This is the fourth of a six-post series that discusses how, when, why and why not apply military strategy and tactics to business. For the sake of some brevity, I won’t repeat my introduction to this topic but, if you’re interested, you can find it here in the preamble. There are also a few more introductory words in the second post, here.
In short, I’ve always had a difficult time mapping military strategy to business, although I’ve always been compelled to. It seems so natural to take stories of great military exploits and use what was learned from them to advance a business idea or improve on its execution. Among the many problems in doing this, though, are questions about when to apply a particular strategy; does the organization have the competence to execute against that strategy; and can one correctly interpret what actually made a particular military strategy or tactic successful, especially once applied in a business context with its inherently slower feedback.
That said, the legends of military successes and failures are great teachers. Not so much for the direct application of what a military leader did at some time, but in presenting a palette of potential actions. The stories and analogies are also good because they are easy to remember and are great tools for leading others.
In my view, there are a small set of profound lessons to be learned from the great military commanders and their exploits through the ages of warfare. Lessons is the key term here, not specific strategies or tactics. In my effort to communicate what I believe that some of these lessons are, I’ll try to toss in a few military stories that indicate to me why these particular lessons are so important and can be readily applied to business. The lessons are:
- Speed (covered previously)
- Focus (covered previously)
- Indirect Approaches
- Intelligence (knowledge of what’s going on)
Today’s episode of applying military strategy and tactics to business is . . .
Classic, gentlemanly military strategy called for opposing forces to line up in a field opposite one another, all participants in plain site, and then to wreak havoc on each other. This type of direct, frontal assault is rarely used any more unless one force has an overwhelming superiority over the other. Even then, it doesn’t happen very often and when it does, it’s not without many surprises and casualties. Military leaders that historically adopted less directly confrontational strategies or even complete indirect strategies soon found great success even when they were confronted by an enemy with superior forces.
So, what does it mean to have an indirect strategy? In military terms, indirect strategy involves attacking an enemy on his flanks (sides) or rear – basically, where he doesn’t expect it.
Hannibal, the Carthaginian military commander who marched his army over the Pyrenees and Alps to attack the Roman Empire, kept the Roman army at bay (and often in retreat) on their own soil for more than a decade using indirect strategies. Among Hannibal’s many successful military strategies, he became known for engaging the enemy with weak troops in the center of his formation and two hidden sets of strong troops that wrapped around the sides of the opposing force (flanking them), squeezing them from the sides and, sometimes the rear. While the Romans thought they were successfully attacking the weaker force in the center, they lost the battle as they were crushed from the sides. This indirect approach took the enemy by surprise and attacked it where it was weakest. Even the mighty Roman armies could not remove Hannibal from the Empire. That is, until they started using indirect approaches themselves.
Like Hannibal did in so many major battles, Douglas MacArthur employed a master-stroke of indirect strategy to keep the UN Forces in South Korea from being pushed off the Korean peninsula at the beginning of the Korean War. A few months after the war started, the South Korean and UN forces had been pushed to the south-eastern end of the Korean peninsula at Pusan Province. MacArthur proposed and executed an indirect attack behind the lines of the North Koreans, far north of Pusan, on Korea’s western shore. The amphibious attack surprised the North Koreans and cut the North Korean Army south of Inchon off from supplies and personnel, ultimately causing the collapse of the North Korean forces in southern Korea.
As with military strategy, direct, frontal attacks against other companies in business rarely succeed. Unless your company is by far the largest in its business or has a strongly dominant sales channel, any direct attack against your competition is likely to fail. The old adage is that you need a 10:1 superiority over your competition to beat them head-to-head. My view is that unless you’re a Microsoft (fill in your favorite large company in your favorite market here – it used to be IBM for all examples), and, in Microsoft’s case, really only in operating systems and Office-like applications, it’s probably best to focus on indirect approaches when taking on competition.
So, rather than competing on features or performance, change the ground rules. Compete on price, distribution model, ease-of-use, accessibility, partnerships, integration, switching cost or similar.
An example of this near and dear to my heart is the emergence of my first successful company, Viewlogic Systems (acquired by Synopsys, in 1997). One of the co-founders of Viewlogic was Sal Carcia, who initially led marketing and sales for the company. Sal was (and I’m sure still is) a brilliant marketing guy who had an innate sense for market dynamics and saw holes (read: opportunities) in the market very clearly and accurately. In 1984, when we founded Viewlogic, EDA tools (software tools for Electronic Design Automation – electronics CAD tools) were turnkey systems bundled with big hardware. These systems were very expensive and most companies could only afford to buy one seat (one bundled unit) for every 10 to 20 engineers they employed. A ratio guaranteed to limit the productivity of the entire engineering group.
Sal’s idea, which sounds so basic now, but keep in mind that PCs were new in 1981 and still pretty limited in 1984, was to bundle a complete EDA system with a PC for $10,000 per seat. About one tenth of what a competitor’s system sold for. $10K wasn’t just a random, lower figure, it was what Sal saw as the maximum we could charge without requiring the engineering manager (the customer) to get sign-off from upper management for the purchase. So, as a result of Sal’s strategy, Viewlogic sold to the engineering manager who made more local and faster decisions while our competition was selling to big corporate organizations with long sales cycle.
Also, at $10K/seat. Engineering managers could equip each their of engineers with the EDA tools they needed, resulting in more productive groups that then promoted the tools to the rest of the organization.
In the end, most of Viewlogic’s tools were not revolutionary (some features were, of course, and we figured out how to mash a whole lotta functionality into 640KB of memory), but the packaging was a breakthrough, helping us reach a market previously unserved. As an added bonus, because of the anchor of hardware that the competition hauled with it, it couldn’t come down to fight with us in our space until it rewrote most of its software to likewise run on a PC.
So, in the end, Viewlogic never tried to win by bettering the competition at what they were good at. It took an indirect strategy of fighting the competition where it was weak and unprepared and unable to defend itself. This indirect approach was the key to Viewlogic’s initial success.
Employing indirect strategies doesn’t mean that you need to change your end goal. It simply means that you need to change the way you approach the battle to achieve it. It’s much better to avoid being perceived as a threat to the big guys in the market or to escape their attention all together than it is to pound your chest and take them on head-to-head. They’re bigger, stronger, have more resources and more customers. For the most part, they don’t need to be better than you to kick your ass.
Let your ego go; be smart; attack at the intersection of where your competition is weak and customers perceive value. It’s not only about having a better product or service, it’s about the whole package – support, customer satisfaction, distribution, PR . . . everything. Direct strategies usually fail in business as they do in their military application. Don’t become another bump in the road for your competition, use an indirect approach to catch them off-guard and unprepared to respond to your threat.
Next up . . . Intelligence.