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The Art of War for Managers – Top Takeaways
- January 21, 2022
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I recently took the opportunity to reread the book The Art of War for Managers by Gerald A. Michelson. The book uses the teachings of Sun Tzu’s work The Art of War and translates them to be applicable to business.
It’s an amazing book that is complex and packed with profound passages that make you stop and think; “How can I apply this to my work? What are the implications?” You may not agree with or see it prudent to implement each of the concepts, but regardless, they are thought-provoking. This blog article is a compilation of my top takeaways and there are so many that it almost feels like a book report.
In the book, the organization of the translated concepts is fragmented and the concepts are often repeated. As I processed the information, I organized them into groups that may be more easily assimilated. The top takeaways are captured in the following four groups:
Throughout the book, the goal or the “ultimate victory” is defined as winning without conflict. It is preferred to craft a strategy and tactics that will allow you to be successful without sacrificing or at the least, minimizing the expenditure of resources.
When setting strategy the business assessment needs to consider root causes and utilize those to find new and better avenues for success. A strategy needs to be durable over time, taking into consideration both internal and external forces. A good strategy isn’t reactionary to competitors, it focuses on the customer and considers the competitive environment. When total superiority isn’t attainable, gain relative superiority by amassing strengths against your opponent’s vulnerabilities. Strategy can be implemented in two forms. The first is sequential, where steps are taken one after the other to culminate in the desired result. The second is cumulative where initiatives may happen randomly or simultaneously to achieve the desired result.
The market and your position are always moving, you are either growing or shrinking. Therefore it’s best to be on offense, make competitors and the market react to you. Lead the technological advancements. A great example is Tide®. They have a strong leadership position in laundry detergents. However, they don’t rest on that position, instead, they innovate which was exemplified by the introduction of Tide Pods.
Sun Tzu advises, the more secure your feel, the more susceptible you will be to surprise.
There are five constant factors in any strategic assessment:
He proposes that there are three areas to gain a strategic advantage:
Additionally, use unique strengths in your position to your advantage. They may be natural strengths such as China’s use of its rare earth metal resources to boost its negotiating power.
You must understand your customer as well as your opponents. The best way to gather that information is to:
He offers several cautions regarding the competition and your position. First, while you don’t want to be overly cautious and focus on your competitors, it is disastrous to underestimate them. Second, he cautions that copying your competition will result in failure. You will not understand the nuances of why those you are copying are doing what they are doing. Last, he cautions that the worst position is to not have a position, much like the marketing cliché “you can’t be everything to everyone”.
While most of the book is focused on general business strategy and management there are several passages that are focused on marketing strategy.
The strategy must focus on the needs of the customer and the organization’s capability to satisfy those needs.
The concept of the “marketing maneuver” is discussed where you take an indirect approach to enter the desired market. An example of this was used by Hyundai when it entered the U.S. market as an entry-level value brand. Over time Hyundai built itself up to offering luxury vehicles under the Genesis brand name.
Hyundai began to accomplish this by moving quickly and forcefully to differentiate itself by offering the longest warranty in the industry, 10 years and 100,000 miles. Sun Tzu repeatedly emphasizes the importance of speed to implementation to gain the maximum advantage before the competition can counter.
Michaelson references a great quote, “people don’t buy on price, they are sold on price”. This cautions us from overly focusing on short-term sales tactics. The lasting and loyal customer relationship is where the most value is gained, it’s expensive and risky to rely on selling to new customers.
Lastly, there is an interesting comment regarding marketing research. He approaches marketing as something that carries risk. Perhaps monetary risk from the standpoint of spending dollars on an unproven campaign, or possibly reputational risk from that campaign’s message. He contends that good marketing research is designed to manage risk, thus shifting away from the notion that marketing is taking a risk.
In the book strategy is defined as “doing the right thing while tactics are doing things right”. Strategies are expected to be long-lasting whereas tactics constantly evolve based on the situation. Strategy is first and determines tactics, the tactics needed to support the strategy must be considered during the formation of the strategy. Victory is made possible by the mental capability of a leader and his/her ability to take a sound strategy and develop effective tactics. Developing strategy without consideration of tactics can bring situations where you try to boil the ocean.
Sun Tzu stressed that extraordinary plans yield extraordinary results. Working harder on normal strategy and tactics does not yield extraordinary results, it requires unconventional thinking along with exceptional effort. Doing more faster and better isn’t a strategy, it needs to be rooted in the customer.
The importance of speed is consistently reinforced throughout the book. Sun Tzu lists several reasons why speed is so important.
Waiting less
Speed is necessary to gain a first-mover advantage which may reduce resource needs. Those who come later will likely need to expend more resources to compete and displace the first-mover. Preparedness and information are needed to be a successful first-mover. It takes leadership and ambition to mentally enter the unknown.
Speed brings surprise, blitzkrieg a.k.a. lightning war concentrates resources away from areas of resistance for a short time period. For example, performing a sales team blitz in a particular store or district.
The external advantage is gained by surprise when you get inside your opponent’s “observation-oriented-decision-action time cycle”. By the time your opponent recognizes what you are doing, it will already be too late.
“Originality, conventionality, is one of the main pillars of generalship. To do something that the enemy does not expect, is not prepared, for something which will surprise him and disarm him morally.” British Major General J. F. C Fuller
Secrecy doesn’t mean plans must be completely hidden from the competition, but secrets must be protected enough to take the competition unaware and unable to effectively react.
While you seek to know your opponents’ secrets, protect your own. Don’t be naive and assume your opponents’ morality regarding stealing secrets.
Deception is referenced many times in the book, however a critical point is made that deception is always targeted at the competition, it’s never used against the customer. Use deception as a tool to move your opponents in a predictable and favorable way.
Predictability is a weakness that the competition may exploit. For example, years ago the predictable Black Friday offers created an opportunity for competitors to get a head start by starting their sales on Thanksgiving night. Once that became predictable the offers started earlier and earlier.
Napoleon said, “Force must be concentrated at one point, and as soon as the breach is made the equilibrium is broken.”
There are several ways to gain relative superiority:
In the book, Michaelson references a study of 300 military frontal assault campaigns, only six had a decisive result.
The concentration of power is used to win with minimal or no conflict. Look for weakness or opportunity, the concept of finding a niche position in the market is alluded to numerous times. The need to find a niche is particularly true if you do not have the same resources as your competition. An example is White Claw® and its use of hard seltzer to enter the alcoholic beverage category that is dominated by massive companies such as Anheuser-Busch.
Concentrating power may also be from accumulating momentum and releasing it at a time that achieves maximum effect. Similarly, concentrate resources such as advertising spend. Release the resources when seasonal demand is highest in order to achieve maximum impact.
“The organization exists so that tasks can be managed, people supported, and results achieved.”
Sun Tzu’s five points in which victory may be predicted:
Precise implementation of well-conceived plans is the way to avoid confusion. “Play for the championship one day at a time with a consistent focus on the long-range direction.” To accomplish success, Sun Tzu lays out the following traits of a good command system:
Within the command system, communication is critical, it’s noted that it’s become more challenging to break through the clutter. Meetings, phone calls, texts, Slack, email, etc. contribute to the complexity. Managers must understand that for messages to be effective they need to take an appropriate format. For example, the CEO of Better.com ignited controversy and consequently took a leave of absence after announcing the layoff of 900 employees on a Zoom call.2
“The paradox of war in the Information Age is one of managing massive amounts of information and resisting the temptation to over-control it. The competitive advantage is nullified when you try to run decisions up and down the chain of command… Once the commander’s intent is understood, decisions must be devolved to the lowest possible level to allow these front line soldiers to exploit the opportunities that develop.”3 General Gordon R. Sullivan
Michelson references the example of Wegmans food markets store managers. They regularly conduct focus groups with their customers and then utilize the insights to quickly implement unique changes to their stores.
Finally, Sun Tzu issues a warning that oftentimes incompetent leaders refuse information because it may signal the need to change course.
“The ability to learn faster than your competitors may soon be the only sustainable competitive advantage.” Arnie De Geus, Royal Dutch Shell
Learning must be part of an employee’s evaluation. Within the commands system, it’s noted that it is the critical duty of managers to train their teams. And with growing organizations, ongoing highly interactive training is a necessity.
A quote from 210 B.C. “I was to learn later in life that we tend to meet a new situation by reorganizing, a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.” Petronis Arbiter
Don’t design systems and processes around the capabilities of individuals, design them to accomplish the strategy then place individuals.
Decentralize and segment tasks into manageable parts. To reduce their mental burden, leaders must accept less certainty and allow decisions to happen at all levels. Sun Tsu’s guidelines to decision-making at various levels:
Be cognizant that departments are customers of the management and are competing for resources and attention.
To introduce the discussion of people management, it’s good to first understand what Sun Tzu sees are the critical elements to a growing organization:
“If each of us hires people who are bigger than we are, Ogilvy & Mather will become a company of giants.”4 David Mather, Ogilvy & Mather
Managers should promote discussions and disagreement, don’t allow issues to linger as it will sacrifice speed. Be open to feedback and make it known you will not shoot the messenger.
Utilize a scorecard to measure employees across key areas including financial results, customer impact, innovation, and training. Prevent arguments of undue praise or criticism by using a scorecard and by establishing metrics. Make review cycles short and with immediate rewards. Recognition should be given in front of an audience.
Asking for a little more effort isn’t enough for extraordinary results. To get extraordinary results the following should happen:
Move your teams into situations where there is no retreat. The concept of survival exists at both a corporate level and a personal level. At a corporate level, we’ve seen how established brick and mortar retailers like Walmart have been forced to adjust to the threat of online retailers. Personal survival exists with meritocracy, such as companies with an up or out culture.
The importance of self-awareness is evidenced by Sun Tzu’s list of character flaws.
Sun Tzu offers some interesting thoughts that help us to navigate office politics. First, “good politicians negotiate, bad politicians fight battles”. Only fight the battles that truly matter. While you might be able to win a battle, in the long run, you may hurt yourself by creating adversaries in the process.
Prevent preventable mistakes, don’t allow the quality of physical objects to negatively affect perception. For example, when building a presentation, ensure there are no errors on the slides. Those typos and errors are preventable ahead of the presentation.
“No matter where you work, you are not an employee. You are in the business with one employer–yourself–in competition with millions of similar businesses worldwide… Nobody owes you a career–you own it as a sole proprietor. And the key to survival is to learn to add more value every day.” Andrew Grove, Intel
Your knowledge and career increase with each job change, as does your value to other employers. If you aren’t ascending in your organization then recognize it may be time to move on.
Set your internal goals above the target, so that if you come up short, you’ve still attained the external goal.
Cover photo: Photo by Birmingham Museums Trust on Unsplash
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