War & Business Strategies

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War & Business Strategy Understanding Founda4ons and Drawing Parallels

By a show of hands, how many of you believe that military and business strategy are the same?

Understanding the Similari0es

In the world of business, we regularly hear phrases like “we have won the baDle for industry leadership,” “we have successfully defended our market posi4on,” or “we have made a killing in the stock market”

These phrases use military terminology to express business successes, but is that where the rela4onship ends?

Both the military and business are concerned with compe44on and how to succeed in the face of determined adversaries.

In one case, there is physical survival; in the other, there is commercial survival.

Both use a mental ac4vity which seeks to iden4fy a way of winning, and each defines this process as “strategy.”

In each case, resources – physical, human and moral – are applied at cri4cal points in an aDempt to achieve the aim.

Between 500 – 600 BC, Sun Tzu, a great Chinese General, began wri4ng his volume on military strategy called the Art of War.

Sun Tzu proposed that the most successful general was one that could win before the figh4ng has to start (deterrence); that superior manpower, posi4on, technology and so on would prevail (competitive advantage); and to avoid what is strong (indirect approach).

Heads of State also used military strategy to ensure that their na4ons survived or to minimize the affects of aggressive moves by compe4tors.

This strategy is conducted on a world stage and can result in the loss of lives, will involve vast sums of money, and will influence the progress of human history.

This type of strategy is known as a Grand Strategy.

An example of grand strategy is the conquest of India, but the way this is achieved also requires a means, method and a plan.

This is where strategy changes to tac4cs.

BaDalion commanders will develop a “strategy” to conquer the enemy, but the Corps Commanders will look at these at “tac4cs.”

Strategy is the theory of the use of combats for the object of war. Tac*cs is the theory of the use of military forces in combat.

Differences Between Military and Business Strategy

Many people who study strategy have tried to disprove the link between military and business strategy…

This is not possible to do for a number of reasons…

First, there was no such thing as business strategy prior to the 1960s. Before that, all strategy was considered military strategy.

In the military, ge;ng results is as easy as giving orders. It’s not that simple in civilian life.

We believe that ge_ng results is as easy (or as difficult) as giving the right orders, whether in the military or in business.

Making the right decision and building a team to execute the decision is a challenge for a leader.

In both spheres, the leader must act through people.

As a business person, I have to make a profit. In the military, you don’t have to face that pressure.

While we agree, the military does not face the same kind of boDom line pressures that business face.

The pressure that all of our organiza4ons face is pressure to perform, to succeed and to win.

In today’s world, with poli4cal demands for accountability and efficiency, the military has been forced to reduce its costs and improve its produc4vity as surely as any private enterprise.

In business, I have to struggle, get and keep customers, but the military is a public ins0tu0on – you don’t have to go out and find customers.

In a sense, Pakistan’s ci4zens are the military’s customers and they are in no danger of losing them.

The danger is in failing them on the baDlefield. In that sense, compe44on is at the core of the military’s existence.

Strategy

We were taught in business school that – good strategy does not recognize the concept of victory.

Strategy is the way to gain advantage in the current circumstances and as far ahead as it is possible to look, but retain the understanding that adjustment may have to be made.

As I men4oned previously, business strategy did not emerge un4l the 1960s, so the concept of strategy was started by the military and later adopted by the business world.

Understanding the Origins of Strategy

The word strategy comes from two Greek words – stratos (army) and agein (to lead) – which means “art of the general.”

The reason for telling you this is not just to show you where the word comes from, but that it has been around since 500 BC.

In 508 BC, in the great city of Athens, ten tribal divisions were formed, each headed by an elected strategos.

The crea4on of a strategos showed the increase in the military decision-‐making process and the complexity that came with it.

Warfare had evolved to the point where winning sides no longer relied on the deeds of heroic individuals but on the co-‐ordina4on of many different units of men figh4ng in close forma4on.

Strategoi were not only selected for their wisdom, but were also required to have first-‐hand experience in baDle.

They also required vision, ar4cula4on and communicate it to the people.

In 338 BC, Philip of Macedon and his son Alexander the Great gained victory in the baDle of Chaeronea…

Many of us use this baDle to draw parallels with current management concepts…

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The Parallels Ø  Philip and Alexander had very clear goals in the baDle Ø  They used an indirect approach Ø  They used decep4on Ø  They had a well-‐developed con4ngency plan Ø  They exploited their top-‐down command structure against a

Greek military that relied on the more difficult democra4c system

Ø  They analyzed their strengths and weaknesses, and used their strengths to offset their weaknesses

Ø  They aDacked their opponent’s weaknesses Ø  They concentrated their forces at the cri4cal points

This evidence shows that strategic thinking by the Macedonians to achieve superiority over the larger Greek forces.

Sun Tzu’s Art of War was the first wriDen document on the principles of strategy, and his declara4ons have been quoted in recent years in the business context…

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The Art of War Taught Ø  Stressed the value of planning Ø  Recognized the value of 4ming Ø  Explained that war was a contest of wills of opposing generals Ø  An4cipated the strategy of the indirect approach Ø  Stressed the importance of mobility Ø  Iden4fied leadership and morale as important aDributes of

successful forces Ø  Along with a number of other observa4ons s4ll relevant today

to business people

In Rome, the Romans were ruthless and warlike, habits that had become part of their culture over decades of war.

The Senate was responsible for strategic decision making at the direc4on of the state, but Senators were not only poli4cians…

No Roman could stand for poli4cal office un4l he had served on ten annual military campaigns.

Like the strategoi of Greece, the Roman strategies knew from first hand experience about military opera4ons.

The Romans did not face a single enemy whose ul4mate defeat would ensure permanent security. Their only goal was the maintenance of a minimally adequate level of security at the lowest feasible cost to society.

These condi4ons are similar to the problems that modern corpora4ons face – no single baDle wins security, but they face an endless aDack of compe4tors in which only the most efficient will survive

Origins of Strategy in Business

Strategy can be seen as “the way to win.” So winners must have a strategy whether they acknowledge it or not.

Henry Mintzberg developed the founda4onal principle of the different components of strategy:

Plan – recognized that a common view is that strategy is a consciously intended course of ac4on which is made in advance of the ac4on and is purposeful.

Ploy – suggests that strategy can be a manoeuver intended to outwit or confuse the opposi4on.

PaDern – iden4fies a consistency in strategic behavior, whether or not intended, that over 4me becomes recognizable or even predictable.

Posi4on – means that strategy locates an organiza4on in an environment and is a media4ng or matching force between an organiza4on and the outside world.

Perspec4ve – proposes that strategy is the way an organiza4on perceives the world, an abstract concept that shapes the behavior of the par4es involved.

Michael Porter broke strategy into further components to be used as compe44on: New Entrants, Subs4tute Products, Power of Suppliers, Power of Buyers, and Industry Compe44on.

Campbell and Young defined the Ashridge Model for how strategy could be used for se_ng the mission/vision of an organiza4on: Purpose, Values, Behavior Standards and Strategy

We also know that strategy must be able to drive decision making.

Strategy is the choice from many available op4ons as a way to succeeding.

So what we learn is that strategy is all of its forms, originated from the military and was tailored to business to achieve compe44ve advantage, a mission or vision, target objec4ves and drive the decision making process.

War & Business Strategies

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