Useful guide for Strategy formulation of all organizations. Learning Resource complied by Jayadeva de Silva and produced by Humantalents International. This is chapter from author's book "Humantalents Management"

1. Military Lessons For Business
Managers
By
Jayadeva de Silva. M.Sc, MBIM, FIPM, FITD
The Art of War by Sun Tzu is the oldest military
classic known in Chinese literature; Sun Tzu’s Art of
War is in fact a very short book. It contains less
than 6200 characters of classical Chinese literary
writing. The book has only 13 chapters with each
chapter barely a page long. The fact that the original
work of Sun Tzu was in literary writing has created
many problems for scholars in capturing the full
meanings and implications of his thoughts. This is
largely attributed to the complexity of the Chinese
Language. Prof. Wee of the National University of
Singapore in his book has provided the closest meanings
in English for the terms used in Sun Tzu’s original
writings. The idea of an analogy between the world of
business and that of the battlefield is not a novel
one. One would hear of car wars, cola wars and such
economic wars almost daily. Various studies relating
to the application of military strategies to business
practices have been published. For example Marketing
Warfare by Rie’s and Trout (1986) has been based on the
works of the German General Karl Von Clausewitz, which
were written in 1832. The word strategy comes from the
Greek word strategos. Originally referring to a
general, the word came to refer to “The art of the
general” or “What the general does”. Today, strategy
refers to the art and science of directing resources to
optimise the chances of victory and reduce the effects
of tactical defects.
The business world is like the battlefield. In fact
businesses have collapsed through poor planning,
resulting in the loss of capital and employment. This
is no different from war, where poor planning can lead
to the loss of men, equipment and the battle itself; in
the case of Companies in the business world, the impact
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2. of losses can at times be felt throughout many other
sectors of the economy, just as losses in war can
literally tear a nation apart. Thus the challenges
facing a Military Head of State and the CEO of a
Company is comparable. Please refer Table 1.
Table 1: Comparison between a Military Head of State
and a CEO of a Company
Military Business
1. To consolidate his 1. Protect the Market Share
present government of business.
within a defined
territory and to
protect it from 2. Finding new markets whose
external aggression needs might be met by the
current products.
2. To expand his present
territory either by
conquering neighbour 3. Exploring and developing
states new products for existing
markets.
Or
3. By embarking on more
ambitious expeditions 4. Developing new businesses
to far away lands and with new products in new
territories. markets.
Influence of the Rulers in the Government
In war, people should be in perfect accord with their
Ruler and be willing to accompany him in life and in
death without any fear of danger. If the leader is
wise and capable he will be able to gain the moral
support of his subjects so much so that they will be
willing to accompany him through the thick and thin of
a battle and the ups and downs of the state. While
this may seem unthinkable, in reality there are
examples such as suicide bombers who are willing to lay
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3. down their lives for their leader (although this may
evoke some uncomfortable feelings among us). This kind
of influence can be observed outside the battlefield
when one examines the role governments have played in
the success of industries in countries like Japan,
Singapore and South Korea. For example, the Japanese
Ministry of Trade and Industry (MITI) is known for
charting the overall industrial policy for the country.
The Japanese government will also not hesitate to
support their industries in various ways such as
through government guarantees and financing similarly
in NICs, the governments have greatly encouraged their
companies to have an outward orientation and have
packaged various incentives to help them achieve such
objectives. The result is that these countries are
export driven. On the other hand one witnesses corrupt
and weak governments that are responsible for the decay
in their national economies. It is well known that
many African, Asian and Latin American countries suffer
economically because of incapable governments that are
unable to exercise leadership. In today’s business
world, many countries including Sri Lanka rely on
foreign investment to stimulate economic growth. One
key determinant of the inflow of foreign investment is
the level of political stability, which in turn depends
heavily on political leadership. An enlightened ruler
will create the climate for the rise of the nation.
For business a capable government will provide
political stability and hence attract foreign
investments and stimulate economic growth, while a
corrupt government will only sow the seeds of economic
decay. The first step in the strategic decision making
process whether in military or business is Situation
Appraisal. This involves assessing the desirability of
engaging in combat. Having thoroughly appraised the
situation, one would next proceed to formulation of
goals and strategies. The choice of strategies has to
be compatible with the goals selected and has to be
appropriate to a given situation. Next would be the
Evaluation of Strategies at which the strategist has to
assess the effectiveness of the proposed strategies.
Once they are evaluated as feasible and effective, the
next stage would be Implementation. During this stage
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4. the tactical & operational aspects of effective
implementation is considered. Finally to ensure
success, there must be Controls with Feedback
Mechanisms.
The Principle of Detailed Planning
Strategic Management must begin with detailed planning.
Focus is not whether a Company or an army plan or does
not plan, rather it is how detailed the planning is.
This would encompass consideration of facts, which are
micro as well as macro, controllable as well as
uncontrollable, internal as well as external, static as
well as dynamic, human as well as non-human, tangible
as well as intangible. In short, detailed planning has
to be exhaustive in coverage and consideration.
Detailed planning cannot be carried out on the basis of
intuition, gut feeling, calculated guesses or other
subjective means. It must be based on intelligence,
which can be obtained by men who have knowledge of the
enemy or the competitive situation. Thus there is a
need to actively collect, store, analyse and utilise
information for the development of more effective
strategies. The successful acquisition and utilisation
of information for strategic purposes is an important
factor, which determines the competitiveness of a
country or a business.
Mission
In the days before radio and other forms of modern
communication, ancient armies solved the problem of
keeping the combat unit together and moving forward
with a ‘standard’ or ‘ensign’. This device was simply
a tall pole with a flag or other symbol representing
the combat unit that could be seen above the dust and
confusion of the battle. Soldiers used this standard
as a rallying point, giving them a focus and helping to
ensure unified efforts in combat. The mission and
mission statement, we believe, serve the same function
for the modern enterprise – to provide a sense of
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5. guidance, orientation, and direction in the complexity
and occasional flurry of the enterprises day-to-day
existence. In an era of discontinuous change, the
Mission Statement takes on even more importance as the
single statement that provides long-term focus for the
efforts of the enterprise. Thus it should have a
vision component, describing what the enterprise needs
to accomplish, what business it is in (or intends to be
in) and what significant contribution it expects to
make. Then the mission statement should have a ‘theme’
component describing how the enterprise intends to
achieve its objectives. This theme component helps to
distinguish the enterprise from others by defining its
unique characteristics.
Values
Like in the battlefield, in business too people have to
operate under tremendous strains. It may be the
‘religious faith’ or ‘faith in their ruler’ which
provides the support and guidance for the military
general in the battlefront. Similarly, in business
management, we need to believe in something. It has to
be a belief in something more important and immortal
than ourselves that will give us a will to succeed and
a kind of serenity in stress. What we mean here is a
set of values which communicates itself to those are
who are being lead, and helps sustain their
determination to be successful. This is extremely
important in difficult situations, because people who
are so inspired and motivated really can do the
apparently impossible.
Choice of Battle Ground
In military combat as well as in business one of the
important factors to ensure success is to choose
battlegrounds carefully. Choosing the right
battleground enables the army and the Company to
exhibit its strengths better and camouflage its
weaknesses. In addition it will also enable the firm
to exploit opportunities in the market – for example
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6. through niching strategies one could cushion the
effects of threats in the environment. In choosing a
battleground to compete, a Company should opt for one
in which it has distinct advantages over its
competitors. It can also look for areas ignored by the
competitors. An understanding and appreciation of the
characteristics of different battlegrounds will help
decide the appropriateness of a given strategy. Let us
examine the different types of battlegrounds.
Dispersive Ground
This is a battle situation in which the army is
fighting in its own territory. For example, one of
Israels’ military strategies has always been to avoid
fighting a war within her own territory. Its
occupation of the West bank, Golan Heights and Gaza
Strip typify her resolve not to fight in her own
territory. In the business world one observes that the
United States is facing a problem of exports from
Japan, South Korea, Taiwan, Hong Kong and Singapore.
The US has chosen passive and defensive strategies by
trying to fight on its own soil, rather than
concentrate on a more aggressive and offensive export
drive (which would be analogus to fighting beyond one’s
territory). On the other hand a Firm competing with
two many brands in the same market could be in a
dispersive battleground. In such cases, Company has to
ensure the unit of purpose among all personnel
involved.
Accessible Ground
This is a ground that is open and equally accessible to
the enemy and yourself. In such grounds ancient war
strategy was to prevent the enemy from entering your
territory. In the business world one finds businesses
where the market entry and exit are very easy. There
is then the need to protect market share by building up
strong defences through improvement of the total system
that include production, marketing, advertising and
promotion, inventory control, planning and distribution
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7. outlets – so much so that the walls become thick and
impenetrable.
Frontier Ground
When the army has made only a shallow penetration into
the enemy’s territory the ground is considered frontier
in nature. Military strategy would be not to stop in
frontier ground and to keep the forces closely linked.
In the area of foreign market entry, the Japanese can
be hailed as gurus of this strategy of never stopping
at frontier ground. With the coordinated efforts
needed in a frontier ground situation, without rushing
into foreign markets simultaneously, Toyota entered the
US market followed by other Japanese Automobile
Companies.
Entrapping Ground
One in which it is easy to get in but difficult to get
out. It is a type of ground that is filled with booby
traps. Businesses with low capital but high operating
costs can be entrapping too. This is especially so
where there are strong labour unions or labour laws
that prevent management from retrenching workers. At
times the unions may even obstruct any modernization or
mechanization efforts.
Constricted Ground
In essence, a constricted ground is one in which the
access route is narrow and retreat route is tortuous.
It is the type of ground that is difficult to get into
and at the same time difficult to get out. To survive
in a constricted environment, resourcefulness is
required in the design of strategies. This is because
the competitive advantage enjoyed is often very narrow
and at the same time this advantage is vulnerable to
attacks. If technology is the competitive advantage it
becomes very important to build on this strength and
defend it as much as possible through continuous
upgrading.
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8. Key Ground
Is one which is equally advantageous to the enemy and
yourself. Owing to its importance, it is highly
contentious and the forces of both sides are likely to
contest bitterly for it. For example, with the opening
of China many multinational Companies view the Chinese
market as a key market owing to the vast business
potential. It is therefore, not surprising to witness
many Companies rushing into Chinese markets. If one
were to apply military strategies one should avoid
attacking the enemy on key ground. Rather, it is
important to improve your supporting skills – rush up
all your rear forces and elements. The way the
Japanese have handled the Americans and Europeans in
the world markets is a good example.
Focal Ground
When a state is surrounded by three other states, its
ground is considered focal. In such a ground the
enclosed state forms the key to the other three states
in that the one who captures it can have a commanding
situation over other states. Thus it can be expected
that the focal ground be always under threat of siege.
The strategy here is to be-friend neighbouring states
and to strengthen ties with the allies. The small
producers in an oligopolistic market structure are in
focal grounds. If you are the small producer, it is
very important not to agitate the larger competitors.
It is better to follow the leader than to lead them.
To survive in such a business situation, there is a
need to also strengthen ties with allies. These allies
would include the suppliers, customers, bankers, labour
unions and government bodies. One remembers how the
strong support received by Chryslers allies prevented
it from going bankrupt or being squeezed out by much
larger Companies like General Motors and Ford.
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9. Indifferent Ground
Indifferent or indecisive ground is a situation that is
dis-advantageous to both the enemy and yourself. In
such situations, there is absolutely no advantage in
making the first move. When China first opened up,
many Companies were hesitant to go in as they were
uncertain about the Chinese Policy. Many Companies
sidelined themselves and preferred to gain from the
experiences of the early entrants. In the same way
Japanese concentrated on applied R & D and Production
Technology of American and European Firms.
Treacherous Ground
When the Army is travelling in mountain forests,
dangerous passes, marshy swamps or other difficult
terrain it is in treacherous ground. In such a
situation the Army does not encamp but should move
swiftly. In the mature state of the product life
cycle, the market is saturated with all kinds of
competitive products. It is therefore, important not
to stay too long in matured markets.
Desolate Ground
In war, as the battle progresses, grounds that were
originally captured and deemed valuable might lose
their appeal as they become less crucial to the
subsequent conduct of war. One should not linger on
that ground. Much the same way Companies should not
stay in declining markets. Japanese Companies
abandoned labour intensive industries such as textiles,
once they realised that the other developing Countries
are able to operate more cheaply than them.
Distant Ground
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10. In distant ground both sides are away from home base
and are equally matched in forces. It is to the best
interest of both sides to avoid direct battles which
would confer little advantage to either side. The
Japanese penetration of foreign markets again provides
a very good example of this avoidance of direct battle
in distant ground.
Serious Ground
It is one on which the army has penetrated deep into
the enemy territory and has left behind many of the
enemies fortified cities and towns. In this case the
army normally plunders the resources of the enemy but
protect its supply routes to ensure a continuous flow
of provisions. In the same way, a Company operating in
a foreign market should seriously consider relying as
much as possible on local resources, which include all
factors of production like labour, capital, technology,
management, raw materials and other supplies.
Death Ground
This is a situation in which the army can only survive
if it fights with the courage of desperation, where the
only way to survive is fight. Chrysler Corporation of
United States was on the verge of bankruptcy between
1978 and 1982. Lee Iaococca made it abundantly clear
to his employees that the only way to survive was to
fight. His efforts resulted in a drastic change in the
behaviour and loyalty of the workers towards
management.
The Principle of Concentration of Forces & the Need to Attack
This means economising of forces; In other words
application of minimum of strength to a point other
than the decisive one in order to pave the way for the
application of mass force at the point of decision.
The idea is to use one’s limited available force to
strike at the enemy’s weakest point where victory can
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11. be better assured. What is important is relative
strength and not absolute strength at the point of
contact. Relative superiority can be achieved by
clever choice of battleground, maintaining strict
secrecy of one’s battle plan and using deception. In
war, the invincibility in defence depends on one’s own
efforts, while the opportunity for victory depends on
the enemy. It follows that those skilled in warfare
can make them invincible but cannot cause the enemy to
be vulnerable. In ancient times, those skilful in
warfare first made themselves invulnerable before
waiting for opportunities to defeat the enemy. Even
when one is playing a competitive game like football,
the only way to win is to kick the ball into the
opponent’s goal, as one cannot win by only defending
one’s goal. Similarly in competitive business, one has
to compete openly for market share, rather than
defending one’s own market share. This may be
specially done when the market is not growing and in
times of recession. Over the last two decades,
countries like Japan, Singapore, South Korea and Hong
Kong had been pursuing attacking strategies in
international trade. However as in war, in any
corporate planning decision too, it is essential to
have a contingency plan.
Swiftness in Execution of Plans
Once a detailed plan is developed based on information
gathered through intelligence and the battleground
chosen, it is important that the plan be executed
swiftly. Swiftness includes perfect timing (as it
catches others off guard, and hence minimizes
opposition), the maintenance of momentum and the
avoidance of protracted campaigns. It also demands
that the co-ordination be perfect. All these are
equally valid in business situations. Like in war,
throughout the business one should maintain
adaptability in manoeuvres. Adaptability in manoeuvres
entails provision for creativity, innovation and the
exercise of initiatives. To move ahead of competitors,
a Company must encourage the flow of innovative ideas
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12. on all fronts – products, service, marketing strategies
etc.
The company must be capable of capitalizing the
opportunities as and when they arise.
When large-scale integrated circuits (LSI) first
appeared, western countries quickly explored them for
usage for missile and space development. Whereas the
Japanese saw the opportunity for the use of same in
pocket calculators and watches. Price of the LSI
circuit dropped, due to large-scale use in the Japanese
industries, and the product quality was also
stabilised.
Deceptiveness in Actions & Strategies
All warfare is based on deception. The enemy should
not know where you intend to attack; If he does not
know where you intend to attack he must defend in many
places. The more places he defends the more scattered
are his forces and the weaker his force at any one
point. In order to achieve distinct advantage in
combat, one must choose the battleground that is more
advantageous to oneself than to the enemy; and bring
the enemy to where you want to fight through the use of
baits and deception. At the same time one should not
succumb to enemy’s baits. While the term deceptive
tactics seems very unethical the truth is that baits
are used in the business world too. One of the
commonly used methods for lesser developing countries
to attract foreign investments is the offer of
incentives such as exemption from taxes through pioneer
status, unlimited repatriation of earnings etc. Even
among developed countries, baits have been used for
economic and political reasons.
Anticipation of the Enemy’s Reaction and Changes in Environment
It will be naive to assume that when one embarks on an
offensive, the enemy will not react. In other words,
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13. it is dangerous to assume that the enemy is not capable
of strategising nor is developing effective responses.
In essence, there is a need to modify a strategy that
may be carefully evaluated and implemented because of
the reactions of the enemy and the changes in the
environment.
Planning for Victory & Combat Readiness
One over-riding principle for victory in war is that of
unity. To win there must be unity of minds and hearts
from the ruler to the subjects of the state. To make
the war a successful one the appointment of the
generals must be based on the ability of the skills of
the candidates. Just like in the army, the way a
business is structured and organised will have a
serious effect on the success. This aspect includes
effective policies, programmes, operating procedures,
channels of communication, lines of authority and
responsibility. The organisation and structure of a
company is one area that must be considered in
strategic Planning. What would be the best way to
organise the Company to face the future. Very often
the strategy is decided based on the structure. The
structure should follow the strategy and not the other
way. If a company wants to encourage creativity,
innovation and entrepreneurial spirit, what is the best
way to structure the company? The strength of an army
does not depend on large forces. Army should not
advance relying on sheer numbers. What is more
important is the training of men and officers in the
army as well as in the business. The quality of the
people is definitely competitive and it is very
interesting to note that the more successful companies
are also those with a heavy commitment to Human
Resources Development. The level of training will
dictate the state of combat readiness of the firm.
With well-trained personnel, the firm can engage in
more activities with greater confidence. Furthermore,
they are better able to handle difficult situations and
yet produce superior results. Another important
dimension to winning a war is discipline.
Comprehensive and elaborate measures to direct human
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14. behaviour are required to achieve organisational goals
and objectives. Companies that place heavy emphasis on
their reward system are normally in a stronger
position. Japanese companies have a tradition of
sending their executives for annual executive training
camps where the training not only incorporates military
style discipline but also includes doses of spiritual
and social values such as learning self sacrifice,
humility, hard work, suffering and tolerance.
Therefore the need to be ‘combat fit’ should be the aim
of every Company. Staff training and development
auditing and improvement of every aspect of the
corporate resources should always be part and parcel of
the activities of the Company.
Efficient and effective management of organisations is
critical for the country’s development efforts.
Increasing competition at both national and
international level requires strategic managerial
thinking by the business community. The idea of an
analogy between the world of business and that of the
battlefield was explored as some of the ancient
writings on war offer valuable insights into the nature
of modern business practices and help explain some of
the startling economic trends in our times.
• This is chapter from the book “Humantalents
Management” by the author
• The book is now downloadable free of charge from
www.slideshare.com
• Author Mr Jayadeva de Silva can be contacted by
email
djayadeva@gmail.com
Tel 94 77 7272295
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