Business Strategy Lessons From ‘Art Of War’ (Sun Tzu) — Part 01
01 — The war is a matter of life and death, a road either to safety or to ruin — Sun Tzu
You could build a great business, only when you feel what you do is a matter of life and death.
Being a good company doesn’t matter when things go well, but it can be the difference between life and death when things go wrong — Ben Horowitz
Every great company had faced a moment of time where it must fight for its life. Darwin E Smith, CEO of Kimberly-Clark, had to move away from the traditional core business of coated paper, sold the paper mills and threw all the proceeds into the consumer business of Huggies and Kleenex.
In 1986, Colman Mockler, CEO of Gillette, had to fight the hostile takeover of the company, brought radically new, advanced technology systems and re-invented the brand.
In 1993, IBM’s CEO Lou Gerstner had to fight against splitting up of the company into small units.
02-The basic tenet of any war is to have full obedience to your King — Sun Tzu
The only goal in life of a soldier is the welfare of the King.
Your king is your own customers. If you care for them, they will care for your business. Anticipate their needs, desires, wants and fulfil them. If you ask a women skin care manufacturer, he would say that they are in the business of helping women have healthier, youthful and beautiful life rather than saying of making a line of skin care products. Yes, the objective is the welfare of our customers.
03- A war’s success relies on understanding the context, geography — Sun Tzu.
Understand the geography of the country before you march. Make use of local guides. We are not fit to lead an army on the march unless we are familiar with the face of the country — its mountains and forests, narrow passes, rivers, climatic conditions, its pitfalls and precipices, its marshes and swamps.
In Business, we need to understand in detail about geographies(Domestic and International) of your market, regions that could play a massive role, regions that could be easier to access, easier to control, potential distribution channels, existing competitor distribution channels, consumer segments, retail merchandisers, terrains etc.. Similarly, we need to understand the different contexts, different conditions, different moods a product/service would be used. Use designers, anthropologists, sales and service personnel, retail industry personals as your guides.
04 — All the warfare is based on deception-Sun Tzu
When able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.
Business success is also based on deception — Facebook says that it helps us to keep friends close to us — Are they near or far away?. All those social media applications are meant to save our time, but we are addicted and engrossed all the time in those applications.
A toothpaste brand offers so many toothpaste varieties — Calci-lock, peppermint, Citrus, Spicy fresh, Power breeze, Salt, Active salt, Charcoal, Herbal, Vedic, Ice cool, Deep clean, Sparkle white, Whitening, Advanced Health, Gum Health, Sensitivity, Complete repair, Enamel repair and the list goes on.
Let’s take an example that a manufacturer would like to launch a ‘Drinking Water’ brand — Water is a commodity product — The market is very competitive — How to differentiate our product so that we could sell? — Let’s add an organic element to it — A natural pure source for the water — Add some natural traditional flavour — add some health ingredient — add some natural herbs, roots, spices — Water that energises — Now, our product is not just ‘a drinking water’ — An energy drink? — Our product has evolved into a separate category — we could charge a premium. Is it not deception?
This consultant had so many success stories, client testimonials — Anyone talks about their failures? Even Sachin Tendulkar got so many ducks in international matches. Successes are made more visible than failures and we overestimate our chances of success by hiring this consultant. Chances of success might be very minute, but we succumb to the illusion.
You go online, try to check a product — you see the message that 7850 people have already bought this item — Oh, Let’s buy it.(Social proof). Only 2 items per person — Oh, in demand, let’s buy it(Scarcity Principle) — Shop for Rs.5000, get a bag free.
Building a Great Business and The ‘Art Of War’ Strategy — Part 02
05 — A war’s strategy is to “Hold Out Baits” — Sun Tzu
Building a Great Business and The ‘Art Of War’ Strategy — Part 03
11 — The clever general looks to the effect of combined energy of the team than individuals — Sun Tzu
Building a Great Business and The ‘Art Of War’ Strategy — Part 04
17 — Be the first to occupy the strategic positional advantage — Sun Tzu
References: The art of war by Sun Tzu and notes by Lionel Giles, Good to great by Jim Collins, Playing to Win by AG Lafley, Wired to Care by Dev Patnaik, What is Strategy by Michael Porter, Blue Ocean Strategy, The hard thing about hard things by Ben Horowitz, Something really new by Denis Hauptly, The power of habit by Charles Duhigg, Strategy that works by Cesare R. Mainardi and Paul Leinwand