Sun Tzu and the Art of Business (1996) illustrates how ancient Chinese general Sun Tzu’s classic text The Art of War applies to modern business’s hyper-competitive environment. This summary explores how business leaders can combine Sun Tzu’s battle strategies into their own market domination plans.
About the author:
Mark R. McNeilly is an author, academic, and business executive. He’s currently a professor of marketing at the University of North Carolina and has previously worked with IBM and Lenovo.
Introduction: Strategize your path to victory:
The universe of business is just like a battlefield. There’s an ongoing war for customers, visibility, and market supremacy. So, how do you plan on being the best?
That’s to be answered in the following summary. Referring to the ancient Chinese military general Sun Tzu’s philosophy, you will learn the classical strategies of real war to concur the business war.
Sun Tzu wrote The Art of War more than 2,000 years ago, and its wisdom and insights are still used and famous to this very day. From leadership tactics to resources and surprise-attacks, this is a complete manual for you to outsmart your competition and secure long-term success.
Take control of your enemy’s territory but don’t damage it on the way:
How can the philosophy of an ancient general help you to have a successful business? Before we answer your question, we need to elaborate on what success even means.
Generally speaking, western cultures describe a successful business as one that provides its owners a return to their investment. Asian cultures, however, view a successful business as one that gives people employment chances. Though, before a business can do either of these success standards, it needs to survive and prosper. These should be the fundamental goals of a business owner – and they are precisely what Sun Tzu’s strategy principles will help you attain.
In The Art of War, Sun Tzu tells his readers to “take all-under- heaven intact.” This means that leaders should capture everything the enemy has without destroying their assets.
On the other hand, in business, “take all-under-heaven” means you should go for market dominance. To do that, you should take control over a more significant share of the market than any of your competitors. This is essential because it leads to profit. Businesses that dominate the market can gain improved economies of scale, higher customer loyalty, and more significant revenues. This all combines to a huger bottom line.
Sun Tzu’s principles aren’t just to “take all-under-heaven,” but to take it in one piece. Business-wise, you shouldn’t damage the market you desire to dominate. After all, destroying a market drains its probability.
Steer clear of your enemies’ strengths and go for their weaknesses:
Take a river speeding down the mountain, for example; it will wash everything in its ways. But where is, does the power in that lies? Sun Tzu says the power in that is that it always flows downhill and not uphill.
Taking everything from your opponent can sound daunting, but it has to be done if you want to be like the river. To overcome the war of business, don’t go for the high feats. Aim for the low points instead.
Many business leaders solicit to dominate the market by attacking their opponents’ strongest suits and products, usually by imitation. If a business is known for its low prices and often sales, attackers provide an even higher discount.
This might look like a charming and promising way. After all, it was for your competitors; why wouldn’t it for you? But take the communication company AT&T, and you’ll know why this is a mistake.
In the early 1980s, the executives of AT&T noticed that other communication businesses were going into the computer industry. So they decided to do the same and develop their own computers.
However, this strategy turned out to be a disaster. Despite AT&T’s great research center and enormous resources, their project failed to gain any of their opponents’ computer market. After eight years, AT&T has lost billions of dollars, and thousands of people lost their jobs.
Once you strike your competitors’ strengths, you’ll most likely find yourself trying to fight an uphill battle just like a river going upward. Your war in market dominance will go on for years the end you up with exhausted and drained resources and morale. To avoid this, keep your attacks low on your enemies’ weaknesses. Search for the weakest link in their value chain and mercilessly exploit it.
“Even a lion doesn’t go after the fastest antelope in the herd.”
Do in-depth research on your competitors’ company:
Now that you know to attack your enemies’ weakest suits, you should figure out how to understand their weak points in the first place. How?
The wise general, Sun Tzu, always emerges with a victory because he knew pre-hand his enemy’s capabilities, plans, and even his way of thinking. However, you can’t acquire this foreknowledge by merely looking at your enemy’s past. The only way is to talk to those who know your enemy’s situation.
It’s not enough to educate yourself about your competitors’ yearly turnover, the size of their company, or insights about their product – though it is a decent start. It would be best if you dive deeper than that. You should buy their products and break them apart to gain as much information as possible. Also, listen to their press covers and industry trade journals to reveal their mindset or strategy.
You can dig even more profound than this. Learn about their culture, their values, beliefs, and assumptions that ultimately drive their behavior.
Delve into the background of their past, senior executives. Where did they go to school or work in the past? What experiences shaped their mentalities? Try to figure out if they are risk-takers, or they play it safe. Determine what sources of information they rely on to make decisions. Combing all this information will aid you to predict what their next move could be.
Once you are knowledgeable about your opponents’ plans, you can quickly know how to respond to their attacks. This is what McDonald’s did when they felt that their rivals, Burger King, were planning an attack on their fries.
Speed makes up for the lack of resources:
What’s the primary thing to win in a war? Sun Tzu’s answer is surprising. Instead of overwhelming resources or military might, he believed that speed an essential component for victorious warfare. He says that you should be as fast as a hare whenever your opponent cracks you an opening.
The reason behind this is simple: a swift army can easily defeat an army larger than itself. When you move swiftly, you can target your enemies’ forces unit by unit before they can even think about responding. That’s how you overcome a larger army little by little, moving quickly from one unit to the other.
Being fast compensates for being small. This applies in business as well. Imagine yourself leading a small company. You aim to claim market share from a big competitor with many employees. Suppose your competitor takes 2 hours to complete a successful sales call, while your salespeople only take half an hour. In that case, you’d be needing a quarter of his staff to this. Also, having more limited staff will give you a greater return on your investment.
Captivate your enemy in two places at the same time:
It’s easy for your enemy to protect himself against an attack he knows is coming. If you want to cause real damage in a war like a business, you need to surprise your enemies and hit them with an unexpected stone. Once they realize they are under attack, you would already have claimed victory.
Sun Tzu teaches us a double-edged weapon to surprise our enemy. You have to use two attacks: direct and indirect ones.
The direct attack is the one that your enemy can see coming from a distance. It would act as a head-on offensive that announces your entrance to the battlefield. However, the real power of strategy is attained from the indirect attack.
Southwest Airlines were dominating California’s low-cost, short-haul air market in the early 1990s. But that shifted once United Airlines began to offer cheaper flights. This move was a direct attack from United Airlines. Southwest Airlines responded by reducing its costs. On the open, these two were in a head-on battle to take over California’s sky.
But something else was happening under the tables. While united was immersed in fighting back against Southwest, Southwest blasted off a devastating indirect attack. The whole aim of the direct and indirect attacks, according to Sun Tzu, was to distract your opponent, so he won’t see the indirect one coming.
As for Southwest Airlines, United’s edge was its profitable long-haul flights. Therefore, Southwest started offering the same. Doing this made them consume a different domain of United’s customer base. By United’s surprise, they found themselves fighting a war of different faces. They lost their money across a few key markets, while Southwest continued to gain more flights and more money. Just like that, Southwest Airlines embodied Sun Tzu’s principles and launched the least expected missile on their enemy.
“In battle, use the normal force to engage; use the extraordinary to win.”
Leaders should wield five main characteristics and avoid few others:
Since Sun Tzu’s ancient civilization, all the way into our modern one, humans have always wondered? What qualities make a good leader? What are the characteristics that allow someone to lead their troop to victory and his people to well-being?
Today, the same question is applied in the world of business. What kind of individual drives his employees to success? And what qualities make him an unsuitable choice for a leader?
First, Sun Tzu considers an essential quality for a leader is wisdom. Wisdom allows the one in charge to identify when situations are shifting and make strategic, pragmatic, and right choices. Second, Leaders need to be valiant and dare to seize challenging opportunities when the time comes.
Thirdly, another essential quality a leader should embody is being humane with their troops and appreciate their effort. The fourth quality is that leaders should be genuine and sincere to assure their troops that they will reward them. The fifth and final key characteristic is good leaders should be strict and force discipline of their forces to prevent chaos.
In a business setting, these leadership qualities are just as relevant. Wise business leaders recognize the strengths and weaknesses of their own enterprises and their rivals simultaneously. With perseverance, great executives back up their wisdom and are fearless to act on their insights. Humanity and sincerity, too, are essential. Leaders that don’t decently treat their employees can never get them to work whole-heartedly and do their absolute best. Finally, real leaders complete their duties all the way through and make sure their strategies are completed flawlessly and successfully.
So, this is how a leader should be. But how should they not? Sun Tzu points out a few reed flags leaders should avoid. The first one is recklessness, where a leader rushes into threatening situations that can cause tremendous damage. Leaders should also not be cowards, especially when they are full of themselves. A weakling leader gets too scared to exploit a fleeting opportunity if he feels that it might hinder his manhood.
Sun Tzu also mentions that compassion can too be a dangerous trait in a leader. When leaders are too compassionate, they tend to stay on the safe sides and avoid taking profitable risks. Those sacrifice long-term success just to avoid hardships. And ultimately, success is any leader’s life goal.
Put Sun Tzu’s teaching into your own life, and guide yourself into a success!