Applying Military Strategy and Tactics to Business
Applying Military Strategy and Tactics to Business Preamble During the late 80s and early 90s, much of the predominant management philosophy involved directly applying classical military strategy to business. Sun Tsu was regularly quoted at Board meetings and on Wall Street and books like On War and Leadership Secrets of Attila the Hun were among the most popular business books available. At the time, I wasn’t a big subscriber to the idea that lessons from military conquests and failures could be readily applied to making a business successful.
Perhaps it was that I couldn’t get my head around morphing one of Sun Tsu’s many principles of warfare into something that I could adopt as a leader or manager . . . “Camp in high places, facing the sun. Do not climb heights in order to fight. So much for mountain warfare. ” – Sun Tsu, The Art of War Huh? Maybe it was that the black and white nature of warfare, with real life death and destruction that made it difficult for me to draw comparisons with the gray-ness of business strategy and its inherently longer feedback loop.
Or, it could have been because mapping strategy directly to success or failure discounts the value of the quality of implementation. As a strong believer in the power of strong management, I believe that top-notch execution often trumps good strategy. As I see it, a good strategy poorly implemented will lose to a lesser strategy that is well implemented (that ought to elicit some strong opinions . . . ). For whatever reasons I struggled with using centuries of military wisdom in conducting business in the past, my recent re-reading of excerpts from books by a few of the great military historians – B.
H. Liddel Hart, Carl von Clausewitz and, of course, Sun Tsu, among others, has got me re-thinking about the application of what armies and empires have learned about beating the crap out of the other guy. Of course, from the cheap seats, anyone can read an excerpt from the writings by or about a great military strategist or tactician and come up with their very own way of applying it to their business. Napoleon’s 35th military maxim is: “Encampments of the same army should always be formed so as to protect each other. One might apply this maxim to business by translating it as: all of our products and services should be closely aligned and interconnected in some way, making it harder for our competition to pick off any one product or service. Sounds reasonable. Microsoft clearly does that with Office, an obviously successful implementation of this strategy. But what if I interpret this to mean that I should build walls around my current products or services, focusing my energy on defending my current position instead of expanding aggressively?
It’s easy to see how this interpretation of Napoleon’s maxim could open me up to failure as it did when DEC refused to leave the VAX behind. Both interpretations are reasonable, but one leads to a high likelihood of success and the other to a reasonable possibility of failure. The problem, as I see it, is that even students of military history have difficulty determining what strategy or tactic to apply a priori in a military engagement, let alone while adapting it to its business application. There are many examples in military history of a certain strategy being successful in one battle and failing miserably in another.
Sure, it’s easy to be a Monday-morning quarterback, but when the data is coming at you in real time, making the right call on what military strategy to use in your business is difficult and potentially dangerous. So with the caveat of interpretation stated above, I’d like to present my summary of winning military strategies and tactics that businesses in today’s world of diminishing sustainable differentiation can use to help make them successful . . . • Speed • Focus • Indirect Approaches • Intelligence (knowledge of what’s going on) • Deception
Arguably, not nearly a complete list but, like I said earlier, it’s easy to map virtually any military strategy to any business strategy. My goal here is to present the most obvious ones (to me) and to use examples of the use of the particularly military strategy in action and show how it applies to business. My plan is to do a separate post for each one of these strategic areas to avoid this post from becoming exceedingly long and, probably, way too boring. First up, Speed . . . Speed There are very few examples of successful military campaigns waged slowly.
American Civil War General Nathan Bedford Forrest, one of the first students of mobile warfare, consistently defeated opposing Union generals even though he was almost always outnumbered and out-gunned. His strategy – speed. He is known for getting to battles days before the Union armies expected his arrival – driving men and horses virtually 24 hours a day in order to create a surprise attack. Forrest rarely lost in battle as a result of his use of speed. He called his strategy: “get there fustest [sic] with the mostest. Roughly 75 years later, in 1939, the German Army started its sweep across Europe with its invasion of Poland. It moved so swiftly across the continent that it caught other countries ill-prepared and unable to mobilize forces or infrastructure to defend themselves. The Germans use of blitzkrieg, orlightning war, allowed them to stay mobile and to avoid becoming entrenched in one place as all the armies in WWI had. This strategy and, of course, the preparations to implement a strategy of speed, made the German army vastly superior to the other armies of Europe and, ultimately, more successful in it’s initial engagements.
Like armies, companies that stay flexible and move quickly hugely increase their likelihood of success. This is, of course, true in terms of markets – getting products and services that people really want or need to market first is almost always a winning strategy – but it may be even more important in terms of the culture it creates inside a company. When your employees are flexible and innovative, moving quickly to take on the next challenge, they will all be driving for success and well-prepared to quickly respond to any surprises that arise from the competition.
One of the reasons that speed works is that many companies are afraid of it and thus, don’t employ it as a strategy. It is, therefore, likely that your competition is afraid of speed. Or, at least, more afraid of it than you are. It feels much safer to move slowly, after all. But it isn’t. Slow companies are exposed to attack from all directions and once attacked, often don’t have the ability to defend themselves, let alone go on the offensive. Road kill. In my experience, speed has also shown its value in another critical way – by minimizing the impact of execution errors.
Any business is going to have some execution errors. If the business is plodding along, though, small mistakes in tactics can cause huge, unrecoverable problems. If the business is moving quickly, though, most execution errors become mere bumps in the road. The flexibility of the organization can absorb them and continue to move forward with small changes in strategy or tactics. This, in fact, may be the greatest advantage of employing speed as a strategy. For business, as with the military, speed is your friend – keep the pedal to the metal.
Next up . . . focus. Focus During Napoleon’s early campaigns, virtually all of which were successful, he used a set of 78 Maxims to guide him in battle (before he thought his armies were too big to be defeated). Maxim XXIX stated: “When you have resolved to fight a battle, collect your whole force. Dispense with nothing. A single battalion sometimes decides the day. ” Napoleon believed that it was nearly impossible to know what force, tactic or sub-strategy would determine the outcome of a specific battle.
Therefore, he always focused all of his forces on the attainment of a single goal – on winning the battle at hand. The only time he split his forces was to use flanking maneuvers where part of his force would attack the enemy from another direction. Even when this tactic was used, though, all of his forces were engaged in the single battle at hand with the common goal of winning that particular contest. He didn’t hold men in reserve and he didn’t split his forces to fight in multiple, simultaneous engagements.
The same cannot be said for the British during the African Campaign in WWII The British, who had recognized the strategic importance of Africa well ahead of the Germans, committed large forces and many tanks, guns and planes to the region to make sure that it remained in their control. The Germans, although out-manned and out-gunned almost eradicated the British forces from Africa by taking advantage of a fundamental weakness in British military strategy – to hold some forces in reserve during a battle just in case they needed them later.
This conservative British strategy of not committing all their energies to the task at hand meant that the Germans never had to engage the entire British force at any time and their inferiority of men and equipment didn’t come into play and thus, they almost wrested control of the continent from the British with many fewer resources. During the civil war, George McClellan, first General in Chief of the Union Army, failed to convincingly defeat a much smaller and less-equipped Confederate force in many engagements.
This included missing a huge opportunity to take the Confederate capital, Richmond, during the first year of the war and, therefore, passing up an opportunity to bring the war to a close early in its execution. McClellan almost never committed a large enough force to any engagement, choosing to leave behind many men to defend Washington (as commanded by Lincoln) and keeping even more in reserve and disengaged from any particular battle. There are dozens of examples throughout history of armies being defeated because forces were split for one reason or another.
Whether to fight a battle or war on too many fronts or to hold forces in reserve, too little of the available resources were applied to ensure victory. Most often, it appears that the cause of these errors was ego and/or ignorance. But sometimes the error lay in simply underestimating the effort required to be successful in any one arena. With low barriers to entry in so many market segments these days, many companies assume that they can create any new product or service without too much trouble or expense (let’s build our own web browser! ). Funny enough, this might be true.
You may be able to address any new problem that you see potential customers having. The problem is that while you can do anything, you simply can’t do everything. Doing everything or, in fact, just doing multiple things, is the same as fighting a battle on multiple fronts – it’s not likely that you’ll succeed unless you have loads-o-resources. Most small companies (or groups within larger ones) don’t, of course, and end up struggling when they lose their focus on their goal. Saying focused is particularly difficult for startups which, by their very nature, have little momentum behind what they’re doing and, thus, a lot of flexibility.
Add to this the fact that the smart, hard-working people who found startups or join them near their inception are the kind of people that see opportunities all around them. A new, exciting market niche here; weak competition there; unfulfilled customer need somewhere else. It’s natural for this type of person in a startup environment to have difficulty staying the course, wanting to jump at every opportunity they see. Focus not only involves trying not to bite off more than you can chew, but also not changing direction too frequently or haphazardly. In a startup, it’s especially easy to get pulled in new irections daily as sales people feed back what they’re hearing, customers demand new functionality and advisors express their beliefs about what is right and wrong. And, since many startupscan actually turn on a dime, they often do just that. Turning on that dime may be the right thing to do. But companies or groups that do so frequently, are doomed to getting overrun by the competition. It’s hard to do things well if what your target is a moving one. This is not to say that adjusting goals and direction should be avoided completely. It’s often necessary and smart to do so. Such changes have to be made thoughtfully and carefully, though.
It should be difficult to change your focus at any time. If it were easy, you weren’t focused enough. If you choose to make a change, just make sure that everyone makes that change and is aligned with the same, unified goal. Don’t split your forces, it’ll end in your defeat. Why fight with one arm tied behind your back? Commit everyone and everything to your goal and try to minimize changes to that goal. Success is elusive enough, why compete with yourself by losing focus? Concentrate all you energy and time on your goal and, like any consolidated, focused military effort, you’ll optimize your chances for success.
Disclaimer: I am not now nor have I ever been a military strategist. Additionally, although I’ve spent many years of my career creating, refining and attempting to lead others in the execution of business strategy, I’m sure that some (likely, those closest to me) would also question my abilities as a business strategist. Indirect Approaches Classic, gentlemanly military strategy called for opposing forces to line up in a field opposite one another, all participants in plain site, and then to wreak havoc on each other.
This type of direct, frontal assault is rarely used any more unless one force has an overwhelming superiority over the other. Even then, it doesn’t happen very often and when it does, it’s not without many surprises and casualties. Military leaders that historically adopted less directly confrontational strategies or even complete indirect strategies soon found great success even when they were confronted by an enemy with superior forces. So, what does it mean to have an indirect strategy? In military terms, indirect strategy involves attacking an enemy on his flanks (sides) or rear – basically, where he oesn’t expect it. Hannibal, the Carthaginian military commander who marched his army over the Pyrenees and Alps to attack the Roman Empire, kept the Roman army at bay (and often in retreat) on their own soil for more than a decade using indirect strategies. Among Hannibal’s many successful military strategies, he became known for engaging the enemy with weak troops in the center of his formation and two hidden sets of strong troops that wrapped around the sides of the opposing force (flanking them), squeezing them from the sides and, sometimes the rear.
While the Romans thought they were successfully attacking the weaker force in the center, they lost the battle as they were crushed from the sides. This indirect approach took the enemy by surprise and attacked it where it was weakest. Even the mighty Roman armies could not remove Hannibal from the Empire. That is, until they started using indirect approaches themselves. Like Hannibal did in so many major battles, Douglas MacArthur employed a master-stroke of indirect strategy to keep the UN Forces in South Korea from being pushed off the Korean peninsula at the beginning of the Korean War.
A few months after the war started, the South Korean and UN forces had been pushed to the south-eastern end of the Korean peninsula at Pusan Province. MacArthur proposed and executed an indirect attack behind the lines of the North Koreans, far north of Pusan, on Korea’s western shore. The amphibious attack surprised the North Koreans and cut the North Korean Army south of Inchon off from supplies and personnel, ultimately causing the collapse of the North Korean forces in southern Korea. As with military strategy, direct, frontal attacks against other companies in business rarely succeed.
Unless your company is by far the largest in its business or has a strongly dominant sales channel, any direct attack against your competition is likely to fail. The old adage is that you need a 10:1 superiority over your competition to beat them head-to-head. My view is that unless you’re a Microsoft (fill in your favorite large company in your favorite market here – it used to be IBM for all examples), and, in Microsoft’s case, really only in operating systems and Office-like applications, it’s probably best to focus on indirect approaches when taking on competition.
So, rather than competing on features or performance, change the ground rules. Compete on price, distribution model, ease-of-use, accessibility, partnerships, integration, switching cost or similar. An example of this near and dear to my heart is the emergence of my first successful company, Viewlogic Systems (acquired by Synopsys, in 1997). One of the co-founders of Viewlogic was Sal Carcia, who initially led marketing and sales for the company. Sal was (and I’m sure still is) a brilliant marketing guy who had an innate sense for market dynamics and saw holes (read: opportunities) in the market very clearly and accurately.
In 1984, when we founded Viewlogic, EDA tools (software tools for Electronic Design Automation – electronics CAD tools) were turnkey systems bundled with big hardware. These systems were very expensive and most companies could only afford to buy one seat (one bundled unit) for every 10 to 20 engineers they employed. A ratio guaranteed to limit the productivity of the entire engineering group. Sal’s idea, which sounds so basic now, but keep in mind that PCs were new in 1981 and still pretty limited in 1984, was to bundle a complete EDA system with a PC for $10,000 per seat. About one tenth of what a competitor’s system sold for. 10K wasn’t just a random, lower figure, it was what Sal saw as the maximum we could charge without requiring the engineering manager (the customer) to get sign-off from upper management for the purchase. So, as a result of Sal’s strategy, Viewlogic sold to the engineering manager who made more local and faster decisions while our competition was selling to big corporate organizations with long sales cycle. Also, at $10K/seat. Engineering managers could equip each their of engineers with the EDA tools they needed, resulting in more productive groups that then promoted the tools to the rest of the organization.
In the end, most of Viewlogic’s tools were not revolutionary (some features were, of course, and we figured out how to mash a whole lotta functionality into 640KB of memory), but the packaging was a breakthrough, helping us reach a market previously unserved. As an added bonus, because of the anchor of hardware that the competition hauled with it, it couldn’t come down to fight with us in our space until it rewrote most of its software to likewise run on a PC. So, in the end, Viewlogic never tried to win by bettering the competition at what they were good at.
It took an indirect strategy of fighting the competition where it was weak and unprepared and unable to defend itself. This indirect approach was the key to Viewlogic’s initial success. Employing indirect strategies doesn’t mean that you need to change your end goal. It simply means that you need to change the way you approach the battle to achieve it. It’s much better to avoid being perceived as a threat to the big guys in the market or to escape their attention all together than it is to pound your chest and take them on head-to-head. They’re bigger, stronger, have more resources and more customers.
For the most part, they don’t need to be better than you to kick your ass. Let your ego go; be smart; attack at the intersection of where your competition is weak and customers perceive value. It’s not only about having a better product or service, it’s about the whole package – support, customer satisfaction, distribution, PR . . . everything. Direct strategies usually fail in business as they do in their military application. Don’t become another bump in the road for your competition, use an indirect approach to catch them off-guard and unprepared to respond to your threat. Next up . . .
Intelligence. Intelligence Among Webster’s definitions for intelligence, two primary ones directly apply to both military and business matters: 1) you need to be smart or, at least, be able to think and, 2) you need to have knowledge of what the enemy/competition knows and thinks. Main Entry: inA·telA·liA·gence Pronunciation: in-’te-l&-j&n(t)s Function: noun Etymology: Middle English, from Middle French, from Latinintelligentia, from intelligent-, intelligens intelligent • The ability to learn or understand or to deal with new or trying situations; also : the skilled use of reason.
The ability to apply knowledge to manipulate one’s environment or to think abstractly as measured by objective criteria. • Information concerning an enemy or possible enemy or an area; also : an agency engaged in obtaining such information. In military engagements, intelligence is often more important than the size of the force, how well it’s armed and who it is led by. A perfect example of this is in the military strategies employed by Mao Zedong as he led the Red Army in its 20+ year rebellion against theKuomintang government in China.
After the start of the rebellion, the Red Army, for the most part, got it’s butt kicked whenever and where-ever it engaged the vastly superior government army forces. For the most part, the Red Army was out-manned, had many fewer weapons and was isolated into parts of the country that made it difficult to get tactical advantage in widespread warfare. Recognizing his deficiencies, Mao turned to strategies that involved actively collecting intelligence about his opponent. He had spies throughout the government who gathered information about their plans and actions.
Perhaps even more importantly, he designated soldiers dressed in civilian clothing to be stationed throughout the country to monitor the movement of the government’s troops and supplies. By gathering this information and extracting trends from it, he learned what his opponent was doing and, over time, understood what type of moves that they made in response to his own. Ultimately, having this knowledge, Mao was able to gain the upper hand and to ultimately defeat the government troops, exiling Chiang Kai-Shek to Taiwan in 1949.
Prior to World War II, while most of the rest of the world was relatively ignorant to the value of keeping secrets, well . . . secret, the Germans invested heavily in cryptography. The efforts of the German government and military agencies to make sure that communications were secure resulted in the adoption of the Enigma Cipher machine – an electro-mechanical device that encoded and decoded messages. The German Navy, in particular, relied heavily on the secrecy of their communications and had the most complex Enigma machines and processes surrounding them.
It took years for Germany’s enemies to break the Enigma. The huge value in breaking the code was well understood, though, and a concerted effort was mounted to break to do so as part of the strategy to defeat the Germans. At first the Polish made headway, then the British took over the main effort. Through the work of a huge number of scientists and mathematicians, mostly stationed at the famous Bletchley Park in England, and a stolen Enigma machine here and there, the Allies were able to read many of the top-secret messages being sent by the Germans.
Using this information, the Allies were able to change their tactics and even much of their strategy in the battle of the Atlantic. Each action took on more significance with less effort. The knowledge of what the enemy was going to do let the Allies stay one step ahead and to focus their efforts on the singular end goal of winning battles, without having to spread their forces out too far. Now, I’m not suggesting that you engage in any kind of industrial espionage. Merely that knowing what your competition is up to is critical to your business or, at he very least, critical to how you run your business. Spies aren’t required. You just need to be aware. Your sales channel will be able to tell what’s going on (if it’s not a completely automated channel) and anyone that engages with your customers will discover what the competition is doing if they listen well. If you’re among the group of people that claims to have no competition – WAKE UP! Every business has at least one competitor, even if it’s the choice your customer has to keep doing what they’re doing.
The infinitely low barriers to entry in virtually all product or service areas these days also guarantees that you’ll have more competitors in the near future if your target market has any real value. There’s simply no excuse for not knowing what your current and emerging competition is up to. This knowledge not only helps you differentiate your product or service right out of the gate, but also helps you keep your costs lower because you waste less time with a more focused approach. Of course, no business that just focuses on what their competitors are doing is going to be successful.
True success can only come from using the other kind of intelligence – that which only comes from using your head. In my experience (and I’m at least as guilty as anyone I’ve ever known) there are too-many knee-jerk reactions in business. Managers often make quick decisions in a situation without extensive knowledge of what is really going on. In an environment where everything is moving fast, it’s a natural mistake to make. Additionally, the fear of the consequences of not answering a challenge or looking like one is in control often encourages half-baked reactions.
Every manager needs to keep in mind the value of looking before they leap. Or, as I like to think about it – responding instead of reacting. The difference between responding and reacting is thinking – one involves it, the other doesn’t. I know, I know, this is where you’re saying to yourself: “I don’t have time for long, drawn-out planning sessions. My business is go, go, go and if I slow down, I’m dead. ” In most cases, taking a step back, drawing some pictures on a white board, talking to a few people or getting together with your team to ponder the paths ahead only involves hours or perhaps a few days.
Not weeks and months. Of course, at times, it does take longer. In my experience, though, whatever it takes to make an informed (note that I say informed – not perfect or correct or even low-risk) decision on how to respond to the challenge that you face is worthwhile and will save you loads of time and energy later. Think about the situation, at least a little, then move. Don’t move slowly, but move deliberately. As with successful military campaigns, the more intelligence you have – both kinds – the more likely it is that you’ll set your business on the best possible path to success.
Increased knowledge of what your competition is up to and, more importantly, considered thought put in to your overall strategy and to any response to changes improves your likelihood of success while helping to reduce effort that might be wasted in areas unnecessary or even unrelated to the optimal path of the business Next up, the final installment in this series: Deception. Deception If you’re like me, you immediately question how deception can and should be applied to business.
In a business context, the concept of deception seems almost immoral or, at least, against the rules – if not the legal ones, at least the ones understood as part of business decorum, civility or fair play. Who wants to win by cheating, after all? There is little concern for such concepts in modern warfare (historically, much of warfare was conducted under a code of ethics – aside from the Geneva Convention rules, no such code exists today), however, where the goal is most often the physical destruction of the enemy. In battle, a commander’s trickery and deception can easily represent the difference between victory and death.
There are few better examples of this than the campaigns of Confederate General Thomas Jonathan “Stonewall” Jackson and his army during the Civil War in the US. Stonewall Jackson is widely considered as one most gifted tactical commanders in US history. His motto: “Mystify, mislead and Surprise. ” Early in the Civil War, during the infamous Valley Campaign, Jackson found his Army outmanned, outgunned and often, surrounded. After an initial tactical defeat in a relatively small battle, Jackson’s 17,000 troops soundly defeated the Union’s 60,000 man Army of the Potomac.
He accomplished this feat by constantly surprising the enemy, attacking its flanks, sneaking behind its lines and appearing like his forces were larger than they actually were. During the campaign, Jackson marched his troops almost 650 miles in 48 days to defeat and cause the retreat of a Union Army that outmanned him almost 4:1. Trickery and illusion were his key tactics in the Valley Campaign and he used them frequently in successive victories during the war and until his death in battle (from friendly fire) in 1863. Like Jackson before him, Erwin Rommel was a master of deception.
Even though Rommel was primarily a tank commander – relatively easy to detect and slow-moving – he often got the upper hand on his enemies by sneaking his tanks through dense forests or via indirect routes. Rommel is best known for his success during WWII’s North African Campaign where he consistently defeated the better armed and staffed British Army. His understanding of how the British tank command worked led him to implement the most important tactic to his success during the campaign – making the British believe that his forces were much greater than they were.
This, in turn, caused the British to split their forces, leaving many tanks in reserve (they conservatively never wanted to risk all their tanks in battle) and gave Rommel’s smaller force a far better chance at success. The deception turned out to be the key that initiated his victories. Rommel implemented this by making his tanks appear to be in locations where they were not. He would frequently have trucks drive in circles throughout the day in one area. The clouds of dust they kicked up would be so extreme that the British assumed that there were huge tank convoys preparing to entrench themselves for battle at that location.
In the mean time, Rommel, would move his active tank columns at night into flanking positions around the British. Rommel’s ability to deceive the British let his smaller and weaker force win battles for years in the desert. In a business world that thrives on communication and rewards the speed and quantity of information available, it’s difficult to see how deception might be used in a strategy leading to success. After all, anything you do to mislead your competition might mislead your customer as well.
There are a few uses of deception, however, that are commonly used and are valuable tools in the business strategy quiver: • Press releases as a defensive tool: Most often successfully employed by medium to large companies, a me-too press release announcing that your company has or will have some product, feature or service that your competitor just launched can effectively slow your competition’s sales process down until you actually have it. This is especially effective if you are already the perceived market leader in that particular segment.
Switching costs are, generally, high and current customers want to believe that you’ll continue to deliver the best stuff. Of course, this won’t hold your competition off forever, but it will allow you a bit of time to catch up. • Appearing bigger than you are as an offensive tool: Larger companies often prefer to purchase from established vendors. Of course, this depends on what you are selling and how much it costs, but it is generally true for anything even remotely mission critical or costing a lot.
Giving the world the impression that your company is larger or better established than you are can only help you in this environment. This can be done through advertising – small companies generally do little-to-none, big companies do a lot; large, highly visible displays at trade shows; success stories from large customers; focusing on implementation instead of just functions or features; and so forth. • Taking advantage of the reactionary nature of your competition: Companies tend to react without thinking instead of responding in a thoughtful, considered way.
You can take advantage of this by misleading your competition, when appropriate, in an effort to waste their time or defocus them. In the most basic case, you can entice them to spend energy in areas that are outside your main focus, giving you more lead time when you introduce your own new product or service. Keep in mind that when you implement strategies like this, you don’t get a bye on precise execution. You still have to execute well – if you can’t execute your company’s strategy better than your competition can execute on the same strategy, no amount of deception will help you.
Certainly, deception in the form of outright lying and cheating is a dead-end strategy. It might work out in the short term, but it’s going to get you in trouble in the long term. Defined a bit softer, though, as a method for manipulating or spinning reality (I know, I’m cutting this a bit thin, but you get the idea), it is almost as powerful a tool in business as it is in warfare and is one that can be employed to increase your opportunities for success.