Sun Zi’s Art of War for Business Transformation in a Precarious World

By: Lim Liat                8-9-2022


Sun Zi’s Art of War is not just about warfare. It is rather, the winners’ mindset. It is about how the ordinary can do the extraordinary, of defeating giants and becoming winners. It is about how to strategize to win and execute with leadership, a cool head yet a passionate heart, watchfulness, learning, and adaptability. It is a humble and growth mindset.

Winners Plan First

[The Art of War Chapter 4 形篇]: 是故胜兵先胜而后求战,败兵先战而后求胜。

Winners plan first to win and then start a fight. Losers fight first and then try to win.

The secret of “hundred battles and a hundred victories” is simply choosing to fight only the wars you can win after careful planning. For business, we need to plan and derive the right strategies first. Always start with a plan and only do it when it is sure to be profitable even in the worse possible scenario.

Planning with Five Factors

How then can we plan first? How can we know we can win? Sun Zi proposed five factors:

[Chapter 1 始计】故经之以五事,校之以计而索其情:一曰道,二曰天,三曰地,四曰将,五曰法。

Hence, manage with five factors. Measure and compare them to obtain the truth. The first factor is “Philosophy”, then “Heaven”, “Terrain”,” Commanders”, and lastly “Methods”.

1 道 Philosophy or Belief or Culture

Sun Zi explained that Dao is the thing that unites the people from the bottom to the top such that they are willing to live and die for, regardless of danger. It is the religion or the philosophy that they believe in. In business, that will be the “Mission, Vision, and Values” of the business. It is also the behavior and values represented in the culture of the organization.

 2 天 Heaven, Weather, the Seasons, Trends, or Timing

Sun Zi explained that ‘Heaven’ is night and day, cold and hot, the cyclical seasons. It is the weather of the environment that one is in. In business, such environmental factors will be the PESTEL (Political, Economic, Social, Technology, Environmental, and Legal) factors and the desires of customers. The key is to learn to read the trends and directions making sure we ride the trend rather than going against the trend.

3 地 Terrain and Paths

The terrain is about distance, slope, width, throughway or dead end, and place for living or death. In business, terrains will be your marketplace. It will include your market positioning, your path, and your distance to reach your customers. How big is your market? How fast and scalable can you grow your business to be the leader? How easily can your customers buy from you? Customer experience with you is a journey from knowing, buying, delivering, installing, using, enjoying, fixing when spoiled, and upgrading. You can change any of the above in the journey to serve your customers better.

 4 将 Commanders – Their qualities and capabilities.

This represents the leadership of your company. Sun Zi tells us good leaders need to have five attributes in balance. The five are wisdom, trustworthiness, love, boldness, and discipline. Sun Zi tells us that if we love our men like our children, then they will be committed to dying for us. But if we over-love them to spoil them so that they could not be commanded then they could be employed in war. If we love them too much to not punish them, then they will be ill-disciplined and disorganized. Without the wisdom of not knowing the enemy and thereby resulting in a loss and death is the most unloving thing. Boldness is not recklessness but being able to stay calm in a crisis and to make the right decision quickly. We can see that the attributes need to be in balance. Wisdom alone is a Cheat; Trust alone is a Fool; Love alone is a Weakling; Bravery alone is Impulsive; Discipline alone is Cruelty.

5 法 The Organization and Methods.

More specifically, it is the organization structure, know-how, processes, procedures, company laws and policies, command, control, and communications. All should be in alignment for the use of the management to achieve their mission and visions.

Seven Measures for Knowing if we can Win

How can we know we are stronger? It can only be done by measuring and comparison. So, Sun Zi proposed seven measures as follows:

 【1 始计】故校之以计索其情,曰:主孰有道?将孰有能?天地孰得?法令孰行?兵众孰强?士卒孰练?赏罚孰明?吾以此知胜负矣。

 1 主孰有道?Do the top leaders possess the Dao, the philosophy?

Do the top leadership has the right mission, vision, and values? Most organizations today have mission, vision, and values statements. But they are too abstract and vague to be behavioral, and so be observable, copyable, and promotable. So the actual behavior of the staff, the real culture, is very different from those stated. Worse is when the senior management does not live out those values. They think that the values are for their staff and not themselves. This will create a real culture that conflicts with the desired philosophy of the business.

2 将孰有能?Are the Commanders capable?

Do our leaders have the five attributes mentioned earlier? Are they in balance?

3 天地孰得?Are the advantages of the trends & terrains being exploited?

The failure of many past giants such as Kodak, Nokia, and RIM is best explained by the quote from Peter Drucker, father of Western Management, “Business failed because their Theory of Business does not match reality”.

Sun Zi tells us to always”审时度势” Read the Time & Assess the Situational Configuration.

Let’s learn from Jeff Bezos, founder of Amazon:

What we need to do is always lean into the future; when the world changes around you and when it changes against you – what used to be a tailwind is now a headwind – you have to lean into that and figure out what to do because complaining is not a strategy.” – Jeff Bezos, Founder of Amazon.

We take the advice from Steve Jobs, founder of Apple, Next, Pixar who said,” I Skate to where the puck is going to be, not to where it has been”.

4 法令孰行?Are the laws and commands being enforced and followed?

What makes for a disorganized and chaotic organization? How can a large number of people work together smoothly? Does the staff know what are the right or wrong things to do? Values must be made into policies to guide behaviors. Staff should be promoted or fired based on those policies. Sun Zi emphasized this importance by stating the seventh measure shown below.

5 兵众孰强? Are the staff capable?

Do the staff have the right skills (according to the needs of your strategies)? What is the level of proficiency of their skills relative to your competitors? What is the size relative to your competitors?

6 士卒孰练? Are the men well trained?

Do they practice often so that the execution is fast and smooth when triggered? Having the right skill but lacking frequent practice is insufficient for winning. Sun Zi tells us the impact, the power, is the stored energy through frequent practices released in the shortest possible time. This is thousands of years before Newton’s formula of Power = Energy/Time!

7 赏罚孰明?Are the rewards & punishments fair & transparent?

There is no use in having policies and laws when enforcement of rewards and punishments is not done. The impact of such negligence is best described by Sima Guang, historian, and senior official of the Song Dynasty, “If goodness is not rewarded and evil is not punished, then the good ones will be lazy and the evil ones diligent.” The most common error committed is the rewards and punishments are for openly and fairly done, causing suspicion and distrust.

We can use the seven measures to appraise our own company. It is like a health check. When we use them to compare against the enemies’  we can arrive at a conclusion on the probability of winning.

Application To Your Business – 10 Questions for Your Review

1 Consider your company mission and visions are they meaningful and motivating? Are they communicated clearly and frequently from top to bottom?

2 What values are key to accomplishing your mission?
Most companies’ values are basic moral values such as honesty, passion, professionalism, etc. They are minimum but not sufficient for your success. If you are in Food & Beverage business, then the key values should be cleanliness, hygiene, healthiness, and contamination prevention. In high-tech business, the value should be innovations, learning, experimentation, critical thinking, etc.

3 Are those values described in observable, behavioral terms, be institutionalized into policies?
Most companies like to put “Customer First” as a value. But what does it mean? Different people have different concepts of customer-first. It is best to look up how Amazon and Netflix define those values into behavior, observable and copyable terms.

4 Do you have corresponding incentives and discipline systems to enforce those key values?

5 Are your offerings leading, riding, following, or outdated by the market trends?

6 Is your offering position well in the eyes of the customers?

7 Have you worked out your strategies to achieve your visions? How can you tell if they are good or bad strategies? Can you tell which are the strategic jobs?

8 Do you have the right people in those key jobs?

9 Are those key jobs given the right authorities to make those key decisions?

10 How are you well organized and the staff well disciplined?

Strategize with an Outside-In Approach

Chapter 10 地形篇: “知彼知己, 胜乃不殆, 知天知地, 胜乃可全”

The most common error in quoting Sun Zi is “知己知彼 百战百胜“, “Knowing self and knowing others will give you a hundred battles with hundred victories”. Such wording is not found in the text of the Art of War. Firstly, the order is wrong. It is knowing others first to know yourself. You may have a hundred engineers and think you are strong. But the reality is that whether you are strong or weak depends on the competitor you pick to fight. If he has only ten engineers, then your hundred is strong. But if your competitor has a thousand engineers, then your hundred engineers’ strength is weak. Our tendency of looking at the world from ourselves is very dangerous. Our inside-out view will cause us to look for things and evidence that support our opinions but fail to see the things that we should have seen; things that could cause our failure.

Consider the failure of Nokia and Microsoft smartphones. They wrongly project their subjective view that the smartphone market will be just like the PC world where Apple was the niche and Microsoft was the majority. They failed to see that the iPhone was not just a phone connecting people but rather a cloud device that connects people to the cloud of social networks, knowledge, and commerce applications.


So, the right way to do your strategic planning is to invert the SWOT (Strengths Weaknesses Opportunities Threats) into TOWS. Take the outside-in approach to look at the threats first. Your strength or weakness should be judged accordingly to the demand of the outside environment. Strengths are those you have to overcome the threats. Weaknesses are those that cause you to be overcome by threats. You can decide how to employ your strength to overcome the threats and how to compensate for the weaknesses to survive the threats. These become your strategic initiatives. Only when you can survive the threats can you then exploit the opportunities. As with the threats, we can now work out the strategic initiatives to exploit the opportunities. Consolidating the initiatives will give us the strategies to ride on the external trends.

Change the Rules of the Games – Giant Killing

For a transformational change, we need to find out the current rules of the business and then change them such that our abilities become the needed strength and others become irrelevant or weak. This is because the current rules of the game are dominated by the giants.

Story of Apple iPod

Is iPod just an mp3 player? The mp3 player giants then, such as Creative Technology and Samsung, thought so. But it’s actually a rules-changing device. It changed the rules of the sales and distribution of music and songs. It is about searching and paying for a dollar for a song that you like and being able to immediately enjoy it on the move, rather than being forced to pay for a CD at $20 containing many songs that you don’t care for. Sun Zi’s 5 factors tell us not to look just at the surface of what and how, but to go deeper into the why, the Dao, and work out the what and how. That is where you discover the rules and then change them to suit you, so that you may become the new champion.

Pre-Plan Action is Key because GIGO (Garbage-in Garage-Out)

Sun Zi stresses a lot on planning before action. Planning should be based on facts, situations, and intelligence about the enemy, and then figure out how to gain advantages over the enemy. Sun Zi gives us many tactics that were later expanded to the famous 36 Stratagem for warfare. Early probing and careful planning with decisive committed action at the right time and place to gain a win in the shortest possible time is the mindset of the winners. The posturing of Power 势(accumulation of strength) and then a decisive control 节 release at the right time is the key to early success. Lack of power or releasing too early or late is bad.

Is Business a Warfare?

Business is commonly misunderstood as warfare. The fact is business is actually a love affair between you and your customers. However, your customers will use your competitors to judge how ‘loving’ you are to them. So, which do you focus your attention on first? Jeff Bezos, founder of in HBR Oct 2007 said, “Be afraid of our customers because those are the folks who have the money. Our competitors are never going to send us money.” In business, the customer is the judge who decides who wins by casting his money. So focus on your customers first and address competitors as needed when the customers bring them up. If we focus just on the competitors, we will just be playing catch-up games. Nevertheless, if you are new to a business, then learn from the market leaders. It will help you understand the customers’ desires and the current rules of the game.

Sun Zi’s Art of War is Incomplete

Business today is not just the competition for products or services. It is also about the competition in supply chains. In the case of the Apple iPhone, it is iPhone supply chains versus the Android supply chains. Apple had chosen the proprietary route. Android is based on more open standards. Android’s supply chain has many more partners than Apple’s resulting in better economies of scale. It is the key reason for Android becoming the market share leader even though it started 2 years after the Apple iPhone. Android’s success is all about how Google is able to form an alliance, the Open Handset Alliance against Apple.

With Sun Zi, we know how to compete. But we also need to know how to form an alliance. Such know-how is the wisdom of Gui Gu Zi, the Father of Diplomacy. While Sun Zi’s 4 levels of winning strategy, alliances, fighting in the field, attack a fortified castle, did mention alliances, he did not cover them in much detail. Such work on influencing human hearts is in Gui Gu Zi’s book “Open and Close” and should be a subsequent read after Sun Zi.


Chapter 11〔九地〕将军之事,静以幽,正以治。

The affairs of the commanders are keeping calm and quiet to plan deep and wide, considering all the forces at play in depth. With righteousness and fairness, manage and engage the people for a fighting fit orderly force.

The first half is about strategizing and the second half is about execution with speed and order and thereby achieving your mission and visions. How to strategize to win is best depicted in the diagram below. There is no one right strategy or a fixed pattern for all situations. The KEY is to be agile, flexible, and adaptable to exploit the situations.

Success depends on staying relevant to your customers, the markets, and the external PESTEL situation. Please stay humble and take an outside-in approach. Need to engage your staff to be united and committed to executing the derived strategies with ever-learning and adaptation to the changes. Hope you can take Sun Zi’s Art of War thinking mindset to review your business to achieve greater success.

My public courses available in Singapore:

Sun Tzu’s Art of War for Success: The Complete Strategic and Leadership Insights for Business Leaders

Winning Without Warring: Advanced Sun Tzu’s Art of War Strategy for Business Leaders 4.0

eMail for an in-house course or consulting.

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