- Some people, when I wax
eloquent about "The Art of War" say reading that is not
as good as doing an MBA. And I would say, it's a
bit of apples and oranges. I think it's this broad
philosophical book that MBA students would be well advised to take on and read in business school and say, "If I step back from that, could I get a better
perspective on how to use this?" The great military strategists, the Sun Tzus and the von Clausewitzs, head away of conceptualizing the competition between forces. They saw the best result of military strategy is not having a war. Strategy in business is a
relatively new enterprise. It really only came into existence in the late 50s, early 60s, and it was an offshoot
of military strategy. People think business and
war is all about the numbers, and analyzing everything, and quantifying everything- and it's not. In military strategy, they're really two actors
that attention was paid to: One is ourselves. How strong is our army? What resources do we have to to fight? And then competition, our enemy. How strong are they? What resources do they have? And so, we'll decide strategy
on the basis of the company, or in that case, the country. But in business, the company and the competitor. Sun Tzu, a Chinese general/philosopher who wrote one of the
most influential books on war called "The Art of War"- he wanted to get in behind
the mechanics of war to talk more about the philosophy. And I think that's why it's
had the staying power it has because nothing about the
world really has changed from that deeper philosophical sense. Even though the world has evolved, the equipment used in war, but the philosophy, I think, behind it has remained constant
for the many centuries. One thing Sun Tzu said was: "The supreme art of war is to subdue the enemy without fighting." Having the unnecessary carnage in war, the actual killing of people or in business, the
unnecessary destruction of kind of monetary assets in people's lives and careers- that's not the object of war. The object of war should be to try and make sure that you have an outcome that is sustainable. If the object of war is
to crush somebody else in a way that makes them hate you forever, guess what they'll do? They will hate you forever. So you express your business strategy in a way that causes
potential competitors to say, "I'm gonna compete elsewhere," and hopefully they'll
succeed elsewhere, right? That's the perfect strategy, so that you won't get into wars, they won't attack you. "There's no instance
of a nation benefiting from prolonged warfare." On what playing field or if you like military
strategy, battlefield, are you going to play and where not? And then on that playing field, how are you going to be the best? How are you going to win? You only want to engage in competitions where you can create a win without creating a loser who will keep on attacking you. Ask yourself, "What can I uniquely do for a particular set of customers?" "Would-be competitors will
choose to do something else because I do that thing better." That is not a prolonged war. If you do it right,
it's a prolonged peace. "When you surround an army, leave an outlet free. Do not press a desperate foe too hard." You either have to absolutely eliminate, entirely, a competitor, or give it a chance to
find another place to play. You can create for them an escape road to a different part of the market, a different segment. But you've shown them that in your target customer set, you are the best, and they can't just come into that place and do whatever they want. "Treat your men as you
would your own beloved sons. And they will follow you
into the deepest valley." A challenge in the modern
corporation, right? 'Cause many of them get very big. And you can think of your employees as
pawns in a bigger game, and if you lose a few, so be it. A challenge for anybody
who's a military commander or a business leader is that they pay very little attention to what you say. They pay attention like
a hawk to what you do. So if you say, "Oh, we're a family, you're like my son," and "Oh, we have too many of you, and we're gonna lay off a couple thousand of you." Say, "Oh, so that's what
you do with family members? You fire them?" That's why the disengagement
scores in business these days are dreadful. They're terrible! And I believe it's because
senior managers are not listening to Sun Tzu and saying, "Each of my employees, I need to treat as if they were members of your family." And they will be creative for you. They will treat the
customer exactly the way you wished they treated them. They'll develop the
people underneath them. They'll do all of these
things that are done for love, not because somebody
commanded them to do it. In due course, what was recognized in
the world of business strategy is that there's a
third super important actor- and that is the customer. And so you had to have a tripartite view, which is there's things that are important about the company, there's things that are
important about our competitors, and there's things that are
important about customers- and that was a problem with
early business strategy. It didn't pay much
attention to the customer, but over the last 40 years, getting more and more intimate and knowledgeable about customers, and really finding ways
to serve them better has become a more
integral part of strategy. And that's one of the
reasons why in the world of business now, design has become very important because design is a field that focuses very much on the customer. And that's why I've spent some of my time in forging a bond between the world of strategy
and the world of design, because the world of design
has the best training in understanding customers and creating offers for them. It's really weak in understanding the
company and competition; it doesn't pay attention to that. That's more the world of
business strategy, historically. And so if you meld those two together, business strategy and design, you get absolutely the most powerful way of creating fantastic, winning
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