Entering The Battlefield
The general who wins a battle makes many calculations in his mind before that battle is fought. —Sun Tzu, The Art of War
Henry Ford lapped his competitors at the turn of the last century. Ruth Handler vinyl-molded an icon decades ago. Hastings and Randolph busted the blue-and-yellow giant at the turn of this century, and are already fighting the next campaign. In each case, the disruptive technologies at the heart of the battle couldn’t have been more different, but the successful strategies were surprisingly similar. These leaders each plucked a clear vulnerability from the confusion of war: expensive cars, flimsy paper dolls, limited movie selection and late fees. They each had a vision for striking at that vulnerability with something better. And they each overcame the tremendous resistance that always seems to spring up against new ideas that threaten the status quo, no matter how obvious their potential.
Entering the battlefield is all about creating and then sticking to a bold vision. Great leaders dream bigger than others, and they hold fast to those dreams, tirelessly molding external circumstances to their will no matter how loudly or often they are told to give up. And when these leaders do capture a square on the map, they aren’t satisfied. They simply double down on their efforts to expand their territory. As Sun Tzu writes in The Art of War, “Opportunities multiply as they are seized.”
Waging War
In war, let your great object be victory, not lengthy campaigns. —Sun Tzu, The Art of War
The introduction of a new technology follows a pattern. First hobbyists experiment with applying a new idea to an existing problem. Then entrepreneurs catch on to the potential and rush to scale up an offering for the mass market. Some try to capture the territory before they face any competition—the first-mover advantage. When this effort fails, as it often does, an arms race ensues. Often the company that understands the customer best takes the lead. Then a newer technology arrives, and the cycle starts all over again. Bumble vs. Tinder is one good example.
Again and again, Sun Tzu tells us to act fast. “Even if you are winning,” Sun Tzu wrote, “if you continue for a long time it will dull your forces and blunt your edge.” Go after each opportunity aggressively, but not until you’re truly ready to seize it. If you strike before you’re ready, you will forfeit your opportunity.
The Winning Strategy
To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting. —Sun Tzu, The Art of War
Even big companies need a winning strategy if they want to stay on top. And they need to execute on that strategy ruthlessly. Tactics come and go, but a sound strategy must dictate the day-to-day approach.
In the words of author and Harvard Business School professor David Maister, “strategy means saying ‘no.’” A good strategy guides decision making by winnowing all the available options down to a manageable few. “Does this fit our strategy?” becomes a leader’s very first consideration when considering any new tactic. Saying no to what doesn’t fit builds quality and ensures consistency. As the actions of Microsoft against Netscape and McDonald’s against its imitators make clear, that focus can give an established competitor the edge against flexible and dynamic upstarts.
Strategy requires hard choices. Making those choices is the job of any leader, but not every leader has the stomach for it. you sometimes have to sacrifice one part of your business in order to succeed in another. It isn’t an easy decision, but growth always comes at a price.
Positioning
The skillful fighter puts himself into a position which makes defeat impossible. —Sun Tzu, The Art of War
Positioning is any leader’s most important job. If you don’t know exactly who you’re for and, crucially, why they should choose what you’re offering, your leadership will be muddled, indistinct, and ineffective.
Saying yes to the right business opportunities means saying no to the wrong ones, even when that means sacrificing a measure of success with one group of customers to secure greater success with another. This is the courageous choice at the heart of positioning. Often, the greater the sacrifice, the stronger the position. That kind of focus is hard to beat. Leaders who are willing to give up a good position to capture a great one can steer their companies through even the most turbulent times.
A second position can be claimed—as Apple did when it expanded from computers to mobile devices and went up against Blackberry—but only once the strength of the first position has been established through disciplined focus. No position, however, is permanent. The best leaders continually seek out new, more defensible ones, abandoning the positions they can no longer hold against determined new competitors. This vigilant maneuvering is necessary because the battlefield is always changing. The high ground won’t stay high for long.
In With The New
Take advantage of the enemy’s unreadiness, make your way by unexpected routes, and attack unguarded spots. —Sun Tzu, The Art of War
Throughout the history of warfare, battles have been won and lost based on a leader’s ability to respond to the new: new territory, new tactics, new technology. If you simply try to beat the new back with the same old methods, you will eventually be defeated. To win, you need to harness the new yourself.
Over and over, we see that navigating the new demands boldness and agility. Leaders who can drag moribund companies out of their comfort zones can still emerge triumphant. We love to tell the story of the scrappy upstart who topples the incumbent. The truth is that established companies successfully fight back far more often than the mythmaking acknowledges. Sometimes all it takes is a single, strategic blow. This is illustrated by the war Anheuser-Busch between Miller. An entire war can be won by finding a weak spot—a competitor’s narrow vulnerability—and striking without mercy.
Exploiting Vulnerabilities
In war, avoid what is strong and strike at what is weak. —Sun Tzu, The Art of War
All’s fair in love and business war. Seemingly invulnerable companies can hang by a thread, safe only as long as no one notices that thread. Some opponents, however, have a knack for spotting a vulnerability, whether it’s a vital but disgruntled employee or a frustrated customer base ready to switch to something new. When looking for a weakness in your competitor, look first at its leaders. Their flaws represent your greatest opportunities.
Sometimes business wars are won through years of patience, effort, and strategy. And sometimes they’re won with a single, timely strike. Take Beats by Dre vs. Monster Cable for example.
Savvy leaders wait patiently (and sometimes impatiently) for an opening. Then they strike with all their might. As they develop their eye for vulnerabilities in others, they learn to close their own, becoming cautious, humble, and frugal lest they fall victim to the same gambits. As Sun Tzu wrote, “the skillful fighter puts himself into a position which makes defeat impossible, and does not miss the moment for defeating the enemy.”
It’s possible, of course, to take it too far when trying to exploit a competitor’s vulnerabilities. Some leaders seek advantage in ways that are unethical—or even illegal. In such cases, they have to bear the consequences of stepping over the line in pursuit of profit and market share.
Dirty Tricks
There is a proper season for making attacks with fire, and special days for starting a conflagration. —Sun Tzu, The Art of War
Tricks. Lies. Even violence. When the stakes are high enough, some leaders will turn to any weapon in their arsenal to defeat their enemies and secure their company’s future. Though public embarrassment or even legal consequences may follow, government doesn’t deal with corporate wrongdoing as severely as it punishes individual crimes—particularly when the dirty trickster is a successful American corporation. New, well-intentioned regulations may rule out a particularly nasty tactic in the future, but rarely is the offending party forced to return the majority of their ill-gotten winnings. And so the culture of deception remains. Certain leaders are always on the lookout for new ploys. It should be no surprise that dirty tricks are used across industries and by leaders who would never consider unethical behavior in their personal lives. All’s fair in business war. Sun-Maid vs. the Raisin Mafia is a case in point.
There are some fights, however, that simply can’t be won on the battlefield—at least not by traditional means. Such wars aren’t waged in a day but over weeks, months, or years. They’re won by companies that earn the affection and respect of their customers and, just as important, their own employees. Win hearts and minds, and you will have won the war without firing a single shot.
Resilience
Just as water retains no constant shape, so in warfare there are no constant conditions. —Sun Tzu, The Art of War
“You don’t learn to walk by following the rules,” Virgin founder Sir Richard Branson wrote. “You learn by doing, and by falling over.” Resilient businesses aren’t afraid of falling. In fact, if they don’t stumble now and then, they know they aren’t taking enough risks. The rise of Adidas is one such example.
The instinct in tough times is to hunker down and play it safe. However, great leaders keep making bets in good times and bad. That’s because they keep one eye toward the future even as they navigate the perils of the present. These leaders mitigate the risks by keeping their bets as small as possible, but they never let adverse conditions—industry woes, economic recessions, even wars—slow the pace of innovation. Take Nintendo for example when it took over America. Then, when a bet shows promise, they put everything the company has behind it. They know that prudence and frugality won’t save them. Sell or die.
There are no shortcuts. Start now, not when it’s easier down the road. Great products take time to develop—you can’t buy them later when resources aren’t as tight. Countless businesses have cratered by throwing money at a problem that only starting earlier could have solved. If you wait until times are good to start building your company’s future, you simply won’t have one.
