway towards victory. If we know that the enemy is open to attack, but are unaware that our own men are not in a condition to attack, we have gone only halfway towards victory. If we know that the enemy is open to attack, and also know that our men are in a condition to attack, but are unaware that the nature of the ground makes fighting impracticable, we have still gone only halfway towards victory.

Understanding the Market

Understanding your company’s strengths without understanding the competition’s weaknesses, means you are only half prepared to succeed.

Understanding that the competition has a weakness, but not understanding your own company’s strengths, means you are only half prepared to succeed.

If we know the competition has a weakness and we know our company’s strengths but we don’t know market conditions, you are still only half prepared to succeed.



Sun Tzu said:


Rapidity is the essence of war: take advantage of the enemy's unreadiness, make your way by unexpected routes, and attack unguarded spots.

When you Attack the Competition

Frequent assaults on a competitor will lead to success. Make your move when they are unready, promote yourself in unexpected ways, expose defects in their offerings that the marketplace does not know about.



Sun Tzu said:


When invading hostile territory, the general principle is, that penetrating deeply brings cohesion; penetrating but a short way means dispersion.

Moving Into a New Market

When you make your move into a new market, ensure that you will take over that market. Taking only a small portion of the market means the competition can disperse and come back stronger.



Sun Tzu said:


Confront your soldiers with the deed itself; never let them know your design.

Collaborating with Your Team on Strategic Matters

Your team does not need to know your entire, adapting, strategy. Your team should follow your instructions regarding a task that is a piece of a strategy only you know.



Sun Tzu said:


Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical. No ruler should put troops into the field merely to gratify his own spleen; no general should fight a battle simply out of pique.

If it is to your advantage, make a forward move; if not, stay where you are.

Anger may in time change to gladness; vexation may be succeeded by content. But a kingdom that has once been destroyed can never come again into being; nor can the dead ever be brought back to life.

When to Implement your Competitive Strategy

Creating your plan does not mean implementing it immediately. Do not implement your plan unless the time is right for you to be successful.

Do not let nervous energy determine that you will move. Do not ever decide to make your move because of any emotion.

Only implement your strategic plans when the time is right.

You may be glad that you waited instead of implementing your plan irrationally.

If you implement your plan because of anger or emotion, your company will have negative consequences that may never recover.



Sun Tzu said:


Thus, what enables the wise sovereign and the good general to strike and conquer, and achieve things beyond the reach of ordinary men, is foreknowledge. Now this foreknowledge cannot be elicited from spirits; it cannot be obtained inductively from experience, nor by any deductive calculation. Knowledge of the enemy's dispositions can only be obtained from other men.

Professional Networking

Understanding your company’s profession and the industry is necessary for even a good businessperson to succeed.

This insider information cannot be instilled naturally, by tenure, or by education.

Information about your competitors can only be obtained by professional networking.


The Art of Waging Business War

Art & Photos

Transcript of The Art of Waging Business War