In Business as in War, Offense Is Essential to Victory

Posted: July 6, 2010 in Uncategorized
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The best form of defense is attack.

Clausewitz

Offense is about gaining and keeping the initiative. It’s as much a state of mind as a state of fact.

When you go on the defensive, you willingly give the initiative to the enemy. You can pick your ground and fortify your position, which confers a marked advantage to the defense (at least three times stronger than the offense). But then the attacker has the choice of time and place to make his moves.

Nobody ever won a war by hunkering down and staying on the defensive. At most, one can avoid losing, but that is not a very favorable outcome.

Great Britain and France declared war on Germany almost immediately after the invasion of Poland on 1 September 1939. The British sent a rather small expeditionary force across the Channel to help defend northern France and the Low Countries, while France had the largest and most technologically advanced army in Europe. They could have invaded Germany on their vulnerable western flank, but they instead chose to stay on the strategic defense in the hope that the war wouldn’t escalate. Apart from some air raids, they just waited. The Germans called this sitzkrieg or “sitting” war, while in English it is known as the “Phony War.” This gave Germany time to consolidate its victory over Poland and to invade Norway and Denmark in April 1940. This was followed by the German invasion of the Low Countries and France in May, which led to their defeat and occupation. The western allies were almost completely passive in facing Germany, and the latter had full initiative to strike at the time and place of their choosing. This is why the German victory in the West in 1940 was so complete and so psychologically overwhelming.

Gaining and Keeping the Initiative

How do you gain and keep the initiative in business?

  • Stay on the move. The natural movement is toward a deterioration of competitive position. For instance, a breakthrough product will eventually have imitators and become merely distinctive within the pack. By extension, a product that is distinctive or merely competitive will eventually become uncompetitive. Products and services must be constantly updated to stay ahead of the competition. This requires energy, resolve, and initiative, qualities that are crucial to maintaining a winning and offensive mindset.

Lee Iacocca took the helm of Chrysler Corporation in the late 70s after the US government saved the company. He had to do something symbolic to go back on the offensive. Despite market research that showed little interest in a convertible, he ordered his engineers to cut the roof off a New Yorker and to make a prototype convertible he could drive around. The reaction from onlookers was immediate and very positive, so he decided to go ahead with a new line of convertibles, thereby reinvigorating those brands and the reputation of the company. The highly successful introduction or the minivan, a category buster that combined the size of the station wagon with the comfort and space of a van, all on a car chassis, followed this. It was so successful that imitations started pouring out of the competition. Unfortunately, Chrysler was not able to sustain this level of innovation over time and has declined – almost to oblivion – since then.

  • Maintain your freedom of action. Freedom of action is the ability to reorient your forces to take advantage of a fleeting opportunity or to react to a move by the competition. In practice, you have to have substantial financial reserves or the ability to down tools in one area and tool up quickly in another. I’m convinced this is why all the technology leaders (Apple, Intel, Microsoft, Google) maintain huge cash reserves. They want to stay at the forefront of their respective markets so they purposely keep large reserves to move fast.
  • Do the unexpected. There is no better way to gain and keep the initiative than to do the unexpected. In business, this can mean introducing a new product when your competitors least expect it, or launching a surprise takeover of a competitor.
  • Get there first. The best way to do this is to break up or redefine categories and expectations. Apple has raised this to an art form: all-in-one computers (iMac), iPod, iTunes, iPhone, App Store, and now the iPad. Another good illustration is provided with Bombardier Aerospace. The company practically invented the regional jet, a smaller commuter jet that took advantage of the airlines’ trend to hub-and-spoke service. They have maintained their advance in that segment since the beginning and are trying a repeat over longer haul routes with the introduction of the C Series, a new category between regional jets and small jetliners such as the 737 and A320.
  • Pit strengths against weaknesses. Strengths and weaknesses create the greatest vulnerabilities in companies and consequently provide great opportunities for competitors. This is why, for instance, high price fashion boutiques can continue to exist in the face of massive price competition by high volume retailers. The latter can’t provide cachet, attentive service, and cutting edge fashion statements so the boutiques use their unique strength, small size and personal service, to stay relevant and competitive.
  • Move fast. Don’t wait for perfection and don’t dither. Introduce a new product or service when it’s 80 percent ready and then upgrade it constantly. For the longest time, Microsoft Windows was considered an inferior operating system (some would contend it still is). But that didn’t stop the company from completely dominating the PC market. I believe they were successful because they were extremely fast in getting the product to market, even though it was far from perfect. They would then fix it and upgrade it. Had they waited for perfection, they never would have grown to the almost complete market domination they had in the late 90s.
  • Use defense wisely. Once you’ve gained an advantage, you can go on the defensive temporarily to consolidate your advance or to buy time. We will cover this in more detail in a forthcoming post.

© 2010 Richard Martin. Reproduction and quotes permitted with proper attribution.

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