Business Lessons From A 5th Century Military Strategist
How the teachings of Sun Tzu’s ‘The Art of War’ can perfect your business strategy.
It was my first business strategy lecture. It started as any other lecture would — a brief introduction, some learning outcomes, the module assessment — but then came the recommended readings; The Art of War by Sun Tzu.
The first book on the list, prime spot, placed even before the lecturer’s own textbook. Having heard of it before, I was fairly confused. Why were we being told to study a 2,400-year-old Chinese military treatise for a class on planning for a successful business in today’s world? But then I read it.
There’s a reason Sun Tzu’s was an incredibly successful leader — he was an exceptional tactician. The lessons he teaches in The Art of War are timeless and hold relevant advice for entrepreneurs throughout every stage of their business venture.
I have compiled a list of a few of the lessons I found to be most beneficial and how they apply to contemporary society.
Know your environment
“If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven and know Earth, you may make your victory complete.”
The environment is what gives your business its means of survival. However, it can also lead to its demise. Therefore, having a full understanding of your business environment is essential for success.
However, the environment goes beyond just your competitors (‘the enemy’) — they’re merely one layer. Encompassing all of your business’s environment is the macro-environment (‘Heaven’) and then there is your industry (‘Earth’). Failure to analyse each of these layers gives you no basis for planning.
“The art of war, then, is governed by five constant factors, to be taken into account in one’s deliberations, when seeking to determine the conditions obtaining in the field. These are: (1) The Moral Law; (2) Heaven; (3) Earth; (4) The Commander; (5) Method and discipline.”
In a contemporary setting, there are numerous frameworks you can use to understand your environment — such as performing a PESTEL analysis to analyse the macro-environmental factors or looking at Porter’s Five Forces to assess the industry. But regardless of how you decide to go about analysing your environment — make sure you know it and know it well.
Gain and sustain competitive advantage through your capabilities
“Concentrate your energy and hoard your strength.”
What is it that makes one competitor superior to another? It is how they use their capabilities — their resources and competences.
Through focusing your energy into your strengths, you can use them to overcome your weaknesses, gain from opportunities and protect from threats.
In other words, by performing a SWOT analysis you can identify what you’re good at and concentrate on that in order to gain competitive advantage.
Have a clear and defined purpose
“There are not more than five musical notes, yet the combinations of these five give rise to more melodies than can ever be heard.
There are not more than five primary colours, yet in combination they produce more hues than can ever been seen.
There are not more than five cardinal tastes, yet combinations of them yield more flavours than can ever be tasted.”
What makes your business unique is its purpose. Without a purpose, your business has no identity.
Your purpose is the combination of your values, vision, objectives and mission. The specific combination of these is what makes your business stand out and gives it shape. How you plan, how you act, everything should revolve around your purpose.
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win”
Without a clear and defined purpose, you simply can’t win — you have no direction, you have nothing to achieve. The reason successful businesses are successful is that they have a reason.
Take IKEA for example; their purpose is to create a better everyday life for people by offering a wide range of well-designed, functional home furnishing products at accessible prices. It’s the direction that their purpose has given them which sets them apart from other furniture stores. They know what they want to do and how they want to do it. They have their values and objectives clearly established. Without these elements, they wouldn’t be able to actually formulate a strategy — and we all know when you fail to plan, you plan to fail.
Be adaptable and continuously monitor your strategy
“Victory in war is not repetitious but adapts in form endlessly”
Your business has to be able to adapt to new innovations, different trends, legal requirements and so many other variable factors. Therefore, it’s essential to always monitor your strategy so that you can act quickly when you see that it’s failing to adapt.
“Do not repeat the tactics which have gained you one victory, but let your methods be regulated by the infinite variety of circumstances.”
Long-term success doesn’t come from a continuously implemented static strategy — it comes from one that’s flexible and can adjust to changes. In order for your business to be resilient, it must be aware of changes and be able to act on them.
Have a strong sense of culture throughout your company
“Treat your men as you would your own beloved sons. And they will follow you into the deepest valley.”
Your business’s culture is its taken-for-granted assumptions and behaviours that are shared within a particular group — be it your customers, your employees, whoever. Your culture defines how people act and respond to your business.
It’s essential to have an understanding of your business’s culture and to know how to manage it so that it can have a positive influence. When you manage your business’s culture correctly, even in difficult times your people will stand by you. The more integrated they are with the culture, the more invested they’ll be invested in the business’s success.
Don’t aim to destroy competitors, aim to create value
“The supreme art of war is to subdue the enemy without fighting.”
You shouldn’t go into an industry with the intention of beating your rivals, you should go in with the intention of earning a profit. By aiming to destroy your competitors, take over the market and be number one you often end up engaging in a zero-sum competition which, over time, erodes the market.
“The greatest victory is that which requires no battle.”
Whereas when you aim to be unique and create value for your customers, you won’t need to engage in destructive competitive practices. You win by earning a profit through your product.
To summarise, the most valuable lessons I learnt through The Art of War are;
- Know your environment
- Gain and sustain competitive advantage through your capabilities
- Have a clear and defined purpose
- Be adaptable and continuously monitor your strategy
- Have a strong sense of culture throughout your company
- Don’t aim to destroy competitors, aim to create value
With that being said, Sun Tzu offers many other valuable insights that I haven’t even touched on — it’s no surprise that The Art of War continues to be referred to, despite being thousands of years old.
It’s truly an essential read and perfect companion for anyone looking to succeed on the business battlefield.
