Strategy vs. Tactics (not what you expect)

So, I got some highly unanticipated free time, so here’s a quick run through some important fundamentals.  I don’t care what you do, mastery of the fundamentals is the key to being successful, be it sports, work, or strategy.

First the obligatory definitions, I could argue these, but for today we’ll go by what’s currently popping up on Wikipedia:

Strategy:  a high level plan to achieve one or more goals under conditions of uncertainty. (one could debate that strategy not just a synonym for plan, we’ll save that for another time).

tactic is a conceptual action implemented as one or more specific tasks (fair enough).

So formally speaking the text book definitions from military science and business books goes like this, a strategy is a plan that is executed via a variety of tactics.  The military goes on to say that grand tactics are large scale tactics, and grand strategy is the political strategy that provides overall direction to military strategy (i.e. terrorists bad, China OK, Canada Harmless).

Gee, that’s actually kinda boring.  So how does this help you?  Where is the salient advantage in these pedantic semantics?

First, the common sense is strategy and tactics are interchangeable words for a solution to the problem.  Strategy and tactics have a yin yang relationship in defining each other – bigger long term picture relative to immediate small scale.

Stay with me.

Tactical means winning battle today. Strategy means winning the war. But the battle had a strategy, broken up into tactics utilized by each team. But each team leader had a strategy, that was adapted in execution by a strategic utilization of appropriate tactics for the resistance and challenges faced. Yin / Yang.  Once you leave the textbook, the only difference between strategy and tactics is your perspective.  Boxers and quarterbacks have strategies for minutes worth of action. Political strategies have tactics that take months to execute.

The difference between strategy and tactics in everyday language is simply to show the short term vs long term perspectives to the task at hand.  That would make grand strategy where strategies interact, and grand tactics where different tactics interact.

So what? How does this help you? (finally there)

First, conversationally it is good to simply know the effective semantic difference between strategy and tactics.  Hopefully your now there.

Secondly, in order to be truly successful, you need to have good strategy and good tactics.  You need to understand the role of each.

Many business have good strategies, but bad tactics and can’t make the strategy happen. In Afghanistan, the US military enjoys tactical brilliance and dominance; they almost never lose a battle; but strategically Afghanistan is a decade old strategic quagmire.  Winning every battle yet to win the war.  Just like we all know well established small businesses that were tactically brilliant, did great work – but were strategically incapable of adapting to change and simply went out of business when the economy crashed.

Conversely, there is a long tradition of brilliant strategies they nobody managed to make happen.  The quote that comes to mind is “the best laid plans of mice and men.”

The simple truth is strategy and tactics are the same skill, same concept applied at different levels. That simple idea is important because you now know that a perfect strategy cannot succeed without good tactics; and brilliant tactics probably won’t deliver strategic results on their own.  When your strategies fail for lack of execution, you know there is a disconnect between the strategic and the tactical.

So when you are making your decisions, planning, preparing, and executing your vision for the future, remember that you will have to simultaneously view your struggles from both the strategic and tactical points of view in order to succeed.

And honestly, you probably need to consider the grand tactical and grand strategic views as well to make your long term life get to where you want to go.

So what does that mean?

Strategically you have one year, two year, five year, and probably ten year or longer perspective, goals, and challenges.

Tactically you have a perspective, goals and challenges for this morning, today, this week, this month.

Grand tactically you have to manage the interactions between your work tactical situation, your home and personal tactical situation. You may have multiple projects. Health or fitness goals, school, family, or relationship commitments and challenges that affect your daily tactics of that important business problem your are tactically solving now. Also there are grand tactical problems you can’t control – traffic, weather, sickness, accidents. But you have to manage the grand tactical everyday of how do I deal with a getting sick, a fender bender, find a breakfast and still keep my boss happy this morning?  At minimum you can think of grand tactical as tactical work life balance.

In terms of grand strategy, well; you need to balance work, career, business and personal strategic goals and resources, and how those strategies interact. Grand strategically you also have to consider the big picture – politics, law, the economy – things you can’t control that may have a big effect.  There is a good time and a bad time to make investments or purchase real estate – if you’re lucky you find the intersection of grand strategic opportunity with personal strategy – i.e. buy a new home after the housing bubble bursts, not before – if you have the choice.  Anybody who bought a house in 2008 either didn’t have a choice, or failed their due diligence of the housing bubble that was well understood in financial journals a year before the market crashed.

Grand strategically how do I use limited time and money to get what I want in the long term – career, family, home, car, hobby? In business grand strategy how to I balance supply chain costs with new healthcare regulation costs and changes to corporate tax code while attracting quality talent?  Those are grand strategy considerations that form the broader picture of sometimes conflicting strategic goals we have – like put in overtime for that promotion but spend more time with family.

And obviously here where we circle around.  You need tactical competence on the day to day stuff, grand tactical skill to balance conflicting priorities and limited resources, all while remembering your strategic schwerpunkt ….  Not to mention the grand strategy reality of conflicting strategies and the grand strategic environment you are in.

Now, you can ignore these truths keep muddling through the way you like.  Or you can try to organize your mind and efforts in terms of the tactical, grand tactical, strategic, and grand strategic – and see if that perspective helps you improve how you manage priorities and get things done, considering short term opportunities within the context of long term goals and strategic constraints out of your control.

Yes, thinking like a strategist can and probably will give you a headache.  I recommend you start by writing things down. As I’ve learned, if you don’t write it down, it never happened.

That’s enough for today.  Thanks for reading, hope it helps.  Let me know.

– Ted Galpin SPP

Posted in Strategy, Uncategorized | 2 Comments

TED, FRY, Complexity, Systems and Strategy

First in a series on prediction.  I hope.

Today is a simple if abstract discussion.  The math of strategy.  Now the majority of my peers at ASP specifically avoid the quantitative, and most strategists I’ve encountered are  MBA’s, historians, or soldiers that are not that keen on math, and don’t have much use for it beyond the simple arithmetic of “our big number beats their little number.” (which isn’t even always true).

Hannah Fry TED Talk

TED, FRY, Complexity, Systems and Strategy

By now, many of us are familiar with TED Talks (Technology, Entertainment, Design).  Personally I was chagrined when I found out Ted.com was taken.  But at least it’s being put to good use.

The TED talks are about “Ideas worth Sharing.”  They started out very cool, and have gotten more commercialized over time, but more often than not, are fascinating; if typically very focused on technology (due to their silicon valley roots).  There are also independently organized TEDX talks that really embody the “diamond in the rough” meme that started TED.  It’s a great place to see well communicated ideas.

The other day on my lunch hour I happened upon a TEDx Talk from Britain that well, hit my sensibilities as a physicist, mathematician, and strategist squarely.

FRY?

Dr Hannah Fry, according to her website, is a “Dr. of Fluid Dynamics, researcher of Complexity Theory and all round bad-ass.”  If you take a look at her PhD Thesis, it’s 200 pages of graduate level mathematics that pretty well qualify her self description (As do her blogs posts on Python scripting).

OK, enough background.  SO what?

Point is, Dr Fry did a really well developed TEDx Talk earlier this year that demonstrates in layman’s terms the power of modern mathematics.  Specifically they created a mathematical model given available information and science that accurately recreates what happened in the 2011 London Riots, and appears to predict the behaviour of riots.

Complexity

OK, I’m biased.  I’m an astrophysicist that does quantitative analysis of business intelligence and project planning and execution for a living.  My pile of books to read at home includes math texts on catastrophe theory, game theory, and complexity theory.  But I confess that it was John Mauldin that first showed me the value of applying complexity theory to strategic thinking.

Here’s how Math works.  Your classical physics and math is great for directly predicting simple things.  This is the majority of everyday engineering and construction.  We can accurately mathematically predict how well engineered machines and processes will work before we build them (e.g. machines, electronics, factories).  We can use math to measure and control the consumption of measurable quantities, be is Gas in our cars, grams of protein for athletes, sales revenue, market share or money in our bank accounts.  But you are limited by what you can measure, and it has to be “simple” mathematically speaking.

2 Problems.
1 – There are many things you can’t measure.
2 – Some  problems require you to measure too many things.

Now in the 20th century, science got around some of those problems by using statistics (i.e. simple pattern recognition).  We can mathematically model and predict how huge systems work if their behavior is simple when treating them as a whole.  This works for things like galaxies, stars, gases, explosions, fluids, water, etc.  I don’t need to track every molecule of water in a pipe, just the sum of its parts and everything works out.

The problem is the middle ground.  A complex system is something that has too many variables to measure and solve simply; and not consistent enough to treat as a single simple whole (i.e. a business, a war, the economy).

Now in the 21st century (with the help of computers), complexity theory is starting to get good.  Researchers like Dr Fry are starting to create mathematical models that accurately reproduce and potentially predict the behavior of real life complex systems, using rationality and complex math.   This is possible by basing the model by adapting existing models that work in analogous scientific systems.

For example assume:

How viruses spread = How information spreads
Shopping travel habits = Rioting Travel habits
Predator Prey movement = Rioter / Police movement

Adapt those three models into a single predictive model, and they actually do model and predict how fast, how long, and where riots will spread; based on input conditions and changing variables.  The model is roughly as accurate as the input data, and does a good job of recreating riots that have happened.  But even here, the precision and accuracy of the model is based on how many measurements you can put in.  Historical data plus known science becomes a constraint on future prediction.  That’s mathematical modeling 101, at least it was when I was in college.

Notice business kids,  they use the known science of shopper behavior to accurately predict how rioters behave.  Personally I had forgotten there was a science to shopper behavior.  Point – there is tons of data and science out there, if you take the time to find it (there nothing new under the sun, odds are somebody else already knows the solution to your problem).

Systems

So at this point, ya’ll are saying, cool Ted.  So some math geeks can do some math that models a riot.  So what?

Ok kids.  Any organization; a family, an army, an NGO, government or business is a system of interrelated parts that exchange information and resources to accomplish a variety of activities to accomplish organizational goals while also doing activities it needs to do to survive.  E.G.  A Family may go on vacation – focusing on logistics, travel and entertainment, but still have to deal with tactical needs of food, shelter, sleep, and family politics plus the long term requirements like bills, insurance, and a home.

A business may be focused on selling it’s product, with the normal cycle of R&D, Marketing, supply chain, manufacturing it’s product – but also has to have HR, Legal, Accounting, Facilities, IT, Taxes, and possibly PR and Lobbying to support the simple goal of building and selling a product.

Point is – all the functions of the business form a system of relationships that exchange information and resources in a constant and definable way.  Time sheets feed accounting so they can do payroll, but need charge numbers on the time sheets to feed financial cost controls and bucket costs for filing taxes.  These are mathematically speaking, complex systems like what Dr. Fry works with.

Hopefully, the system thing is making sense.  System, ecosystem – simply a collection of processes that flow resources and information through the organization to accomplish what needs to happen.  Working in an Engineering firm, I see plenty of technical process flow diagrams for things like refineries and power plants – and the methods are the same as when we are doing business processes.  There is a reason why there is a whole “systems thinking” movement in management consulting.  It’s accurate to the real world, and works when done well.  I was amazed when I started studying business strategy, all these cyclical strategy frameworks were almost identical to a standard engineering control theory.

Funny to me at least, I bring up that point at an ASP meeting fully of strategy consultants that developed these business strategy frame works, and they are honestly ignorant of their parallel development of the existing engineering science that is many decades old.

Well, kids, there is a math to your organization’s system.  And an easier paradigm than complexity theory.  Google the term “topology”.  It’s a branch of mathematics developed to study shapes; but what topology really does is map the relationships of different groups with different functions.  Which means two relevant things.  1 – there is a math for quantitatively modeling the relationships; i.e. the flows of information, resources, and processes within your organization.  And that math is also the math of databases; so if you can find someone willing to learn the theory of a homeomorphism (one to one vs. one to many relationships),  you can have a model or framework for understanding exactly how to map the system of processes of your organization; and even use it to streamline the series of databases that IT already maintains to try and manage that existing system via IT based business intelligence (ERP).   This allows you to data mine your big data intelligently if you understand the topology, the relationships between how different sets of data interact.

Then to miss Fry’s point.  If you can find some graduate students in complexity theory, you can model the behavior of your organization’s processes  and accurately and precisely predict how they will react under different scenarios.  You can take what good managers do instinctively, and improve on it.

Now, let’s be honest.  The vast majority of us have not studied graduate level mathematics like complexity or topology.  But you don’t really need to do formal math to be effective.  Math is just the science of patterns and relationships.  It’s built on rules and numbers.  But the rules work without the numbers (accurately if not precisely).

If you can understand the difference between a one to one and a one to many relationship, and notice that a pattern of a one week delay in supply chain results in a two week delay and cost in manufacturing –  You can sketch out some simply process flow diagrams to model the systems of your organization, and see the patterns of what goes right, what goes wrong, and will have a legitimate engineered approach to troubleshooting and understanding what goes right and what goes wrong.  It works for plants filled with a billion dollars of machinery, it can work for your organization filled with people doing various interdependent functions working towards team production.

Learn the concepts, and it can paradigm shift your ability to understand and solve problems.  If you can define and recognize the consistent patterns of your organization, you can predict how changes will affect those patterns.

Strategy

So what?

We covered, well, a lot in a small space.  I obviously have too much applied math to get of my chest.

Dr Fry can’t tell you when a riot will happen.  But she can tell you how a riot will happen. That allows for some very precise scenario planning.  Be ready for an event or change before it happens.  And honestly, scenario planning has been around for decades.  Even going through the act of inaccurate scenario planning prepares the participants for change – orients them to better understanding the patterns of an organization and how they react to change.

If you understand the patterns, you have a chance at anticipating, managing and changing them.

Example

Here’s the math free example of applying the math of understanding patterns of behaviour and relationships.  Charles Duhigg wrote a very useful book called the Power of Habit.  He thinks in terms of habits and the behavioural triggers that cause them.  Which is simple math: Trigger = Habitual Behaviour; only gets more complex as you see how a system of habits as a process in a population.

So what?  Well, how’s this for problem solving.  Some years back, Mr. Duhigg spent some time in Iraq during the war.  In the city he was in, the Army had a problem that every evening people would gather in the town square, protest, and there were some riots.

Over a few several days, Army leadership observed the habits – people didn’t show up to riot.  The town square was also a market.  People arrived to shop, ate dinner, and then were already gathered in the evening.  Trouble simply ensued after dinner.

Solution? The Army Major tasked to solve the problem simply banned kebab stands from the town square.

So at the end of the day, people in the town square got hungry, went to find food, and left the square.  Ended violent protests and riots with zero force, no violence, no death.

Charles Duhigg rightly calls that the power of Habit.  Someone like Dr. Fry would likely call that an elegant solution by simply understanding the equation, and changing a variable to zero.  I simply call it good strategy.

Dry Fry may be able to predict the pattern of a riot.  In one instance, Charles Duhigg witness an Army officer able to identify the pattern and disrupt it, and prevented the riots from happening.  In other words, he successfully predicted the conditions needed for a riot.  They can do that because in there own way, they do the math to understand why things happen the way they do.

The lessons here are simple:

  • You can’t predict the future (unless you are very well informed and good at game theory, then you can a little – but we’ll leave that for next week.)
  • But if you can identify predictable patterns of behaviour for system or relationships ( e.g. an organization), you can predict how that behaviour will happen; e.g. Dry Fry and her complexity models that show how riots happen.
  • The better the math (pattern recognition), the more precise the model.  But even simple models can yield accurate and useable predictive results for patterns of behavior.
  • You can use a system map or process diagram to identify the relationships and patterns of your organization.  That will give you a framework for predicting the patterns of your organization.
  • If you can predict how your organization will respond to change, you can prepare for and manage that change.  Whether a change in the market, or any deliberate strategic change to the organization driven by leadership.  If you know how the organization works as a system of processes, you can deliberately engineer the desired results.

And the big points

  • You know change is coming. You know the world is not standing still.  This is a tool that can help you be ready for change, and respond and change your organization and it’s system of processes in a faster and more appropriate way.  Simply put, an appreciation of math combined with some leg work, and you can adapt faster and better than your competition.
  • Yes kids, this is another approach to process improvement.
  • Even better – If you can do that internally with your organization, you can probably also map the system of processes for your value chain, supply chain, market, competition, etc.  And get the same sort of feel for predicting and appreciating changes external to your company. Allowing you to adapt your external view and relationships just like the internal above.
  • Even better, if you take the time to understand how things work in the world, you may be able to manipulate (influence) the process to get results more in your favor.  I.E. it may be possible to alter a riot in progress, or a market shift to change the outcome predicted by the model, and achieve a more desirable outcome.

You can’t predict when events will happen, but you can be ready with a good response for when they do.  Yeah, it’s basically the boy scout motto.  But there is legitimate math that can help you manage the problems that are too big to measure, and too unpredictable to treat simply.

By rigorous study of the math of the patterns, we can learn them, and that allows us to predict, adapt to, and potentially disrupt, prevent or improve those patterns.

If you understand the patterns of conflict, you have the potential to predict, adapt and manipulate it to a more desirable result.

And in my mind, that is what strategy is all about.

If you made it this far, thanks for reading my pedantic rant on math.

-Ted Galpin SPP

 

 

Posted in Business Strategy, Games, Math, Military Strategy, Strategy | Leave a comment

The Strategy Book

Leo over at Zen Habits is suggesting I would be happier if I write more.  He’s probably correct.

So here’s a story boys and girls… (And usual rules apply, keep Google handy for my obscure references, html links go stale too fast)

About a year ago, an interesting gentleman named Max McKeown apparently found my inconsistent effort here, saw some value, and asked me to read and review a book he’d written.  I accepted, and he graciously sent me a free copy of the book.  It coincidentally arrived on my birthday.

Of course as I said, that was a year ago.  Max, I am very sorry it took a year, but I’m finally fulfilling my end of the bargain.  Thanks for the cool book!

So as I said, the book showed up in the mail (via Amazon I think).  Of course I had just bought a house, after starting a new job.  Not to mention the normal stress of toddler chaos, etc.  As Aaron Allston once wrote – you have to know what the timing is good for.  Well the timing was terrible.  Took me about 6 months to read the book, mostly on my lunch hour at the office.  I’ve probably reread half the chapters twice.  Actually started at least 4 different versions of this article in the last 9 months.  There’s a draft on Google docs, one on wordpress IPhone app, and another in my Awesome notes app, probably a draft or two sitting in my email.  Not to mention copious notes scribbled in the margins and the inside book cover.

But here’s the two lessons learned that are pretty obvious to an outside observer.  I was way too over committed at the time I made the commitment.  But It’s never to late to try, try again.  You’ll never finish if you don’t try.

So, I read and carefully reread and considered Max McKeown’s Strategy Book for the better part of a year.

It’s a good book.  Based on what I could find in a little bit of open source intelligence (i.e. online research); Max is a English writer, consultant, academic and thought leader type with a collection of graduate degrees in Business Strategy.  You can find him on You Tube, Wikipedia, and Twitter, but no TED Talk yet.  He appears to like black leather jackets and presents wearing t shirts.

Hence, his Strategy Book is informal and well focused on business strategy; though I would argue many of it’s lessons are applicable to strategic science in general.

Now, I preface my critique by saying I’m a serious wonk.  Just a few days ago I went on my first after dark baby sitter date since my daughter was born.  My wife took me to a presentation / reception with the NASA Team that just finished a 5 year research project on Saturn’s moon Titan.  I wished they had been more technical, but it was a general audience of about 200 people, so I instead acted like a giddy teenager.

So when I say Max’s book is light and easy to read, but lacks scientific rigor; that’s the opinion of a physicist.  Many of you will adore the fact that Max uses plain language and an organized format to explain and validate dozens of basic concepts of strategy without any mathematics or science; but with a good dose of real life examples and anecdotes from the business world.

I personally view the book as fundamentals of business strategy.  Max obviously knows what he is talking about.  The book is an excellent business strategy 101.  And it has a place on my bookshelf as such.  It distills the state of strategy practice as known by western business schools.  It was very reminiscent of everything I saw taking my Strategic Planning Professional exam a couple years ago.

The book does not cover much else.  You have to get past the normal consultant / thought leader fluff in the beginning.  The examples talk about products and services, customers and market competition.  You will not find math, game theory, economics, military science, behavioral science, or really any straight science.  It’s simply good, solid business school strategy.  Which makes it accessible and digestible to a wide audience, and Max does show a level of sophistication with his craft.  I found myself nodding my head up and down through most of the book.  It’s a valuable read.

I wish it had been more technical and more precise in many places.  But that was not the purpose of the book, nor it’s writer.  It’s a business guy talking business strategy.  No more, no less.

Every Chapter is formatted with a stated objective, the context of the objective, the challenges involved, how to recognize / measure success of implementing the objective, and the potential limits and pitfalls involved.  The 235 pages walk you through understanding strategy as a subject, how to internalize strategy in yourself, create and implement it in a business organization; and a collection of his favorite business strategy tools like SWOT, Porter’s 5 forces, various idea maps, visualization matrices, and processes that he has had success with.  It’s a Strategy MBA in a single book, with a decent index.

And the best part is he gives plenty of advice on how the reader, likely not being an executive, but likely an analyst or middle manager can navigate corporate culture to make use of the knowledge of the book.  Yes kids, there is some good wisdom in the pages too.  He has a chapter entitled “Understanding what can go wrong.” He spends time on the fact the strategy is change management.  If you can get your mind outside the box, it covers layman’s strategy well and can be useful for most decision making and problem solving, especially where you face a group dynamic (friends, family, organizations, and businesses).

Most business strategy books are trying to sell a theory, process, or system.  Max chose to give us a useful broad reference instead.  And he intentionally filled every topical chapter with thought provoking questions intended to guide your own critical thinking process, and teach you how to think like a strategist.

As I said, It’s a good, educational book.  You can find it on Amazon or at http://www.maxmckeown.com/   Paper back only, which has a cool slick polymer finish that feels good in my hands, but couldn’t find it on Kindle.  Sorry Kids.

After writing this, I think I’ll read The Strategy Book again after I finish The Japanese Art of War, something Thomas Cleary wrote that I have to reread whenever I get caught in my own OODA Sprial, something that appropriately describes my past 2 years.  Which is another lesson learned; it doesn’t matter how much they pay you, a painful job is a painful job, no amount of money can change that.

So if you want a good read in business strategy 1o1, Max McKeown wrote the book for you.

That’s all I got today.  Thanks for reading,

Ted Galpin, SPP

 

Posted in Book Review, Business Strategy | Tagged | Leave a comment

And we’re back – with some thoughts on the OODA Spiral

Just short on my lunch break, but had some fascinating side discussions helping out with the strategic planning for ironically the Association of Strategic Planning (ASP).

(Warning, on a reread this is heavy wonk on esoteric terminology, and I’ve found hyperlinks outside the blog to reference ideas expire and then do little good, keep google handy).

I was pondering the idea of combining Bruce Bueno de Mesquita’s game theory approaches  with proactive OODA loops.  An idea that I have played with for years, my father started calling an OODA Spiral.  If Observe, Orient, Decide, Act is a good scientific model for human / mammal decision making….

Then it possible to get “looped.”  Literally things are happening faster than you can keep up, and the world passes you by, at least for a moment.  Happens to me allot when I am trying to do something while my Wife and Daughter compete for my attention.  Invariably I get looped by to much information and burn my breakfast on Saturday morning.  I would argue that getting looped, or a lock of the decision cycle is generally what happens to a quarterback right before he gets sacked.  Can’t make a decision fast enough, and somebody else ends the play for him.  Read:  “Looped” = Decision lock = a stalled or interrupted OODA cycle.  You get stuck on observe and orient, can’t decide and act fast enough.

SO a decision spiral is when a decision making process gets looped, and more information / things happening just loop again and again into a spiral of inaction.  That would be what the US military calls “Shock and Awe”.  If there is more happening than you can deal with, you loose the ability to make decisions until the world slows down enough that you can orient to it.

The Game theory aspect of it it simply knowing what people will focus on, and if you can loop them, trap them in an OODA spiral they no longer can make make actions that effect you – at least as long as you can keep them in a spiral.  Talk about taking initiative.

That’s the idea anyway.  Let me know what you think.

The concept that hit me talking with my friends at ASP, was that in organizational strategic planning, i.e. strategic planning for a business; a decision spiral could be related to the common phenomena of strategic plans that sit on a shelf and never get implemented.

This goes back to my old post on OODA loops and the tyranny of the urgent killing any schwerpunkt one might have.  So busy fighting off alligators you forget you are in the swamp to drain it, not fight alligators.  In business, most of the executives I know are so busy fire fighting, caught up in tactical urgency, they never have time for anything strategic.

That’s pretty well established.  But think of that in terms of an organizational OODA spiral. The environment is changing faster than the organizational decision cycle can react, and eventually they give up trying to constantly reorient.  They don’t even figure out how to orient to a strategic plan thy spent resources developing, they just see lots of change and work that is hard to understand, and the whole company joins in a stand alone complex of work on tactical urgency, maintain the status quo…  Instead of making strategic decisions and actions that would remove or preempt the tactical problems.  The whole organization gets trapped in an OODA spiral.

Apologies – A stand alone complex – concept from a show called Ghost in the Shell.  Basically a stand alone complex is a simple idea empowered by the information age.  Given the same information, people tend to make the same decision.  Give the same information in the form of tweets and TV to a few million kids on twitter, you get brand based social moments and the Arab spring.  A stand alone complex is a simple consequence of game theory.  Viral information that inspires action in a significant part of the population, that all individually come to the same orientation, decision, and action from the same or similar observation.  That is a stand alone complex.

So what?

OK.  Many esoteric ideas add up to what?

The short version is simply this.  If we know the root cause of a problem, we can engineer a solution.  If strategy rarely if ever gets implemented in businesses because of a stand alone complex in the form of an OODA spiral, at least among leader ship.  Then the solution is to not let leadership get looped.  Prevent the  OODA Spiral.  Traditionally in strategic planning that means the executive decision maker simply makes the decision and then coerces action down the chain of command to make change and implement strategy.

But there have got to be other ways than brute force, right?  Can a strategy professional influence a CEO, Board, or group of senior decision makers in such a way to prevent the OODA spiral that prevents them from implementing a strategic plan once they have it?

I’m thinking yes.  Change managment before the Change? More on that later

Thanks for reading the Lunch Time analysis.

-Ted Galpin

 

 

 

Posted in Business Strategy, Math, Strategy, Uncategorized | 1 Comment

Motives, Managing Expectations, Alignment and Friction.

So, been gone for a very long time.

Explanation – life is what happens while you are making other plans.  Survived the “new normal” economy.  New day job, new house, lots of new changes.

First a good strategic lesson I just picked up from a really popular blog:  The Art of Non-Conformity

“…one important fact: it is always very important to carefully examine someone’s motives in communicating.

Whenever you read something, ask yourself, “What are the author’s motivations? Why did he or she choose to devote a great deal of time and effort to one particular thing in exclusion of others?”

Good lesson from Chris Guillebeau.  Why am I doing this?  Because writing about strategy helps me understand it.  And I love strategy and want to understand it better.  Sharing it helps because other people read what I say, let me know when I’m wrong, challenge my assumptions, and help me learn.

So, I was speaking of new changes in my life.

Including a paradigm shift here at Strategic Science.  This started out as my rather ambitious goal of putting out well researched, well edited and referenced technical essays on strategy on a consistent basis.  That takes way too many hours.  Obviously not a realistic goal.  But I did get a surprising amount of very positive feedback for my efforts.   And since noticed I’ve still spent an inordinate amount of time writing about strategy.  Just that half of it went to a couple of friends in email, and the rest sits in a filing cabinet full of notes…

Not an effective strategy.  I got OODA Looped by a combination of unrealistic expectations and normal distraction caused by life, family, career, kids.

So to apply lessons learned.  It’s easy to lose sight of strategic goals when urgency ends up trumping priority.  Or in this case tactical (short term) needs trumps strategic (i.e. long term goals).  And one of my long term goals is to use this tool as a way to build a strategy body of knowledge.

So going forward, probably less technical rigor – but hopefully more than a couple posts a year.

Today’s lessons to share.  “It is always very important to carefully examine someone’s motives in communicating.

But to go beyond the obvious, do that with yourself.  Carefully examine your motives in what you are doing.  Are your actions, tactics, methods strategically aligned with your goals?  Mine were not, and I’m the strategy geek.  Sure, there are mitigating circumstances that impede strategy.  Clausewitz and the United States Marine Corps call that strategic friction “That which makes the seemingly simple extremely difficult.”

Strategic alignment is a no brainer right?  You need to focus on your schwerpunkt, balance urgency with strategic priority, and keep your actions aligned with your schwerpunkt.  As Myomoto Mushashi wrote “Do nothing useless.”

But plan for friction.  It will happen.  If you’re at war or in construction the obvious friction will be weather and logistics.  If your executing strategy in business, your obvious friction will be budget and culture; or as Stephen Haines liked to say, “The Shark of culture eats strategy every time.”

Plan on friction, or you will make the same mistake I made for the last two years.  Scroll down the blog and you’ll see the results made by underestimating strategic friction.  You may get by for awhile, but don’t be surprised when you get bogged down.

 

Posted in Business Strategy, Military Strategy, Self Help, Strategy, Uncategorized | 1 Comment

The coolest thing I’ve seen all year (AI)

Hi there world.

First – A warning to all you young turks out there gearing up to change the world. It will vary with circumstances, but infants are resource consuming schwerpunkts, that will make it difficult to finish any other projects (Apologies for the slow trickle of articles).

Teaser – the lead in is a little long, but the topic is recent developments in AI managed strategy.

On to the topic at hand. As a Strategy geek, growing up I spent inordinate amounts of time playing strategy games. As with many this fascination started out with Chess and Axis and Allies, but quickly moved on the the likes of Herzog Zwei, Star Control, and Star Wars: Rebellion… Leading to a long list occasionally continuing now with distractions like Sins of a Solar Empire. I learned all about resource management, maneuver and misdirection, and the limits of computer interface and computer opponents. My pipe dream for years has been an in game macro building interface that would allow me to automate repetitive tasks and coordinate complicated tasks requiring multiple commands issued simultaneously; like coordinating multi vector combined arms assault. Something nearly impossible to pull off with a mouse and keyboard, hot key, click, drag and drop interface.

I digress. The standard in real time strategy (RTS) games is Blizzard’s franchise StarCraft. Published in 1998, it’s still heavily played and the subject of multiple professional leagues (mostly in South Korea) despite it’s sequel being released last year (something I’ve avoided, my time being stretched too thin already).

StarCraft is simply the standard because it’s known as the most refined, polished, and accessible yet complex RTS game available, with arguably the best game balance. A reputation made possible by years of constant user feedback and updates to an initially best of class software.

So what? Star Craft is nothing new. Cool, but basically just a good diversion. Though many would argue that due to the sophistication of the game, it does make a good laboratory for experimenting with strategy and tactics. Personally I’ve successfully been able to use it to play with concepts like Shock & Awe, OODA Loops, using psychology against human players; and geometry and pattern recognition against AI (artificial intelligence or computer programed) opponents. One of the limits I found with the AI in StarCraft (and pretty much every other game I’ve played), is eventually, if you survive long enough, it seems like the AI reaches the end of it’s script, and basically falls asleep into a passive state. In Star Craft it only takes a few hours; even playing against 7 AI players, I know if I can last about 3 hours the AI will slow down and give me a chance to take them out one by one. In newer RTS games it may take longer, but inevitably I found in playing AI opponents, if I can set up a strong defense and economy; I can basically wait for the AI script (or scripts for multiple opponents) to run out and go passive on me (something I found by accident in Sins of A Solar Empire, this can take 30 hours, but a good defense will last if you leave the game running while you sleep and go to work). Then winning the game is easy. Now the same tends to work with human opponents, typically after hours of play they get tired and sloppy, resorting to attrition (especially late on Friday nights), and even the best players will make mistakes and give you opportunities if you can wear them down or confuse them.

Which brings me to the coolest thing I’ve seen this year. I was looking online to see if my theory on AI scripts running out was correct. During that search I unexpectedly stumbled into the Coolest Thing I’ve seen in at least a year.

Apparently the University of California Santa Cruz has a thriving AI research program in computer science; and when the StarCraft API was made available to the public in 2009, and a new opportunity was quickly recognized. You could create a stand alone AI player program that could control StarCraft through the API. In the spirit of Deep Blue and Chess AI, they decided to take AI research to the next level by organizing a StarCraft AI game competition. Chess is hard because you have to consider all moves and see the future, but the moves are limited. AI playing Poker is mostly a matter of probability. Go is harder because you have many more pieces and more moves to consider, but you can always see the whole board. In Star Craft you have to deal with all of the above, plus the fog or war (i.e. the unknown areas of the game you can’t see), resource management, and the rock paper scissors limitations of different units in battle. And you have to do all this in real time, the other players don’t have to wait to take their turn. They can keep making moves while you are still making a decision. Until now, all AI research done with RTS has been limited to buggy, open source home made games with their own host of issues. For the first time AI research has access to a reliable and refined commercially developed RTS software for research.

To quote an AI instructor at Berkley “I can literally walk down the list of concepts we cover and show you where every one of them show up in StarCraft and in our agent.”

So simply put, programing an AI to play Star Craft is not only a legitimate activity for research in computer science and artificial intelligence, but there are multiple professional leagues on different continents that can provide highly ranked players to test the AI against.

So it’s great for computer science research, and yeah, programing a computer to play a real time strategy game is fun. But what does this have to do with strategy?

AI is already here
Forces you to formalize the basics
It gives you a lab to experiment in
Lessons learned
A Culture of Innovation
My Wish List

AI is already here

As a Strategist, the concept of Artificial intelligence is a fun idea. If I program a computer correctly, can it execute strategy for me? My early lament in college was simply just to have a macro script interface for Star Craft, so I could automate repetitive and predictable tasks; like resource gathering and scouting; not to mention more easily coordinate the actions of a hundred units better. Hot keys help to speed up a mouse and keyboard interface, but it’s almost impossible to really manage a good Cannae style pincer moment clicking a mouse as fast as you can ordering a few units at a time.

But the potential is there. That type of automated strategy is already present in the stock market. You can look at price history of stocks, and where the price changes go from a relatively smooth curve of deliberate human decision changing to the saw tooth up and down of algorithm based trading is really obvious; especially to my friends that engineer industrial controls systems where you see the same phenomena. Computers react faster, and typically more decisively. They trade stocks, run industrial equipment, and keep our power, communications, and financial infrastructure running reliably, by reacting faster and taking in far more information with more precise memory than a human operator. The limit being they don’t yet think, and for the most part automated control systems, typically SCADA based, can only deal with situations they are programed for. Anything weird happens, in a hedge fund or an industrial control circuit; the computer doesn’t think, it defaults to a human operator to make the hard choices. Now when it comes to keeping the lights on and the value of my 401k, I’m glad they are not experimenting with artificial intelligence that can out perform human decision making; the price of mistakes is too high.

But in a game? A video game play tested for over a decade to be arguably the best available real time strategy environment? I though a computer playing Jeopardy was Cool, but the guys at IBM got to have all the fun. Now I have a playground for testing AI. I have a playground for testing Strategy. Best of all, I have a playground for testing AI controlled tactics and strategy. And there is a formal competition where I can compete against my peers. Makes it easy to figure out what theoretical strategic fundamentals are needed, and which aren’t. You can measure, record, replay. All the things you can’t do in the real world that makes after action analysis so much the purview of opinion and guess work as much as fact.

Forces you to formalize the basics

The military strategy community is working on ideas like 4th Generation Warfare, 5th Generation warfare, asymmetric warfare, swarming, and network centric warfare. An exercise like the StarCraft AI Competition forces the participants “back to basics” especially in terms of strategy. They couldn’t just program in tactics and maneuvers. Given the rules of the game, they had to invent decision making and management software to obtain and manage resources; i.e. the had to start with logistics. Then teach software to scout out targets, have a memory and then decide what to invest your resources in, and what resources to use against what targets.

But the point is they had to start from scratch and do everything. Formalize the computer basics of logistics and resource planning into computer algorithms; before the computer could even build an army to maneuver. Strategy doesn’t get more fundamental than that. They can’t ignore anything as details to be handled later by subordinates, there are no givens. Every behavior has to be programmed in, and when they miss something, it was readily apparent in testing as a weakness that was exploited by an opponent.

It gives you a lab to experiment in.

It gives you a laboratory to test your theories against both theoretical AI frameworks, and test against expert human players, to validate or prove the theories wrong. Once you get the fundamentals down, you can still fine tune them, test them hundreds of times quickly to see what the algorithm is missing. And as the AI gets more sophisticated, you can layer and prioritize different techniques and theories in the program, and see what works, and what doesn’t.

The academically built parametric models used for AI research and military defense planning simply are not as sophisticated or refined as the millions of man hours that have gone into StarCraft. This is a far better Sandbox than we’ve ever seen before. Powerful, sophisticated technology that’s already built and very affordable. A Strategy Theoretician’s dream come true. Now I just need to work on my programming skills.

Lessons learned

The UC Team, creators of the Berkley Overmind AI that won the first competition in 2010 has shared it’s experiences in many places online.

The learning experiences from the first competition are note worthy to the larger practice of strategy. Static scripted plans just didn’t work, they were easy to out maneuver or disrupt. Strategies had to be flexible and able to adapt. Creating “agents” or sub processes in the AI to handle different responsibilities and decision making was the next step. They had to create list of responsibilities, an org chart, and division of responsibility. And they each had to be flexible and interactive to respond to the ever changing competitive environment. Just like a modern business or army.

They gave the computer a series of schwerpunkts for different situations, and let the AI decide when to do what based on the current conditions. Just like the practice of letting middle management/ tactical commanders dictate their own tactics to achieve their objectives.

Most of the AI development was spent purely on resource planning and management.

When It came to combat strategy, they were already short on time, so they picked Zerg Mutalisks, a very versatile and affordable air unit to base their entire offense on. They programmed the Mutalisks to fly in groups, and gave them essentially a vector field that pushed them to attack targets, and push away from danger. Using several clever techniques to fine tune the vector field and teach the agent target selection resulted in an expertly executed hit and run cycling swarm that picked off the most dangerous enemies first while avoiding enemy attacks. A level of tactical control I could never pull off with my mouse.

But their offensive strategy was simple. Find the easiest to use weapon available, and figure out of to maximize it’s potential. Simple strategy executed by very refined and simple yet effective tactics. Not really different from Pepsi selling cola or WD40 selling cans of lubricant. Pick something simple and reliable, and just get really good at it. The refinement was done by programming a game that ran multiple iterations of encounters with the vector field at different settings and letting the AI experiment and use metrics to optimize the settings. Trying different settings, measuring results, and applying lessons learned (conceptually close to Six Sigma).

Target selection in the end was a simple matter of predicting return on investment (ROI) – another empirical exercise. If the cost of engaging a target outweighed the benefit, don’t attack. The trick was developing the values of different behaviors; and the trade off between tactical advantage versus strategic outcome. Once developed, the computer automatically analyzes all known targets and engages the targets that have the best strategic effect (as weighted by the values programmed in) while avoiding battles it can’t win until it has more resources to take on harder targets of value. If set up correctly, it will allow the AI to ignore unimportant targets of opportunity (red herrings) in favor of strategic targets. Again, something that is hard to manage when you only have one set of eye keeping track of hundreds of units on the map.

Path Planning. One lingering bug StarCraft has; when left to their own devices, units on the move can get stuck on walls or in corners, especially when traveling long distances. For a human player this is a small annoyance, but for an AI, it meant they had to develop their own agent to plan and control the path and movement of units. Once they had Path Planning, they combined that with the danger avoidance agent, and they could have multiple scouts constantly traveling around the battlefield, with good situational awareness given by crossing lots of terrain, but high survivability from being able to avoid known and suddenly appearing danger.

With that high level of situational awareness, the resource planner is able to adapt resource planning and prioritization based on the behavior and resources of other players. (i.e. If an opponent starts building air power, you need air defense and vice versa.)

And danger aware path planning and high situational awareness also allowed the hit and run swarms to circumvent patrols and penetrate small gaps in defenses and quickly wipe out strategic targets before opponents could respond. This level of awareness is kept in a precise database giving a more exact awareness than the limited attention and memory that forces a Human player to act on memory and instinct.

Purely by following what made sense in programming the AI for the competition; the Berkley Overmind Team developed a network centric swarm that won the competition over other strategies. Which repeats similar research done in the defense community by Rand and others. Makes you wonder if anybody on the Berkley Overmind team was aware of network centric warfare or not. I’d love to ask that question.

A Culture of Innovation

In terms of AI. The first obvious innovation is seen in the results of the competition. Many AI’s were able to utilize and defend against many of the unconventional tactics used in professional play; but also showed unexpected adaptation and decision making to unexpected situations and strategies.

Within the somewhat limited environment of StarCraft, the AI’s had managed to make decisions and successfully solve problems using a mixture of processes and procedures. Businesses would be so lucky to be so effective and efficient in their decision making. Given a clear set of rules and relationships, the computer was able to succeed in surprising ways. Or as one article put it, “Most interesting of all, the contain-harass-expand strategy was a completely emergent behavior.”

Secondly, one of the articles mentioned going forward, after the competition they will be publishing the source codes of the AI’s as part of the proceedings of the conference. The idea being that each year the competitors will be standing on the shoulders of the giants from the previous year; instead of reinventing the wheel every year you get an innovative and escalating arms race. In a few years, I’d expect to see some very sophisticated AI’s simply because each competition is building on the previous year’s work.

My Wish List

Well, first I’d love the chance to play some of these AI’s. In fact if I was one of the teams, I’d be tempted to set up a server that people could connect to and play. While there is a potential counter intelligence concern there, the amount you could learn by looking at replays would really improve your learning curve, especially if you have a learning AI playing a variety of human players.

Second, I’d love to participate in the competition somehow. But given how rusty my limited programming skills are, and how limited my time is already; I doubt I could produce a work product comparable to what dozens of university students can produce over the course of a year. But as an avid Star Craft Player and more importantly Strategy Researcher, I’d happily do pro bono consulting just to get to participate in such a cool experiment.

Ghost Tactics

Combining their hit and run behavior, threat tracking, path planning, and scouting used by Berkley’s Overmind AI gives a wonderful view of the battle space where you put your strengths precisely against the enemies weaknesses. This would make Sun Tzu proud.

It also is a variation of one of my favorites from the Strategy Bag of tricks.

In the book Conventions of War: Dread Empires Fall by Walter Jon Williams, the Author postulates a space navy tactical method co developed by 2 characters; called either the “Martinez Method” or “Ghost Tactics”. Is actually a very similar concept if a little more sophisticated than what the Berkley Overmind used. This is a mathematical technique that applies great for things like Star Craft and Naval Warfare, but more creatively could be applied to other military or even business environments, as always, the trick would be in proper application of the model.

Ghost tactics is similar to the Berkley Overmind overall effect. You track all the known positions of all the units, obstacles, etc. Create a 4D Vector field showing the areas over time of each units weapons effect and ranges, sensor effect and ranges, and use that data to generate a constantly updating Convex Hull (This makes me glad I signed up for that differential geometry elective in college). Simply put, a Convex Hull is a path showing the intersection of two different overlapping data sets (typically represented by vector fields or shapes). The idea is that you create 2 data sets. First an enemy data set showing where and when they are strong and weak. You create the same data set for all of your units.

Giving the 2 data sets knowing where and when all the safe and dangerous places are, relative to each individual unit, changing over time and as new data comes in. You create a convex hull in the computer overlapping all your strong positions with all the enemies weak positions. You prioritize them by the best and worse places to go. The Berkley Overmind basically accomplished this result in real time without resorting to complex geometry.

Now the Author Walter Jon Williams takes it a step further, suggesting you move your forces along that convex hull with a path planning algorithm that uses a chaos based function to maneuver randomly across that convex hull, so the opponent cannot predict where you will be or anticipate your strategy, beyond that you will always have your forces lined up where you have a tactical and strategic advantage. Great for attrition, but I’m not sure how you reconcile unpredictable target selection with high value target selection.

Sounds great in theory. Would be fun to try using a convex hull and chaos theory to make a highly dynamic and unpredictable AI, always wanted to see what that would look like and how well it would hold up in the real world.

Combined Arms

This is likely already on the way. Just like in the real world, the advantages given by using different weapons in a complimentary fashion will likely show up soon in the AI competition. The one I would really like to see is complimentary use of special abilities certain units have. Apparently the Second place team had Terran Workers constantly repairing units in battle, and gave that AI a competitive advantage only really overcome by old fashioned attrition.

OODA Loops

I can hear the skeptical half of the military community groaning already. But there is two applications of OODA that I would love to see in this context.

1 – The 30 second battle plan. Not sure how they do it now, but as detailed in One Bullet Away, by Nathaniel Fick; a decade ago Marine officer training taught officers to make their OODA loops faster. The idea being if you could plan and begin a battle plan, or for that matter change a battle plan in 30 seconds, you could react to a changing battle field faster than the enemy, and eventually out maneuver him. In the AI competition, ironically this would probably result in a programming exercise to optimize and tighten code for the purposes of making decisions and making analysis faster; ideally to be able to react and adapt faster than your opponents.

One possibility would be to code Ghost Tactics to compute the Convex Hull in the Graphics processor; which is specifically designed for differential geometry computation (assuming the competition server has a graphics card installed).

2 – Shock and Awe. I doubt you will demoralize an AI through fast attrition. But if you can hit an AI with different problems very quickly; you should be able to confuse it or slow down it’s decision making, may be even able to get it into decision lock, simply by giving it more problems than it can deal with. Now you’d have to be an expert in AI psychology (i.e. a Programmer) to do this properly. But it should result in some interesting effects if you can figure out how to pull it off.

Well, That’s all I have. The future is coming. If you believe the world is flat (or at least that I’m not the only person who reads outside my industry) I guarantee you people in the Defense industry are already looking to adapt the techniques from the Berkley Overmind into use of drones and C4ISR systems (I would love to use the Berkley Overmind to control say a few dozen Predator Drones on Patrol, you’d need human eyes to verify targets and give attack permission, but still at the very least would be a great way to determine path planning for scout drones, and maybe even to coordinate them on tactical offensive in a large scale conflict). Some aggressive financial types may even be able to translate those algorithms into highly adaptive and competitive day trading software somehow (they already figured out high frequency microsecond trading). When It comes the SCADA, I’ll just say I’m curious what could be done with smart SCADA, I’ve heard of several half baked failures already. But I’m a Post Modernist at heart, have to mix everything together and see what ideas I can adapt from unrelated places. I’m looking forward to seeing more good things come from the Star Craft AI Competition.

Thanks for Reading,

Your humble wishing he had more time to write and do research strategist,

TS Galpin

Posted in Games, Military Strategy, Strategy | Tagged , , , , | 1 Comment

Strategic Science on the Competitive Intelligence Podcast!

First thing – sorry for the months without posts. The site got hacked while I was out of town, followed immediately by a nice contract that’s using 50 hours a week (paying jobs come first), and did I mention that toddlers benefit from time and attention.  I had to create the opportunities to actually plug a bunch of holes with the website and reinstall the database (and all the work) from scratch, get past the learning curve with the new company, and start writing and formatting posts again.

That being said, some good things happened since the last post;

1 – New look and improved site
2- Read “Ghosts of Cannae” great book, Book review to follow soon.
3 – The interview I did with August Jackson and the Competitive Intelligence Podcast has long since been posted.  The interview is available at the CI Podcast as well as on iTunes.

For those of you who aren’t familiar, August Jackson has been hosting the CI Podcast out east for many years now, and has become a bit of a pundit in SCIP as well as the greater CI community. It’s a very informative and helpful podcast I’ve been listening to for years, and was very flattered by August’s invitation.

August wanted to discuss an early post “The Problem with Competitive Intelligence.” The interview was very fun, covered allot, and was a great use of a Friday afternoon (and Skype).

So if you want to hear the voice of strategic science and get more in depth ideas on “The Problem with Competitive Intelligence”, Please check out the podcast.

Thanks!

-T

 

Posted in Business Strategy, Intelligence, Self Help | Tagged , | 3 Comments

Top Ten Strategy Tricks: #10 Schwerpunkt

Top Ten strat­egy Tricks — Really our ten favorite strat­egy concepts.

Here at strate­gic sci­ence we have a bag of tricks — mostly dif­fer­ent strate­gic tech­niques used for intel­li­gence, plan­ning, exe­cu­tion and adap­ta­tion. Things like SWOT, PESTL, five forces, value chains, PERT, Gannt Logic, Mett — TC, C4ISR, The Kill Chain… etc.

Given our time avail­able, a full analy­sis of even one let alone 10 meth­ods would be so long nobody will read it.

So we’ll cover one item at a time, Abe Lin­coln style (like a woman’s dress, long enough to cover up, but short enough to keep inter­est). But we’ll give you the full list now so you know why you’re com­ing back for more. And one quick warn­ing, our favorite tricks here at strate­gic sci­ence tend to be unortho­dox with an anti estab­lish­ment interpretation.

10 — Schw­er­punkt
9 — Wedge’s Instant Strat­egy
8 — Action is faster than reac­tion
7 — Instinct over Facts
6 — Ghost Tac­tics
5 — Ratio­nal Self Inter­est — The 90% Rule
4 — OODA Loop
3 — Stand Alone Com­plex
2 — Bad News First
1 — The Fourth Turning

Bonus tricks beyond the Ten: Com­plex­ity The­ory, Decep­tion Sci­ence, and the Macho YoYo.

Schw­er­punkt

First in the top ten series

We are putting Schw­er­punkt at num­ber 10, because it’s so impor­tant it needs to be men­tioned first.… Prob­a­bly belongs as num­ber 1 or 2 if ranked by importance.

“An oper­a­tion with­out Schw­er­punkt is like a man with­out character.”

–Field Mar­shal Paul von Hindenburg

Schw­er­punkt is Ger­man, trans­lates lit­er­ally to “hard point” or “dif­fi­cult point.” The term orig­i­nates in Clause­witz’ “On War”, where Clause­witz uses it to mean strate­gic objec­tive, goal or destination.

Schw­er­punkt has been adapted by dif­fer­ent trans­la­tions as focus of effort or cen­ter of grav­ity; a some­what dif­fer­ent con­cept used in mod­ern mil­i­tary doc­trine; notably the vastly dif­fer­ent inter­pre­ta­tions of Amer­i­can COG and Ger­man Mil­i­tary Schw­er­punkt. Their stuff works, but it’s much more com­pli­cated than what we need for strategy.

In strate­gic sci­ence as always, we go to the roots of the term — a hard point, the schw­er­punkt is the unmov­ing tar­get of your strat­egy. The one thing every­one is work­ing toward.

In the busi­ness world, schw­er­punkt is typ­i­cally imple­mented in the form of visions and mis­sion state­ments. And here I have to give Herb Ruben­stien credit; he says a strat­egy
should always be some­thing you can state in one sen­tence. That sen­tence is your schwerpunkt.

So what?

So a schw­er­punkt is your strate­gic tar­get. It could be con­trol­ling Bagh­dad in 72 hours (US Mil­i­tary in 2002), Obtain­ing 15 Mil­lion sub­scribers (Dish Net­work), or sell­ing con­sis­tent qual­ity fast food across the globe (McDonald’s). Sim­ply com­mu­ni­cat­ing the schw­er­punkt to every­one par­tic­i­pat­ing in the strat­egy allows them to use their own judg­ment in how their respon­si­bil­i­ties align to the schw­er­punkt. And it is the tar­get used to deter­mine pri­or­i­ties and rel­e­vance of efforts. If your using resources in such a way that don’t point towards your schw­er­punkt, why are you using them?

Miyamoto Musashi, the leg­endary Japan­ese swords­man wrote pro­lif­i­cally on sword fight­ing; often not­ing if your goal is to stick the pointy end of the sword into the other man; any fancy tech­niques, motions, or the­o­ries that dis­tract from that sim­ple goal are useless.

Appli­ca­tion

This should be obvi­ous upon inspec­tion — a sim­ple sen­tence that estab­lishes the des­ti­na­tion or cen­tral goal for the orga­ni­za­tion pro­vides just enough guid­ance that the lead­ers and indi­vid­u­als of the orga­ni­za­tion can fill in the gaps of the strate­gic plan and exec­u­tive guid­ance that always appear in exe­cu­tion. Bet­ter, a well com­mu­ni­cated schw­er­punkt allows mul­ti­ple lead­ers to inde­pen­dently and simul­ta­ne­ously adapt strat­egy to chang­ing sit­u­a­tions imme­di­ately coor­di­nated by a com­mon schw­er­punkt — with­out senior lead­er­ship get­ting in the way.

Exam­ples

Most com­mon exam­ple are the con­test real­ity shows like Iron Chef or Project Run­way. The chal­lenge is to often to cre­ate a result around a cen­tral theme (i.e. schw­er­punkt). Judges fre­quently ask the losers why they ignored the schw­er­punkt and went off on some ran­dom tan­gent that had lit­tle to do with the scope of the challenge.

My per­sonal exam­ple of how a shared group schw­er­punkt allows enhanced uncom­mu­ni­cated group coor­di­na­tion was sim­ply meet­ing my friends for a movie. Fresh­man year of col­lege, every­one scat­tered across the state at dif­fer­ent col­leges and jobs, bunch of dis­or­ga­nized 19 year old’s all agree to meet at the same the­ater in the city for the 5:30 pm big action movie pre­mier they all wanted to see. Sort of a reunion. Well, this was the early 90’s before cell phones and email, so com­mu­ni­ca­tion was a challenge.

I got stuck in fri­day after­noon rush hour when I hit town, and got there about 5:29 PM, about a minute before the big movie started. I was not alone. About 3 of us showed up about that time. There was no way we would get a seat, odds are the new movie would be sold out right?

Well, it didn’t mat­ter. Because we had solid com­mit­ments, a firm ros­ter, and group trust; one guy patiently was wait­ing out­side the the­ater with 3 extra tick­ets in his hand, and the rest of the group had bought extra sodas and were sav­ing seats inside. All that coor­di­na­tion sim­ply thanks to say­ing yes to a friend on a 20 sec­ond phone call a few days ear­lier. The Schw­er­punkt was to get the gang back together to see a cer­atin movie at a cer­tain time; and every­one inde­pe­dently cor­rdi­nated efforts and picked up each other’s slack to make it hap­pen smoothly despite a lack of communication.

Beyond the question

Sim­ply put, hav­ing a schw­er­punkt is not enough. It has to be clearly com­mu­ni­cated, and used as the pri­or­ity and cen­tral value in deci­sion mak­ing. Just like every other wasted strate­gic plan, it only works if you actu­ally use it and act on it.

See you next week,

Thanks for read­ing, your hum­ble strategist,

TS Galpin

Posted in Uncategorized | 5 Comments

The Difference Between Intelligence and Espionage

An out­side the box strate­gic dis­cus­sion by TSGalpin

The Dif­fer­ence Between Intel­li­gence and Espi­onage.

Is a mat­ter of life an death.

I actu­ally had some fun stuff planned for this week’s arti­cle, but catch­ing up on the news changed my mind. As a cute com­edy song pointed out in 2004, Amer­ica is so spoiled now that obe­sity is an epidemic.

Really? Just think about that. We have it so good that one of our most dif­fi­cult chal­lenges as a soci­ety is eat­ing too much.

About 1.7 Bil­lion peo­ple live in Poverty. That basi­cally means about a third of the earth isn’t sure where their next meal is com­ing from. And Amer­i­cans are dying from overeating.

So what does that have to do with intel­li­gence and espionage?

Well, con­sider Amer­i­can are so spoiled we are dying from over eat­ing. How else are we spoiled? One could say most Amer­i­cans view the world through Dis­ney col­ored glasses; War is an abstract idea we see in movies; crime is rare and the police han­dle it. Eat­ing, heat, and elec­tric­ity are a cer­tainty, even air con­di­tion­ing and inter­net access are a cer­tainty these days. The worst thing most peo­ple can imag­ine is los­ing their job.

The rest of the world isn’t so for­tu­nate. War, Plague, Famine, and Death are com­mon. Life is cheap, guns cost less than food. Chil­dren fight wars started by par­ents that died before they could know them.

I’ll spare the sta­tis­tics and num­bers because this is depress­ing enough already. The point is peo­ple need to remem­ber how dan­ger­ous a place the world is when they start inter­act­ing with it, or their mis­takes will get some­body killed.

And I don’t know about you, but I don’t like hav­ing a death on my con­science. Not if I could have eas­ily pre­vented it, or worse yet contributed to it.

Def­i­n­i­tions
Recent Events
The Rea­son Why
Wit­ness Pro­tec­tion
Did it make a dif­fer­ence?
Walk­ing The Line
Cross­ing The Line
Who Pays the Price?
The Ethics and Morals of Infor­ma­tion
Outcomes

Def­i­n­i­tions

Intel­li­gence is about gath­er­ing infor­ma­tion and ana­lyz­ing it so you can make informed deci­sions to accom­plish your goals. Sounds sim­ple eh? The trick is some prob­lems are com­pli­cated, and some infor­ma­tion is hard to find or under­stand. That is why we have busi­ness intel­li­gence, com­pet­i­tive intel­li­gence, defense intel­li­gence, national intel­li­gence, etc. Peo­ple fig­ured out that news and opin­ions make great enter­tain­ment, but you need intel­li­gence analy­sis to really make a good deci­sion and antic­i­pate the con­se­quences of your actions.

Espi­onage is about dan­ger­ous intel­li­gence; i.e. secrets. These are things that peo­ple are will­ing to fight to pro­tect. Most busi­ness secrets really aren’t that big a deal, and domes­tic indus­trial espi­onage is a hard to quan­tify activ­ity often result­ing in legal action and peo­ple los­ing jobs.

You get out into the world; espi­onage is con­sid­ered a mat­ter of national secu­rity, is often a mil­i­tary mat­ter, and peo­ple kill to pro­tect their secrets. Often because those secrets keep them alive. Osama doesn’t want his loca­tion to be known, because if it is, a bomb will land on it. That’s a sim­ple exam­ple of the infor­ma­tion peo­ple are will­ing to kill or die for.

Obvi­ously most Amer­i­cans don’t do those sort of things or think in those terms. If they do, they often wind up in jail or worse.

The last tech­ni­cal term is “redac­tion;” basi­cally a fancy word for cen­sor­ship of secrets. That old TV show where “names are changed to pro­tect the inno­cent” is a great exam­ple of redaction.

Recent Events

So what started all this?

Wik­ileaks is an inter­na­tional orga­ni­za­tion based in Swe­den that calls itself ” a multi-jurisdictional pub­lic ser­vice designed to pro­tect whistle­blow­ers, jour­nal­ists and activists who have sen­si­tive mate­ri­als to com­mu­ni­cate to the public.”

Ear­lier this week Wik­ileaks released 90,000 secret US mil­i­tary Afghan war intel­li­gence doc­u­ments it obtained to news sources, and made about 75,000 pub­licly avail­able online. To their credit Wik­ileaks did make an effort to try and redact the doc­u­ments to reduce any neg­a­tive impact. The media reac­tion has been sig­nif­i­cant, talk­ing through the details and reaction.

The Rea­son Why

Wik­ileaks, much like the mod­ern media and jour­nal­ists is all about free­dom of infor­ma­tion, trans­parency in gov­ern­ment, and fight­ing cor­rup­tion; all while pro­tect­ing the sources that pro­vide them with information.

So basi­cally they don’t like secrets, and hon­estly do pro­vide an impor­tant gov­er­nance func­tion to help keep the pow­ers that be a lit­tle more honest.

But the ques­tion is did they accom­plish that this time?

Did it make a dif­fer­ence?

Well, accord­ing to both the Wash­ing­ton post and for­mer CIA Direc­tor Michael V. Hay­den, no. All the media out­lets are report­ing that the wik­ileaks infor­ma­tion only con­firms what we already know:

– War is worse when described by peo­ple on the ground than by politi­cians.
– There are civil­ian casu­al­ties in war.
– Pak­istani Intel­li­gence is hard to work with.
– The Tal­iban are get­ting stronger.
– The Amer­i­can backed Afghan gov­ern­ment has prob­lems with corruption.

All things we’ve known for a long time, and most of them men­tioned in my pre­vi­ous arti­cle on Afghanistan.

Despite their mis­sion state­ment; Wik­ileaks didn’t give us any­thing new to work with. The “whis­tle blow­ers” are being inves­ti­gated by the mil­i­tary. All they pro­vided were some his­tor­i­cal records that don’t change the Amer­i­can Pol­i­tics at all, but will prob­a­bly get the peo­ple Wik­ileaks is try­ing to pro­tect arrested. Not exactly good for the rep­u­ta­tion is it?

Wit­ness Protection

Here’s the whole point of what I’m writ­ing. The dif­fer­ence between intel­li­gence and espi­onage is wit­ness pro­tec­tion. When peo­ple are will­ing to kill to pro­tect their secrets, what do they do to the peo­ple that tell you the secrets?

When you use a per­son as a pri­mary intel­li­gence asset — that is you ask them to spy and con­duct espi­onage on your behalf; there’s usu­ally an implicit social con­tract that you will not endan­ger the life of your source or their fam­ily; oth­er­wise why would they risk them­selves to share the infor­ma­tion with you?

In Afghanistan and Pak­istan, the US Mil­i­tary has eas­ily thou­sands of civil­ian intel­li­gence con­tacts hid­ing in plain sight, covertly pro­vid­ing us with infor­ma­tion on the Tal­iban and Al-Qaeda. Most are likely civil­ians who live in areas fre­quented by our ene­mies, or who con­duct busi­ness with our enemies.

Wik­ileaks redacted the names. But report­edly the dates and places and details are there, free for down­load on the Wik­ileaks web site. You want to know how the US learned about the meet­ing where your brother got killed in Kan­da­har? Now you can read the Pen­ta­gon file on it. It’s like try­ing to remem­ber the name of the guy who puked in your sink at that party in col­lege. If you were there and you know all the peo­ple involved, it’s not to hard to con­nect the dots and start fig­ur­ing out the names of who’s talk­ing to the Americans.

Wik­ileaks just com­prim­ised every con­tact we have in the region

Walk­ing The Line

The Hacker com­mu­nity is the orig­i­nal “Set the infor­ma­tion free” cul­ture. In the same week as this Wik­ileaks con­tro­versy is going on, Adrian Lamo, a well known hacker, had a sim­i­lar oppor­tu­nity this week, and han­dled it very dif­fer­ently. He took the hard drive filled with 90,000 secret doc­u­ments pro­vided by an Army intel­li­gence ana­lyst, and returned it to the mil­i­tary. He said “I went to the right author­i­ties, because it seemed incom­pre­hen­si­ble that some­one could leak that mas­sive amount of data and not have it endan­ger human life,” as quoted by CNN.com.

But the hacker under­stood the con­se­quences of pub­li­cally releas­ing that infor­ma­tion — peo­ple would prob­a­bly die.

He under­stood the dif­fer­ence between intel­li­gence and espionage.

Cross­ing The Line

Funny that the hacker with a crim­i­nal record was wor­ried about the wit­ness pro­tec­tion issue. And Wik­ileaks only did enough to pro­tect the iden­ti­ties of Amer­i­can soldiers.

And what did they get out of it? There has been no change in our view of Afghanistan or Amer­i­can pol­i­tics due to the leak. All they did was get credit for the largest leak of mil­i­tary secrets ever, and con­squently endan­gered the lives of thou­sands of Afghan and Pak­istani con­tacts and their families.

Who Pays the Price?

In an arti­cle on CNN.com for­mer 4 star gen­eral and CIA Direc­tor Michael V. Hay­den called wikileak’s release both stu­pid, and a tragedy.

Most of the sources men­tioned in the 75,000 released doc­u­ments now have to won­der, how good are their ene­mies at con­nect­ing the dots? How do they pro­tect them­selves and their familes?

The Amer­i­can mil­i­tary and intel­li­gence com­mu­nity has lost it rep­u­ta­tion for pro­tect­ing it’s part­ners in the region. Remem­ber the next time you work with the US gov­ern­ment, your inter­ac­tion will be doc­u­mented, and who will be look­ing for pay back when your deeds come to light?

So the US will prob­a­bly lose most of it’s spies in the region, and has lost cred­i­bil­ity for recruit­ing new ones. Doesn’t exactly help us fight terrorism.

The Ethics and Morals of Infor­ma­tion

Iron­i­cally this is prob­a­bly some­thing best under­stood by hack­ers and intel­li­gence pro­fes­sion­als. The Strate­gic and Com­pet­i­tive Intel­li­gence Pro­fes­sion­als even have a care­ful Code of Ethics that adresses the con­se­quences of con­trol­ing information.

Any­body who trades in infor­ma­tion, be they a jour­nal­ist, an intel­li­gence pro­fes­sional, or an ide­al­ist like wik­ileaks really needs to under­stand the respon­si­bil­i­ties and con­se­quences of that trade. And part of that is decid­ing how and when to respon­si­bly report the infor­ma­tion you have with­out jeop­ar­diz­ing the lives of inno­cent people.

I would argue that “The peo­ple have a right to know,” does not take pri­or­ity over the oblig­a­tion to do no harm. We might all ben­e­fit from jour­nal­ists and groups like wik­ileaks devel­op­ing an eth­i­cal stan­dard like the hip­po­cratic oath.

But real point is, if you traf­fic in infor­ma­tion — in intel­li­gence, jounal­ism, or oth­er­wise you need to under­stand the dif­fer­ence between intel­li­gence and espi­onage, or you will get peo­ple killed.

Out­comes

If I were a Tal­iban or Al-Qaeda strate­gist — I now have 75,000 clas­si­fied US Mil­i­tary reports that tell me what my ene­mies know and don’t know. What they are good at and what they are not good at. And best of all, it gives me more than enough infor­ma­tion to purge (kill) every source of pri­mary intel­li­gence the Amer­i­cans have in Afghanistan, Pak­istan, and prob­a­bly the sur­round­ing parts of cen­tral asia.

The Wik­ileaks down­load is actu­ally an amaz­ing resource for mak­ing a strate­gic assess­ment of the US Mil­i­tary in Afghanistan.

The Amer­i­can mil­i­tary now enjoys a rep­u­ta­tion as not being able to pro­tect it’s allies.

And Wik­ileaks has proven at least in this case, that to take credit for a good scoop, they will release infor­ma­tion that does no good what so ever, but does plenty of poten­tial harm.

Makes you won­der, are they stu­pid or just self­ish? Does it make a difference?

The only thing I can say — is with “friends” like these, who needs enemies?

The take away here is in intel­li­gence, the dan­ger is your typ­i­cal busi­ness risk. But espi­onage con­no­tates laws being bro­ken, and life threat­en­ing dan­ger. Those who work in espi­onage often risk not only thier lives, but for the com­pro­mised con­tacts in Afghanistan, likely their inno­cent fam­i­lies are in dan­ger as well.

The dif­fer­ence between intel­li­gence and espi­onage is sim­ply the level of risk you take.

And the cor­rol­lary to that is likely the higher the risk, the greater the poten­tial to inflict harm.

And infor­ma­tion pro­fes­sion­als have a moral and eth­i­cal oblig­a­tion to not com­pro­mise the safety of inno­cent peo­ple. That’s a mes­sage Wik­ileaks needs to hear.

And to the point, Wik­ileaks needs to take off their Dis­ney col­ored glasses, rec­og­nize how dan­ger­ous the world is and learn the dif­fer­ence between intel­li­gence and espi­onage, so maybe they will think twice before they endan­ger thou­sands of lives by releas­ing sen­si­tive infor­ma­tion that has no pro­duc­tive effect on the world.

Thanks for reading,

Your hum­ble strategist,

T.S. Galpin

Posted in Competive Intelligence, Geopolitics, Intelligence, Military Strategy, Strategy | Leave a comment

You don’t know Sun Tzu

An out­side the box strate­gic dis­cus­sion by TS Galpin

You don’t know Sun Tzu

Well, actu­ally maybe you do.  But Prob­a­bly not the same way I do.

I’ve been work­ing long days on the strat­egy book, and Sun Tzu cer­tainly takes some time to inter­nal­ize.   There’s a say­ing — “there’s noth­ing new under the sun.”  That’s true in sci­ence, espe­cially strat­egy.  Today we are talk­ing about what the mil­i­tary calls “net assess­ment.”  It hap­pens to be the first chap­ter in Sun Tzu’s “Art of War.”  You’ll prob­a­bly rec­og­nize these ideas from busi­ness the­o­ries out there, it’s a com­mon and often poorly exe­cuted con­cept in strat­egy and intelligence.

Assess­ment is the details of “Know your self and know your enemy, and you will win a thou­sand bat­tles.”   If noth­ing else, you need to have a holis­tic assess­ment of where you are and what you face; or what you don’t know will likely end you.

Sun Tzu has the best method for assess­ment I’ve found (though I have found many adap­ta­tions or rein­ven­tions).  There’s noth­ing new under the sun.

And sorry it’s a lit­tle late, had some tech­ni­cal prob­lems to rem­edy.  Hope­fully this is worth the wait.

Sun Tzu Bing Fa?
The prob­lem with Sun Tzu
Tao —
Pur­pose & Val­ues
Tian — The Envi­ron­ment
Di - Sit­u­a­tion & Posi­tion
Jiang — Abil­ity of Deci­sion Mak­ers
Fa — Meth­ods & Tech­nol­ogy
Bal­ance of advan­tage
The take away
So what?

A statue of Sun Tzu

Statue of Sun Tzu in Yuri­hama, Tot­tori, Japan (com­pli­ments of Wikipedia).

Sun Tzu Bing Fa?

You’ve prob­a­bly heard of it as  Sun Tzu’s Art of War, the Chi­nese clas­sic now ingrained in pop­u­lar cul­ture.  Most have no inten­tion of read­ing it, and those of us who try get headaches.  How­ever it is well regarded across the globe as the old­est and most author­i­ta­tive work on strat­egy.  So in strate­gic sci­ence we work through the headaches to try and unlock the enigma.

The Art of War is the Eng­lish title as trans­lated by Lionel Giles, the first author­i­ta­tive Eng­lish trans­la­tion made in Britain 100 years ago, ded­i­cated as a gift to his brother, a mil­i­tary offi­cer at the time.

The Chi­nese title is “Sun Tzu Bing Fa.”  The lit­eral trans­la­tion can be made as “Mas­ter Sun’s Com­pet­i­tive Meth­ods” or more appro­pri­ately “Mas­ter Sun’s Strat­egy.”  The “Art of War” how­ever is a far more roman­tic and poetic title, that reflects the mar­tial nature of the text (and likely a choice influ­enced by Machiavelli’s work of the same name).

The prob­lem with Sun Tzu

Is under­stand­ing what he left behind.

The con­text

Is largely ancient Chi­nese feu­dal king­dom sur­vival, around the war­ring states period.  The Strate­gic the­ory is mar­ried to the mil­i­tary sci­ence, and rooted in Taoist phi­los­o­phy.  So many dis­miss the book as mil­i­tary sci­ence or Chi­nese phi­los­o­phy; rather than gen­eral strat­egy (It’s actu­ally all three).  Schol­ars often stress that the idioms are largely Taoist and eas­ily mis­lead­ing to west­ern readers.

The lan­guage

Is hard for flu­ent schol­ars.  And lit­er­ally ancient.  Any given char­ac­ter in the text has mul­ti­ple mean­ings, some of which don’t directly trans­late well to Eng­lish con­cepts.  Just skim­ming the chap­ter title trans­la­tions on the Wikipedia page shows the dif­fi­culty of pre­cise trans­la­tion for sim­ple 1 or 2 char­ac­ter chap­ter titles.  It was writ­ten poet­i­cally on bam­boo strips, rep­utably with math­e­mat­i­cal log­i­cal rela­tion­ships that don’t really trans­late to Eng­lish text (espe­cially con­sid­er­ing most trans­la­tors are lin­guists and his­to­ri­ans, not math­e­mati­cians versed in trans­lat­ing Chi­nese for­mula into west­ern math­e­mat­i­cal sym­bols.  And who buys a math book on Sun Tzu? I’ll bet there is a small audi­ence for:

ƒ(advantage)=?(assessment)??[(?purpose)(?climate)(?position)(?leadership)(?technology)]

(Though per­son­ally I really miss the proofs we did in topol­ogy and abstract alge­bra, and enjoy that sort of exercise.)

Any­ways,

The Thomas Cleary and Gary Gagli­adri trans­la­tions very care­fully admon­ish that with­out a knowl­edge of Chi­nese lan­guage, cul­tural idioms, the his­tor­i­cal con­text, Tao­ism, and the struc­ture of the orig­i­nal text, under­stand­ing even a very good Eng­lish trans­la­tion is challenging.

So that leaves me spend­ing a few weeks with sev­eral dif­fer­ent copies of The Art of War, Gary Gagliardi’s handy translit­er­a­tion of the Tai­wanese Military’s com­plete ver­sion of Bing Fa, and my dog eared copies of Tao Te Ching and Tao of Pooh, and hun­dreds of online searches  to try and make up for my west­ern education.

Start­ing with the orig­i­nal Chi­nese Char­ac­ters, in true strate­gic sci­ence fash­ion the exer­cise here is to find the gen­eral core con­cepts in Bing Fa and present them in pre­cise sim­ple language.

Mas­ter Sun’s 5 Prin­ci­ples of strate­gic assessment

Tao — Pur­pose & Val­ues

Tao trans­lates to “Way” or “Path.”  See­ing that Tao­ism is a sub­ject onto itself, we will tread lightly.  For strate­gic assess­ment, in the con­text of mea­sur­ing an orga­ni­za­tions com­pet­i­tive advan­tage, Tao is the organization’s pur­pose and values.

This is impor­tant in terms of both strate­gic align­ment of action, and achiev­ing max­i­mum com­pli­ance from your peo­ple.  Peo­ple fight harder for a cause they believe in.  And in both east­ern and west­ern thought there is often a moral advan­tage con­sid­ered in a higher pur­pose.  You can make sim­i­lar argu­ments using incen­tive based game the­ory and ratio­nal choice on the advan­tage of a moti­vat­ing pur­pose and shared val­ues.

How hard do I work on unpaid over­time that only keeps my boss happy and earns some face­less exec­u­tive a bonus?  By com­par­i­son, how hard do I com­mit myself when I’m help­ing my friends or fam­ily?  That’s why vol­un­teers defend­ing their homes often enjoy sig­nif­i­cantly higher com­bat com­pli­ance then invad­ing pro­fes­sional mer­ce­nar­ies.  Pro­tect­ing your fam­ily and home is a much stronger moti­va­tion than fol­low­ing orders, plun­der, or fear of pun­ish­ment.  Like wise how many of you know exec­u­tives that bad mouth the company’s mis­sion state­ment, core val­ues or code of ethics?  Why would you trust or risk your­self for lead­er­ship that does that?

The first assess­ment is who has the most advan­tage from the effec­tive­ness and align­ment of the their organization’s pur­pose and values?

Tian — The Envi­ron­ment

Tian trans­lates to “heaven” or “divine prov­i­dence.”  It’s like ask­ing who’s side nature is on.  When Mas­ter Sun rec­om­mends to dis­cuss heaven he means what are the advan­tages and dis­ad­van­tages that no one con­trols.  These are exter­nal con­di­tions of the cli­mate, sea­son, or envi­ron­ment like weather, the econ­omy, reg­u­la­tions, laws, and com­mod­ity prices.  Try­ing to find busi­ness financ­ing in 2007 is very dif­fer­ent than 2009.  Sea­sons may change, but they are also beyond your control.

So which orga­ni­za­tion enjoys more com­pet­i­tive advan­tages from the nature of the envi­ron­ment?  The clas­sic exam­ple is the strate­gic mil­i­tary advan­tage that Rus­sia enjoys in the win­ter.  Hitler and Napoleon both failed to invade Rus­sia because they failed to con­sider the harsh Russ­ian win­ter.  On the other hand, the long Russ­ian win­ter ices over ports, com­pli­cates logis­tics and work­ing con­di­tions, and cre­ates an eco­nomic disadvantage.

Cur­rent envi­ron­men­tal busi­ness fac­tors are the econ­omy, poor avail­abil­ity of financ­ing, still rel­a­tively cheap energy and the poten­tial of envi­ron­men­tal reg­u­la­tion of energy.  But if you’re hir­ing there is a plen­ti­ful and well moti­vated labor pool for most skill sets.  So a grow­ing com­pany, if it can find cap­i­tal, would enjoy cheaper growth costs and bet­ter staffing today than say 5 years ago in a dif­fer­ent climate.

The sec­ond assess­ment is the nat­ural envi­ron­men­tal fac­tors and who gains an advan­tage or dis­ad­van­tage from them.  Tim­ing is everything.

Di — Sit­u­a­tion & Posi­tion

Di trans­lates to “Ground,” “Place,” “Sit­u­a­tion,” or “Posi­tion.” Or as the cliche’ goes “Loca­tion, Loca­tion, Loca­tion!”  These are the exter­nal con­di­tions that can be cho­sen or con­trolled.  You may not be able to con­trol the weather, but you can choose the time, place, and posi­tion of your bat­tles.  This can be fight­ing down­hill or locat­ing your fac­to­ries near cheap for­eign labor.  The Red Barron’s dog fight­ing posi­tion­ing based on the Dicta Boel­cke is great exam­ple — if pos­si­ble keep the sun to your back, and attack tar­gets from above and behind.

Michael Porter’s Five Forces analy­sis is a pop­u­lar tech­nique for assess­ing a busi­ness mar­ket posi­tion.  It con­sid­ers the posi­tions of your sup­pli­ers, cus­tomers, exist­ing com­peti­tors, new com­peti­tors, and sub­sti­tute prod­ucts; and can be used to deter­mine how to posi­tion your­self to succeed.

You can choose when, how, and where you com­pete.  Is the posi­tion close or dis­tant?  Do you have room to maneu­ver?  Is the posi­tion easy or dif­fi­cult to obtain and con­trol?  Find a posi­tion where you can­not lose.

Obvi­ously posi­tions change.  A west fac­ing hill side is a great uphill advan­tage until the sun sets in your face and blinds you.  Or you can sim­ply be unable to main­tain you posi­tion and lose it.  Com­pe­ti­tion is often about fight­ing over advan­ta­geous position.

The third assess­ment is who enjoys the most sit­u­a­tional or posi­tional advantages.

Jiang — Abil­ity of Deci­sion Mak­ers

Jiang means the “gen­eral” or “lead­er­ship.”  Mas­ter Sun uses it to mean the abil­ity of deci­sion mak­ers.  Assess the deci­sion makers’:

Intel­li­gence. Are they knowl­edge­able and pos­sess good judg­ment?  Can they make quick deci­sions?  Do they have the right skills?
Trust.  Do they inspire trust?  Can they be trusted?  Do they trust their sub­or­di­nates?
Love.  Do they take care of their peo­ple and care about the cost of vic­tory?
Brav­ery.  Are they will­ing to take the right risks and stand up to their fears?  Do they inspire brav­ery in oth­ers?  Are peo­ple will­ing to fight for them?
Dis­ci­pline.  Are the able to do the right thing at the right time con­sis­tently with­out over­sight?  Do they main­tain con­sis­tent dis­ci­pline, incen­tives and expec­ta­tions in the organization?

Now this may be the most sub­jec­tive part of the assess­ment, but typ­i­cally speak­ing, human resources and cus­tomer sat­is­fac­tion bench­marks alone may speak vol­umes.  Here the trick is not to judge by rep­u­ta­tion, rather by evi­dence to the above criteria.

The fourth assess­ment is the abil­ity of the deci­sion makers.

Fa — Meth­ods & Tech­nol­ogy

Fa trans­lates to meth­ods, skills, prac­tices, tech­niques, or doc­trine.  For the pur­pose of strate­gic assess­ment it means skill level and effec­tive­ness of your meth­ods, and the effec­tive­ness of the tech­nol­ogy used.  This is how good your orga­ni­za­tion is at what it does, and the qual­ity of it’s tools and weapons.  How strong, how fast, how effec­tive are your processes, logis­tics, and end prod­ucts?  How well trained are your people?

As John Kee­gan wisely argues in his book “Intel­li­gence in War” even when good intel­li­gence is avail­able, you can’t win a bat­tle if you don’t know how to fight.  When com­pe­ti­tion gets fierce, the stronger com­peti­tor always enjoys that advantage.

The effec­tive­ness of your meth­ods and skill at exe­cut­ing them is one of the sin­gle most impor­tant advan­tages you can have.

Tech­nol­ogy can­not be dis­missed.  In 480 and 490 BC inva­sions of Greece, the Greeks tech­no­log­i­cal advan­tage over the Per­sians was sim­ply the Hoplite heav­ier armor and weapons.  Greeks used longer spears, and metal shields; Per­sian spears were shorter, their shields were wicker.  Nobody real­ized the advan­tage of stealth tech­nol­ogy and mod­ern Amer­i­can air power until tested against the world’s 4th largest mil­i­tary dur­ing Desert Storm in 1991.

How­ever, new tech­nolo­gies that com­pli­cate processes and require sig­nif­i­cant train­ing are often a com­pet­i­tive dis­ad­van­tage.  A won­der­ful exam­ple is BYD who fig­ured out how to make supe­rior prod­ucts with inex­pen­sive Chi­nese engi­neers and labor inten­sive man­u­fac­tur­ing meth­ods; beat­ing out com­peti­tors using exotic processes and indus­tri­al­ized robotic manufacturing.

The sub­tle con­text of this is train­ing.  Supe­rior tech­nol­ogy and meth­ods only work if the peo­ple have the train­ing to use them to an advantage.

Meth­ods and tech­nol­ogy may be dif­fi­cult to mea­sure directly; like lead­er­ship you may have to mea­sure them through indi­rect means, or sim­ply test their effec­tive­ness through direct com­pe­ti­tion.  But you can fig­ure out who’s got the advan­tage and what it is.

The fifth assess­ment is who’s meth­ods, tech­nol­ogy and train­ing give greater advantage?

Bal­ance of advantage

Mas­ter sun then advises you add up all the advan­tages and dis­ad­van­tages found in the assess­ment, and you will see who has the over­all advan­tage.  If your mea­sure­ment of assess­ment is accu­rate, you can pre­dict the winner.

For exam­ple, In WWII the Nazi’s enjoyed home field defen­sive advan­tage, more expe­ri­ence, more sophis­ti­cated meth­ods and best of breed tech­nol­ogy in most cat­e­gories; but supe­rior tech­nol­ogy, a more expe­ri­enced army, and home field advan­tage did not make up for poor pur­pose and val­ues, not to men­tion inten­tion­ally dis­or­ga­nized over­lap­ping lead­er­ship that could not exe­cute an effec­tive strate­gic deci­sion with­out Hitler’s micro­manag­ing approval.

The final assess­ment is the net assess­ment.  Add up the advan­tages and dis­ad­van­tages on each side, and you’ll have great insight into who will win, who will lose, and why.

The whole point of net assess­ment is to holis­ti­cally under­stand everyone’s strengths and weak­nesses, so you can maneu­ver your strengths against your competitor’s weaknesses.

The take away

As I said at the begin­ning — prob­a­bly noth­ing there that hasn’t been said in a dozen busi­ness man­age­ment books.  Sun Tzu just nicely brings in all together in a cou­ple of pages.

Once you’ve made the five assess­ments, Mas­ter Sun chal­lenges the net assessment:

Which polit­i­cal lead­er­ship holds the right pur­pose and val­ues?
Which man­age­ment posses supe­rior skill?
What sea­son and posi­tion pro­vide supe­rior advan­tage?
Which method of com­mand and con­trol works best?
Which force is stronger?
Which peo­ple have bet­ter train­ing?
Which incen­tives and dis­ci­pline are most con­sis­tent and clear?

These tell you who will win and who will lose.  If you want to win, You need to develop an orga­ni­za­tion that is com­pet­i­tive on every above point, e.g. the five assess­ments and the net assess­ment ques­tions.  If you are assess­ing strat­egy for com­pe­ti­tion, this is how you iden­tify the key strengths and weaknesses.

This net assess­ment should make it obvi­ous what you need to do to win. And just as impor­tantly, what won’t work (please, never again try com­pet­i­tive entry into Rus­sia dur­ing the winter).

Now here’s the trick.  Assess­ment of your inter­nal busi­ness is prob­a­bly han­dled by finance, busi­ness ana­lysts and busi­ness intel­li­gence.  The assess­ment of busi­ness com­peti­tors is prob­a­bly done by either mar­ket research, com­pet­i­tive intel­li­gence, or lack­ing that, a cou­ple of proac­tive leaders.

That should show an obvi­ous dis­con­nect.  If your inter­nal ana­lysts and exter­nal ana­lysts are dif­fer­ent depart­ments, with dif­fer­ent goals, meth­ods, and val­ues… Then your busi­ness is prob­a­bly inca­pable of mak­ing a valid net assessment.

So what?

If, and only if you can coor­di­nate and com­bine inter­nal and exter­nal scopes of busi­ness to align, mea­sure, com­pare, and con­trast your inter­nal assess­ments with your exter­nal assessments; then, and only then have you legit­i­mately com­pleted the step so fun­da­men­tal to strat­egy that Sun Tzu put it on the first page of The Art of War.

If you don’t have a strate­gic assess­ment, or worse, your strate­gic assess­ment is patched together from unaligned work prod­ucts from dif­fer­ent groups — then your strat­egy won’t be based on the rel­e­vant facts; and will likely fail when those facts deter­mine com­pet­i­tive advantage.

If you’re look­ing for some­thing use­ful for the com­pet­i­tive intel­li­gence folks to do?  Have them do a net assess­ment, and have them start on your inter­nal assess­ment first.  That will pro­vide the tem­plate for exter­nal assessments.

But how do you use that every­day? What does this actu­ally mean for you as an individual?

Well, if you want to enjoy per­sonal com­pet­i­tive advan­tage.  Con­sider your pur­pose and val­ues.  Are they work­ing to your strate­gic advan­tage?  Think about your envi­ron­ment, what is the tim­ing good for?  Where can you posi­tion your­self?  How do you rate on the 5 abil­i­ties of deci­sion mak­ers?  Can you improve your abil­i­ties?  What meth­ods and tech­nol­ogy do you have avail­able?  Can you improve them?  Sim­ply under­stand­ing these prin­ci­ples for your­self, your fam­ily, and the groups you work with will allow you to be bet­ter at any­thing you want to do.

If you ever find your­self in a com­pet­i­tive envi­ron­ment, you can then make the com­par­a­tive net assess­ment of your oppo­nents and obsta­cles to best align what you have, to the oppor­tu­ni­ties for suc­cess that your com­peti­tors pro­vide you with.

Thanks for reading,

Your hum­ble strategist,

T.S. Galpin

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