Military tactics are like unto water; for water in its natural course runs away from high places and hastens downwards. So in war, the way is to avoid what is strong and to strike at what is weak. Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions.

Sun Tzu

This quote by Sun Tzu can be interpreted to mean many things, but in its essence, it describes wonderfully the fact that military success is usually a function of following the path of least resistance and reinforcing success. Just as water finds the lowest point and eventually works its way around all obstacles, a well-led army will avoid hard defenses and obstacles and seek the weakest points in the enemy’s line.

Reinforcing success

An attacking force sends out a vanguard and reconnaissance elements to find the weaknesses in the defender’s dispositions. Once these are identified, the main body can follow along and squeeze between the defender’s strong points, thus avoiding costly frontal assaults. The aim is to get around the main defenses and to threaten vital lines of communication and objectives in depth. By doing so, the attacker hopes that the defender will abandon his fortifications and thus the advantage of holding ground. The idea is to find the weak spots and reinforce successful penetrations of the defenses.

In business, companies often expend resources trying to emulate competing products and services when they should be developing their own unique value instead. There is an even more frequent propensity to reinforce failure and to continue investing in losing propositions, whereas successes go unrewarded or unreinforced. This is analogous to frontal assaults on enemy strong points while weak points go unexploited. It is a sure recipe for long-term underperformance.

Example: King Henry III of England soundly defeated the French Army at Crécy in August 1346. But rather than pursue the disorganized French with a view to destroying them, they sat on their victory and gave a chance to the French king to reconstitute his forces to fight another day. Interestingly, the English owed their victory to French obstinacy and the foolhardiness of repeated knightly charges against their center, allowing the English long bowmen to massacre them at a distance from the flanks, while the dismounted English knights and infantry stood their ground in the middle. If the French had instead gone around the English position at Crécy to attack their lines of communication back to the Channel ports, the medium term result would no doubt have been very different.

Peter Drucker identified unexpected successes and failures as rich sources of innovation. He also propounded reinforcing strengths as the road to business success. What are some of the principles for avoiding obstacles and reinforcing successes in business?

  • Avoid difficult terrain. Defenders tend to base their fortifications and obstacles on major geographic features, such as watercourses, wooded areas, built up areas, mountainous terrain. This is what the English did at Crécy. It is analogous to business models that are based on various forms of exclusivity, such as patents, long-term service contracts with customers, dependence on replacement parts, territorial monopolies, etc. These practices make it difficult to break into an existing market where strong relationships already exist between company and customer.
  • Divest from repeated failure. Trying to compete directly against a well-established competitor with a “me too” product or service is analogous to attempting a frontal assault against a well-entrenched defender. It will be costly and most probably lead to failure. Even worse is continuing to pour resources into a losing proposition, like the French at Crécy. This is like Microsoft’s repeated attempts to develop its own search engine and social networking services, at the cost of billions. They work reasonably well, and may even be better than the competition’s, but they are attacking established services, such as Google and Facebook.
  • Beware of complacency. An old saw in the military is that a fast advance with little enemy resistance might be a sign of an impending ambush. In other words, the enemy might be deliberately drawing you in the better to hit you when you least expect it and when you’re most likely overextended. By the same token, fast progress in business can be a sign of true success, but it could also be a sign of danger. For instance, a new technology will probably attract early adopters, many of whom are technophiles. They might adopt the technology enthusiastically, but they are not necessarily representative of the bulk of users, which should be the focus in most cases. It is therefore prudent to use this initial success to bolster a new product category, while remaining cognizant of the desires and needs of the wider market.

 

  • Exploit successes. Throughout history, military commanders have been faulted most often for failing to exploit enemy weaknesses and reinforcing their own successes, just as the English failed to exploit their massive victory at Crécy with a pursuit. Unfortunately, this is easier said than done. The challenge is to distinguish real failure from temporary setback, and, just as in the previous point, a major success from a momentary or small one. The best way is to experiment and to try different things, being careful to monitor cause and effect. This is why many companies maintain many small investments in various technologies and approaches, watching and waiting to see what will stick and what will fall by the wayside. When they see a success, they invest in it to see how far they can get, even to the point of adjusting their overall strategy and business model.

 

Questions

  1. Is there an area where your competition has no presence? Are there markets that are underserved, either because customers are unaware of their needs or because you could create new ones?
  2. Conversely, are their areas that are well served by your competitors? Do they have a marked advantage in those markets or could you easily penetrate their territory with improved products or services?
  3. Have you been failing repeatedly with a new product or market despite sustained effort and huge investment in resources? What would be the effect of divesting yourself of this approach?
  4. Are you maintaining products or staying in markets because of pigheadedness, or because you can truly win with them?
  5. Do you have raging successes that you have ignored because they didn’t “fit” your ideas of the business or strategy? What about more obscure successes within your business?
  6. What would it take to elevate these unexpected successes to replace the repeated failures? Can you transfer resources from the latter to the former?
  7. Do you have a systematic approach to experimenting with new products, markets, processes, and business models? Are you open to change or do you stick to your knitting in the face of contrary evidence?
  8. Do you reinforce successes cautiously while staying on the lookout for signs of danger and competitive threats?

 

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

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