In the first part of Chapter 1 of the Sun Tzu Art of
War, it was mentioned that going to war is of vital importance to the
state, because it can determine whether it survives or not and also
whether it will prosper or be destroyed. There is no in between. Since
the stakes are high, initial planning and assessment are critical.
So
which area should the ruler look at before deciding to go to war? Sun
Tzu proposed these five main areas and they are broken down into seven
sub areas.
We can see from the writings that Sun Tzu is a very
meticulous person because he broke the five points down to the
dimensions that one should look out for. For example, he broke down the
terrain into whether it is high or low, near or far, wide plains or
narrow paths, treacherous or accessible or the weather is broke down
into cold or hot, night or day and which season it is in.
The 5 areas and 7 sub- areas are:
1) Political leadership of the Ruler
2) The weather where the battle is taking place
3) The terrain where the battle is taking place
4) Generalship, the person commanding the battle
5) Army organization structure and systems
7 Sub areas
a) Political Intelligence of a Ruler
b) Capability of General
c) Advantage of provided by Weather and Terrain
d) Effective and Efficient Execution of Orders
e) Equipped level and numerical strength of army
f) Training level of army
g) Administration of rewards and punishment
Relating to business aspect,
these are important factors that determine the successful
implementation of a company's strategy. The key here is to relate these
factors to business. There should not be much difficulty in relating
these factors from military to business.
a) Employer or top management ability to unite the company or department behind a vision or to achieve certain goals.
b) Capability of Manager or Team Leader.
c) Different Aspects of Market like the culture of people, government set rules and regulation.
d) Business Systems like inventory management, delivery system and others.
e) Technology available to staff.
f) Skill set and knowledge level of staff.
g) Administration of rewards and punishment.
1) Unity: Employer or top management ability to unite the company or department behind a vision or to achieve certain goals
As
the heading says, political leadership in war is equivalent to the
ability of the top management of the company to unite behind certain
goals and vision.
Easier said than done? Sure but I think there
are certain guidelines we can follow, first of all, the idea and
purpose of the goals and vision should be made as clear as possible to
the whole company. How do you do that? Quite easy, in my opinion,
involve the whole company in crafting the goals and painting the
vision. For those of you who has seen the Apprentice 3, in the graffiti
competition, the leader of Magna Corp, was able to consult some of the
kids from the street to provide some input to the graffiti that they
were painting. In the end, because the focus group that determines the
winner was able to identify with the graffiti, (the kids and the focus
group came from the same neighborhood), the Magna Corp won the
competition.
For those of you from big companies, it is
definitely very difficult to involve the whole company. So the top
management could decide some macro goals and vision pass it down to the
middle management and get them to craft out the goals of their
department according to the goals or vision crafted by the top
management and so on. What is important is the whole company can relate
to the macro goals and vision painted by the top management.
Another
important factor is the hiring process. Michael Dell, from Dell
Computers stresses that it is important to hire people who is
completely in sync with the company's philosophy and objectives. This
person's thinking must be compatible with company's value and belief.
(Please read Direct From Dell by Michael Dell).
2) Capability of Generals: Capability of Manager or Team Leader (Leadership)
This
is more straightforward than the previous sub-area. This is one area
that is quite important in my opinion. The reason why I say that is
because firstly, a good leader would have been able to unite and
command the respect of his army and people of the nation. A wise
general would not be leading his army to attack when weather conditions
are bad or terrain is unfavorable. Even if he is forced to do so, his
wisdom (one of the characteristics for mentioned comparison) would be
able make his troops avoid engaging his enemies or turn disadvantages
into advantages. Good generals would be able to create a strong
organization structure and control in his army through the other four
characteristic mentioned for comparison.
The five capabilities
that are advocated by Sun Tzu are Wisdom, Benevolence, Courage,
Discipline and Trustworthiness. Just these five characteristics are
definitely not and exhaustive list of the characteristic of a good
leader, but in my opinion these five are the most important so that an
army, or in business, the project team or department to function
properly. And from these five words, there are a lot of things to look
out for, which I shall not write here or I would be writing a whole
chapter.
3) Advantage of provided by Weather and Terrain:
Different Aspects of Market like the culture of people, government set
rules and regulation
This is something that is not
straightforward, not a lot of people can relate from weather and
terrain with respect to which area of business. After reading some
books and some thoughts, I would like many to take note of the
difference.
For weather, we know that in war, the advantages and
disadvantages presented by it can be tremendous and influence is wide
ranging. It is one of the factors that we cannot control at all. For
business, these could be the trends that are happening in the broad
industry. Like certain consumer trends, e.g. Consumers are going for
healthier food. Grey-ing market, Current Technology is going the
convergent route and so on.
So what about terrain? Well after
much thought I think it can be comparable to the market you are
battling or catering to. Depending on the market and your strategic
focus, the barriers of entry and exit are determined. If you have
looked through Sun Tzu Art of War, you would have known that when Sun
Zi mentioned about terrain, it is most of the time, how easy or
difficult one can enter the terrain. For a comprehensive list of
barriers of entry or exit, I would recommend Michael Porter's
Competitive Strategy.
4) Effective and Efficient Execution of Orders - Business Systems like inventory management, delivery system and others.
In the fourth sub areas proposed by Sun Tzu, it queries whether an army is able to execute orders efficiently and effectively.
In
war, if the orders are not clearly passed down to everyone in the army,
confusion will prevail and would render the whole army useless and in
the end the general would not be able to execute his strategy. So we
can see from here is that strategies can be formulated but there would
be risk in carrying out the strategy. In Romance of Three Kingdoms, we
have marveled at the strategies that were formulated by Kong Ming, or
more often known as Zhuge Liang, but if the generals that he delegated
the assignment to was not able to execute them well, his strategies
would be useless no matter how good it sound on paper.
Relating
this to business, I think the most prominent thing that a company
should go for is to improve the business systems in his company.
Business systems could be logistic/supply chain systems, sales
processing systems, HR systems and many more. As most companies,
operate or expand, they should aim to improve their systems. Make it
more convenient and effective for the staffs that are using it.
Sometimes, as the companies expand too fast, like catering to several
overseas market or relocation of some functions of the company to other
countries and so on, some requirements that were needed could be
redundant and new requirements & regulations or technology must be
added to improve it.
So how do you improve the systems in your
company? Well, need I say more, ask the people who are using the
system. For example, for sales processing system, ask your salespeople,
admin staff for the system. You may include your IT personnel to see if
there could be some cost effective automation integrated into the
process.
All in all, give your staff the necessary resources and convenience to carry out their task effectively and efficiently.
5) Equipped level and numerical strength of army - Technology available to staff
Now
in war the equipped level and the numerical strength of the army plays
and important part in victory. Because the larger the army, the more
you can strengthen you positions or attack more places to distract your
enemy. The next best thing would be to equip your army with the best
armor and weapon so that they have the advantage over the enemy's army.
This advantage, no matter how small or little, will be important during
war. Because as I said in war, it is either live or death, for the
nation as a whole.
So how does this relate to business? We can
easily interpret this as the equipped level of your staff in carrying
out their jobs. For instance, an employee cannot do much if you only
provide her with a typewriter. All she can do is fill out forms or file
a report. But if you provide her with a computer, now that is a totally
different thing. She can do calculation of account, enter accounts and
so on.
Each and every staff should be equipped with the bare
necessities to help improve their work rate. We have seen how Wal-Mart
is using the latest technology, RFID, to help improve their logistics
and sales. By using technology, you would be able to provide your staff
with real time data so that they can make quick decision and clinch
sales easily. Of course all these have to be weighted against the costs
of buying and installing the technology. Be well versed with the latest
available technology, note their development and once it is
advantageous to equip your staff with it, go ahead to buy it.
6) Training Level of Army - skill set and knowledge level of Staff
When
we say equipped level, most people would quickly relate to technology
available to staff, we tend to overlook the software which is the skill
set of the staff. We need to send our staff to attain more skills and
knowledge. Knowledge of the industry to feel the pulse of it, new
developments in their field like sales and marketing, knowledge of
maximising the efficiency of the technology available and so on. A
computer is nothing if one does not have the knowledge to use. Now
another point I want to mention here is that most employer would send
their employees to pick up skills that are needed immediately but this
often does not provide a company with a competitive edge, what
employers should look out for is sending staff to obtain skills that
are needed in the future so that you are well equipped to handle the
new opportunities that you foresee coming and reduce the reaction lag
as mention in Porter's Competitive Strategy.
Now a lot of people
worry that if you send these people to improve their skill sets, they
would leave for greener pastures when they are poached for that skill.
I would suggest that you make this clear to the employee and ask that
he be contracted for a period of time or at least require the staff to
pay part of the training fees, not substantially of course.
7) Administration of Rewards and Punishment
Here
I would like to stress the importance of rewards and punishment. Han
Fei Zi, a great politician during the Warring States Era stressed the
importance of administering rewards and punishment, writing two
chapters on it. He said that the administration of it is so important
it actually determines the survival or demise of the nation. And equate
the administration power of rewards and punishment of the ruler to the
fangs and claws to a tiger. Without the power, the ruler would not be
able to administer the affairs of the state well. Would anyone listen
to their supervisor if it lacks the power to administer rewards and
punishment? Of course not, because he has lost authority on you.
One
of the two chapters written by Han Fei Zi, is about setting the rules
and condition for rewards and punishment and the next chapter on how to
administer it. The reason why a chapter was written on the
administration is because during those days and even till now, we tend
to reward more to people that we know and love and excuse our relatives
or friends from punishment when they make a mistake. Why is this so?
This is because firstly, we are human beings thus we have feelings and
secondly is because these friends affect our social life. We do not
want to offend them.
So it is important in the modern business
that they structure their reward and punishment correctly so that their
work is aligned with that of the business strategy and culture. For
example if you reward base on individual sales, it is very likely you
would not be promoting teamwork. If you reward base on individual
product department performance, it is very unlikely that cross selling
would not occur.
Besides aligning with the business strategy and
culture, the administration of rewards and punishment plays a big part
in talent management strategies as well. In business, the pay you give
to your staff is always compared to one that is similar job scope and
preferably in the same industry to make a good comparison. Beside the
pay being compared with other similar jobs, it is also compared with
inflation as well. Employee may feel shortchanged, especially in times
of high inflation, when income increase cannot be in tune with
inflation.
