In business as in war, a company can be small and win or can be large but lose. The rules of success or failure depends on key variables:
The Debate—Similar or Dissimilar
A debate exists as to whether business strategy and war strategy are equivalent. The attraction of applying strategic, operational and tactical strategies of war to business is similar. Many principles and tools of war strategies can be applied to assist those in the business world. Some view business and war strategies differently and come up with a new view of how they can be applied.
One dissimilarity with business is that, within the context of past military planning and doctrine, there tended to be, generally, only one enemy and the purpose of the planning activity is to fashion the conditions for a specific, decisive act to bring defeat to the enemy. However, the nature of current warfare has transformed vastly from the days of state-to-state positional warfare and two well-defined enemies fighting within distinct geographic theaters of conflict.
For more than seventy years, war planners have been dealing with asymmetric warfare, fourth generation warfare, low intensity conflict, nonstate actors participating in various wars and skirmishes. As in business, rarely do we deal with a single enemy or a single decisive battle to end a conflict and bring about the defeat or surrender of the single enemy. The Iraq and Afghan wars of conflict are examples of this assessment.
Current Warfare Strategy
In Iraq, the US military and its allies were fighting Iraq’s the Sunni Arab community upon their toppling of Saddam Hussein’s brutal Baathist regime and subsequently these same Iraqi Arab Sunnis allied themselves with US forces to extract from communities the menace and plague of Al Qaeda. Both in Afghanistan and Pakistan, US military forces were fighting alongside of, and supporting, the national security forces of these two nations while the next minute they are combating them directly and indirectly while fighting the Taliban, fragments of Al-Qaeda and different Jihadist combatants.
Accordingly, current warfare strategy, as we know it today, and business strategy have begun to converge with more remarkable similarities than differences. In business, the competitive landscape is generally complex and dynamic. Strategy and tactical interplay are vital in business. Similarly in warfare, the multitude of different stakeholders must be considered. In Afghanistan, the US military must, at the same time, plan and manage relationships encompassing Pakistanis, the Iranians, the Russians and several Afghan clans. Some times they are treated as friends and sometimes as foes. This complex relationship is also trues in business. Look at Apple Computer and Samsung. Both are fighting in the battlefield of the courts over intellectual property rights and at the same time cooperating and collaborating on other projects.
The competition is more vague and often operates over an ill-defined territory. Consequently, modern warfare is more about politics and community action than purely military engagement and its goal is to wear down the various forces working against your army and render them ineffective and unwilling to continue fighting rather than totally eliminating them. An example is Coca Cola versus Pepsi. Both companies have waged a very expensive conflict, however none have the intention of totally destroy the opponent.
Types of Warfare
In large part, warfare strategy, at a tactical level, fosters “kill, capture, destroy” asuch of the military opponent’s capabilities as fast as possible while protecting current forces. In business strategy, parallel tactics are called upon. Types of warfare include:
Limited War—a military example is the US versus the Nicaragua Sandinistas whereas the US used overwhelming superiority to defeat. A business example is Microsoft versus smaller software producers in the 1980s and 1990s. Microsoft used patent trolling techniques and it market dominance to block competition.
Counter-Insurgency (COIN)—a military example is the US versus the Taliban. Although decisive victory probably cannot be achieved within the normal mode of warfare, a COIN strategy use the divide and rule tactic that bifurcates the existing power structure and prevent smaller power groups from linking up. The strategy is designed to fracture the connections between insurgency and the population thus weakening the enemy. A business example is the US versus Microsoft for violating the Sherman Antitrust Act. Microsoft used its WINTEL dominance to crush its competition during the browser wars with Netscape’s Navigator and Opera Software’s Opera browsers. By bundling its Internet Explore web browser into its operating systems (O/S), making it difficult to download competing browsers into the Window O/S, and forming restrictive licensing agreements with its original equipment manufacturers, Microsoft prevented smaller companies effectively from competing or gaining any traction.
Total War—a military example is the Soviet Union versus Nazi Germany. Typically a high intensity conflict of balanced opponents, such wars tend to be a victory at any price, even if truce would be advantageous for both parties during a stage of the war. An example is two of Germany’s most well known brands Volkswagen and Porsche and reclusive industrial families, the Porsches and the Piechs; both belong to the same family line. This resulted in the 2008 majority takeover by Porsche of Volkswagen. The typical strategy is total exhausting of the opponent similar to war.
Correspondingly, purpose of much of the best of current business strategy is to transform the rules of the game in favor of the business. Creating unique market niches based on the first move advantage, and discovering a unique technology as well as product, and process innovation can grab an unquestionable market share based on a combination of these factors that competitors simply cannot weaken. Accordingly, warfare, whether business or military, becomes a series of battles whereby the cleverest “wins”, but where victory is more about the superiority at what you do rather than total dominance leading to a wholesale decimation of the company’s competition.
Strategic Business Warfare Tactics Series:
This it is first of a blog series on business warfare strategies. The series will discuss various war tactics that can be used as competitive strategies for family businesses, entrepreneurs, small businesses, and business executive to thrive in both good and tough market conditions. Sign up at http://garyrushin.com to follow the series.