You don’t know Sun Tzu

An out­side the box strate­gic dis­cus­sion by Ted S 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:


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


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,

Ted S Galpin

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