“Art of War“, written by a Chinese master strategist, Sun Tzu, over 2,500 years ago, lays out an effective strategic philosophy that has proven itself over millennia and still, holds true for all kinds of endeavors. This time proof guide is one of the most revered books on strategy and a hot favourite for the entrepreneurs around the world.
More than two centuries ago, Sun Tzu said, “the art of war is of vital importance to the State“. This principle is as important to business as it is to politics. Every day entrepreneurs face a battle, it could be related to the market shares, commodity pricing, investment disagreements or promotions. And some days, they find themselves in a war, when nothing seems to go right- bad negotiations, line up promotion matters, production issues or staff crisis. The six principles of warfare by the Chinese wizard will effectively rescue the start up out of the marshy lowlands.
- “Generally in war, the best policy is to take a state intact; to ruin it is inferior to this….For to win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill.”
This is the principle of ‘win without a fight‘. It is suggested that one must capture the market without destroying it. For a business to flourish in the market, adopt ahead on a strategy where, in the end, the company must not be left devoid of profit or lack a customer base. This move can be achieved by several means, for example, target under-served or poorly-served market sectors or by using subtle, low-key process which allows the startup to be hidden from the competitors, yet, piercing in strongly into the market. The market pricing war must be avoided as this could trigger a retaliation, leaving the market dry and without profits. Also, the managers and owners must have an exit strategy planned and must be equipped to tap onto any opportunity, that strikes.
Amazon adapted this principle to emerge as the crowned king of book retailing industry.
As Amazon CEO, Jeff Bezos says, “Amazon should approach these small publishers the way a cheetah would pursue a sickly gazelle.”
This quite, low key approached helped Amazon to remain camouflaged from the competitors and eventually, reached the pinnacle.
- “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.”
The second principle of warfare can very easily be spilled over into the business world. The entrepreneur should avoid the strongest points of the competitor and instead, attack his weakness. Challenging the strongest point of the competitor, head on, will land you in a pool of attrition, which is unnecessarily expensive and will lead to a quick drain of your financial resources. Attacking the big fish’s weakness will increase your gains while decreasing the utilization of resources. This, by definition, increases the profits.
Walmart is a perfect example of this principle. The retail giant chose to start in smaller cities, rather than focusing on a metropolitan area. This low-key approach helped Walmart to eliminate local, weaker competition while simultaneously, growing stronger.
- “Know the enemy and know yourself; in a hundred battles you will never be in peril”
Business intelligence involves knowing your competitor’s strengths and weakness and a deep understanding of your own abilities. It is also imperative to understand the market demand, supply and trends. A thorough investigation of the ‘battle terrain’ will lead to victory. As you step out to understand how deep the competition waters are, conceal your plan well to ensure that your strategy is not turned against you by your competitor.
The ‘burger war’ between McDonalds and Burger King serves as a good example. During the ongoing war, Burger King decided to attack the rival’s famous French Fries. Upon learning of this assault, the CEO of McDonalds immediately wrote a letter to all the restaurants of the chain informing them of this advancement. The letter which included detailed instructions of frying the potatoes helped the fast food jumbo to stop the enemy at his tracks and recapture the market as the King of French Fries.
- “To rely on rustics and not prepare is the greatest of crimes; to be prepared beforehand for any contingency is the greatest of virtues.”
This principle illustrates the value of preparation. Stepping into the business market unprepared or ill-prepared is the perfect recipe for failure. Foreknowledge of rival’s strategies and working will reduce the time to make decisions and hence, will enable you to act swiftly. Just like war, the scenario in a market is ever changing. A company which is unable to adapt quickly to this changing environment, will eventually, perish. Speed is instrumental in first to market, empowering the business to take advantage of floating opportunities and keeping the competition off balance. Preparation and analysis of your rival’s reactions to your attacks, will ensure that you sing the tune on which the competitor dances.
Coca-Cola continually brings out new products into the market to cater to the changing taste of the customers. This swift, but not hasty, move by the company in adapting to the changing environment retains the loyalty among the consumers, ensuring a year-round profit. In 2004, Coca-Cola India launched, the much advertised, Vanilla Coke. The flavour extension did not soothe the taste buds of Indians leading to a constant decline in demand, thus forcing the beverage honcho to pull out the product in mere 10 months after its launch. The reasons were several, but soon, the company revived its sales in the country and the losses incurred were nullified.
- “Therefore, those skilled in war bring the enemy to the field of battle and are not brought there by him.”
This principle states that the business strategy should be able to change the rules of the game and push the competition to adhere to your rules and desires. One way of taking over the reins is by forming alliances. A collective strong force will limit enemy’s moves and bar him from winning. Additionally, by controlling key strategic points, the market will become your playground.
The alliance of Microsoft and Facebook is no surprise to anyone in the technology world. In 2007, Microsoft took a $240 million equity stake in Facebook to form a strategic alliance, making it the exclusive third party ad platform for Facebook. And as Microsoft acquired Skype, the Facebook users started enjoying free video chats across the world. This ‘gang’ of three virtually made Google+ lag behind in the race, as Facebook has emerged as the hub of personal cum professional tools. Interestingly, while Google is still struggling in social media space and burning millions of dollars every month to grab a sizable share of the pie, Microsoft is shooting at Google by placing the gun on the shoulders of Facebook.
- “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.”
This principle highlights the characteristics of the leader. A just, benevolent and righteous leader will lead his men to victory. A leader must always keep his needs secondary and must be able to cater to his troops’ needs. As the famous saying goes – “a leader is one who knows the way, goes the way and shows the way“, must set an example by actions.
There are a number of successful tech leaders who have etched their names on the walls of history. One such leader is Jack Ma, founder and executive Chairman of Alibaba. The Chinese entrepreneur turned billionaire, dished out pearls of wisdom for budding entrepreneurs and younger audience at an interview. He advised the young to work for a small company with a good boss rather than working with a big company.
In an another heart to heart interview, Jack Ma revealed, that he doubted the abilities of his 18 member team when he started the company. Many years later, the ones whom he doubted stayed and the ones he hired from outside, left him. He tagged it as the biggest regret of his life and advises the young minds to believe in their employees. In the same talk, he mentioned the qualities of a good leader and how the leader can unite his team.
A leader should never compare his technical skills with his employee’s. Your employee should have superior technical skills than you. If he doesn’t, it means you have hired the wrong person. What, then, makes the leader stands out?
1. A leader should be a visionary and have more foresight than an employee.
2. A leader should have higher grit and tenacity, and be able to endure what the employees can’t.
3. A leader should have higher endurance and ability to accept and embrace failure.
The quality of a good leader therefore is his vision, tenacity, and his capability.
Being used extensively in the military arena and in the business world, these six principles are the golden key to success.
Let your plans be dark and impenetrable like the night, and when you move, fall like a thunderbolt.