PART 3 of 4 considers the principles developed by Sun Tzu for dealing with business rivals and follows on from part one which looked at qualities of successful leaders, and part two considered the principles for organising your business affairs.
I have summarised Sun Tzu’s principles into four simple categories:
- Qualities of a successful leader;
- Organising your business affairs;
- Dealing with rivals; and
- Strategies for effective leadership.
3. Dealing with rivals
3.1 Employ experts and consultants
When operating in a foreign country it is important to seek the advice of local experts so that you can best take advantage of local laws and natural advantages. When operating in an unfamiliar industry, employ consultants to provide specialized knowledge on the industry and the competition.
Know your [competition], know yourself and you can fight a hundred battles without disaster…
3.2 Use spying, deception and bluff
Donald Krause, consultant and author of The Art of War for Executives, believes that people whose scruples do not include spying and appropriate levels of deception will not be very successful in business or politics.
Spies are a most important element in [business], because on them depends a [company]’s ability to [act].
Do not publicly release definite business plans.
The spot where we intend to fight must not be made known for then the enemy will have to prepare against a possible attack at several different points.
Release confusing, incorrect or contradictory reports to the media. Your competitors will not know what you are planning to do, and they will not be able to prepare accordingly.
All [business] is based on deception…when able to [release a new product], we must seem unable; when using [much energy], we must seem inactive…If your [competitor] is of choleric temper, seek to irritate him. Pretend to be weak, that he may grow arrogant.
3.3 Understand the motivation of your allies
We cannot enter into alliance with [other companies] until we are acquainted with their designs.
3.4 Attack your competitor’s reputation
Donald Krause, author of The Art of War for Executives, says “…personal attacks are frequently used in business situations when more logical methods might fail. The person using the personal attack tactic is usually the one operating from the weaker position. Personal attacks are particularly effective in environments where performance is subordinated to personality. … I have found that Sun Tzu’s description of the ideal circumstances for a personal attack, as I interpreted the fire attack section, work excellently in real life.”
3.5 Poach customers and employees
Poaching a highly trained senior employee from one of your competitors is equivalent to training twenty of your own. Some of your juniors will leave you, some will prove useless, and some will be unsuccessful for other reasons. You will need to train ten juniors in order to create one senior employee; your competitor must do the same.
…a wise general makes a point of foraging on the enemy. One cartload of the enemy’s provisions is equivalent to twenty of one’s own, and likewise a single picul of his provender is equivalent to twenty from one’s own store…Because twenty cartloads will be consumed in the process of transporting one cartload to the front.