- 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 solutions for customers.
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