The Art of Waging Business War

1
Sun Tzu, or Master Sun, was a Chinese general who
was born around 572 BC. His treatise, The Art of
War is regarded as one of the greatest
masterpieces of all time. It guided ancient
Chinese military thought and is still studied
worldwide by military strategists. This Art of
Waging Business War is a comparison of an ancient
military masterpiece to modern business ventures.
Obviously, the two time periods and endeavors
could not be more opposite. I was, therefore,
struck by the number of similarities. I invite
the reader to read The Art of Waging Business War
actively and challenge the comparisons
articulated. Compare the original text from The
Art of War to your career, your company, your
experiences, and this particular comparison. I
hope you find the exercise as interesting as I
did. -Natalie Lynch
McNeilly, Mark R. (2001), Sun Tzu and the Art of
Modern Warfare, Oxford University Press, ISBN
0-19-513340-4. Sawyer, Ralph D. (1994), The Art
of War, Westview Press, ISBN 0-8133-1915-X.
2
Pillars of Operations

• The art of war, then, is governed by five
  constant factors
• The Moral Law The Moral Law causes the people to
  be in complete accord with their ruler, so that
  they will follow him regardless of their lives,
  undismayed by any danger
• Heaven Heaven signifies night and day, cold and
  heat, times and seasons
• Earth Earth comprises distances, great and
  small danger and security open ground and
  narrow passes the chances of life and death
• The Commander The Commander stands for the
  virtues of wisdom, sincerely, benevolence,
  courage and strictness
• Method and discipline By method and discipline
  are to be understood the marshaling of the army
  in its proper subdivisions, the graduations of
  rank among the officers, the maintenance of roads
  by which supplies may reach the army, and the
  control of military expenditure.
• These five heads should be familiar to every
  general he who knows them will be victorious he
  who knows them not will fail.

• Heads of Business are governed by
• Ethical Code. Act so justly and honorably that
  employees want to follow you
• The Goal. This will represent the surges and
  spike of a companys profitability and
  infrastructure
• The Path. This signifies the bureaucratic,
  technical, logistical, and legal struggles to
  overcome
• The Entrepreneur. You stand for wisdom,
  sincerely, benevolence, courage and discipline
• Techniques. This should be understood as the
  marshaling of supplier chains, organizational
  hierarchies, and business protocols.
• These five concepts should be familiar to every
  business owner. Those that understand them will
  be profitable and
• those who do not will fail.

3
The Difficult Phases
When you engage in actual fighting, if victory is
long in coming, then men's weapons will grow dull
and their ardor will be damped. If you lay siege
to a town, you will exhaust your
strength.?. Now, when your weapons are dulled,
your ardor damped, your strength exhausted and
your treasure spent, other chieftains will spring
up to take advantage of your extremity. Then no
man, however wise, will be able to avert the
consequences that must ensue. ?
When times are tough your tools, mental or
physical, will wear down. Conflict with another,
be it a vendor, a founder, or a competitor, will
take an emotional toll on each individual and on
the corporate energy. These times of prolonged
struggle must be endured however, if a party
adverse to your company becomes aware of the
difficulty they will likely choose this time to
strike.
4
Investments, Supplies, and Cash Flow
The skillful soldier does not raise a second
levy, neither are his supply-wagons loaded more
than twice. ? Bring war material with you from
home, but forage on the enemy. Thus the army will
have food enough for its needs.
It is never recommended to seek investments
twice. Understand everything you need when you
first ask for funds. Only invest a prudent
amount into your formation and then aggressively
seek to develop a sleek and lean manner of
procurement.
5
Winning Over A Competitor's Accounts
Therefore in chariot fighting, when ten or more
chariots have been taken, those should be
rewarded who took the first. Our own flags should
be substituted for those of the enemy, and the
chariots mingled and used in conjunction with
ours. The captured soldiers should be kindly
treated and kept. ? This is called, using the
conquered foe to augment one's own strength. ? In
war, then, let your great object be victory, not
lengthy campaigns.
The representatives that secure the first sales
to a customer previously loyal to a competitor
should be cherished and praised. Those new
customers should be incorporated into your own
client systems and treated very well. Each
converted account creates momentum and adds to
the companys growth by more than one sale. The
goals of the company should be a profitable sale
and the focus should not be on the process of
converting the account.
6
On the Companys Leader
Thus it may be known that the leader of armies is
the arbiter of the people's fate, the man on whom
it depends whether the nation shall be in peace
or in peril.
The head of a company determines the fate of his
employees and his employees families. He also
determines the nature of the workplace and if it
is stressful, hostile, collaborative, or
methodical.
7
Taking over a Competitor
In the practical art of war, the best thing of
all is to take the enemy's country whole and
intact to shatter and destroy it is not so good.
So, too, it is better to recapture an army entire
than to destroy it, to capture a regiment, a
detachment or a company entire than to destroy
them. ?
If your goal is to take over a competitor, take
it over intact. Do not destroy its customer base,
employee moral, or momentum.
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The Company Fight
Thus we may know that there are five essentials
for victory He will win who knows when to fight
and when not to fight, He will win who knows how
to handle both superior and inferior forces, He
will win whose army is animated by the same
spirit throughout all its ranks, He will win who,
prepared himself, waits to take the enemy
unprepared, He will win who has military capacity
and is not interfered with by the
sovereign, Hence the saying If you know the
enemy and know yourself, you need not fear the
result of a hundred battles. If you know yourself
but not the enemy, for every victory gained you
will also suffer a defeat. If you know neither
the enemy nor yourself, you will succumb in every
battle.
There are five essentials for every business
Pick your battles wisely, You will be
successful if you understand how to compete with
the corporate giant and the new innovator, Hire
passionate people for every job, Be proactive and
understand when your competition is not
well-positioned, Keep clean books and affairs so
that complaints, scandals, and investigations do
not interfere with success. We should say Know
the competition and know yourself so your company
will be secure. If you know yourself but not the
enemy you will have a failure for every victory.
If you know neither yourself nor the competition,
your company will fail.
9
Small Companies Fighting a Big War
The control of a large force is the same
principle as the control of a few men it is
merely a question of dividing up their numbers.
? Fighting with a large army under your command
is nowise different from fighting with a small
one it is merely a question of instituting signs
and signals. ?
Managing a small number of people requires the
same leadership qualities as managing a large
company it is merely a questing of delegating
appropriately. Regardless of the size,
institute processes, methods, and models of
success that work and grow with your workforce.
10
Hiring a Team
The clever combatant looks to the effect of
combined energy, and does not require too much
from individuals. Hence his ability to pick out
the right men and utilize combined energy. ? When
he utilizes combined energy, his fighting men
become as it were like unto rolling logs or
stones. For it is the nature of a log or stone to
remain motionless on level ground, and to move
when on a slope if four-cornered, to come to a
standstill, but if round-shaped, to go rolling
down. ? Thus the energy developed by good
fighting men is as the momentum of a round stone
rolled down a mountain thousands of feet in
height. So much on the subject of energy.
A good leader looks to the effect of combined
energy and does not require too much from
individuals. Hence, his ability to hire the right
employees to create this combined energy. When
this good leader builds a team that create
energy, his employees gain momentum. If the team
is assembled with the right elements, it will
propel forward. If the team does not have a spark
of cohesion, the employees will cause the company
to stagnate. And, if the company has even one
employee that impedes progression, the company
will stop moving in a direction. Thus, the
energy developed by good employees is as the
momentum of a stone rolling down the hill. That
is enough about that.
11
Product Quality
You can be sure of succeeding in your attacks if
you only attack places which are undefended. You
can ensure the safety of your defense if you only
hold positions that cannot be attacked. ? Hence
that general is skillful in attack whose opponent
does not know what to defend and he is skillful
in defense whose opponent does not know what to
attack.
You can be sure of your companys success if your
product satisfies an unsatisfied need. You can
further ensure the safety of your company if you
produce a quality product that cannot easily be
reverse engineered or broken. This way, your
competitors will not be able to duplicate your
product and will not know how to satisfy the
markets desire for your product.
12
Company Weaknesses
In making tactical dispositions, the highest
pitch you can attain is to conceal them conceal
your dispositions, and you will be safe from the
prying of the subtlest spies, from the
machinations of the wisest brains. ? All men
can see the tactics whereby I conquer, but what
none can see is the strategy out of which victory
is evolved. ? Do not repeat the tactics which
have gained you one victory, but let your methods
be regulated by the infinite variety of
circumstances. He who can modify his tactics
in relation to his opponent and thereby succeed
in winning, may be called a heaven-born captain.
The best way to address your weaknesses is to
acknowledge them by concealing them this way
your vulnerabilities will be safe from the prying
of even internal spies and from the machinations
of the wisest brains. Successful business
people will tell you that outsiders have no idea
what those leaders overcame to gain their
success. Do not repeat the tactics and
concealment methods that helped you hide a
company weakness. Always change your maneuvers
and strategies. Natural leaders are able to
change strategies according to the current
market.
13
The Employees at Startup
Maneuvering with an army is advantageous with an
undisciplined multitude, most dangerous. ? If you
set a fully equipped army in march in order to
snatch an advantage, the chances are that you
will be too late. ? Thus, if you order your men
to roll up their buff-coats, and make forced
marches without halting day or night, covering
double the usual distance at a stretch, doing a
hundred LI in order to wrest an advantage, the
leaders of all your three divisions will fall
into the hands of the enemy. The stronger men
will be in front, the jaded ones will fall
behind, and on this plan only one-tenth of your
army will reach its destination.
It is dangerous to initiate a project or company
with neophytes and it is much bettor to have a
seasoned team. If anxiety leads you to launch a
product or company before you are ready, that
endeavor is likely to fail. Forcing employees
to work past exhaustion for the sake of a
deadline will simply cause you to loose entire
teams to the competition. You may retain some of
your more dedicated employees but only a small
portion will be retained by the company.
14
The Organization at Startup
Thus, if you order your men to roll up their
buff-coats, and make forced marches without
halting day or night, covering double the usual
distance at a stretch, doing a hundred LI in
order to wrest an advantage, the leaders of all
your three divisions will fall into the hands of
the enemy. We may take it then that an army
without its baggage-train is lost without
provisions it is lost without bases of supply it
is lost. ?
It is dangerous to initiate a project or company
with neophytes and it is much bettor to have a
seasoned team. If your personnel and supplies
are not adequate your startup will fail.
Similarly, you will fail without an established
supply chain.
15
Joint Ventures
We cannot enter into alliances until we are
acquainted with the designs of our neighbors. 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, its pitfalls and
precipices, its marshes and swamps. ? We shall be
unable to turn natural advantage to account
unless we make use of local guides. ? In war,
practice dissimulation, and you will succeed.
Do not enter alliances with other companies or
entrepreneurs until you have done a substantial
amount of due diligence. It is unwise to enter
into alliances until you wholly understand the
market place, labor pool, and supplier resources
involved. Use experts and tenured professionals
because they have naturally learned from the
mistakes they previously made. Be stoic about
your intentions, even with possible
collaborators, and you will succeed.
16
Creating Protocols
The Book of Army Management says On the field of
battle, the spoken word does not carry far
enough hence the institution of gongs and drums.
Nor can ordinary objects be seen clearly enough
hence the institution of banners and flags.
? Gongs and drums, banners and flags, are means
whereby the ears and eyes of the host may be
focused on one particular point. ? The host thus
forming a single united body, is it impossible
either for the brave to advance alone, or for the
cowardly to retreat alone. This is the art of
handling large masses of men. ? In
night-fighting, then, make much use of
signal-fires and drums, and in fighting by day,
of flags and banners, as a means of influencing
the ears and eyes of your army.
Have a protocol book because, during busy times,
instruction may be misinterpreted. Make a usable
series of instructions that show employees how to
handle business affairs. The use of protocols,
manuals, and instructions provide a resource for
employees to use when there are many distractions
in the workplace. These protocols also indicate
the company is acting in an intentional fashion.
This will help create good standardization
without micromanagement when business is hectic
or frantic. Even during dark periods, employees
can rely on well-laid protocols and understand
their duties by referencing these protocols,
instructions, and guidelines.
17
Scheduling Negotiations
Now a soldier's spirit is keenest in the morning
by noonday it has begun to flag and in the
evening, his mind is bent only on returning to
camp. ? A clever general, therefore, avoids an
army when its spirit is keen, but attacks it when
it is sluggish and inclined to return. This is
the art of studying moods.
Employees spirits are keenest in the morning. By
noonday, employees begin to tire. In the evening,
employees minds think about going home. A
clever leader, therefore, avoids competitive
negotiations during the morning but may initiate
them in the afternoon and intend to finish them
in the evening. A clever leader also protects his
own organization from allowing a competitor to
use the clock to gain an advantage.
18
Winning with Integrity
When you surround an army, leave an outlet free.
Do not press a desperate foe too hard.
When you have clearly out-maneuvered an enemy,
win with grace. There is no reason to continue
aggression beyond the win. Your competitor is a
company of humans, who should be respected and
will author your companys reputation.
19
Patience with the Competition
Reduce the hostile chiefs by inflicting damage on
them and make trouble for them, and keep them
constantly engaged hold out specious
allurements, and make them rush to any given
point. ? The art of war teaches us to rely not on
the likelihood of the enemy's not coming, but on
our own readiness to receive him not on the
chance of his not attacking, but rather on the
fact that we have made our position unassailable.
?
Weaken the heads of your competition by
inflecting pain on them. Make trouble for them,
keep them constantly engaged with you rather than
their customers, tease them unrealistic
opportunities, and never rest long enough for
your competition to collect their wits. These
teachings instruct us how to over-prepare
ourselves for the competition and know that when
they make a move in the market, your company will
be prepared.
20
Winning with Integrity
When you surround an army, leave an outlet free.
Do not press a desperate foe too hard.
When you have clearly out-maneuvered an enemy,
win with grace. There is no reason to continue
aggression beyond the win. Your competitor is a
company of humans, who should be respected and
will draft your community reputation.
21
Characteristics of a Leader that a Competitor can
Overcome

• There are five dangerous faults which may affect
  a general
• recklessness, which leads to destruction
• cowardice, which leads to capture
• a hasty temper, which can be provoked by insults
• a delicacy of honor which is sensitive to shame
• over-solicitude for his men, which exposes him to
  worry and trouble. ?
• These are the five besetting sins of a general,
  ruinous to the conduct of war. ?
• When an army is overthrown and its leader slain,
  the cause will surely be found among these five
  dangerous faults. Let them be a subject of
  meditation.

• The dangerous character flaws of a leader are
• recklessness, which cause your company to
  deteriorate
• Cowardice, which leads to takeover
• A hasty temper, which competitors will use
  against you
• A delicacy of honor, that cannot admit or make
  corrections when he is wrong
• Over-solicitude for his team, which leads to
  worry about the team instead of the company
  supporting the team.
• A leader who does not mediate these five
  characteristics will succumb to a competitor.
• A reflection of other business failures will
  reveal that the leaders of those failures had
  these sins. Leaders should meditate on
• Overcoming these sins.

22
Making the Right Decision for Your Team
All armies prefer high ground to low and sunny
places to dark. ? If you are careful of your men,
and camp on hard ground, the army will be free
from disease of every kind, and this will spell
victory. ?
Employees prefer to work for a company that makes
ethical decisions even if they themselves
struggle to make the ethical decisions. Be
careful to lead your team to always make the
right decision, which is often the hardest. This
way, your company will not have the disease of a
poor ethic and will lead to success.
23
Calling a Bluff
Humble words and increased preparations are signs
that the enemy is about to advance. Violent
language and driving forward as if to the attack
are signs that he will retreat. Peace
proposals unaccompanied by a sworn covenant
indicate a plot.
When someone suddenly becomes humble during
negotiation or competition, they are about to
make an attacking move. When someone suddenly
becomes aggressive during negotiation or
competition, they are making their last surge
before quitting. Do not trust hollow promises.
Insist on documentation with any competitor.
24
A Competitors Behavior
When the soldiers stand leaning on their spears,
they are faint from want of food. If those who
are sent to draw water begin by drinking
themselves, the army is suffering from thirst. If
the enemy sees an advantage to be gained and
makes no effort to secure it, the soldiers are
exhausted. If the officers are angry, it
means that the men are weary. ?? The sight of
men whispering together in small knots or
speaking in subdued tones points to disaffection
amongst the rank and file. When envoys are
sent with compliments in their mouths, it is a
sign that the enemy wishes for a truce.
When you are able to observe a competitor's
behavior, perhaps at a convention, pay attention.
Watch to see if their expense budgets are
restricted by how they enjoy free food and
drinks. If individuals ignore opportunities to
interact with customers, they may know the
company is too far in decline. If the
competitor's management is angry, it is because
the competitor's employees have already given up.
If a competitor's gossips cannot help
opportunities to gossip, there is general
dissatisfaction with their employer. When a
competitor approaches with compliments, it is
likely they need a favor.
25
Enforcing Company Policy
If in training soldiers commands are habitually
enforced, the army will be well-disciplined if
not, its discipline will be bad.
A company should enforce company policies without
exception.
26
Empowering People and Following Orders
If a general shows confidence in his men but
always insists on his orders being obeyed, the
gain will be mutual.
Companies, leaders, and employees will all
benefit from employees who are enabled and
required to make decisions that consistently
adhere to management instructions.
27
Ambiguous Leadership
When the general is weak and without authority
when his orders are not clear and distinct when
there are no fixes duties assigned to officers
and men, and the ranks are formed in a slovenly
haphazard manner, the result is utter
disorganization. ?
When a leaders decisions and instructions are
inconsistent, his goals are insufficiently clear,
when employees have unclear responsibilities,
when the hierarchy is confusing, the company
cannot move in a consorted manner.
28
Employee Reverence
The general who advances without coveting fame
and retreats without fearing disgrace, whose only
thought is to protect his country and do good
service for his sovereign, is the jewel of the
kingdom. ? Regard your soldiers as your children,
and they will follow you into the deepest
valleys look upon them as your own beloved sons,
and they will stand by you even unto death. ? If,
however, you are indulgent, but unable to make
your authority felt kind-hearted, but unable to
enforce your commands and incapable, moreover,
of quelling disorder then your soldiers must be
likened to spoilt children they are useless for
any practical purpose.
An employee who takes proactive actions without
seeking attention and acknowledges mistakes
without fearing reprimand, whose only thoughts
are the benefit of his coworkers, leadership, and
employer, this employee is the jewel of a
company. Act in servitude to your employees
because their families and futures rely on your
leadership. Treat them as beloved children. Those
employees will stay with you through the
difficult phases. Reverence for employees must
be genuine and distinguishable from doting. If
you overly-reward employees without earning
respect, they will become bureaucratic drains on
your company.
29
Understanding the Market
If we know that our own men are in a condition to
attack, but are unaware that the enemy is not
open to attack, we have gone only halfway towards
victory. ? If we know that the enemy is open to
attack, but are unaware that our own men are not
in a condition to attack, we have gone only
halfway towards victory. ? If we know that the
enemy is open to attack, and also know that our
men are in a condition to attack, but are unaware
that the nature of the ground makes fighting
impracticable, we have still gone only halfway
towards victory.
Understanding your companys strengths without
understanding the competitions weaknesses, means
you are only half prepared to succeed. Understand
ing that the competition has a weakness, but not
understanding your own companys strengths, means
you are only half prepared to succeed. If we
know the competition has a weakness and we know
our companys strengths but we dont know market
conditions, you are still only half prepared to
succeed.
30
When you Attack the Competition
Rapidity is the essence of war take advantage of
the enemy's unreadiness, make your way by
unexpected routes, and attack unguarded spots.
Frequent assaults on a competitor will lead to
success. Make your move when they are unready,
promote yourself in unexpected ways, expose
defects in their offerings that the marketplace
does not know about.
31
Moving Into a New Market
When invading hostile territory, the general
principle is, that penetrating deeply brings
cohesion penetrating but a short way means
dispersion.
When you make your move into a new market, ensure
that you will take over that market. Taking only
a small portion of the market means the
competition can disperse and come back stronger.
32
Collaborating with Your Team on Strategic Matters
Confront your soldiers with the deed itself
never let them know your design.
Your team does not need to know your entire,
adapting, strategy. Your team should follow your
instructions regarding a task that is a piece of
a strategy only you know.
33
When to Implement your Competitive Strategy
Move not unless you see an advantage use not
your troops unless there is something to be
gained fight not unless the position is
critical. ? No ruler should put troops into the
field merely to gratify his own spleen no
general should fight a battle simply out of
pique. If it is to your advantage, make a
forward move if not, stay where you are. Anger
may in time change to gladness vexation may be
succeeded by content. ? But a kingdom that has
once been destroyed can never come again into
being nor can the dead ever be brought back to
life.
Creating your plan does not mean implementing it
immediately. Do not implement your plan unless
the time is right for you to be successful. Do
not let nervous energy determine that you will
move. Do not ever decide to make your move
because of any emotion. Only implement your
strategic plans when the time is right. You may
be glad that you waited instead of implementing
your plan irrationally. If you implement your
plan because of anger or emotion, your company
will have negative consequences that may never
recover.
34
Professional Networking
Thus, what enables the wise sovereign and the
good general to strike and conquer, and achieve
things beyond the reach of ordinary men, is
foreknowledge. ? Now this foreknowledge cannot be
elicited from spirits it cannot be obtained
inductively from experience, nor by any deductive
calculation. ? Knowledge of the enemy's
dispositions can only be obtained from other men.
Understanding your companys profession and the
industry is necessary for even a good
businessperson to succeed. This insider
information cannot be instilled naturally, by
tenure, or by education. Information about your
competitors can only be obtained by professional
networking.