See How Jack Ma Applied the Art of War in Growing Your Business in Bad Times

In 2016 Zhejiang Businessmen Conference, Jack Ma gave a speech on “How to grow your business in a challenging time?”. You will find many concepts taught by Sun Zi’s Art of War in his speech. Here is his speech mind-mapped from the Art of War perspective. You can learn about the application of the Art of War by a very successful master.

The Mind-Map of the Art of War Oriented Speech:

Jack Ma put forward 13 key points in his speech. I reorganized them according to Sun Zi’s Five factors.

The Key Lessons:

  1. Transform to Stay Relevant:
    The most important concept is that any business must be constantly transforming itself to stay relevant to the market.  This echoed Peter Drucker’s quote “Business failed because their theory of business does not match reality”. The main teaching of the Art of War is 审时度势 – Read the Time & Trends and then response rightly.
  2. Develop Inner Core Strengths:
    Jack Ma said the inner strengths are about organization, talents, and culture. These are exactly the 法 method, 将 commanders/leadership, and 道 dao philosophy. The order is opposite of Sun Zi. But Jack Ma in other speeches said that Culture is key. So we see Jack did not have the order in mind. Sun Zi said that “Dao 道 is the thing that unites everyone from top to bottom to act together and they are not afraid to die and to live together. It is the mission, vision, and values of a business. It is the culture of the business.
  3. Leadership – Entrepreneurs vs Professional Manager
    Jack Ma used a hunting story to show the difference. An entrepreneur and a manager went hunting. They fired at a wild-boar. They missed. The manager would run away. But the entrepreneur will bring out his knife to go after the wild-boar! When times turn bad, managers live first. Entrepreneurs will find ways to turn the business around. You can find the other leadership attributes highlighted by Sun Zi in Jack’s speech as shown on the map.
  4. Good News or Bad News? It all depends on You!
    If the economists forecast is bad, it may seem like bad news. But the good news is that it applies to everyone, including your competitors. Hence, another key principle of Sun Zi is about conversion. Choose the right combination of time, situations, people, methods such that you see the opportunities in the bad news, where also you convert the harms to benefits so that you can be successful while others fail. Similarly,  when things are going well, you need the potential dangers, the current wastes, the possible redundancies in the future and take action now.
  5. TOWS, not SWOT.
    The Art of War is about cool and calm evidence base decision making based on facts and calculations. Warfare cannot be left to chance or by prayers. Threats must be addressed before opportunities. Jack Ma advised this in point 5 above.
Your Turns:
What are lessons can you pick up from Jack’s speech. What one or two things that impressed you that you may want to take action now to benefit your business?

Lim Liat (c) 22 Feb 2017

For more on Sun Zi, see Sun Zi and Other Strategists

New Management Thinking and Sun Zi’s Art of War

PwC’s Strategy+Business website has an article titled “Creating a Strategy That Works” that came out with Five Key Practices after studying 14 leading companies in various countries and industries. It pointed out how these five unconventional acts differ from the conventional business wisdom. These five unconventional wisdom supports the teaching of Sun Zi’s Art of War. Furthermore, Sun Zi’s Art of War provides a better framework and additional wisdom that demands our study.

PwC’s Strategy+Business website has an article titled “Creating a Strategy That Works“. It compared the conventional business wisdom against the unconventional acts of the leaders in the various industries and countries.  I like to examine such business strategic articles and books, e.g.  Playing to Win: How Strategy Really Works, or Managing in a Time of Great Change, against the teaching of Sun Zi’s Art of War to see if the Art of War is still applicable to business and whether there are additional wisdom to be gained from both, the modern Western management thinking and the ancient Chinese wisdom.

 Here the summary of the combined thinking presented in a mind-map format:

The main branches describe the unconventional acts with the conventional acts described under them. In the sub-branches, additional remarks are added to give greater clarity.  Related quotations from the Sun Zi’s Art of War Book are added.For Point 4 Cut Costs to Grow Stronger, Jesus used the illustration of the pruning of a vine to convey the concept better, see Secrets of Organizational Success – Growing Vines.Culture Eats Strategy for BreakfastThe Key Points of the Teaching is best summarized by a quote of Peter Drucker (at least commonly attributed to him) which is “Culture eats strategy for breakfast/lunch”. It is not about not to have a strategy but rather has a strategy based on your identity of unique value contribution driven by the right culture. Having the right culture adopted by all as the foundation, it can handle the storms of all changes and come out winning. The identity and the right culture, usually described in the business literature as the mission, visions, and values, is also what Sun Zi called it as Dao 道, the Way or the Philosophy of the company. Sun Zi’s put it as the #1 factor in his five factors of 道Way 天Heaven/Seasonal Trends, 地 Terrain/Markets 将Leadership 法 Methods. Using a solid unchanging foundation to handle all changes is a famous Chinese Stratagem of 以静制动 using the unmoved to manage the moving. This is also the famous Jim Collins Hedgedog concept. It reminds me of Jesus’ parable of the “Wise and Foolish Builders”

  • “Everyone then who hears these words of mine and does them will be like a wise man who built his house on the rock. 25 And the rain fell, and the floods came, and the winds blew and beat on that house, but it did not fall, because it had been founded on the rock. 26 And everyone who hears these words of mine and does not do them will be like a foolish man who built his house on the sand. 27 And the rain fell, and the floods came, and the winds blew and beat against that house, and it fell, and great was the fall of it.” –  Matthew 7:24-27

The two key words are Jesus’ Words and Doing them. They can be translated into modern business practices as the right Way (Sun Zi’s Dao 道) and then the adopting and execution of them, which means the right culture. Culture is the actual values and behavior adopted by the people.

The most successful example of the adoption of the right culture, the mission, and its practice, is Apple Inc. See What and Who has the Best Mission Statement?

As most management books only cover a subset of the total wisdom needed to run a business well, it is my recommendation that we study Sun Zi’s Art of war for a complete picture. My complete Sun Zi’s Art of War framework for developing business strategies taken from one of slide in my Sun Zi courses, is shown below:

I hope you can see that modern management books continue to support the teaching of Sun Zi’s Art of War.  The Art of War gives a more comprehensive and condensed teachings on not only developing the better-winning strategy but also the leadership skills to execute them.

For more on Sun Zi, see Sun Zi and Other Strategists(Gui Gu Zi)

Lim Liat (c) 6 Feb 2016

Sun Zi’s Art of War Formula – Simple yet Comprehensive

The ‘Art of War’ of Sun Zi contains 13 chapters. The challenge is to capture the essence and yet without loosing any key details in as short a form as possible. Here is the Formula that tells you all.

I spent many weeks reflecting on how I can express the content of Sun Zi’s Art of War in as short a form as possible and at the same time not loosing any key details. The short form is good for us to remember, recall and to apply it into the many business decisions that we face.

One Chinese Word – 势 Comparative Power

It can be expressed in one Chinese Word – 势 Comparative Power. To be clearer, Sun Zi teaches us about how to 造势 Create or build Comparative Power and then 取势 ride on the wave of the created power.

‘知彼知己’ ‘Know Others(Competitors) and Know Self’.

The ‘how to’ is expressed in the famous quotation of ‘知彼知己’ ‘Knowing Others(Competitors) and Knowing Self’. This is about building our strengths relative to our competitors or in the modern management term of ‘comparative’ or ‘competitive’ advantage. Sun Zi used a bow and arrow to illustrate power and speed of action. The distance the arrow can reached is dependent on much the bow is bent (potential power or energy that we must build) and how fast the trigger, the arrow is released.

 ‘知天知地‘  Know Heaven (Weather, Season, Timing) and Earth (Terrain, Positioning)

What is frequently omitted is in the second part of ‘知天知地‘ , which is ‘knowing the timing (seasons and wealther) and knowing the terrain (or more precise, the shapes and advantages offered by the terrains such as cliff, narrow passage, water obstacle etc). Sun Zi not only tell us how to build our strength with his five factors of philosophy, timing, terrain, leadership and policies and seven measures which include the strength and skill of staff; he also tell us to make use of, or exploit the potential power from the external environment ot timing and terrains. Making use of the natural tendency offered by Heaven (Timing, Seasons) and Earth (Terrains), will allow us to have power without any of our effort! We just ride the tidal wave. Making use of nayural forces or tendencies is best illustrated with a puzzle. “How do you feed pepper to your cat?”. Hint: The answer is in the natural tendency of the cat.

Out Innovate Them

The last part then is the engagement between us and our competitors. The is for winning is to surprise them or in modern management term, out innovate them! Another way is speed. We can also sieze the initiative by out menuerving the competitors with deception, tempting, threatening, creating chaos, division, angering,  waiting while they labor and spend, attacking their weakness etc.

The Tag Line – Build Ride Innovate

The tagline for Art of War is then about build your comparative advantage over them, ride on the natural trends and out innovate them.

One More Thing – Business is a Love Affair more than War

Sun Zi was taking about war. To apply Sun Zi’s wisdom in today business world, we need to know one key thing – Business is a love affair with us customers first with our competitors being used as reference to evaluate our business value that we bring to our customers. The best way to out do our competitors is actually to focus first on serving and developing relationship with our customers. We keep track on our competitors is only for the purpose for serving and increasing our value to our customers. We make use of what our competitors are doing that we may do add even more value to our customers.

The Sun Zi’s Art of War Formula

To capture all the essential teaching of a subject, it is much clearer and simpler to express it as a fomula as shown below:SunZi Art of War Formula

Hope you can grasp the essential teaching of Sun Zi’s Art of War.

Lim Liat (c) 26 April 2014

The Highest Form of Leadership – Leaderless

The best form of leadership, for this VUCAD world, one that is adaptive and sustainable over time, is leaderless. But you don’t get that kind of leadership overnight. It can only be built overtime with right people and a simple principle of remaining leaderless. Surprised? Read the details….

Who should Microsoft choose to be the next CEO? Some one that can compete with Google and Apple ? No says Ancient Chinese Wisdom Book I-Ching. An Invisible Leader says Lao Zi. Lou Gerstner who saved and transformed the ailing IBM says, “It is the culture only”. So, pick someone who can build the self-managed leaderless culture.

What is the highest form of leadership? 
According to I-Ching, the Book of Change, it is leaderless.

A key hexagram in leadership in I-Ching is #1 Heaven – The Creative Force. See Learning from “I-Ching” Part 04 1-乾 Heaven – Creative Force. In it, it lists out six stages of growth for a ‘dragon’, representing an able person, from learner,  to executive, to manager, to entrepreneur, to Chief Executive Officer (CEO), to retiring chairman. Then it adds a seven grand summary stage with description of “用九”:见群龙无首,吉。”. Translated as “Use Nine: Seeing a host of dragons without a chief. It is good fortune.” A group of dragons without a chief is a stage of good fortune! In the commentary added by Confucius or his disciples, we find the following:

  • 乾元“用九”,天下治也。Heaven/Creation is great. Use Nine and the world is ruled well.
  • 乾元“用九”,乃见天则。Heaven/Creation is great. Use Nine is the model of the rule of heaven.
So we can see that the best or the good fortune stage of an organization is leaderless.
The good fortune is seen in the following:
  1. a host or a group i.e. an organization or a community
  2. dragons : more accurately, mature dragons that went through the six stages of growth. They are independent persons with good virtue of character and ability.
  3. without a chief: There is no one designated as the chief or commander to direct others around. The people know what to do for the good of the organization. When face a crisis, may be the best person to handle it will take the lead and others will contribute according to their best abilities. When the situation changes, previous leader hand over to the next one who is most able to do the leading.  He that is able takes the lead is the leadership model of the Ancient China before formation of Dynasty when the kingship is handed to the son. Such leadership model ensures the organization always has the best person to run it. It is self-renewal.
Building the High Performance Self-Managed Leaderless Organization
Such a high performing self-managed and self-sustained organization does not come just like that. They must fulfill the 3 criteria listed above, namely, an organization, dragons, without a chief.
  1. Shared Mission & Values: An organization or a grouping of people must have common mission and values as the glue to bring and hold them together.
  2. Dragons – Talents Development. We need to hire and develop the talents and make sure they grow up in character and ability. In I-Ching, we can find the details those qualities and know-hows in the 64 Hexagrams and 386 stage lines of wisdom.
  3. Leaderless – The Best One Lead: The organization needs to have a simple rule on leadership. There is no fixed leader under normal operation. When there is a crisis or a need, then the most able one to address the need take over as the leader. When the issue is solved or resolved, the leader steps down and the group return to leaderless mode.
The important one to note is that such a flexible self-manage organization needs to be built over time. But we now have the guidelines to build such an organization. In the present commercial world, there are more and more organizations adopting such a self-management model. The most popular one is The MorningStar Tomato Company  http://morningstarco.com/index.cgi?Page=Self-Management.
See also Levels of Leadership – Can We Measure Leadership?, where Lao Zi tells us the highest level of leadership is the invisible leader. This also shows Lao Zi’s actionless principle in action. See The Tao Bible in One minute .
If you are still doubtful, consider the purpose of parenting. The job of parents is to develop their children from dependence to independent mature adults. The job of CEO is then about developing their staff to be capable and engaged staff so that they can be independent and yet co-operative staff to achieve the mission of the organization.
Lim Liat (c) 8 Nov 2013