The Art of War is an old Chinese military book. The work, written by the ancient Chinese military strategist Sun Tzu, is composed of 13 chapters.
Each chapter is devoted to an aspect of warfare and how it applies to military strategy and tactics. The Art of War remains one of the most influential strategy text and has influenced military thinking, strategic planning, legal strategy, lifestyles and beyond.
Here are some key points applied to business tactics.
Strategic planning, calculating and comparing competitors leads to a successful company
If a company aims to dominate a market, it is fighting for its very survival. Hence, all efforts must be made to understand how to create new products, and that knowledge must be used to properly plan.
The product leader who draws proper plans before getting a new product to the market will defeat the leader who makes none. Therefore, you must always plan and deliberate upfront. By comparing the competitive landscape on seven considerations, you can forecast success and failure:
- Which of the two companies have complete support from his teams so that they will follow?
- Which of the two companies is more capable?
- Which company has advantages of circumstances like outreach, technological advantage and the domain knowledge?
- Which company enforces the discipline of its teams and processes more strongly?
- Which company has the stronger product teams?
- Which company has the better leaders and teams?
- Which company has more consistency in enforcing discipline?
Carefully compare the company to your own so that you will know where he is strong and where it is weak. Then plan according to the circumstances. If you know your competitors and know yourself, you will always be successful.
Secure yourself against failure, and wait for an opportunity to succeed
Successful strategists only enter confrontations they know they will win, whereas unsuccessful ones enter and only then begin to think of how they can win.
A skillful company avoids confrontations they may lose, thus ensuring they will fail. But even the most brilliant product teams cannot say exactly when success will come, so they must wait for the competition to make a mistake and provide them the opportunity for succeed.
A successful company knows that to be successful, there are five essential rules:
- It must know when to take bold action and when not.
- It must know how to deal both competitors inferior and superior to themselves.
- It must have a strong, uniform spirit and discipline.
- It must take action so that it is prepared and the competition is unprepared.
- It must have the capacity and freedom to make decisions without interference from a others in the organization.
Be cautious. Take action only when you have the advantage. Avoid your competition where they are strong and take bold actions in areas where they are weak.
Avoid the competition when its spirit is keen, its structure and appearance are in perfect order or when it has a more advantageous position such as higher morale ground and public image.
Never enter a confrontation (on twitter or elsewhere) simply out of anger; there must always be something to be won. Your anger will eventually fade, but a company’s image destroyed can never be fully be brought back to life.
Avoid the traps your competitors will try to draw you into. Do not lead your company into situations where you get uninteresting as an employer or where you do not know the domain or your allies well.
Product teams are only successful if stakeholders and employees do not cause their own failure
In companies, the product vision is determined by a product team, but a product team is managed by a manager. Hence, by his direction, a manager can impede his team. The most disastrous ways he can do this are by ordering them to proceed or give up when such action is impossible, by attempting to do product decisions with classical project management practices or by staffing the team with inappropriate roles.
These errors shake the confidence of teams and can cause failure.
However, a leader can also exhibit dangerous faults. He can be reckless and lead his teams to destruction, or he can be a hesitant; he can be so choleric or proud that he is provoked by insults and slander from others; or he can be too concerned with the comfort of his own teams and let such considerations hinder tactics.
The leader is also responsible if any of these six calamities befall a company:
- If he hurls his teams against a force ten times its size, causing his employees to resign.
- If his teams are too strong in relation to the decision makers, causing insubordination.
- If the teams are too weak, leading to them being worn down by leaders and giving up.
- If the higher leaders are angry and undisciplined, leading them to follow their own agenda on their own accord and cause the ruin of the company.
- If the leader is weak and indecisive, resulting in a weak, disorganized company.
- If the leader is unable to estimate an competitor’s strength and hurls an inferior team against a superior one, leading to overwhelming defeat.
Companies are only successful if stakeholders and leaders do not cause their own defeat.
Conserve your resources through stratagems, foraging and espionage.
Maintaining an company is expensive: a host of 100,000 employees can cost 160M€ a day.
Prolonged struggles can exhaust the resources of any company, leaving it weak and vulnerable. Hence, aim for quick and decisive success, not prolonged campaigns.
Avoid campaigns against competitors, because this usually takes month of preparations, and many impatient leaders will squander their resources in pointless activities.
The best way to lessen the cost is to capture the competitions (sales) territory whole and intact rather than to destroy it through costly (price) battle. To achieve this, you need a much stronger product vision and empowered employees than your competition.
A skillful leader will subdue his competition without any fighting, which constitutes the ultimate triumph. This is known as attacking by stratagem. Great leaders excel not only at winning but at winning with ease.
Another way to conserve the companies resources is to take them from your competition by foraging locally and augmenting your own strength with the competitors resources.
As single battles can end wars, you should engage market intelligence: it provides decisive information about the competitors disposition as well as carry false information back to him.
Conserve your resources through stratagems, foraging and market intelligence.
Deceive your competition and impose your will on him.
The art of war is based on deception. You must mask strength with weakness, courage with timidity and order with disorder. Confuse your enemy and let him grow careless.
Have your troops feign disorder when in reality they are highly disciplined. When you draw close to your enemy, make it seem like you are far away. When you are able to attack, make it seem like you are unable.
Play with your enemy as a cat plays with a mouse. If he has a temper, irritate him. If he is at ease, harass him; if well supplied, starve him; if quietly encamped, force him to move. If you wish the enemy to advance, hold out bait to him; and if you wish him to retreat, inflict damage on him.
A clever leader seizes the initiative and imposes his will on the competition.
Attack the enemy in poorly defended points that he must rush to defend. Force him to reveal himself so you can seek out his vulnerabilities.
Keep your enemy guessing as to where you will attack, forcing him to splinter and spread out his forces: numerical weakness comes not only from absolute numbers but also from having to prepare for attacks on many fronts.
Deceive your competition and impose your will on him.
Observe the market and your competition, then adapt accordingly.
A good leader knows that there are always positions that cannot be held, roads that must not be followed and commands from the superior that must be reevaluated.
Just as water shapes its course according to the ground it flows over, so you too must adapt to the situation, to the market and to the competition’s disposition.
Observe the market to take advantage of its natural advantages and avoid its disadvantages. In order to fight, do not attack companies with a higher position, or distance yourself from the fundamental core of the company.
Avoid dead ends, environments with small room to move or areas your company doesn’t have a firm stand where small competitors can destroy the entire company. Listen for rumors, events and customer attitudes; they can indicate that a competitor is moving its positioning.
Observe the competition, too. When his employees do not have a clear message for example on social media, they are unorganized. When the employees he sends to the customer start praising themselves for accomplishments of the company, they are suffering from lack of recognition.
And when they start to cannibalizing and consolidating their own portfolio, know that they are willing to innovate.
Adapt your tactics as needed to these circumstances and take advantage of opportunities as they appear.
Observe the market and your competition, then adapt accordingly.
To be successful, manage your employees sternly
Managing and controlling a large company is no different than managing a small one: you must simply divide your teams into smaller numbers and then use technology such as collaboration platforms to control and align your forces.
They will move as one, and the lazy will not dare to do his fair share. A skilled leader leads his company as if he was leading a single man by the hand.
Treat your employees like beloved sons and they will stand by you. If, however, you are unable to command them with authority, they will be as useless as spoilt children.
Discipline among your employees is a sure road to success. But for discipline to be effective, your employees must grow attached to you. Thus, you must treat them humanely while also keeping them under control with discipline.
As a leader, you must be secretive. Keep your competition ignorant and change your plans frequently to keep the competition guessing. (Remark: Sun Tzu also suggests to treat employees the same way. But from my perspective, while in modern time this might lead to short term success, it will destroy the morale and stand-up mentality in the organization and therefore negatively impact the long term success of the company)
Change sides and take long circuitous routes instead of direct ones. Only reveal your hand once you’re deep in the competitions terrain.
When the situation looks bright, tell your employees about it; but when the situation is poor, keep this knowledge to yourself.
The further you penetrate into competitors terrain, the more your employees will feel solidarity.
Put them into challenging situations where there is no solution yet for a specific problem, and they will try their very best to live up to the expectation.
To be successful, manage your teams sternly, keep the competition in uncertainty and challenge your teams.
Final summary
The key message is:
Product development is a matter of survival for the company, and so meticulous planning and estimating must go into the development. A skilled leader chooses confrontation only when he knows success is secure; thus, he is never defeated. He is observant, resourceful and adaptable. He imposes his will on the competition, deceiving and irritating him to drive him to make a fatal error.
The questions answered:
How can you ensure success?
- Planning, calculating and comparing company resources leads to success.
- Secure yourself against defeat, and wait for an opportunity for success.
- A company is only successful if stakeholders and leaders do not cause their own defeat.
How can you achieve advantages over your competition?
- Conserve your resources through stratagems, foraging and market intelligence.
- Deceive your competition and impose your will on him.
- Observe the market and your competition, then adapt accordingly.
How must you manage your employees?
- To be successful, manage your teams sternly and give them hard problems to solve.