Policy on Strategy Formulation Author: Dr. Mike Fung, P.Eng., PhD, MB., MSc., BSc., International WHO s WHO of Professionals (USA), Alberta s WHO s WHO, Fellow: Corporate Secretary (UK), Fellow: Tax and Management Accountant (Australia) Email: dr.mikefung@yahoo.com.hk Web site: www.drmikefung.com Preface This article follows the first one on Preparation for War Engagement. Let us go through some important terms and their concepts. Preparation on War is the assessment on the war situation, and a preparation on soldiers, arms and resources. On War is the declaration on a fight against another country in all aspects and territories. Battle is the individual fight at one spot of military importance. Policy on Strategies of War is the policy on the war. It is what the Generals and Soldiers have to obey, without allowing any error and mistakes. Plot is a cover up plan against the enemy. Specific Strategy is the strategy applied to a specific situation, such as the Geographical Strategies, the Nine Grounds of War, and Nine Changes. Tactic is the technique at the battle, such as flanking, use of cannons, use of missiles, use of airplanes etc. Military Positioning is the aggressive fight to gain certain critical and advantageous military spots, such as a mountain, a seaport, an express way, a bridge etc., which will give the occupant specific advantages to win the war. Sun Tzu Article 2--Policy on Strategies Formulation 02.doc Page 1
In deploying a war, we have the Policy of Strategies first, then, Plots, and Specific Strategy and Tactics. We do not have to worry the exact definitions of them, because they could overlap with each other and there are no exact definitions. The author explains Sun Tzu s Policy of Strategies in the following paragraphs. The Policy of Strategies of War (PSW) PSW is what the Generals and Soldiers as a whole need to obey absolutely, without errors and mistakes. For those who fail to do so, they will be punished severely. Training of Soldiers Sun Tzu said, Train the People and Soldiers Daily so that they will follow the laws and disciplines any times. Governance should be transparent and clear cut. Also, soldiers should be drilled often, so that they can attack and retreat flexibly, with the front supporting the back and vice versa. The operations of the soldiers on the battleground should be As Free Flow as Water, full of flexibility and fluidity. According to the situation, our soldiers should avoid and run away from the hard fighting enemies, and chase after the weak fighting enemies, such that we moves like a whirl. This is what a modern company should achieve in the requirement of a holistic flexibility. Overwhelming Power Sun Tzu said, soliders should act Like Tyrants, Oppressing other Kings, such that it will be Winning in a ratio of weights as Yiu to Chu, which means 576 times to 1, and may even Win the War without A Fight at all. It is because at the war, if the other Kings do not cooperate, they may not permit our soldiers to go through their countries. They may not sell foods and accessories to our army. They may even send information to our enemies, or help our enemies. Nowadays, US soldiers acted like tyrants, oppressing many countries. In the business world, significant amount of money and powers, added with a good reputation, always help. To achieve being a Tyrant, the country has to use a progressive approach, such that pushing up its confidence and powers higher and higher. Whenever a company has achieved such a status, even large suppliers will Sun Tzu Article 2--Policy on Strategies Formulation 02.doc Page 2
support its marketing strategies, customers will buy from it first, and even competitors will respect it, such that the company will achieve its goals easily. Our home country PRC is now doing exactly this way. Information is Power Sun Tzu said, If we know ourselves and know the enemies well, we will fight any battle without a failure. Due to this, the Strategy Division and the Department of Military Commands, should be serious in collecting useful and accurate information, and should not be meant on spending money on Spies. After getting the information, we should stir up the enemy to see their reactions, so that we will know the rules they follow in the operations, their responses and spots of strengths and weaknesses. Based on these, we can formulate our attack and defense strategies. In the business world, Know ourselves and know the enemies are golden rules. The author has seen many businesses failed because they had not follow this golden rule. Becoming Invincible Our army has to Make ourselves unfailing, and wait for the opportunities of the enemies to make mistakes and errors. Some companies, once they were successful in the cracking of the market in entrepreneurship, they expanded very fast and looked for other opportunities. Due to their infirm foundation, they collapsed soon. They forgot that we should become unfailing first, before we look for a winning opportunity. Of course, once the foundations were firmly established, whenever there were good opportunities, they should take the risk and should not be feared to go ahead. Every War Must Win and Win Fast At wars, the most important things are Winning and Fast. So we should not go for a battle easily. We have to Assess the battle to be a sure win before going to the battle. On the other hand, we should not drag on the battle. We should win the battle and the war as soon as possible, so that we can reduce the huge military expenses. On the other hand, when the soldiers were out of home for a long time, they lost their spirits and also their bodies might not be able to hold longer in consuming alien waters and foods out of the country. They also thought of going home soon. So they should not stay out for a battle for a long time. Sun Tzu Article 2--Policy on Strategies Formulation 02.doc Page 3
Win with Substantial Advantages When we are at war, we should win at substantial advantages as much as the weights Yiu to Chu in 576 times to 1. It is to win the war, and one should not take the advantage of glorifying oneself, and make personal benefits. So, at war, we need to minimize our own casualties and damages. That is why we need to be in 576 times to 1 ratio to win. It is because, if we have ten times more soldiers, we circum the enemies, if we have five times more soldiers, we attack them, and if we have two times more soldiers, we split the enemies in order to attack them. So we win in easy win battles, and not to win in difficult battles. Due to this, our army keeps on winning battle by battle so that we become stronger and stronger. In the business world, it is the same. We should remember that we win with absolute advantages, in projects with small risk, small investment, yet high production and high return. We should not take unnecessary risks. Managing Emotions at War The Generals should not be emotional on decisions. They should obey the rule that If we do not have adequate military power, we should defense only. When we have adequate military power, then we can attack. In the business world, some companies did not assess their own strengths and weaknesses and the target projects requirements. They jumped into risky projects, and at the end, they lost them all. Advance or Retreat at Right Times Also we should Advance and retreat properly. The timing must be right. Otherwise, the loss will be huge. Also whether advancing or retreating, the soldiers have to be in orders, otherwise, it was common that our soldiers could be killing our own men. The popular war of Fe Shui in China was such an example that the soldiers stepped on their own men and killed each other by disorders. Fooling the Enemy When we are facing the enemies, we need to Pretend to Follow the Enemy s Wishes, such that, according to their wishes, we will attack them without their guards. This is what we called Winning in an Artist s Way. In fact, in the business world, following the wishes of the suppliers and customers are very common. Sun Tzu Article 2--Policy on Strategies Formulation 02.doc Page 4
Only Move when there are Benefits When we make a decision to act, we should bear in mind that if there are no benefits in acting so, do not act. If we are not in danger, do not get into a battle. It is because in every battle, we will have casualties and damages, and we should not waste our energy, efforts, resources and arms. Sun Tzu said, If we set fire against the enemies, we need to have a clear military objective and the supporting conditions. We should not Waste Efforts in no benefit battles. Attacking What the Enemy Worries Most After deciding on war, we have to Capture the enemies mindful thing. This is what we called Attack where the enemies must protect itself, so that we can manipulate the enemies and not be manipulated. In the olden times, we talked about Country Chai circumed Country Ngai in order to save Country Chiu. This means at that time, Country Chiu asked Country Chai to save them from the attack of Country Ngai. Country Chai did so by sending troops to attack Ngai s home land. So Ngai s troops had to return home to save themselves from the attack of the Country Chai. In the modern market competition, one way to compete is to use a near quality but not as well known band to attack the major incoming making band of the opponent. If the opponent does not return the fight, his business will be lost to me. If they return the fight by lowering their prices of the band, they will lose their sources of profits. This is an awful strategy that the opponent will lose either way. In another example, it was when the Apple Computer attacked IBM the mainframe computer company. Both the IBM mainframe computer and the Apple PC sold the same thing, data calculations. So, if IBM reduced the prices of the mainframe, they would lose heavily in their incomes right away. If IBM developed a small computer to compete with Apple Computer, their own small computer would be competing with its own mainframe computer. Eventually, IBM designed and developed a new version of small computer using public available electronic parts. As a result, the Apple Computer s business was capped, yet, IBM allowed other manufacturers to keep designing and manufacturing small computers with available public electronic Sun Tzu Article 2--Policy on Strategies Formulation 02.doc Page 5
components. So, IBM won over the battle against Apple Computer, but lost the war to many other small computer manufacturers. Forming the Attack Team When the soldiers are in actions, they are organized with structures, but, they win by surprising formation of attacking units drawn from the structures. This is because in defense, the soldiers need to be in proper orders for movements and directives. However, for attacks, we need to draw out special skilled soldiers and their equipment from the organized units to form new special attacking units. This is what we called in the western management as Matrix Management. Matrix Management is the most successful way of management. At 20 years ago, US designed and developed new cars required about five to six years. Later, they adapted to the Japanese s Multi-disciplinary Team management. In the previous management, to design and develop a new car, they needed to design the blue print in the Design Department in one year, then, send to the Engineering Department to check out if feasible. The Engineering Department and the Design Department would go forth and back many times to make the design feasible in engineering. After this, the design was sent to the Manufacturing Department to check for production feasibility. Again, the project was sent forth and back several times amongst the three departments. After this, the design was sent to the Sales Department, which would require changes as well. With the multi-disciplinary team, about two to three competent professionals would be drawn from each department to form a team. With this team, ideas and feasibilities would be checked against each other immediately. With this method, the new car design and development would be able to be completed within two to three years. This was in fact what Sun Tzu said about Normal Organization and Formation of New Attacking Units. Sun Tzu Article 2--Policy on Strategies Formulation 02.doc Page 6