Sun Tzu’s Art of War As A Model For Business Management

Sun Tzu’s Art Of War As A Model For Business Management

The responsibility of being a manager is not something to take lightly at any level of the command structure, whether you are a team leader, department head, store manager, regional manager, general manager or executive your importance to the success of a business is critical. A manager’s role is critical because it is they and they alone who must prepare, select and manage the metaphorical battlegrounds that the business is looking to engage in.

At this point many of you may be wondering what Sun Tzu, an ancient Chinese military general has to do with business management…Well his treatise The Art of War, has and is still regarded by many military and business figures as being critical reading material for those who have to manage people, change and overcome obstacles or challenges. The Art of War has been used countless times by influential business figures, writers and teachers to teach basic management skills and behaviors. Just a few examples of business books based off Sun Tzu’s teachings are:

  • Khoo Kheng-Hor’s, Sun Tzu & Management
  • Gerald A. Michaelson’s, Sun Tzu – The Art of War for Managers: 50 Strategic Rules Updated for Today’s Business
  • Mark R McNeilly’s, Sun Tzu and the Art of Business: Six Strategic Principles For Manages
  • Donald G. Krause’s, The Art of War for Executives: Ancient Knowledge For Today’s Business Professional.

Bearing that in mind we will now outline the five principles that any manager or business owner should follow whether they are at work or on the battlefield…

1. Capture your market without destroying it or yourself

Sun Tzu:Generally in war, the best policy is to take a state intact; to ruin it is inferior to this…Do not put a premium on killing. To capture the enemy’s army is better than to destroy it…For to win one hundred victories in one hundred battles is not the peak of skill, to subdue the enemy without fighting is the peak of skill”

Sun Tzu’s teaching is very clear that it is better to capture your market without having to destroy it or destroy yourself. The goal of any business should be to survive and prosper but to do this a company must aim to capture and secure a hold on their market. This means that the business must drive from the market or diminish their enemy’s role in it. Companies can do this in many different ways but some of them are:

  • Attacking under-served areas of the market.
  • Use marketing campaigns to draw a response from competitors that can then be countered quickly and effectively.
  • Enriching customer service or service quality to improve your market reputation.
  • Engaging more actively with social media and community marketing events.
  • Engaging in more detailed data analysis of the wants and desires of your target market to better isolate and capture your customers.

The most important thing about whatever method of approach you take to capturing your market is that it is not destructive. As Sun Tzu says “to subdue the enemy without fighting is the peak of skill” or in other words, it is better to capture your market through alternative methods than engaging your competitors in direct, aggressive price wars as it not only damages your own bottom line but as a whole reduces the profitability of your market. Where is the logical sense in seeking to destroy something artificially that you wish to possess? Sun Tzu’s teachings encourage business owners to think beyond the simple goal or result. He emphasises that sometimes the most direct solution is not always the best.

2. Avoid your competitor’s strength and attack their weakness

Sun Tzu: “An army may be likened to water, for just as flowing water avoids the heights and hastens to the lowlands, so an army should avoid strength and strike at weakness”

This quote is perhaps the most easily understood of all those featured within this article because it counters the prevalent business idea that the only way to defeat your competitor is to take away his primary income. Sun Tzu is saying that armies or in our case businesses should not target where their competitor is strongest but in fact where they are weakest. To give a real world example. If you owned a travel agency and your nearest competitor was one of the strongest of your peers in their airline sales due to their huge discounting and extensive corporate flight networks, you would be better off targeting and stripping away their large but weaker (more highly priced) car rental packages as a point of attack. To try to compete with their discounting would diminish the profit of the flights for both businesses and also force you to outlay large amounts of capital to cover the discounts. Whereas the car rental packages you offer are already cheaper so you would just have to invest the time to develop an effective marketing campaign to pull clients away from your competitor.

Sun Tzu’s logic regarding attacking a competitor’s weakest point taps into the idea behind the ancient Chinese torture Lingchi or “Death by a thousand cuts”. While destroying your opponent’s largest business area would effectively defeat them, at what cost to you and the market would this occur? Stripping away all of the smaller and seemingly insignificant other business areas will cripple their business just as surely as a thousand small cuts would eventually kill your enemy. It is these considerations of strategy and end goal that a manager must consider.

3. Use Foreknowledge and deception to maximise the power of business intelligence

Sun Tzu: “Know the enemy and know yourself; in a hundred battles you will never be in peril”

This lesson from Sun Tzu is all about knowledge or as we would call it in the modern business environment…data. Any business that wishes to overcome their competitors and truly dominate and understand their business environment must make data driven systems and approaches a focal point of their business. For some businesses this will be collecting customer data, analysing sales figures from specific campaigns or assessing staff conversion rates. That being said other businesses and managers; those truly wishing to be victorious and increase their profits might look at more advanced analytics, modelling and industry wide benchmarking or even predictive analytics for their marketing or purchasing campaigns. Every manager must know that knowledge is power and increased power for the savvy business owner or manager results in increased profits.

For more information regarding financial benchmarking, dashboards or setting up more advanced analytics please feel free to contact us.
4. Use speed and preparation to swiftly overcome the competition

Sun Tzu: “To rely on rustics and not prepare is the greatest of crimes; to be prepared beforehand for any contingency is the greatest of virtues”

This lesson ties directly into the previous lesson because for a manager to effectively take advantage of “foreknowledge” (Data) you must make your business into one that can exploit an opportunity or weakness; efficiently and quickly. In essence what Sun Tzu is saying is that business managers must aim to have their company’s well planned and agile in order to quickly react to sudden opportunities in the marketplace while also ensuring that the business has a long term vision that is well thought out and planned in advance. Ensuring that your company uses agile project planning methodologies could be the difference between making money and losing money.

There will be an article in the coming months covering the agile project management methodology.

5. Develop your character as a leader to maximise the potential of your employees

Sun Tzu: “When one treats people with benevolence, justice and righteousness, and reposes confidence in them, the army will be united in mind and all will be happy to serve their leaders”

A truly great leader who can develop and showcase these strategic concepts will maximise the potential of their employees. Sun Tzu is saying that a manager’s job is not only to demand the best from their staff but also from themselves. To do this a manager should first and foremost be reflective on their own duty and should always aim to be “first in the toils and fatigues of the army (workforce)” or in other words always be willing to work as hard as or harder than any of your staff. There should never be a job that you delegate that you, yourself wouldn’t be willing to do. Sun Tzu says that the leaders that truly inspire their troops (employees) place their own needs, ego and concerns behind those of their employees. A leader must in essence be exactly that, a guiding force from the front rather than a looming figure overlooking his or her staff.

The ideal character of an inspirational leader Sun Tzu characterizes as someone who is wise, consistent, honest, humane and courageous while also being strict.

So in summary while this article may not be showing particularly innovative managing approaches it is important to remember that sometimes to move forward we must first look at the past to understand the foundation of future action. Sun Tzu’s management concepts are timeless and if applied correctly can help managers increase their businesses profitability and their own professional practice.