Rating: 9/10 | Timeless Business Tactics

 

The Art of War has been praised by many successful CEOs for its timeless tactics. Some even read it once a year just because they know that their interpretation of it will be different depending on their current circumstances. I know what you are thinking, “what the heck does war have to with business?” Well, it has been said that “business is like a war without bullets.” I had heard this a few years ago and ordered The Art of War due to its great reputation. What really got me deep into military history and tactics was the Tim Ferris Show’s episode with Reid Hoffman and Michael McCullough.

 

Two of the most prodigious investors out there. Reid expresses the importance of studying tactics to learn how to outmaneuver the competition. Enough of the back story let’s get into my interpretation of the key tactics from this book. I will update this post every year with a time stamp. Just to record how my interpretation changes as I spend more time in the trenches. Being only a single person with limited time and experience my interpretation will be lacking. Some of the bullet points will not have any comment from me. Either because I couldn’t think of anything or it’s a repeat interpretation. I ask you to use the blogs comments section at the bottom and share your business interpretations of this text. Only legal tactics will be allowed, remember when it comes to business you play by the rules or lose your right to play at all.

 

Part 1: Laying the Plans

 

There are five governing factors of war:

 

  1. Moral Law – causes people to follow the leader to the death. If you look at many successful CEOs like Steve Jobs, Jeff Bezos, Bill Gates, Mark Zuckerburg, and Elon Musk. Part of the reason that they are so successful is that people want to be part of their journey and the grand mission. They are also very demanding leaders, the only reason why people put up with them is, because of their belief in the company.

 

  1. Heaven – night and day, cold and heat, times and seasons. To me, this was all about your surroundings. If you are not aware of your surroundings, you will never make it. In business, this is known as the blue and red ocean. Where the red ocean is very saturated with completion and the blue ocean is somewhat of an untapped market or niche. With the Internet and social media, it has gotten easier to compete in red oceans. By making personal connections with the audience as an individual, and not just a brand. Something that many corporations struggle with today.

 

  1. Earth – distance, terrain, danger and security, open ground and narrow passes, the chances of life and death. Again, we are still on surroundings, but this focuses more on your chances of survival. For example, is the barrier to entry in a specific market so high that the first mistake will put me out of business? Richard Branson calls this the silver line of staying profitable and going under. The next thing that came to mind was legal requirements. What tests must be passed for the company or product to exist?

 

  1. The commander – stands for virtues and wisdom, sincerity, benevolence, courage, and strictness. The leader must have intentions that others care about too. They must be knowledgeable in whatever business they are in. Mark Cuban states that you should research your business idea, to the point that you know more about it than anyone else.

 

  1. By method and discipline – the graduation of ranks among the officers, maintain the supply roads and control military expenditure. You have to give people something to work for. While at the same time making sure that they are in the right place regarding their abilities. Then make sure that you have a solid system for curating new promoters.
  • All five boil down to a disciplined force and knowing your environment and the enemy.

 

  • Have a counsel, this is bought up in Good to Great. Your counsel should respect each other and only analyze the facts.
  • Be ready to pivot. Steve Jobs asked Apple what business they were in. When the board responded PC’s, he told them that they would go out of business.
  • All warfare is based on deception, when ready to attack seem unable when near the enemy appear far away and vice versa. Keep a tight lid on proprietary information to make sure that the specifics of your companies next moves are not made public. Yes, that means you have to invest in cybersecurity and training.
  • Bait the enemy – temp your competition into marketing in the areas that you are the best at and have the larger following. This will waste their resources and make your company look good at the same time.
  • Evade those with superior strength or holding all of the key points. Modern strength revolves around money and attention. Don’t compete against billions of dollars, without testing out your niche and its ROI.
  • Irritate an enemy with a choleric temper, pretend to be weak to make them arrogant. This seems to be more relevant among influencers and certain CEO’s. The influencer would be easier to anger due to smaller counsel around them. Regardless these days it is best to not speak ill of others in public. It is one of those few things that will only have a negative ROI.
  • Don’t let the enemy rest and divide their forces. This applies to tech more than anything. Make sure that you are constantly improving and investing in the user experience.
  • Attack the unprepared. Prove that your company is keeping up with the times. A big one now is cybersecurity. Your either trustworthy or you’re not.
  • Make all necessary calculations before the battle. Research everything that you do. To make sure that you fail less and move as efficiently as possible.

 

Part 2: Waging War

 

  • Your soldiers and their weapons will eventually get dull. Celebrate victories and make sure that you give people the time off that they need.
  • Have the resources to fight a long battle. Make sure that you have a financial cushion instead of blowing that money on something stupid.
  • Long wars have no benefit. Don’t try to always one up the completion. Be the best at your core competencies and ignore everything else.
  • A skillful soldier does not equal a second levy and never carries more than 2 of everything. This depends on the individual. If the person cares about the mission they will work at it for as long as they possibly can, f*ck serving once. Next, your one thing will take years to achieve. Lastly, you must have a backup, but do not carry so much that it slows you down. This applies especially to data, why spend money on onsite backups? When you have AWS for a fraction of the price.
  • Bring extra supply and take the enemies. Make sure that your marketing budget is well spent with wiggle room and tap into the competitions traffic lines.
  • The state does not want to contribute to any war that is at a distance. This depends on the type of company that you have. In most cases, this can be overcome by getting the right people on the bus and scripting everything. As Starbucks has with other twenty-seven-thousand global locations.
  • An army at home will drain substance so use the enemy’s provisions. Ha-ha, this one was rough. All that I could think of was a sales team that isn’t producing or taking action.
  • Soldiers must be angered to kill the enemy then rewarded. Follow Tim Ferris’s advice and let people know that you trust them. This will increase their productivity. Then compare your company’s stats to the industry and celebrate outperforming the rest and hitting goals.
  • Great object equals victory not a lengthy campaign. Again, it depends on the context. Marketing campaigns, for example, can be long and brutal. On the other hand, creating something can be hurried. Bust a Henry Ford and lock a bunch of engineers in a room for a few months. Feeding them pizza and monsters under the door.

 

Part 3: Attack by Stratagem

 

  • It is better to capture than destroy. Why make the completion go out of business when you can buy them out? Look at Jeff Bezos and Zappos.
  • Supreme excellence is breaking the enemy resistance without fighting. Be so perfect that the competition does not even have a chance to compete.
  • Prevent junction of the enemy’s forces. Make sure that you get all the right contracts and channels of attention on your side.
  • Do not besiege walled cities. Don’t poke the giants. For example, trying to start a search engine in 2018 will be a waste of your life. Seriously Google is a verb!
  • If you outnumber the enemy by four times or more divide your army. Divide the company into smaller groups that work together and not against each other. The hardest part is making sure that the right information is moved up the hierarchy.
  • Don’t govern your army like a kingdom for each live under different conditions. People that are in business with family and friends call it having two modes. You have work mode and non-work mode. When working with loved ones and friends set a baseline of everyone’s duties. Let’s say that I start a company with a close friend. The first thing that I would do is have us both sign a contract that we will put in the same amount of work. Doing this will avoid drama and lost time.
  • Don’t command your army when they cannot obey you. If something hectic comes up like an influx of physical orders to ship. Everyone should know what they must do if you have the right people around you. Therefore, the extent of your orders in this situation should be minimal or non-existent.
  • Don’t employ officers without any discrimination. Read psychology books or hire a master’s in psychology to do your interviews for you. Everyone on the team must click if you want that modern fun to work at environment. For technical roles, make sure that you put people through multiple problem solving tests.

 

  • The 5 Essentials of Victory

 

  1. Know when to fight and when not to. #commonsense

 

  1. Know how to handle inferior and superior forces. There are a ton of random startups that can move the tectonic plates of any market. Make sure that you are aware of the competition. Regardless of how big or small your team is.

 

  1. The army is animated by the same spirit throughout all of the ranks. The companies culture should make sure that everyone performs and is appreciated.

 

  1. Be prepared to take the enemy when they are not. Value investing basics have reserves for when the sh*t hits the fan.

 

  1. Have military capacity not interfered with by the sovereign. Make sure that politics do not hinder the troops capacity. There is a saying that sh*t only rolls downhill. Make sure that your culture isn’t damaged by one executive having a bad day.

 

  • “Know yourself, and the enemy win every time, only know yourself and win every other battle, know neither and always fail.”

 

Part 4: Tactical Dispositions

 

  • Visualize defeat. Elon Musk, “only the paranoid survive.”
  • Secure ourselves against defeat, but the opportunity to defeat the enemy is probably provided by the enemy.
  • Win with ease. Win as quickly as possible while using as little resources as possible. Standard tools for this would be the 80/20 principle and six sigma.
  • Win battles by making no mistakes. Be perfect by double checking everything at least once.

 

Part 5: The Army on The March

 

  • Camp in high places facing the sun. Take strategic points with patents, influencers, and contracts.
  • Don’t climb heights to fight. Don’t waste resources.
  • After crossing the river get far away from it. Not making your position obvious is difficult due to the internet and similarweb.com. In that respect just focus on your quality.
  • While the enemy is crossing the river attack when half of the army has crossed.
  • Notice changes in the environment that could indicate the enemies position. Know the history concerning your business. While staying aware of where tech is taking all the attention.
  • When the enemy makes a move, they will make it appear as if they are doing the opposite.
  • A peace proposal with no sworn conviction is a plot. Make sure to put everything in writing and make contracts.
  • If the enemy sees an advantage and does not take it, its soldiers are exhausted.
  • Men whispering together in small knots or speaking in subdued tones points to dissatisfaction among the rank and file. Make sure that you maintain the company culture as it grows.
  • Don’t pick fights with enemies that are too big.
  • Enemies with compliments in their mouths want a truce.
  • If your and the enemies forces are equal watch the enemy and wait for reinforcements. When your competition is your equal, you must outwork them, “ten X baby.”
  • Discipline soldiers before they get attached to you. Do this to make sure that people do not get lazy just because they are “cool” with you.
  • Generals must show confidence in their orders for the men to obey. Confidence has always attracted people, it indicates perceived security in an uncertain future.

 

Part 6: Energy

 

  • Leading a large group is the same as leading a small one. Divide the total number of soldiers into smaller groups and institute signs and signals. When your system is properly automated people should not be able to question their role. Since everything is documented.
  • Indirect methods are needed for energy. Work smarter not harder.
  • There are only direct and indirect attacks together they make an endless series of maneuvers. It’s the same concept as chess you can always make a better mousetrap.
  • Quick and quality decisions are needed. If you truly know your business, this should not be a problem.
  • Make sure that your army is defeat proof in your absence. Again, document everything and have reliable generals.
  • Concealing courage under a show of timidity presupposes a fund of latent energy. Its ok to be the underdog. Just make sure that you dominate your niche.
  • Set bait to keep the enemy moving.
  • Pick the right men and utilize their combined energy and not the individuals. This will create a snowball effect of output.

 

Part 7: Weak & Strong Points

 

  • Arrive at the field first to be well rested when the enemy comes. First mover advantage is a double-edged sword that depends on the timing. But hey if you can pull it off, you will be a god.
  • Be well supplied to starve the enemy. Wisely re-invest the companies profits to give it the upper hand.
  • March where the enemy is not. Build your own bridge over a red ocean.
  • Only attack undefended places and only defend places that cannot be attacked. Avoid targeting the die-hard followers of your competition. This would be like Direct TV trying to take Comcast’s customers based off speed and quality. Furthermore, don’t fix it unless it’s broken.
  • Force the enemy out of a strong point by attacking a weak point that they will have to aid. Emerging economic markets would be a good example of this. Quality is another big one that you can use to differentiate yourself.
  • Find the enemies position without being located.
  • Compare the opposing army to your own to see their strengths and weaknesses.
  • Everyone can see the tactics for conquering but not the strategy for victory. Just like chess, you must be able to see five moves into the future in order to win.
  • Do not repeat tactics that have led to victory before. Fake news, if it works reuse the f*ck out of it.
  • Avoid what is strong by attacking the weak. You can buy out competition that is smaller than you. To secure your fragment of the market more tightly.
  • Warfare has no constant conditions. Nothing is predictable so always be ready for the worst.

 

Part 8: Maneuvering

 

  • Turn devious into the direct and misfortune into gain. Promote honesty in all areas of your life and business. Turning misfortune into gain is the right to passage of a true grandmaster, but in reality, all it is admitting to your faults and correcting them. For example, Facebook recently had a major data breach. So, what does Zuckerberg do? He goes on testifies in front of the whole world and he lays out a blueprint of what must be corrected to make Facebook more secure.
  • Take the long route if it gives you the upper hand. You can let others fail and learn from their mistakes.
  • Moving with an undisciplined army is dangerous. Most major corporations are doing this and don’t even know it. Most low-level workers at many companies spend half of their day dicking around instead of working. This lost productivity does cost money that’s why more and more companies are offering people money to quiet.
  • Don’t march for too long or the troops will not be able to fight. Not everyone is crazy enough to disregard their well being for an objective. Let people rest and make sure that they have great working conditions.
  • The army needs supply.
  • Analyze and understand whoever you go into alliances with. This is key regardless of the company’s size. When you’re starting out and tight on money there is no room for dead weight. If you grow to a medium or large business; hiring one person who is so entitled that they believe that they don’t have to put in as much work as everyone else. When this happens others, moral will change. Why is this person able to put in less work, but getting paid the same as me?
  • Leaders must know the environment, know the pitfalls and use local guides. Know everything about your market. Then hire others to cover your weaknesses.
  • Only concentrate or divide your troops if the circumstances call for it. As fires come up, you will have to pull people from their task at hand. Make sure that a detailed disaster recovery plan is set up, and that everyone knows their place in it.
  • When you move fall like thunder and use the dark of night as cover. Be so knowledgeable that you are always decisive in your decision making. Also, try to get the whole company in a constant state of flow through the culture.
  • Ponder and deliberate before you make a move.
  • Make sure that the mass understands that it is a unit, regardless of skill no separation. Make sure that both ends of the hierarchy can communicate with each other.
  • In the night use flares and drums to influence the enemy’s eyes and ears and in the day use flags and banners. Garry Vee says that you should have self-awareness on social media. Then be thoughtful of what you put in and on which channel.
  • An army can be robbed of spirit and a commander of his presence of mind. Remind your troops of the why and make them feel appreciated. Then have a counsil that makes sure that you are always aware of significant events, while you focus on the most important task.
  • Study moods and attack when the enemy is sluggish. It’s like a bear market when the competitions output is decreasing. Increase your output and marketing budget.
  • Studying circumstances – do not attack armies in a calm, confident and organized array. It is difficult to break a well-assembled system/competitor. The best thing to do in this case is copy what is relevant to you.
  • Do not follow an enemy that simulates flight, like the Genghis Khan and the Mongols. Who would run away to separate and ambush the enemy. PR is the only thing that comes to mind. A company could be pulling out of a PR campaign to launch something bigger else ware.
  • When you surround an enemy give them room to move and escape, so that you do not make them too desperate. I don’t think that this is the case in business. When Amazon took over they took over with no indecision.

 

Part 9: Variation in Tactics

 

  • There are certain key points that must not be attacked. Don’t publicly call out the competition on subjects that could blow back on you.

 

  • The five dangerous faults of a general:

 

  1. “Recklessness – which leads to destruction.

 

  1. Cowardice – which leads to capture.

 

  1. A temper that can be provoked by insults.

 

  1. A delicacy of honor which is sensitive to shame.

 

  1. Over-solicitude for his men, which exposes him to worry and trouble.”

 

 

Part 10: Terrain

 

  • Types of terrain

 

  1. Accessible ground – freely traversed by both sides, occupy high grounds first and guard your supply line. Markets that have a low to no barrier to entry are most Internet based companies. Make sure that you start collecting emails right away. While providing a ton of value to build trust.

 

  1. Entangling ground – abandoned ground that is hard to re-occupy. Don’t try to revive the dead, without testing the market first.

 

  1. Temporizing ground – neither side can make the first move. The cost to entry is so high or risky that no one will move. On the other hand, the greater the challenge the greater the reward for solving it.

 

  1. Narrow passes – occupy them first and make sure that they are strongly garrisoned. Own your niche by building a cult-like following.

 

  1. Precipitous heights – occupy high points and make the enemy come to you. Make your brand the go-to for removing x or gaining y pleasure.

 

  1. Positions at a great distance from the enemy – fighting a faraway enemy will be difficult and to your disadvantage. Study foreign markets and consult the locals before dipping your toes.

 

  • Six calamities that an army could face

 

  1. “Flight – caused by fighting an enemy ten times your size.

 

  1. Insubordination – caused by strong soldiers and weak officers.

 

  1. Collapse – weak soldiers and strong officers.

 

  1. Ruin – caused by angry officers giving commands in battle.

 

  1. Disorganization – weak general with no authority, gives unclear orders and lack of assigned duties and haphazardly formed ranks.

 

  1. Rout – fighting a larger enemy without having the strongest soldiers in the front.”

 

  • Make sure that sure that your generals have self-awareness and emotional intelligence. Make sure that your vanguard is full of the best and brightest. Like a flock of birds or drifting behind another car. The infantry will make everything easier for the rest.

 

  • Treat your soldiers like your children and they will stand with you till the death.
  • Make sure that you are always aware of the enemies standing and condition. You can learn a lot from your competition so be humble enough to study them.
  • An experienced soldier in motion is never bewildered. Make sure that everyone is well trained so that nothing catches them off guard.

 

Part 11: The Nine Situations

 

  1. Dispersive ground – fighting in your own territory.

 

  1. Facile – stepping into the edge of the enemy’s territory.

 

  1. Contentious ground – give advantages to both sides. Making alliances with the competition can have many benefits when possible. This is usually the case with small to medium size companies, like the two precursors of PayPal.

 

  1. Open ground – both sides have the liberty of movement.

 

  1. Ground of intersecting highways – has three contentious states that you must get to first.

 

  1. Serious ground – once the army has penetrated the heart of the enemy leaving fortified cities in the rear.

 

  1. Difficult ground – hard to traverse. For example, mountain forests, rugged steeps, marshes, and fens.

 

  1. Hemmed-in ground – narrow gorges that are difficult to travers, a small group can hold off many here.

 

  1. Desperate ground – we can only be saved from destruction by fighting with no delay.

 

  • “On dispersive ground fight not, on facile ground halt not, and on contentious ground attack not.”
  • Open ground does not block the enemy’s way on intersecting highways join hands with your allies.
  • On serious ground gather in plunder in difficult ground keep steadily on the march.
  • On hammed in ground resort to stratagem, on desperate ground fight.
  • Drive wedges in the front and rear to isolate weak segments of the enemy.
  • Create disorder in a united enemy.
  • Only move forward if it’s to your advantage.
  • Seize something that your opponent holds dear to bend them to your will.
  • Take advantage of the enemies unreadiness.
  • Facing death your soldiers will put forth their uttermost strength. The greater the challenge the more pumped up people will be to solve it. Even if it is for narcissistic reasons like proving to themselves that they are smart.
  • Making the best out of the strong and weak involves proper use of the ground.
  • The skillful general conducts his army just as though he were leading a single man willy-nilly by the hand. Creating an organizational system will make sure that no time is wasted in the communication processes.
  • A general must always have the courage to walk in to danger first. Lead by example.
  • Reward those who follow the rules and be willing and able to issue orders on the fly, to guide an army as if it were a single man.
  • Know the enemies purpose.

 

Part 12: The Attack by Fire

 

  • Five ways to use fire:
  1. Burn soldiers in their camp
  2. Burn stores
  3. Burn baggage trains
  4. Burn arsenals and magazines – you could buy out the competitions suppliers.
  5. Hurl dropping fire amongst the enemy

 

  • The five developments of using fire:

 

  1. When the fire breaks out attack at once.
  2. If the enemy stays quiet during the fire, don’t attack.
  3. Make sure that all attacks have been practiced.
  4. You can attack before the fire breaks out.
  5. Make sure that the wind does not blow the fire into your direction.
  • Only fight if you see an advantage and the position is critical.
  • Rulers shouldn’t put troops in the filed for self-gratification.
  • A dead kingdom can never come back into being.

 

Part 13: The Use of Spies

 

  • Most companies make you sign a contract that you will not disclose any proprietary information. Also stealing preoperatory data or spying on other companies is illegal. Making the last section obsolete.