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Idea 48 - War & Strategy

 Idea 48 - War & Strategy

The idea that business could be warfare by another name took hold of many business leaders during the 1980s.

It was not that they wanted to destroy the enemy - though some of them undoubtedly did - but that they believed they should strategize like successful generals.

 

Though it's no longer fashionable to admit it, many leaders of big businesses have felt an affinity with famous generals. They recognize them as the doers of their time, in an age when 'trade' was not a respectable calling. Born later, the kind of men who rose to generalship might well have opted for industry instead. They would have found themselves doing much the same job, planning, organizing resources and motivating large groups of people to reach a defined objective.

 

Jack Welch, General Electric's reforming ex-CEO, made no secret of his admiration for Carl von Clausewitz, whose writings were said to have 'distilled Napoleon into theory'. He was the Prussian chief-of-staff at Waterloo, and his On War was published posthumously in 1832.

 

'Strategy forms the plan of the war', Clausewitz wrote, but acknowledged the truth that plans may have to change. So strategy had to go 'with the army to the field in order to arrange particulars on the spot' he added. 'Strategy can never take its hand from the work for a moment.'

 

As the quote suggests, Clausewitz's approach to strategy was descriptive rather than prescriptive, which appeals to Welch. Welch once quoted from a letter written by one of his managers, saying it captured much of his own thinking about strategic planning: 'Clausewitz summed up what it had all been about . . . Men could not reduce strategy to a formula. Detailed planning necessarily failed, due to the inevitable frictions encountered: chance events, imperfections in execution, and the independent will of the opposition. Instead, the human elements were paramount: leadership, morale, and the almost instinctive savvy of the best generals. Strategy was not a lengthy action plan. It was the evolution of a central idea through continually changing circumstances.'

 

Boston Consulting Group was sufficiently intrigued by Clausewitz to have published a book on him. It was not a Prussian soldier, however, but a Chinese general that best captured the imaginations of late 20th century Western bosses. Beleaguered as they were under the onslaught (more military language) of Japanese imports, they looked East for clues on how to fight back. Japanese literature didn't have much on record, but China offered the extraordinary Art of War by Sun Tzu. He was a highly successful general during the later Chou dynasty, and his book - if he wrote it, which is unclear - dates from around 500 BC, when philosophers Confucius and Lao Tzu were both alive.

 

Aphorism heaven Long admired by Western soldiers, the work is an examination of strategy,

teeming with aphorism and insight for even the casual reader. In 13 chapters, Sun Tzu takes us through strategic planning and development, manoeuvring, spontaneity in the field, dealing with confrontation itself and, finally, the use of intelligence. Strategy is the 'Great Work' of the organization, he insists, and its study cannot be neglected. It has five working

fundamentals:

·       Tao - the feeling of shared ideals among the group that makes them not fear danger.

·       Nature - day, night, hot, cold and the passage of time.

·       Situation - near, far, obstructed or easy and the chances of life or death.

·       Leadership - intelligence, credibility, humanity, courage and discipline.

·       Art - flexibility.

 

Sun Tzu acknowledges that war is not independent of politics and economics. indeed, the five most decisive elements for war are politics, timeliness, favourable geographical location, commanders and law - and politics is the most important. Striking a contemporary chord is his belief that battles should be won with the least cost. The best way to win is through political strategy. He is also insistent that knowledge of the enemy's strengths is at least important as knowledge of your own - use spies.

Lessons for managers? The appearance of the Art of War as a CEO primer has triggered many commentaries and 'Management lessons from .. .' books - at least 50, by one reckoning. One is Mark McNeilly's Sun Tzu and the Art of Business, in which McNeilly extracts from the work

six strategic principles for managers.

 

·       Capture your market without destroying it. Head-on confrontation should be avoided if at all possible. Price wars draw the quickest and most aggressive responses from competitors, and leave everyone drained of profits.

'Generally in war, the best policy is to take a state intact; to ruin it is inferior to this ... For to win     100 victories in 100 battles is not the acme of skill. To subdue the enemy without fighting is the    acme of skill. '

 

·       Avoid your competitor's strength and attack their weakness.

'An army may be likened to water, for just as flowing water avoids the heights and hastens to the lowlands, so an army avoids strength and strikes weakness.'

·       Use foreknowledge and deception to maximize the power of business intelligence.

'Know the enemy and know yourself. In a hundred battles you will never be in peril.'

·       Use speed and preparation to overcome the competition swiftly. Speed is not haste - it requires much preparation

'To rely on rustics and not prepare is the greatest of crimes. To be prepared beforehand for any contingency is the greatest of virtues.'

·       Use alliances and strategic control points to 'shape' your competitors and make them conform to your will. .

'Those skilled in war bring the enemy to the field of battle and are not brought there by him.'

·       Develop your character as a leader to maximize the potential of your employees.

'When one treats people with benevolence, justice and righteousness, and reposes confidence in them, the army will be united in mind and all will be happy to serve their leaders. '

While Sun Tzu continues to have a following, generals are being put out to grass as strategic role models and their places taken by, among others, sports teams.

 

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