THEARTOFWARFORSMALLBUSINESS

THEARTOFWARFOR

SMALLBUSINESS

DefeattheCompetitionandDominatetheMarketwiththeMasterfulStrategiesof

SUNTZU

BeckySheetz-Runkle

Bulkdiscountsavailable.Fordetailsvisit:www.amacombooks.org/go/specialsalesOrcontactspecialsales:Phone:800-250-5308E-mail:specialsls@amanet.org

ViewalltheAMACOMtitlesat:www.amacombooks.orgAmericanManagementAssociation:www.amanet.org

Thispublicationisdesignedtoprovideaccurateandauthoritativeinformationinregardtothesubjectmattercovered.Itissoldwiththeunderstandingthatthepublisherisnotengagedinrenderinglegal,accounting,orotherprofessionalservice.Iflegaladviceorotherexpertassistanceisrequired,theservicesofacompetentprofessionalpersonshouldbesought.

©2014BeckySheetz-Runkle.Allrightsreserved.

PrintedintheUnitedStatesofAmerica.

LIBRARYOFCONGRESSCATALOGING-IN-PUBLICATIONDATASheetz-Runkle,Becky.

Theartofwarforsmallbusiness:defeatthecompetitionanddominatethemarketwiththemasterfulstrategiesofSunTzu/BeckySheetz-Runkle.—1Edition.

pagescmIncludesbibliographicalreferencesandindex.

ISBN-13:978-0-8144-3381-2ISBN-10:0-8144-3381-2

1.Smallbusiness—Management.2.Strategicplanning.3.Leadership.I.Title.HD62.7S52542014

658.4’012—dc232014005358

Thispublicationmaynotbereproduced,storedinaretrievalsystem,ortransmittedinwholeorinpart,inanyformorbyanymeans,electronic,mechanical,photocopying,recording,orotherwise,withoutthepriorwrittenpermissionofAMACOM,adivisionofAmericanManagementAssociation,1601Broadway,NewYork,NY10019.

Thescanning,uploading,ordistributionofthisbookviatheInternetoranyothermeanswithouttheexpresspermission of the publisher is illegal and punishable by law. Please purchase only authorized electroniceditionsofthisworkanddonotparticipateinorencouragepiracyofcopyrightedmaterials,electronicallyorotherwise.Yoursupportoftheauthor’srightsisappreciated.

AboutAMAAmericanManagementAssociation(www.amanet.org)isaworldleaderintalentdevelopment,advancingtheskillsof individuals todrivebusiness success.Ourmission is to support thegoalsof individualsandorganizationsthroughacompleterangeofproductsandservices,includingclassroomandvirtualseminars,webcasts, webinars, podcasts, conferences, corporate and government solutions, business books, andresearch. AMA’s approach to improving performance combines experiential learning—learning through

doing—withopportunitiesforongoingprofessionalgrowthateverystepofone’scareerjourney.

Printingnumber10987654321

Tomyhusband,DavidRunkle.Hedeservesamedal.

CONTENTS

Acknowledgments

Introduction

PART1—SEIZETHEADVANTAGEWITHSUNTZU

1.AboutSunTzuandTheArtofWar

2.ThePowerofApplyingTheArtofWarforSmallBusiness

PART2–UNDERSTANDING:ESSENTIALSUNTZU

3.UnderstandYourself

4.UnderstandtheEnemy

5.UnderstandtheMarket

6.SunTzuforCustomersandBusinessAlliances

PART3—PRINCIPLESFORTHEBATTLEFIELD

7.EmbodytheGeneral

8.Perseverance

9.Focus

10.Unity

PART4—ADVANCEDSUNTZU:STRATEGYFORYOURSMALLBUSINESS

11.Maneuvering

12.Adaptation

13.Spirit

14.Deception

15.SunTzuandtheFutureofYourBusiness

Appendix:KeySunTzuPassagesforSmallBusiness

Notes

Bibliography

Index

AbouttheAuthor

FreeSampleChapterfromDoIt!MarketingbyDavidNewman

ACKNOWLEDGMENTS

The Art of War for Small Business relies on Lionel Giles’s translation as itsprimarysource. Iamalsodeeply indebted toThomasHuynhforhis translatedandannotatedTheArtofWar:Spirituality forConflict,publishedbySkyLightPathsPublishing,andforgenerouslyallowingmetousemanypassagesfromhisworkhere.Thomashasbeen a sourceof encouragement andunderstandingofSunTzu, and his perspective brings amore nuanced viewof the philosopher-general. I’ve made some reference to the popular translation by Samuel B.Griffith of Oxford University, as well as the version presented to StevenMichaelsoninBeijingatasymposiumoftheResearchSocietyofSunTzu’sArtof War. I also relied on J. H. Huang’s Sun-Tzu: Art of War—The NewTranslation, published byHarper Paperbacks, for some translations aswell asdifficult-to-findhistoricalcontext.

Iamgrateful toeachof theseauthorsfor theircontributions to theSunTzuliterature and for their guidance in developing The Art of War for SmallBusiness.

THEARTOFWARFORSMALLBUSINESS

INTRODUCTION

ImaginethatthegreatstrategymastermindSunTzuwaswithustoday.Imaginethathe,likealotofcareermilitarymenandwomen,wentintobusinesslaterinlifeasaCEOor joinedtheexecutiveteamofasmallbusiness.Howwouldheadapthisprinciples fromTheArtofWar towagewarandpeace forhis smallbusinessandbuilditintoanempire?

That’sthequestionattheheartofTheArtofWarforSmallBusiness.Themilitary principles of Sun Tzu’s classic,The Art ofWar, are timeless.

They’readaptedandbroughttolifedailybythecompaniesandexecutivesthatuse them. Sound strategists frequently bring Sun Tzu to life, often withoutnecessarily recognizing the origins of their strategy in the sage’s words frommore than 2,500 years ago. Howmuchmore effective would they be if theystudiedSunTzu’sdirectionandwereable toapply itmore intentionally?Howmuchmoreeffectivewouldyoube?

Small-businessleadersmustbesmarterandstealthierthantheirlarger,better-establishedadversaries.They’llfailiftheytrytomatchthebigplayerstoolfortoolandmoveformove.And they’llwitheron thevine if they justattempt toweatherstorms.Thisisparticularlytrueincompetitiveindustrieswithsmallandshrinkingmargins.Smallbusinessesmustwinbattlesandachievesuccesswithvery lean budgets and comparatively few resources. The great news is that ifinterpretedandexplainedwell,SunTzuprovidesprofoundinsighttodirectand

inspire the moves of small-business leaders so that they can defeat theircompetitionanddominatetheirmarkets.

TomakeSunTzuasrelevantaspossible,TheArtofWarforSmallBusinessis filled with examples of his strategies put into play by small businesses. Inmost (thoughnot all) cases, thepractitionershaveprobablyemulatedourherounwittingly,butthey’vebeenrewardedfortheirmovementsallthesame.Someofthesebusinesseshavemissedthemarklaterintheirevolution,andothersmayfall from grace, either temporarily or permanently, in the future. But don’tmistakefuturepitfallswithperformancethat’sworthlearningfromandperhapsemulating.TheArtofWar forSmallBusiness is forcurrentandaspiringentrepreneurs

and small-business practitioners who are battling Goliaths, and who one dayseek to become powerhouses in their respective industries. It’s also for thosewhostudySunTzuandare looking for anewadaptationuniquely for smallerforces.ThisbookisacomprehensivestudyofSunTzu’smasterpiece,targetedtoapplicationsforsmallarmiesandillustratedwithsuccessstories.TheArtofWarisverymuchtheplaybookthatsmallerforcescanusefordomination.Thisbookisyourguidetoitsapplication.

SUNTZUINJUJITSU

I took my very first martial arts lesson in 1990. I was fifteen, and it was adefiningmoment.Mostpeople takea lesson inkarate, taekwondo, jujitsu,oranothermartialartand,iftheylikeit,declarethattheywanttogetablackbelt.Not me. It was during that very first Tang Soo Do class at the now-defunctRisingSunKarateClubthatIknewIwantedtodomartialarts.Iwantedtostudyandtotrainandteach.IknewtheveryfirstnightthatIwouldonedayhavemyownschool.Morethantwentyyearsandseveralblackbeltslater,I’mpleasedtosay that dreams come true and that passion can continue to burn. I teach at asmalldojo(traininghall)inmyhometoaselectgroupofstudents.Butthestoryhasn’tgoneasplanned.

Inthoseearlydays,Iwasfortunatetofindanexcellentkarateschool,runbytwowonderful instructors, JohnWeaver and Jack Lynch, both ofwhom havelongsinceretiredfromteaching.Theystartedmeoutonmypursuitofmartialarts. I was extremely committed to karate and took that training very, veryseriously.Iwasyoungandlimber,andgotprettygoodatperformingthekicksandpunches.Ialsogotquitegoodatkata,aprescribedsequenceofmovementsthatgetspracticedroutinely.ButwhereIfellshort,timeandtimeagain,wasin

sparring.Iwasn’tafraidtofight,andIwasn’tafraidtogetknockedaround.ButthebottomlinewasthatwhenIwenttoe-to-toewithbigger,strongeropponents,they almost always beat me. They punched harder. They kicked harder. Icouldn’toutmuscle them. Icouldn’toutwrestle them.My technicalproficiencywasnomatchfortheirgreaterstrengthandsize.DespitehowhardIworkedandtrained, the tools I had to useweren’t bringingme any closer to reachingmygoalofself-defensedomination.AfterRisingSunKarateClubcloseditsdoors,ItrainedatacoupleofotherkarateschoolsinandaroundruralLancasterCounty,Pennsylvania,whereIlived.

WhenIwentawaytocollegeinPhiladelphia,ImetSenseiRandyHutchins.He taught jujitsu—more specifically Sho Bushido Ryu Jujitsu, an aiki-jujitsuthatemphasizesconceptssuchasunbalancingtheattackerandusinghisenergyagainsthim.WhereasthekarateIstudiedwaslinear,jujitsuiscircular.Whereaskarateisdefinedbythrowingaseriesofattacks,jujitsuisfluid,withabeginningandanend,butnorealstepsinthemiddle.Eachtechniqueisonemovement.

ThekarateIstudiedwasbasedonforceagainstforce.Theattackercomesinwithapowerfulblowandyoublockit,andyoudeliveryourownblow.Forme,whentheadversarywasmuchstronger,Iwasonthelosingendmoreoftenthanwasacceptable.ThiswasthecasenomatterhowmuchItrained.Itriedforyearsto make the force-on-force model work for me and fell short. It’s verydiscouraging to pour yourself into something and not see results comparablewith thehardworkandcommitmentyoucontribute.Butmyjujitsuexperiencewasfardifferent.Itisn’tbasedonforcevs.force.Instead,youblendwithyourattacker, break his balance, disorient him, and render him compliant. And ifyou’regood,itlooksandfeelseffortless.I’vefoundthistypeofmartialartstobemuchbettersuitedforme toprepare forextremelychallengingself-defensescenariosanddealingwithstronger,biggeradversaries.Butitwasdifficult.Theaspects of karate in which I excelled came easily for me. Leaving thoseprinciples to adopt new ones thatwere diametrically opposed towhat I knewwasintimidatinganduncomfortable.Butithasmadeallthedifference.

Mymartialarts journeyhas requiredsomeseriousandunanticipatedcoursechangesthatcalledmetoquestionwhatIknewandunderstood.Howdoesmyexperience relate to your small business? In the same way, youmay need tomake some changes that are painful and abandon some practices to whichyou’ve grown very attached. Practices you probably take for granted as truth.They need to be exchanged for a spirit of flexibility, adaptability, andwillingnesstobranchout—insomecasesquiteradically—sothatinnovationcanflourish.You need a clear sense of your strategic objectives and an insightfulpicture of your organization and competitors, which requires an honest

assessmentofyourbattlefield.LetSunTzuilluminatethatpath.

PARTONE

SEIZETHEADVANTAGEWITH

SUNTZU

Within the context of an overviewof SunTzu andTheArt ofWar, as presented in the first twochapters, you’ll explore the critical and common advantages and disadvantages of the smallbusiness. They will be recurring factors throughout the book, building blocks toward the moreadvancedconcepts.You’llunderstandtheimpactofTheArtofWarongenerationsandlearnhowtouseTheArtofWarforSmallBusiness.You’lllearnaboutmytranslationmethodologyandreceivesomewarningsonhownottostudySunTzu,nomatterhowtempting.

1ABOUTSUNTZUANDTHEARTOFWAR

ThischaptercoversfundamentalbackgroundonSunTzuandTheArtofWar.Itprovidesyouanunderstandingof thehigh-levelhistorical context thatwill setthestageforthelessonsyoucanapplytoyoursmallbusiness.

ABOUTSUNTZU

SunTzuwas a contemporaryofConfucius.He is believed tohave lived from544to496BC,neartheendofthespringandautumnperiod,duringtumultuoustimes inChina.During thisperiodof theweakChoudynasty,Chinahadmorethan 150 states continually competing for power. These states battled oneanotheruntilonlythirteenmajoronesremained.Ofthese,sevenhadfarsuperiortroops and resources.This era set the stage for theWarringStates period thatwouldfollow.1

SunTzuisthenameweassociatewithTheArtofWar.HisgivennamewasSunWu.Hewasborn into a noble clanwith the surnameChen.A student ofmilitarytheory,hetraveledtothestateofWuasitsmilitarypowerwaspoisedtoescalate.ImpressedwithSunTzu, thekingofWubroughthimintothefoldtohead up troop discipline and to assistGeneralWuZixu in creating the state’s

strategyforexpansion.2Wu’sforemostrivalwasthestateofChu.BecauseChuwasasuperpower,the

kingofWu,GeneralWu,andSunTzuknewthey’dneedtocarefullyconceiveandexecuteastrategytodefeattheirstrongerfoe.Sotheysplittheirarmiesintothreeandconductedhit-and-runattacksonthemightyChu.Forfiveyears,Wuused this strategy. Itworked like this:AdivisionofWuwouldapproachChu,andthesuperpowerwouldemerge.Wuwouldthenwithdraw.Then,whenChuwould withdraw, Wu would emerge. For five years, Wu did this, seeking toexhaustandagitateitsfoes,hopefulthattheywouldmakemistakes.3Itworked.Chuexperiencedgreat losses.Then, in thesixthyear,506BC,Wulaunchedadecisiveassault,wonallfivebattles,andtookYing,Chu’scapital.4

ABOUTTHEARTOFWAR

As the earliest andmost enduring book on strategy,5 and certainly one of theforemostworksforthebattlefield,TheArtofWaristheauthoritativeguideformilitary affairs and political activities in the Far East, and it has become aprominentandoft-studiedtreatiseinmilitary,political,andbusinesssettingsallovertheworld.WhileTheArtofWarisashortandconcisetextofabout7,000words,itscontentsareimmeasurablydenseanditsapplicationsinfinite.The Art of War is required reading in many business schools andmilitary

institutions and essential reading for business leaders. We have no way ofknowing just howmany forces over the centuries have applied Sun Tzu. Thework was first translated into French in 1772, and the first complete andannotatedEnglishtranslationwaspublishedbyLionelGilesin1910.TheArtofWar was usedwith considerable success by theNorthVietnamese during theVietnamWar. It’s said that it was that war that first brought Sun Tzu to theattention of the American military. General Vo Nguyen Giap successfullyimplementedtacticsdescribedinTheArtofWarduringtheBattleofDienBienPhu,aturningpointthatendedthemajorFrenchinvolvement.GeneralVo,laterthemilitarymastermindbehindvictoriesoverAmericanforcesinVietnam,wasanavidstudentandpractitionerofSunTzu’sideas.TheArtofWariswellcitedasinfluencingMaoTse-tungandothercommunistinsurgencies.TwoAmericangenerals,NormanSchwarzkopf andColinPowell, appliedSunTzuduring thefirstGulfWar.6

ButitisSunTzu’senduringbusinesscontextthatisofgreatestinteresttoushere.

Sun Tzu is studied in MBA courses throughout the United States and bymultinational corporations. Small businesses are especially well served to usethistexttounderstandwarasametaphorforbusiness.Today,manycompaniesofallsizesarebasingtheirgrowthonprinciplessuchasecosystemdevelopment,strategic alliances and networks, transparent user communities, and openinnovation. Such concepts may, at first, appear contrary to military strategy.Wouldn’t Sun Tzu be better suited to the dictatorial leadership style that wasmoreinvogueinpreviousgenerations?Thatassumptiondemonstratesalimitedunderstanding of the sage. And certainly this manner of waging business isinadequateforthecollaborative,open,dynamicwaysinwhichsmallbusinessesarethrivingtoday.

SUNTZUFORSMALLBUSINESS:STRATEGYANDSERENDIPITY

TherearemanybooksthatapplySunTzutobusiness,aswellasotherpursuits.My initialadaptationwasSunTzu forWomen:TheArtofWar forWinning inBusiness. Are authors being opportunistic? Maybe. But I can only speak formyself.Here’s the truth.Sun Tzu forWomen fell intomy lap, so to speak. Itwasn’t my concept, but an opportunity presented itself that, upon closeexamination,wasveryattractive.AsIstudiedTheArtofWar, thistimewitharenewedfocusonitsimplicationsforwomeninbusiness,Isawthatapplication.Butthatwasn’tallthatIsaw.

As I waswriting Sun Tzu forWomen, I was repeatedly struck by how hisprinciples could shape and build smaller forces into mighty organizations. Ithought of all the entrepreneurs and small-business CEOs and leaders I’veworkedwithandforovertheyears.Beforewritingthatbook,IhadrereadTheArt ofWar shortly after cofounding a small agency,Q2Marketing,whichwelater sold in 2011. At that time, my perspective was as a new entrepreneurenteringalargebutcrowdedspace.Istudieditwithinacompetitivecontext.Buttoday,Ireaditdifferently.Iseeitthroughthelensofamarketingandstrategyconsultant,andthroughmyclients’eyes.Ithinkyou’llfindthatSunTzu’sTheArtofWarhasprofoundapplicationforyoursmallbusiness,too.The Art ofWar has helpedme to identify and seize opportunities, and it’s

guided me to create favorable conditions for victory. It can help you to takeadvantageofeveryopportunity.Andasyou’llsee,equippingasmallerforcetoovertakealargeroneisacentralandenduringthemeofSunTzu.

2THEPOWEROFAPPLYINGTHEART

OFWARFORSMALLBUSINESS

We take our perspectives everywhere we go. Everything we say and do isautobiographical.IfyouwanttoreadTheArtofWarasabookonwinningandkeepingpeace,youcan.Youcanreaditasabookofaggression.I’malifelongmartialartist,small-businessandmarketingpractitioner,andhistoryenthusiast.Irespect“justwars”andthesoldierswhofightthemand,likeSunTzu,Ibelievethatwar isbestwhen it’suncommon.As I closely followpublicpolicy in theinternational arena, I understand the threat and reality of war as a historicalconstant.Theweakareoverrunbythestrong.Peopleeverywhereareinastateofcompetition.

Business, too, inmanyways, is likewar.Smallbusinesses thatendeavor tofightby therulessetupby industrypowerhousesaredestinedfordefeator,atthe very least, ghastly carnage. But The Art of War, if studied carefully andappliedwell, canbe thewinner’smanual forambitious, innovative, and savvysmallbusinesses.

BecauseSunTzuclearlyunderstoodhowstrategycan trumpamuchlarger,better-funded,morepowerfuladversary,hiscounseliseminentlywellsuitedforsmall-business leaderswhodobattlewith largeropponents. It’salsosuited forsmallbusinessesincompetitivemarketsthatconsistofothersmallandmid-tierplayers that seek to dominate. Thomas Huynh, author of The Art of War:Spirituality for Conflict and founder of Sonshi, an educational resource,

understands thatSunTzu’s intendedaudience inwritinghisworkwasweakerforces.Thesagesought to teach those indisadvantagedpositionshowtoseizethe advantageous position.1 The author of his book’s foreword,MarcBenioff,CEO of Salesforce.com, whom you’ll read more about later in these pages,agrees: “Fundamentally,” Benioff writes, “the book demonstrates how smallarmiescandefeatlargerones.”2

SunTzuisanarchitectofgrandstrategy.YetexistingbusinessbooksonSunTzu don’t tell us how big players used grand strategy to become industrypowerhouses.Theytellhowthebigbusinessesbecameevenbigger,ormistakestheymadethatcausedthemtofall.That’swhytheobjectivehereistoexercisealesson fromSunTzuand fill thevoidby showing small-businesspractitionershowtolearnfromcounterpartsthathavegrowntheirterritoriesbasedonmodernillustrations ofSunTzu.Youhave before you a new concept for the businessworld,anditstimehascome.

SUNTZUFORMODERNBUSINESSWARFARE

Large advertising and promotional budgets no longer dictate a company’scredibility. Savvy small businesses use cost-effective guerilla marketingtechniques to compete with the massive budgets of their competitors. Low-budget5-HourEnergycommercialswerechastisedbytheadindustry.Chobaniusedanextra-largecupmoldandashiny label thatstoodout in thedairycasefrom all the other yogurts.3 When Boston Beer Company began to expandoutsideofNewEngland,thecompany’sfounderflewtoWashington,DC,tosellthe flagship Samuel Adams to bars. He flew so frequently that PresidentialAirlinesbegansellingSamuelAdamsonitsplanes,andheevengot thebeer’snameprintedonthebackoftheticketjackets.4

It takes this kind of innovation and stretching of resources to stand out.Today, you can increasingly go directly to the customer, at a lower cost thaneverbefore.Whencustomerscompareproducts, they lookatonlineandsocialmedia presence. They compare positive and negative rankings on the web,includingyournumberofsocialmediafollowersandhowfansinteractonyourFacebook page. Humble Seed is a start-up that provides high-quality organicseedvarieties.ItacquiredtennewwholesaleaccountsbecauseofthevolumeofitsFacebookfanbase,whichiscurrentlyjustshortof35,000.Thecompanynowcompeteswithlargerbrands.5

Smallbusinesseswon’tgainmarketsharebybattlinglargeradversarieshead-

on.ConsidertheexampleofFelixDennis,CEOofDennisPublishing.HisfirmbattledpowerhouseZiffDavis in theconsumer technologypublishing industryand foughtbitterly.Denniswon,but thecostswere tremendous—twoyearsofprofits for his entire company.6 Sun Tzuwould have deemed this approach acolossalwaste ofmoney and resources, and, in retrospect,Dennis agrees.Thesmallbusinessesthatwindosobybuildingstrategicalliances,outmaneuveringthe larger businesses, creating opportunities, outperforming, and by takingadvantageofeveryopportunitywithintheirgrasp.SunTzuhasneverbeenmorerelevantforsmallbusinessesseekingtoseizeeveryadvantage.

PRIMARYSMALL-BUSINESSADVANTAGES

The extent to which a business understands and leverages its competitiveadvantages will determine its success. While small businesses playing incompetitivemarketsoftenfindthemselvesatastarkdisadvantage,collectively,they have general strengths that theymust recognize and to which theymustplay.Themostcommonadvantagesofsmallcompaniesvis-à-vislargerentities,regardlessof the industry they serve, are listedhere.Theseadvantageswillbedetailed and applied against the backdrop of SunTzu throughout the chaptersthatfollow.

AlliancebuildingAgilityandspeedofmovementConsensus-buildingeaseExcitementandenthusiasmofnewandyoungcompaniesandideasFlexibilityinprocessesandproceduresIconoclasticworldviewandreadinesstotakeonallcomersIndependenceIntimateknowledgeofcustomersInnovationandnurturingofideasNicheexploitationOpennesstotakingrisksPoweroftheunexpectedUnityofpurposeandcommitmenttomission

PRIMARYSMALL-BUSINESSDISADVANTAGES

Throughoutmycareerasastrategicmarketingandcommunicationsconsultantand in working for ad agencies, I’ve supported hundreds of small-businessleaders. Time and again, they fall into the same patterns of the cripplingmistakesSunTzuwarnsagainst.Toanyonefamiliarwiththeparadoxesofsmallbusiness, it’snosurprise thatsomeof thedisadvantageslistedherearealsoontheadvantagelist.

Competitive job fieldwithemployeeswhocanbewooedawaybybiggercompaniesCompetitivepartnerandvendorfield,withpartnersthatmaygivetheirbesttotheindustryleaderDesiretoclosesales,evenonproductsorservicesthataren’tprofitableorpartofalong-termplanFailuretoconsolidategainsduetolackoflong-rangefocusFearofstandingout,puttingastakeintheground,andbeing“toodifferent”LackoforganizationalunifiedpurposeLackofstructureandhierarchyLesscashflowLessdevelopedprocessesandsystemsLessexperiencedleadershipandmanagementLimitedresourcesLimited/underdevelopedunderstandingofthecompetitivefieldDecisionmakingthat’sbasedonfalseyetdeeplyheldassumptionsPerceivedandrealriskofdoingbusinesswithasmallerfirmPooremphasisonstrategyPrioritiesthatshiftcontinuallywiththepursuitofopportunitiesSmallfootprintwithintheindustryandlessclout

BIGBUSINESSDISADVANTAGES

Ifwe lookat thesmall-businessdisadvantagesand turn themaround,wegetagoodpictureoftheadvantagesmanyofthelargerplayerspossess.Butlet’sdo

something a little less demoralizing and look at where big players mostcommonly fall short. These liabilitieswill surface and be explored throughoutTheArtofWarforSmallBusiness.

Narrow focus on core products and customers. Publicly traded bigbusinesses are under tremendous pressure to show revenue and earningsgrowtheachandeveryquarter.Themosteffectivewaytoachievethisgrowthconsistently,quarterbyquarter,istofocusmostaggressivelyontheirbiggestopportunities in their most reliable core markets. This has the naturalconsequence of leading big businesses to tend to their biggest products,platforms, channels, and customers. For smaller competitors, this situationpresentspotentialtodeliveronsmalleropportunitieswithcustomersthatarelessattractivetothebigbusinesses.

Difficultyadapting.Theadvantageforthebigguysisineconomiesofscaleandscopethatenablethemtoofferlowercostswhilereapingtherewardsofbetter margins. The cost of these rewards has often been that themachinebehind theseproductsandservices isa labyrinth that includes (orensnares)various areas of the company, such as manufacturing, marketing, sales,distribution, and finance. This complexity and interdependency makes itdifficult,expensive,andriskytochange.

Aversiontorisk.It’sfarmoredifficultforlargeorganizationstotolerateriskthan it is for smaller ones. They simply have much more to lose. Bigbusinesses are more inclined to accept lower-risk concepts than new ideasthatinvolvegreaterrisk.SirJamesDyson,whoachievedmassivesuccessonthe heels of more than 5,000 “failures” in pursuit of the bagless vacuumcleaner, has said, “Big companies tend not to take risks, so there’s a bigopportunity for entrepreneurs to take them and march on competitors.”7Smaller organizations looking to edge out much larger counterparts musthaveagreaterpropensityforfailure.Some larger businesses maintain their emphasis on innovation and are

equipped to tolerate risk, however. Beginning in its early days,Salesforce.com leveraged its comparatively smaller size to create anadvantage that allowed the business to quickly and smartly innovate whileflyingundertheradarofitsmarket’sGoliaths.Salesforcesucceededbydoingsomethingentirelynewinamarketthatalreadyexisted,andbydoingitina

waythatwasverydifficultforanyoneelsetocopy.8AndasinnovationexpertClaytonChristensenhasnoted,Salesforcecontinues tonurture this spiritofinnovation,evenasthecompanyhasgrownintoabillion-dollarplayer.9

SMALLBUSINESSESNEEDSUNTZU

Toomanysmallbusinessesappeartooperateasiftheyhavelittleornostrategicfocus.Whenyougetclosetomanyoftheseorganizations,youunderstandthattheappearanceisoftenthereality.Theysacrificestrategyformakingshort-termtactical moves. But winning strategy can’t come out of applying the samemethodsandhopesweekafterweek,monthaftermonth.Tacticsarecritical,butif thesestepsaren’tbeingcarriedout insupportofsoundstrategy, it’sa lotofactivity without a lot of progress. Does that ring true for your businesssometimes?Morethansometimes?

Yourcompanymusthaveareal-worldstrategicplanthatcarefullyconsidersthe reality of your competitive marketplace. With that plan in place, eachdepartmentwithintheorganizationshouldhaveawell-coordinatedstrategicplanand tactics to support the company’s über-goal. Everything you do should bedesigned to deploy and advance that strategy. I thinkwe all know this at ourcore,butwedon’tallrunourbusinesseslikeweknowit tobetrue.Ifwedid,businesscoachingwouldn’tbeamultibillion-a-yearindustry.10

THEWARMETAPHORTODAY

ThereareobviouslysomethingsthatSunTzuwoulddodifferentlyonabusinessbattlefieldtodaythanonaliteralbattleground2,500yearsagoinwarringChina.He’d continue to emphasize the role of supreme strategy in defeating the“enemy,” or perhaps he’d update the language to say “competition.” Maybe.He’d maintain his emphasis on gaining intelligence, taking advantage ofalliances, outmaneuvering the competition, taking the better position, dividingand overtaking a larger enemy, and he’d remind us of the necessarycharacteristics of an effective leader. But he’d also talk a great deal about anentirelynewconstituencyofnoconsequencetothemilitaryreaderofantiquity:the customer. This group will be very important to us as we apply theseprinciples.

HOWTOREADTHEARTOFWARFORSMALLBUSINESS

Thisbookiscomposedoffourparts:1)SeizetheAdvantagewithSunTzu;2)Understanding: Essential Sun Tzu; 3) Principles for the Battlefield; and 4)AdvancedSunTzu:StrategyforYourSmallBusiness.Withinthesesections,weexplore twelve key themes fromThe Art ofWar that are expressly for small-businessleadersandentrepreneurs.Theobjectiveistohelpyoubuildastronger,moreenduring,moresuccessfulbusiness.

There aremanygood and inexpensiveEnglish-language translationsofTheArtofWar.IhavereliedlargelyonthepopularLionelGilestranslation,whichwasthefirstcompleteEnglish-languageworkoftheclassic.I’vealsocarefullystudiedandcomparedmanycredibleandevensomewhatdivergenttranslations,includingthoseofHuynh,Griffith,Huang,andtheversionMichaelsonreceivedinBeijing at a symposium of theResearch Society of Sun Tzu’sArt ofWar.Unlessotherwisenoted,theexcerptsusedherearefromGiles’stranslation.Thisworkisavailableinthepublicdomainforfree.

Agreatdeal iswrittenandsaidaboutSunTzu.Muchof it is inquotesandpassageshaphazardlypassedaroundtheInternetlikefourth-generationhand-me-downsinaverybigfamily.Thesepearlsof“wisdom”areattributedtohimandThe Art of War. But many of these attributions are poor interpretations andothers are statements that do not, in any way, appear in The Art of War. Becareful with the Sun Tzu you apply to your business. Stick to reputabletranslationsandyou’llbeontherighttrack.

Naturally, throughout this book I’ve opted to use masculine pronouns inreferencetoSunTzu’sgeneralandhisarmy.Thatshouldn’tbesurprising,asthetext was written in the same way. Don’t allow that to narrow the intendedapplicationofTheArtofWarforSmallBusiness.

One more note: Some of the concepts I’ll share will be repetitive. Thatsometimesirritatesmeasareaderofbusinessbooks.Iwanttheauthortomakeherpointandmoveon,andstopfillingpageswiththesameideas.SunTzudrewsome repeated conclusions in his very shortwork. Sowhen you see the samethemerestatedagainorinanotherchapter,there’saverygoodreasonforit.Andit’snottofillpages.

SUNTZU’SFIVECONSTANTFACTORS

TheArtofWaropenswithSunTzu’sstatementofthefiveconstantfactors.It’sonthesefactors,andotherunifyingprinciples,thatIbasethetwelvethemesof

thisbook.

The art of war, then, is governed by five constant factors, to be taken into account in one’sdeliberations, when seeking to determine the conditions obtained in the field. These are: (1) TheMoralLaw;(2)Heaven;(3)Earth;(4)TheCommander;(5)methodanddiscipline.

Let’sexplorethesefivefactors:

1.TheMoralLawcausesthepeopletobeincompleteaccordwiththeirruler,so that they will follow him regardless of their lives, undismayed by anydanger.ThomasHuynhinterpretsmorallawas“TheWay.”Morallawgovernsthe leader’scharacter, shapesmethodanddiscipline, and impacts success.SunTzusayslateraboutthemorallaw:

Theconsummateleadercultivatesthemorallaw,andstrictlyadherestomethodanddiscipline;thusitisinhispowertocontrolsuccess.

Thereisdoubtlesslyamoral,andIbelieve,anintendedspiritualelementherethat will be adhered to and applied in accordance with each reader’s beliefsystem.Wecanalsotakethemorallawtoapplytotheunityofpurposeasmallbusinessneedstoserveitscustomersandemployeeswithdistinction.

2.Heavensignifiesnightandday,coldandheat,timesandseasons.AccordingtoGriffith, theChinesecharacterT’ien (Heaven) isused in thisverse tomean“weather.” The application here for you is in timing of maneuvers, amidconsiderationsofmarketfactorsandconditionsthatinfluencethem.11

3. Earth comprises distances, great and small; danger and security; openground and narrow passes; the chances of life and death. This statementreflectstheimportanceofmaneuveringeffectivelyandknowingtheadvantagesanddisadvantagesofdifferenttypesofterrain.

4.TheCommander stands for the virtuesofwisdom, sincerely, benevolence,courage, and strictness. A full picture of Sun Tzu’s general is covered inChapter7,“EmbodytheGeneral.”

5.Methodanddisciplinearetobeunderstood[as]themarshalingofthearmyin its proper subdivisions, the graduations of rank among the officers, themaintenanceofroadsbywhichsuppliesmayreachthearmy,andthecontrolofmilitary expenditure. Discipline, structure, and organization are paramountforSunTzu.

Ofthesefivefactors,SunTzusays:

...[H]ewhoknowsthemwillbevictorious;hewhoknowsthemnotwillfail.

Let’snowdelvemoredeeplyintoSunTzu’sArtofWarandhowitcanhelpyoudominateyourmarket.We’llbeginbylookingatthephilosopher-general’sessential counsel for understanding, beginning with your organization andextendingouttoalltheaudiencesthatmattertoyoursuccess.

PARTTWO

UNDERSTANDING:ESSENTIALSUNTZU

Thenext four chapters contain someof themostoft-citedpassages that are theessentialbuildingblocksofTheArtofWar.ThechaptersinPart2willguideyouthroughwhatSunTzudirectsontheimportanceofdevelopingacomplete,honest, anduncompromisingunderstandingofyourself andyourbusiness,yourenemy,yourmarket,andyourassets:customers,employees,andpartners.Thismaterialisfundamental,butdon’tmistakethatwitheasy.Theseideasmustbecarefullystudied.Ifyouavoidthesedirectives,youdosoatyourbusiness’speril.

Just about every business leader would probably agree that an understanding of these factorsmakes eminently good sense. But application is in an entirely different league. Leaders of smallbusinesses tend to make assumptions about what they believe is true about the market, theirbusinesses, theirproducts, theircompetitors,and theirpeople.Theyaresure theyknowwhy theircustomersbuyfromthem,andhowtheirproductsbestmeetcustomerneeds.Iftheycan’tseepasttheir often false assumptions, they won’t be prepared for the battles that are ahead. They’ll bevulnerable to competitors who take seriously the charge to truly understand their organizations,marketplace,andcustomers.

Considercarefullythisimperativepassageaswepreparetoexplorethissection:

Ifyouknowtheenemyandknowyourself,youneednotfeartheresultofahundredbattles.Ifyouknowyourselfbutnottheenemy,foreveryvictorygainedyouwillalsosufferadefeat.Ifyouknowneithertheenemynoryourself,youwillsuccumbineverybattle.

3UNDERSTANDYOURSELF

Full, complete, and actionable knowledge of the army is fundamental for SunTzu. Similarly, you can never effectively act on any understanding of yourenemyoryourmarketwithoutathoroughunderstandingofyourorganization.Ifyou can’t honestly assess where you’re strong and where you’re weak, anyvictoryyouachievewillbefleeting.

BRUTALHONESTY:OVERCOMEFALSEASSUMPTIONS

False assumptions are the self-perpetuating common plague of some small-businessleaders.Iftheassumersaren’tcareful,they’llhearandparrotthesamepartylinesagainandagainandpassthesemisguidedideasontotheentireteam.This path serves to further isolate leadership from actualmarketplace facts byallowingpeopletocontinuetodrawmistakenconclusions.I’veseenmanysmallbusinessescompletelymisunderstandtheirmarketplacebecausetheydidn’twanttobelieve that theirproductsorservicesweremissing themark,or theydidn’twant tomake thenecessary investments forcoursecorrections,or they simplydidn’toffertheinnovationordifferentiationthattheythoughttheydid.

Alwaysholdyourbeliefsaboutyourbusinessanditsperformanceupagainstreal-worlddata,andwhenthetwoareinconflict,payattention.

SUNTZU’SFIVEESSENTIALSFORVICTORY

SunTzusaid that thereare fiveconcepts forwinning.Eachhasat itscore thegeneral’sunderstandingofhisarmy.

1.Hewillwinwhoknowswhentofightandwhennottofight.ThisconceptwillbecoveredinChapter8,“Perseverance.”

2.Hewillwinwhoknowshowtohandlebothsuperiorandinferiorforces.Thisconceptisalsopopularlytranslatedas“largeandsmallforces.”

3.Hewillwinwhosearmyisanimatedbythesamespiritthroughoutallitsranks.

ThisideaofunitythroughtherankswillbeexpoundedoninChapter10.

4.Hewillwinwho,preparedhimself,waitstotaketheenemyunprepared.Sun Tzu advises to pick the right timing and catch your adversaries

when theyaren’t ready.But that strategycan’tbeoptimized if leadershipisn’tpreparedtomaximizethatopportunity.

5.Hewillwinwhohasmilitarycapacityand isnot interferedwithby thesovereign.

Thislastessentialismanifold.Strongleadersholdfasttotheirprinciplesandwantwhatisgoodfortheorganization.SunTzu’sgeneralmusthaveacapable army, and be unencumbered by bureaucracy, so he can makedecisions.Leadersmustbedrivenbyprinciplesandactinthebestinterestsoftheorganization.However,theycan’tmakethebestday-to-dayorlong-termdecisionsforthatorganizationunlesstheirknowledgeofitisdeep.

SunTzufollowstheseessentialswiththis“sowhat”:

Hence the saying: If you know the enemy and know yourself, you need not fear the result of ahundredbattles.Ifyouknowyourselfbutnottheenemy,foreveryvictorygainedyouwillalsosufferadefeat.Ifyouknowneithertheenemynoryourself,youwillsuccumbineverybattle.

AFLOORWAXANDADESSERTTOPPING!

It’scriticaltounderstandwhatyourorganizationisanddoes,aswellaswhatitisn’t and doesn’t do. The all-things-to-all-people trap can be a barrier tounderstandingandclearlydefininganorganization’sofferings.Fearfuloflosingasale,small-businessleaderscanbeunwillingtoputastakeinthegroundandsay,“WesellproductorserviceXtothismarket.”Thatbolddeclarationdoesn’tjustdefinewhatyousellandtowhom;justasimportant,itdefineswhatyoudonotsellandtowhomyoudonotsell.Thisstatementrequiresanappreciationforsolutionsandmarketsthatareprofitable,andthosethatarenot.

Iworkedwithaconsultingcompanythatfocusedonthefederalsector.Theowners and leadership had built a healthymidsize business, but they realizedthey had a problem. They grew their business based on one customer. Thatcustomer’s myriad needs took them away from their primary focus and intotangentiallinesofbusiness.Ifyou’retryingtogrowyourbusiness,youmayseethisasaprettygoodproblemtohave.And itwas, toapoint.Therubwas therealizationthattheyhadmovedintoplacesthattheydidn’treallywanttobe,andthat it wasn’t serving to strategically grow the company. Contracts wereincreasingly comprised of lower-skilled, low-margin solutions that were noteasily repeatable for other customers. Meanwhile, they had a highly skilledworkforce that was growing increasingly frustrated, so this trend was doublydamaging.Tocombat this tendencyof lookingat theshort-termcontractvalueand simply saying “yes” to the customer without thinking of the long-termimpact to theorganization, the leadersof this businessundertook a significantrestructuringtoexpandintootherareas.

Inanothercommonexample,asmallbusinessIworkedwithcastawidenetinanefforttomissnoopportunities.Thatsoundsgood,butnoteverythingthatparadesas anopportunity really is.And sometimes,you shouldbeable to tellpretty easily that some floats shouldn’t be allowed anywhere near the parade.Thiscompanytargetedmid-andlarge-tierhospitalsandhealthcarepractices.Thecompany had an excellent concept, but the CEO’s focus shifted with theweather.Ratherthanpolitelytellingsmallpractices,includingverysmallones,that theyweren’t a fit for the company’s solutions or price point, he chose tocapturetheirinformationandaddthemtothepipelinewithapipedreamthat“asolutionforyourmarketisontheway.”Inreality,theorganizationwasn’tabletoconsistentlydelivertothelarger-tierclientsitsignedup,andforwhichithaddedicated tens of thousands of development hours. It didn’t have theinfrastructure to support sales and service to a very different client base,particularlyonethatwouldn’tbeprofitable.

Mega retail storesmay be able to have something for nearly everyone, butsmallbusinessescan’t,andtryingtodosowillonlyconfusetheorganization’s

missionandmessage,andaddlayersofcomplexity.Andcomplexitykillssales.Ideasarecheap.Resistthetemptationtostartwithafloorwaxproductbutthenconceiveofanopportunitytomakethesameproductintoadesserttopping,orofferitallunderthesameconfusedbanner.It’stemptingtofallintothetrapoftryingtobeallthingstoallpeople,inanattemptnottoloseanyopportunities.Butsmallbusinesseshavetorememberthatnoteverythingisan“opportunity”ifitdoesn’tfitintoyourorganization’sgoalsandobjectives.

COMPENSATINGFORWEAKNESSWITHSTRENGTH

ThissomewhatobscureSunTzuideaspeakstoadaptabilitytothreats.

Theskillfultacticianmaybelikenedtotheshuai-jan.Nowtheshuai-janisasnakethatisfoundintheChungmountains.Strikeatitshead,andyouwillbeattackedbyitstail;strikeatitstail,andyouwillbeattackedbyitshead;strikeatitsmiddle,andyouwillbeattackedbyheadandtailboth.

A precursor to being able to adapt is awareness of your organizationalweaknesses and strengths. Cross-functional training and unity will help yourbusinessovercomethreatsandadvanceforward.

Atari cofounderNolanBushnell understood the bottom-line need to have awell-rounded, cross-trained team.Hewasn’t satisfied that his team, composedlargely of B2B engineers, had no substantive knowledge of their customers’needs.Thesolutionwasn’tinaseminarorclassroomtraining.Bushnellsenttheengineersintothetrenches.

Hewantedthemtosharetheexperiencesofbothcustomersanddistributors.Tothatend,Atariengineersweregivenresponsibilityforrunninggamesintestlocations, with profit-and-loss responsibilities, just like distributors. Theylearnedhowtoidentifyproblemsanddefectsbeforetheyaffectedcustomersordistributors. This experience also gave them valuable early insight intowhichgameswouldbethemostsuccessful.Atarievensentitsengineersontorotationon theassembly line, so theycouldbetterdesignproducts thatwouldbemosteasilymanufactured.

Bydevelopingabetterunderstandingofcriticalpiecesofthepuzzle—inthiscase customers, manufacturers, and distributors—Bushnell strengthened theorganizationandcompensatedforweakspots.1

Onlybyhonestlyevaluatingandunderstandingyourweaknesseswillyoubepositionedtoovercomethem.

GETTHEBASICSRIGHT

Therearesomecommonproblemareas,basedonfalseassumptions,thatsmallbusinessleadersmustlearntorecognize.Misstepsintheseareaswillultimatelycauseseriousproblems.

GutandValidation

I’mabigbelieverintrustingyourgutandputtingyourintuitionintoactionforthegoodofyourcareerorbusiness.Astronggut feeling isvery important formanyentrepreneursandinnovators.Butitmaynotbeenough.Validationfromtheindustry,notonlyofyourconcept,butalsoofhowyouplantodeliverit,canhelpaffirmyourgutinstinctandensurethatyourconceptisdeployedwell.It’scommonforentrepreneurs toclingtoaflawedconceptbecauseit’s theirbaby,evenafterdataandpersonalexperienceshowthemit’snotviable.That’snottheendoftheroad(aswe’llseeinChapter12,“Adaptation)”,butitwillbeadeathknellifleadershipdoesn’tpivot.

VagueBusinessPlan

Successful, dynamic businesses have unifying, purposeful objectives. Lesssuccessful businesses have vague descriptions of their solutions and lack anydifferentiation.Ifyourbusinessislookingtogetfunding,youhavetoshowyourdepthofknowledgeofyourbusinessplan,includingreliablemarketprojectionsandanunderstandingof thecompetitive landscape.Ifyoucan’tarticulateyourplan,you’llhavebigproblems.

PoorMarketplaceUnderstanding

Bewareofsmall-businessleaderswhoboastthattheyhavenocompetitors.Youcan’t sell and market against other players unless you fully understand whatthey’reselling,howthey’redeliveringit,andwhothey’resellingitto.

ABrokenModel

Small businesses need to understand their revenue and profit models so thatthey’llknowif theirmodel issustainableorwill fizzleoutwellbefore it takesoff.Similarly,yourpricinghas tobe in linewithwhat themarketwillbearsothatitwillprovideyouwithaprofit.Howwelldoesyourmodelwork?Really?

KNOWANDLEVERAGEYOUREMPLOYEES

Fundamentaltoknowingyourorganizationisunderstandingandleveragingthemighty force for market domination that is your employee base. Sun Tzu’svisionforhowsoldiersshouldbetreatedandledishighlyrelevantformanagingemployees and teams. Identifying, hiring, and nurturing talent is even moreimportantforsmallbusinesses,whereallteammembersmakeanexponentiallygreater contribution to the whole of the organization than their big-businesscounterparts.Hiringandkeepingapoorsalesperformer,forexample,hurtslargebusinesses. But hiring and keeping underperforming sales pros cripples smallcompanies.Yet,ithappensallthetime.SunTzuprovidesexcellentdirectionontheimportanceofpropercareofthearmy,aswellaspositioningallpersonnelsothat they can be eminently effective. Small businesses should apply theseconceptstotheirteams.

OrganizationandChainofCommand

OrderandachainofcommandareessentialSunTzuconcepts.

Bymethodanddisciplinearetobeunderstoodthemarshalingofthearmyinitspropersubdivisions,thegraduationsofrankamongtheofficers,themaintenanceofroadsbywhichsuppliesmayreachthearmy,andthecontrolofmilitaryexpenditure.

Withoutaclearunderstandingoftheapprovalprocessandstructurebywhichthings get done, organizations will inefficiently spin their wheels, duplicateefforts, and create ineffective lines of communication. This is particularlypainful to watch in a small organization, where communication should besmootherandthesafeguardingofresourcesisoftheessence.

SunTzufurtherdescribesoneofthewaysarulercanbringmisfortuneuponhisarmy:

By employing the officers of his army without discrimination, through ignorance of the militaryprincipleofadaptationtocircumstances.Thisshakestheconfidenceofthesoldiers.

Human resourcesmust be dedicated appropriately andmost effectively, yetthey can be adapted to specific needs as required. If people aren’t utilizedoptimally, their confidence in leadership is weakened and their frustrationincreases.It’sessentialthatyouunderstandhowtobestbringoutyourpeople’sattributesandfullyunderstandtheirstrengths.

HireDoersoverDeliberators

Smallbusinessesneedpeoplewhocanactdefinitivelyandgetthingsdone.

Ifthecampaignisprotracted,theresourcesoftheStatewillnotbeequaltothestrain.

It’s essential to carefully craft and execute strategy.Although patience andtiming are important, when it comes time for action, small businesses needpeoplewhoareprovenandcapableperformers,andwhowilltakeactioninsteadofcallingforunnecessarydelaysormakingexcusesfornotdelivering.

MobilizeStrongTeams

SunTzu’s emphasis is not only on having the right troops, but on leveragingthemformaximumimpact,especiallywhenitmattersmost.

Theclevercombatant looks to theeffectofcombinedenergy,anddoesnot require toomuchfromindividuals.Hencehisabilitytopickouttherightmenandutilizecombinedenergy.Whenheutilizescombinedenergy,his fightingmenbecomeas itwere likeunto rolling logsor stones.For it is thenatureofalogorstonetoremainmotionlessonlevelground,andtomovewhenonaslope;iffour-cornered,tocometoastandstill,butifround-shaped,togorollingdown.Thustheenergydevelopedbygoodfightingmenisasthemomentumofaroundstonerolleddownamountainthousandsoffeetinheight.

Thepoweroftherightpeople,allmovingintherightdirection,followingtherightleaders,can’tbeoverstated.ThisisoneofmyfavoritepassagesfromTheArtofWarbecauseithighlightstheexponentialpowerofexcellentpeoplewhen

they’reledwell.Teams can’t be strong unless they’re loyal. Zappos, the online shoe and

clothing shop with the extraordinary brand that’s included in just about anydiscussion of exceptional customer service, is a well-known success story. In2009, Zappos was acquired by Amazon.com in an all-stock deal worth about$1.2 billion. The Zappos community, which includes its employees, is thecentral force behind that hefty price tag. Zappos is famous for its policy ofpaying its new employees . . . to quit.Once new hires are about aweek intotraining,thecompanyoffersthema$2,000bonus, inadditiontocompensationfortheirtimeworked.Alltheyhavetodoisquit.ThisishowZapposhasbuiltacommitted,loyal,andhigh-performingteamthatspreadsthatsamespirittotheZappos customer base.2 Between 2 percent to 3 percent of all would-be newemployeesaccept theoffer,according to theZapposcorporatewebsite.3Thinkaboutit:$2,000isasmallpricetopaytoridyourbusinessofanemployeewhowon’tperform.

In the sameway, JimKoch, the creatorofSamuelAdams, always seeks toraisetheaveragewiththepeopleBostonBeerCompanyhires.They’vedoneitbyprofilingsuccessfulemployeesanddeveloping interviewquestions thatwilldetermine if a candidate has the samemotivation andbehavioral qualities thatwillhelpraisetheaverage.4

ConsiderationofYourPeople

This passage highlights the leader’s responsibility to demonstrate care andconcernforyourpeople.

Ifyouarecarefulofyourmen,andcamponhardground,thearmywillbefreefromdiseaseofeverykind,andthiswillspellvictory.

Thiscareextendsbeyondlipservice.Itmusttranslateintotheactionsoftheleader.Notethattheobjectiveremainsonwinning,andthewisestewardofhispeoplerecognizesthatbeingcarefulofhismenisanecessarymeanstothatend.This lesson is especially important for small businesses because turnover isexpensive anddisrupts their ability to innovate and satisfy customer demands.Andthecostofyourbestpeoplegoingtoyourcompetitorsisevenhigher.

BuildingIncentives

Sun Tzu clearly values his troops and is careful to motivate and incentivizethem.Ofrewardingthetroopshesays:

Inchariotfighting,whentenormorechariotshavebeentaken,thoseshouldberewardedwhotookthefirst.Thisiscalled,usingtheconqueredfoetoaugmentone’sownstrength.

Fortwenty-first-centurysmall-businessleaders,thisideaislessaboutchariotfightingandmoreaboutrewardingyourpeopleforactingswiftly,successfully,andexceptionally.Thismodusoperandiappliestoall typesofbusinesses.FiveGuysawardscashbonuses tocrewsthatscore thehighest inweeklyrestaurantaudits. These impromptu audits rate bathroom cleanliness, courtesy, foodpreparation, and kitchen equipment safety. A good score earns $1,000, whichgets split among five or six people on a crew. In a recent year, Five Guysawardedmorethan$11milliontoemployeesforperformance.5

Whenyouplunderacountryside,letthespoilbedividedamongstyourmen;whenyoucapturenewterritory,cutitupintoallotmentsforthebenefitofthesoldiery.

SunTzudirectsyoutosharethefruitsofyourbusiness’slabor,includingtheopportunity provided by capturing new territory. For a growing business thatneeds to keep reinvesting in the company, incentives like stock options andperformance-basedbonusesallowyoutorewardyourwomenandmen,asSunTzuadvises,withoutputtinganundueburdenonthecompany.

Don’tOverdoIt

Thesmallbusinessesthatsucceeddoitbecausetheirworkforcesaredrivenandworkbothveryhardandverysmart.ButSunTzuwarnsagainstoverburdeningyourpeopleandpushingthemto:

...makeforcedmarcheswithouthaltingdayornight,coveringdoubletheusualdistanceatastretch.

Askingtoomuchof themwillcauseyourdivisions tofall into thehandsofthe enemy, prohibit the bulk of your army from reaching its destination, and

causeleaderstofall.

Carefullystudythewell-beingofyourmen,anddonotovertaxthem.Concentrateyourenergyandhoardyourstrength.Keepyourarmycontinuallyonthemove,anddeviseunfathomableplans.

Smallorganizationsknowtheimportanceofstayingonthemove.Themostinnovativeones are sourcesof constantmotion andcreativity.For this reason,you should husband your strength and resources so that you can concentrateenergy when it’s needed. This requires you to carefully be in tune with thecapabilitiesandlimitationsofallofyourpeople.Thebetteryour leadersknowtheirpeopleandtheirlimitations,thebetterthey’llbeabletogaugewhenundueburdenisplacedonthem,sotheycanalwaysbringouttheirbest.

Don’tUnder-Doit

InChapter7,wewillexplorethefivedangerousfaultsthatmayaffectageneral.Thefifthisover-solicitudeforhismen,whichexposeshimtoworryandtrouble.

Small-businessleaderscanexhibittraitsofbeingexcessivelyconcernedwiththeirpeople’shappiness.Thistendencycanleadthemtomakedecisionsbasedlargelyonwhattheirpeoplethinkandfeel,attheexpenseofwhat’sinthebestinterestoftheorganization.ForSunTzu,andforyou,neitherextreme—pushingyour people on forcedmarches or being excessively concerned for theirwell-being—isconstructive.

EnforcementofDiscipline

Notsurprisingly,manyofSunTzu’ssevenconsiderationsforforecastingvictoryarecenteredonthemilitaryforces:

1.WhichofthetwosovereignsisimbuedwiththeMorallaw?2.Whichofthetwogeneralshasmostability?3.WithwhomlietheadvantagesderivedfromHeavenandEarth?4.Onwhichsideisdisciplinemostrigorouslyenforced?5.Whicharmyisstronger?6.Onwhichsideareofficersandmenmorehighlytrained?

7. In which army is there the greater constancy both in reward andpunishment?

Able generals and highly skilled and strong armies are critical. So is therigorous enforcement of discipline, or consequences. The idea of order andreward and punishment is as important to Sun Tzu as the character of thesovereign,thegeneral’sability,andthearmy’sstrength.Discipline,consistency,andclearcommunicationonexpectationsarefundamental,buttheycanbetakenfor grantedby small-business leaders.A shockingnumber of small businessespropagate a culture of missed deadlines, waffling leadership, insubordination,andnegativity.Astrong leaderwill requireconsistencyandmakeexpectationsclear.

Sun Tzu provides counsel on how a new leader can incorporate disciplinewithinanorganization:

Ifsoldiersarepunishedbeforetheyhavegrownattachedtoyou,theywillnotprovesubmissive;and,unlesssubmissive,thenwillbepracticallyuseless.If,whenthesoldiershavebecomeattachedtoyou,punishmentsarenotenforced,theywillstillbeuseless.

Thedirectionhere is todoleoutreprimandsappropriately,andonly toyourpeopleoncetheyhaveforgedaconnectionwithyou,notrightawayjusttomakeastatement.Bycontrast,ifyouareunwillingtoenforceconsequencesonceyourpeoplehaveidentifiedwithyourleadership,theywon’tbeassetstoyou.

ConsistencyIsCritical

It’s essential to deliver clear, consistent communication that’s enforced acrosstheorganization.

Ifageneralshowsconfidenceinhismenbutalwaysinsistsonhisordersbeingobeyed,thegainwillbemutual.

FIVEGUYS

I live inNorthernVirginiaoutsideofWashington,DC. I rememberwhenwehadoneor twoFiveGuysrestaurantsherelocally.Nowthey’reeverywhere.ThestoryofFiveGuysisoneofdoingwhat

youdowell,stayinginyourpowerlanes,anddeliveringconsistentcustomerexperience.(That’swhyyou’ll even learnmore aboutFiveGuys, andhow theywouldmakeSunTzuproud, inChapter9“Focus.”)

FiveGuys is the fastest-growing restaurant chain in theUnitedStates, doubling the number ofstores since 2009.With revenue in excess of $1 billion in 2012, Five Guys plays in the “betterburger” categorywith burgers in the $8 range.This $2 billion plus segment, ofwhichFiveGuysownsnearlyhalf,continues togrow.Notsurprisingly, the larger$40billioncategory for fast-foodburgersintheUnitedStatesisdominatedbyMcDonald’s,BurgerKing,andWendy’s.6

FiveGuyshasdifferentiateditselfinimportantandinterestingways.FounderJerryMurrelldidn’tinventthe“betterburger”chain,buthisrestaurantshavebeenlightingthefireunderneaththismarketcategorysince themiddleof the lastdecade.Thecategory includes In-N-OutBurger,Fuddruckers(myhusband’sfirstburgerlove),andnewcomersSmashburgerandShakeShack.DannyMeyer,theNewYork City restaurateur behind Shake Shack, says he doesn’t see FiveGuys as a competitorbecause“arisingtideliftsallburgers.”Provingthatthere’sroominthesandboxforotherstoplay,MeyerevenspokeataFiveGuysfranchiseeconventionin2009.7

IfMeyerhastheFiveGuyswarmandfuzzies,thefast-foodgiantsdon’t.FiveGuyscan’tcompetewith the less-better-burgers on price. Instead,McDonald’s and Burger King havemoved to theirversionsof“betterburgers,”introducinghigher-qualityAngusbeefoptions.8

Speaking of quality, “quality control” is what Murrell calls the “magic” of Five Guys. Therestaurantsdon’tuseanyfrozenproducts—atall.Eachburgerismadetoorder,andcustomerscanchoosefromseventeendifferenttoppings.Theydon’thaveadrive-through,becausethewaitwouldbetoolong.Restaurantsusedtopostasignthatsaid,“Ifyou’reinahurry,therearealotofreallygood hamburger places within a short distance from here.” Themessage between the lines: Thisburgerisworthgettingoutofyourcarandwaitingfor.Andclearly,customersagree.9

FiveGuysrestaurantspaycloseattentiontodetailwiththeirburgers,andthesameistrueoftheirpotatoselectionandtheirrefusaltohave“onefrozenthing”inanyrestaurant,includingmilkshakes.Theywillnotdeliver,either.MurrelltoldInc.magazineofacallthathepersonallyreceivedfromanadmiralatthePentagon.EveryonedeliverstothePentagon,theadmiralsaid.Murrelldidn’tbudge,buthedidhangabannerinfrontofthatstorethatsaid“ABSOLUTELYNODELIVERY.”BusinessfromthePentagonhasbeenstrong,Murrellsaid.10

Whilemostfast-foodchainshavetransactionalrelationshipswithpeople,Murrellknowsthatthevalue of his business is in customers, employees, and suppliers. Five Guys has never had legalproblemswith franchises. He credits this track record, in part, to quarterly independent franchisecommittee meetings. They’ve used many of the same vendors since 1986 because of theircommitmenttoqualityandconsistentcustomerexperience,notbecauselowcostisthetoppriority.Theyalsoofferincentivestoemployeesforexceptionalservice.11

FiveGuyshasplayeditscompetitivehandwithfast-foodgiantsbyhiringawaysomecompetitors.ApastexecutivefromCheckersheadsupbuildingnewstores,andaformerBurgerKingfranchisernow runs the 200 company-owned stores. But knowing the enemy is of little value if you don’tunderstandandleverageyourownstrengthsandassets.

Inordertodoafewthingsvery,verywell,Murrellhassucceededinfiguringoutwhattheotherplayersaren’tdoing,oraren’tdoingaswell,andfillinganextremelylucrativevoid.

SAMUELADAMS

Likethepatriothisflagshipbeerisnamedfor,JimKoch,creatoroftheBostonBeerCompany,hasdonesomethingquiterevolutionary.He’screatedahigh-qualityproductinanextremelycompetitivespace,andmadeitubiquitoustotheconsumer.Butgettinghisbeerintoconsumers’glasseswasn’teasy.

In 1985,whenKoch began distributing his sudsy creation,Americans thought the only qualitybeerswereimported.WhilesomeconsumerswouldpaymoreforaHeinekenoraBeck’s,theywereunlikelytoponyupapremiumpriceforanAmericanbeer.Butthatresistancewasthemakingofanexcitingnewnichemarket.SamuelAdams isseenasanaffordable luxuryas thebeermarket,andconsumers’palates,continuetoevolve.12

In the days before the revolution, Boston Beer Company wasn’t able to get any local Bostondistributorstodeliveritsbrew.SoKochrentedatruckanddelivereditfrombartobar.Ateachbar,he’devangelizeaboutthebrewingandingredientquality,andencouragepotentialbuyerstotasteit.Thisbar-to-barmethodworked,astheSamAdamsbrandcontinuedtospreadthehopsofrevolutionthroughoutNewEnglandandintoWashington,DC.13

LikeJerryMurrellofFiveGuys,Kochhasalwaysunderstoodwhathewasofferingtothemarket.Itwas flavorful, freshAmericanbeer.SixweeksafterSamuelAdamsBostonLagercameout, thecompanywon the title of “best beer inAmerica” at theGreatAmericanBeerFestival.Koch alsounderstoodwhere his beers fit in the grand scheme.His competitionwas the imports, not the bigAmericanbeers.Hisadviceonknowingwhatyou’rebringingtomarket:“Ifit’snotbetterorcheaperthanwhat’salreadyoutthere,youdon’thavearealbusinesstobuildon.”14

Today,themovementthatKochcreatedhaspulled2,400microbreweries—andcounting—alongwith it in theUnitedStates, and thatcategorynowownsan impressive6percentof theU.S.beermarket. Samuel Adams owns one percent of the U.S. beer market. That may sound tiny, but itequatedto$629millioninrevenuein2012.It’sastarkcontrastwiththewhoppingmarketshareofInBevandMillerCoors,butAmericanbeerenthusiasts,aswellasthoseinthe20-plusothercountrieswereSamuelAdamsbeerscanbe found,oweadebtofgratitude toanoriginatorof thecraftbeermovement.15

4UNDERSTANDTHEENEMY

How well any business understands its adversaries is a determining factor inwhetheritwinsorloses.Understandingthestrengths,weaknesses,andrealitiesofyourorganizationisfundamental,butitis,atbest,50percentoftheequation,asSunTzutellsusinthisfamiliarpassage:

Ifyouknowtheenemyandknowyourself,youneednotfeartheresultofahundredbattles.

Sun Tzu’s direction on understanding the enemy is foundational to everychapterofTheArtofWar.Herewelookathismostessentialwisdomonhowtodevelopandapplythisknowledge.

CREATECONDITIONSFORVICTORY

Ifweknowthatourownmenareinaconditiontoattack,butareunawarethattheenemyisnotopentoattack,wehavegoneonlyhalfwaytowardsvictory.

Your readiness forbusinessbattle isonlyhalfof the story.Whileyoumaybeable tokeepfrombeingdefeatedbyadoptingadefensivestrategy that focuseson an insular understanding of your organization, youwon’t be able to break

through to success unless you thoroughly understand your adversary’svulnerabilities and assets. Launching an engagement on an adversary who isstronglypositionedcouldbedisastrousforyou.

Tosecureourselvesagainstdefeatliesinourownhands,buttheopportunityofdefeatingtheenemyisprovidedbytheenemyhimself.

Being aware of the condition of the competitor’s vulnerability is the ideahere.Youmust fully understand the adversary so that youwill be able to seethoseopenings.SunTzucontinues:

Thusthegoodfighterisabletosecurehimselfagainstdefeat,butcannotmakecertainofdefeatingtheenemy.Hencethesaying:Onemayknowhowtoconquerwithoutbeingabletodoit.

How can you guard yourself against defeat and take advantage of theopportunitiestheenemyoffers?Let’sexplorewhatSunTzusaysabouthowtomapweaknessesincompetitorsandtakedecisiveaction.

IDENTIFYADVERSARIES

WhileSunTzu lived ina timewhere thewarringentitieswerewell identified,yourbattlefieldisprobablymorenebulous.Youmaybeinalandscaperifewithmergers and acquisitions, or where one big player is crushing smaller forces.Youmay seenewplayers enteringyourmarket througha revolvingdoor, andothersclandestinelyrisingtoprominence.Identificationofadversaries includesthecompetitorsyouknow,andtheonesyoudon’tknow.

It’samistaketodeterminethatyouhavenocompetitorsbecausenoonehasyour exact technology or processes, or because you’ve not done your duediligence to spot other players. Some small businesses get started and evenoperateforsometimebelievingtheyaretheonlyoneswhocanperforminawaythatwillsatisfythecustomer.It’snevertrue.Evenifyouaredoingsomethingnoonehaseverdonebefore,therearealternatives,evenifthey’relesssophisticatedandmorecostly.Youmustfullyunderstandthosealternatives.

CREATEOPPORTUNITIESTODEFEATTHEENEMY

In sparring,when you’re battling someone skilled, it’s not enough to stand infrontofyouropponent,toe-to-toe,andthrowyourfastest,mostaccuratepunchor kick and expect it to land. Simple one-off blows are easily detected anddeflected.That’swhyreallygoodpractitionersknowhowtousefeints,counters,andmultipleattackstocreateopportunitiesandlandstrikes.Thatwasadifficultlessonformetolearninmartialarts.Mymentor,UcheAnusionwu,ontheotherhand,wasquitegoodatit.He’dfeint,I’dcounter,andhe’dlandablowandtakeme down. He would remind me yet again, usually very matter-of-factly, to“createtheopening.”

It’s all very much the same in business, especially if you’re up against astrongeradversary.Youcan’tstandtoe-to-toe,launchanattack,andexpectittoland.Youhavetocreateopportunities.Ashe’sreactingtoapunchcombinationtothehead,he’svulnerabletoakneestrikeorakickintheribs.Asheblocksandturnstomoveoutofthewayofapunch,hemaygiveyouanopportunitytosliptheblockingarmandslideinwithachoke.Theideaistocreatetheopeningand then quickly seize the opportunity. If your opponent is skilled, he won’tmakethesamemistaketwice.Andhe’llbelesslikelytomakeafuturemistakethatwouldgiveyouanopportunity.

“Createtheopportunity.”Bam!“Findtheopening.”Thump!Takingadvantageofanopeningthat iscreatedbyexternalfactors is justas

useful.Oneday,UcheandIwereworkingonknifedefenseattheendofclass,whiletheotherswerechangingandpreparingtoleave.Asthedefender,Istoodwithmybacktothewall,astheattackerwouldplungeinwiththeblade.Uchepulled the training knife to cut, holding it out in front, between us. Ourinstructor,SenseiRandyHutchins,wasstandingoffthemat,notreallywatchingus.HecalledUche’snametogethisattention.UcheturnedhisheadtolookatSensei.Ashisattentionwasdiverted,withouthesitation,Imovedin,lockedhiswrist, threw him to the mat, and took the knife. Sensei chuckled andcongratulatedme.Therearenoruleswhenthebadguyhasaknife.

ThisstoryillustratesaSunTzuprincipleofpreparation:

Attackhimwhereheisunprepared,appearwhereyouarenotexpected.Takeadvantageoftheenemy’sunpreparedness,makeyourwaybyunexpectedroutes,andattack

himwherehehastakennoprecautions.1

Netflix is an excellent example of a business finding—even creating—theopening.Movie rental giantBlockbustermay have known its strengths, but itwas nomatch for the emerging enemy,Netflix, and the innovator’s ability to

satisfyamarkethungryforentertainmentandconvenience.

ENCOURAGETHEENEMY’SMISTAKES

If you have a deep understanding of your adversary, you can play upon hisweaknessesandencouragehimtofall.Inthispassage,SunTzusaystoexploitanadversary’silltemper:

Ifyouropponent isofcholeric temper, seek to irritatehim.Pretend tobeweak, thathemaygrowarrogant.

ATTACKWEAKNESS,AVOIDSTRENGTH

TheideaofattackingweaknessandavoidingstrengthiscentraltoSunTzu,asitmustbeforsmallbusinesses.Largebusinesses,too,wouldbewellsuitedtoheedthisdirection,butforsmallbusinessesit’smandatory.

Youmayadvanceandbeabsolutelyirresistible,ifyoumakefortheenemy’sweakpoints;youmayretireandbesafefrompursuitifyourmovementsaremorerapidthanthoseoftheenemy.

Therearetwoimportantelementshere.Attackhimwhereheisweak,neverwhereheisstrong,anddosowithspeed.

Whenageneral,unabletoestimatetheenemy’sstrength,allowsaninferiorforcetoengagealargerone,orhurlsaweakdetachmentagainstapowerfulone,andneglectstoplacepickedsoldiersinthefrontrank,theresultmustberout.

You should never set the few out against the many or use weak againststrong.Asforleadingwithpickedsoldiers,Huangcallsthem“thespearhead.”2Thinkofitashavingallthewoodbehindonearrowheadsothatanattackcanbewell coordinated,with the strongest playerswell positioned tomaximize theirpotential.

MEASURECOMPETITORS

Carefully compare the opposing army with your own so that you may knowwherestrengthisabundantandwhereit’sdeficient.Toreachconclusions,you’llneedindicatorsofstrengthandweakness.Determinewhatthosemarkersare.

Whenthesoldiersstandleaningontheirspears, theyarefaint fromwantoffood.If thosewhoaresenttodrawwaterbeginbydrinkingthemselves,thearmyissufferingfromthirst.

Justasyoumustcareforandkeepthebestpeople,youcantellagreatdealabout the competition from reading signs.What areyour competitors lacking?Whereare their frustrations?Are theyexperiencingsignificant turnover?Havetheir travel budgets been cut or increased? What about other spendingcategories?Followyour competitors’ conference and trade showpresence andobservetheiradvertisingspendsandsocialmediaactivity.Thesepublicsourcescan tell you where your competitors are focusing dollars, which can be anindicatorofproblemorplentyforthem.MoredetailsonhowtogainintelligencearediscussedinChapter14,“Deception.”

Bewaryofadversarieswhoarecloseandquiet.Watchtheirmovements:

When the enemy is close at hand and remains quiet, he is relying on the natural strength of hisposition.

Take nothing at face value. Study your adversary’s actions more than hiswords:

Humble words and increased preparations are signs that the enemy is about to advance. Violentlanguageanddrivingforwardasiftotheattackaresignsthathewillretreat.

TIMEYOURATTACKS

Akeypieceofmeasuringyouradversariesandattacking theirweakness is thetimingofattacks:

Appearatpointswhichtheenemymusthastentodefend;marchswiftlytoplaceswhereyouarenotexpected.

Agilityisaprimaryadvantageofsmallbusinesses,whencontrastedwiththecompetition.Ifyouunderstandyouradvantagesandyourenemy,you’llbeable

totimeyourattacksformaximumbenefit.

AVOIDTHEENEMY’STRAPS

JustasSunTzurecommendsthathisgeneralcreatediversionarytechniquesandlure theenemy intomisreadinghis intention,heurges that thegeneralnot fallintotrapssetbythecompetingside:

Whenhe [theenemy]keepsaloof and tries toprovokeabattle,he is anxious for theother side toadvance.

Ifhisplaceofencampmentiseasyofaccess,heistenderingabait.Whensomeareseenadvancingandsomeretreating,itisalure.Whenenvoysaresentwithcomplimentsintheirmouths,itisasignthattheenemywishesfora

truce.

AsHuynhinterprets:

Ifhecomeswithoffering,hewantsrest.If the enemy’s troopsmarch up angrily and remain facing ours for a long timewithout either

joiningbattleor taking themselvesoffagain, thesituation isone thatdemandsgreatvigilanceandcircumspection.

The better you are acquaintedwith your adversary’s design, the less likelyyou’llbetofallforalure.

REMEMBERTHEFORMULA

TheSunTzucommentator,DuMu,succinctlysharesSunTzu’sformula:

Evadetheirstrength,stalktheiropenings,andthenissueadecisiveattackforvictory.3

CHOBANI

ShortlybeforetheGreekeconomiccrisis,myhusband,Dave,andIvisitedAthens.Itwasthere,inthelandof theAegeanSea, thatweexperiencedourmaidenvoyagewithrich,dense,andlusciousGreekyogurt.We’dnevertastedanythinglikeit,andchalkedituptoonemorereasontogoback.

Imagineourjoywhenshortlyafterreturninghome,wefoundGreekyogurtpoppingupatallofourgrocerystores.

WehaveTurkish immigrantHamdiUlukaya to thankforbringing thatMediterranean luxury toour communities. Ulukaya, the founder of Chobani, believed that Americans would like Greekyogurt, if only they had the chance to experience it. Big guys like PepsiCo, Coca-Cola, GeneralMills,andKraftownedtheyogurtmarketwithproductsthathesaysarefarlesshealthy,ladenwithsugar,andofalowerquality.But,saidthegiants,it’swhattheAmericanconsumerdemanded.4

WhenChobani launched in 2007, Fage, based inGreece,was exporting its yogurt to specialtystores in theU.S. and someEuropean countries, but itwas far fromearningnext-big-thing status.UlukayawenttothesestoresandtalkedtoGreekyogurtbuyers.Heandhiscompanythentestedandretested in an effort to develop a top-quality, consistent product. He didn’t have any retailknowledge, but scoredChobani’s firstmajormainstreamopportunitywhenShopRite agreed to letthemcover shelf slotting feeswithyogurt shipments insteadofcash, andallowed in-storeproductsampling. Ulukaya convinced the grocer to put the product in themain dairy area instead of thespecialtyornaturalsection.5There’snothinglikemainstreamvisibilitytopoweranichetoexplode.

Inlessthanfiveyears,thestart-upwassharingshelfspacewithbrandpowerhouses.Inarecentyear,Chobanimademorethan$650millioninsalesandnowcontrolsabout17percentoftheU.S.yogurtmarket.6 Compare that with 2007, when theGreekmarket share of yogurts in theUnitedStateswaslessthanonepercent.7

Ulukayaknewhowtoproduceaqualityproductthatwould,infact,appealtotheAmericanpalateand a sizable portion of consumers. But he also understood the competition. In 2009, projectionsindicated thatChobani shoulddouble itsweeklyproduction to400,000cases tomeet thegrowingneed. But not so fast.Wouldn’t such a jump draw the ire of superpowers Yoplait and Dannon?UlukayaacknowledgedthatrisktoBusinessweek:“Forastart-up,”hesaid,“youneedtostaysmallsotheothersdon’tattack,oryouaimtobeoneofthebigguys.Ifyoudon’tdoitright,youmightloseeverything.”Doitright,orloseeverything.That’sastarkdichotomy.Hedecidedtodoitright,anddo itbig,andpositionedChobani toexceed theprojectionsandmake1millioncasesaweek.Ordersroseto1.2millioncasesaweekin2011,andChobaniisbranchingintointernationalsales.8

ChobanimayhaveopenedthefloodgatestotheGreekyogurtconcept,butothersarelookingtopush their way through. With competitors big and smaller coming for Chobani, we’ll see if thecompanyisabletomaintainthedominantpositionintheGreekspace.

Chobanihasmademanyoftherightmovesthatindicateithasknowledgeofthecompetition,aswellasthemarketplaceanditself.HerearesomeillustrationsthatareimportantthemesofTheArtofWarforSmallBusiness:

Differentiate.Withoutmoneyforadvertising,Ulukayausedanextra-largecupmoldunlikeanythingelse in the dairy case. He also developed unprecedented yogurt flavors like pineapple andpomegranate.9

Build a loyal community. Chobani used its enthusiastic customer base as the foundation of the“ChobaniLoveStories”adcampaign. It letcustomersdefinewhatChobanimeant to them.And itdoubledsales.10Loyaltyisimportant,asnewcompetitorsareenteringthefoldandthesuperbrandshaveintroducedtheirownGreekyogurtproducts,includinglower-costoptions.

Findaniche. “At a consumer level, theGreekyogurt trend is thebiggest innovation in thedairy

industrysinceindividualpackagingofthingslikeyogurtandmozzarellasticks,”RobertRalyea,headofCornellUniversity’sFoodProcessingandDevelopmentLaboratory,toldBloombergnewsservice.He’salsocreditedChobaniwithexceptionalmarketingoftheinnovativeproduct.11

Turndisadvantage toadvantage—and tell that story. “Chobani”comes from theTurkishwordforshepherd.Thecompanysponsored the2012LondonOlympicswith superbTVadvertisementsthat tippedthehat to itsgrassrootsorigins.Against thebackdropof theChobanicommunitystory,thecommercialtellshowtheproductbroughtarevivaltothelocaldairyfarmers,plantworkers,andtruckdrivers,andhowtheyogurtnowpowersTeamUSA.Itfeaturedscenesofaruralcommunitybuildingamakeshifttheatertowatchthegames.12Theadmadebeingthesmallplayeranadvantageand forged a connection with audiences all over the country. Chobani also sponsored the U.S.Olympicteamthe2014WinterOlympics.

5UNDERSTANDTHEMARKET

Manyentrepreneurs, small-business leaders, andvisionariesmake assumptionsabout the market, their customers, and their opportunities. They allow theseassumptions togovern theirdecisions.This is thepath touninformeddecisionmaking, at best, and catastrophic decisionmaking atworst.What assumptionsareyoumakingaboutyourmarket?

Ifyouknowtheenemyandknowyourself,yourvictorywillnotstandindoubt;ifyouknowHeavenandknowEarth,youmaymakeyourvictorycomplete.

AsHuangtranslatesthisSunTzuconcept:

Byperceivingthegeographicalfactorsandperceivingthecyclicnaturaloccurrences,victorytherebyiscomplete.

This chapter explores marketplace factors based on the sage’s analysis ofground. Sun Tzu writes extensively on types of ground, and how to plot thecoursebasedonvaryingcircumstances.RecallSunTzu’sfiveconstantfactors,as described in Chapter 2: Heaven can apply to weather, which we adapt tomarket factors and conditions that influence ourmaneuvers. Earth reflects theimportance of maneuvering effectively and knowing the advantages anddisadvantagesofdifferenttypesofterrain.

Sun Tzu cautions that knowledge of your organization and your adversarywon’t be actionable or meaningful without a complete understanding of yourbattlefield:

Wearenotfittoleadanarmyonthemarchunlesswearefamiliarwiththefaceofthecountry—itsmountainsandforests,itspitfallsandprecipices,itsmarshesandswamps.

GOWHERETHEOPPORTUNITYIS,BUTTHEENEMYISNOT

Anarmymaymarchgreatdistanceswithoutdistress,ifitmarchesthroughcountrywheretheenemyisnot.

Not surprisingly, SunTzu directs you to gowhere the enemy is not.Chobaniintroduced theGreek yogurt concept to themassmarket ofAmerican buyers,and it was some time before the big brands followed the company to thatbattlefield. Samuel Adams beer pioneered an American craft beer revolution.PayPal,whichyou’ll readmoreabout inChapter12, “Adaptation,” reinventedonlinepaymentasweknowittoday.

MOVEWHENHEHASLETDOWNHISGUARD

You can move to where the enemy is, if he’s not expecting you, or is notpreparedforanattack:

Youcanbesureofsucceedinginyourattacksifyouonlyattackplaceswhichareundefended.

Netflixmarched into territory that was not defended by video rental giant,Blockbuster.

USELOCALGUIDES

Weshallbeunabletoturnnaturaladvantagetoaccountunlesswemakeuseoflocalguides.

The ideaof a localguide canbe applied invariouswaysby smallbusinesses.

JimKoch lived in the Boston area, where Samuel Adams firstmade inroads.HamdiUlukayawent out and spoke to a small number of honest-to-goodnessGreekyogurtbuyers.FiveGuyshiredsenior-levelprofessionalsfromcompetingrestaurantbusinesses.NolanBushnellsenthisAtariengineersoutintothegamefield andmanufacturing locations. Start-ups and small businesses can bring inconsultantswhopossessnecessaryexpertiseorformateamoftrustedadvisers.Howcanyoumakeuseoflocalguides?

CHOOSINGGROUND

Sun Tzu identifies nine types of ground, which are interpreted somewhatdifferently by various scholars and authors (as shown in the accompanyingtable).

The art of war recognizes nine varieties of ground: (1) Dispersive ground; (2) facile ground; (3)contentious ground; (4) open ground; (5) ground of intersecting highways; (6) serious ground; (7)difficultground;(8)hemmed-inground;(9)desperateground.

SUNTZU’SNINETYPESOFGROUND,INTERPRETEDFOURWAYS.

Let’sexploretheseninetypesofground,andhowtonavigateeach.

Whenachieftainisfightinginhisownterritory,itisdispersiveground.Ifyouare fighting inyour territory, thebattlehascome toyou.Dispersiveground istypicallynotagoodplaceforasmallerorganization tofind itself.This iswhyniches are important. Samuel Adams didn’t endeavor to be the top-sellingdomesticbeerandtakeonBudweiser.ThemissionofFiveGuysrestaurantsisn’ttocrushallcontendersinthefast-foodindustry.Chobanihasdecidedtouptheante and draw the attention of the biggest players, but it knows what it’s upagainst,anditsCEObelieveshiscompanyiswellpositioned.

Whenyou’reonthisground,SunTzusays:

Ondispersiveground,Iwouldinspiremymenwithunityofpurpose.Ondispersiveground,therefore,fightnot.

When he has penetrated into hostile territory, but to no great distance, it isfacile ground. Facile ground is also called marginal, susceptible, or frontierground.Inthemarketplace,itcanberepresentedbytheexampleofattemptingaconcept,butwithdrawingit,ifitdoesn’tmeetwithsuccessorseemdestinedtosucceed. Five Guys restaurants attempted to introduce coffee and chickensandwiches.Bothitemsfailedandwereremovedfrommenus.

SunTzusays:

On facile ground, I would see that there is close connection between allpartsofmyarmy.Onfacileground,haltnot.

Onfacileground,youshouldkeepmovingsothatyouwon’tbeoverwhelmedby the adversary. Jim Koch knows how to make and market good beer. ButBostonBeerCompany also knows that not every sudsy creationwill be a hit.Overtheyears,thecompanyhashaddozensofbeersthatwouldnevercometoahead commercially. The company has accepted these losses and moved onquickly.1

The multinational networking equipment firm Cisco Systems has a hugerangeofproducts.Butitalsowantstoleadinthemarketswhereitplays.Ciscohas a minimum target of 40 percent share in all markets, and it will leave amarketifitssharedropsbelow20percent.ThisstrategyhasworkedforCisco,whichmaintained a 70 percent share of the networking industry for the betterpartofthelastdecade.2

The pressure to report quarterly revenue growth leads big businesses likeCisco to focus narrowly on winning solutions. Smaller businesses have morefreedom to create viable and sustainable solutions that may not be overnightsuccesses.Buttheymustalwayskeepthebigpictureinmindandrememberthattherearecustomersandmodelsthataren’tprofitable.

Ground the possession of which imports great advantage to either side, is

contentiousground.Thisisgroundthatisequallyadvantageousforyouoryouradversariestooccupy.Chancesarethatifit’snotacrowdedmarketplaceyet,itwillsoonbecomeone.Airwalk(highlightedinthesidebar)isanexampleofhowaverysuccessfulnicheproductwentmainstream,butultimatelywasunable toholdon.

SunTzuadvises:

Oncontentiousground,Iwouldhurryupmyrear.Oncontentiousground,attacknot.

Don’tattackwhenoncontentiousgroundbecauseyouprobablydon’thaveanadvantageinnumbersorpower.Insteadofenteringintobattlewithanadversaryongroundthatisequallyadvantageous,plotyourcoursecarefully.

Groundonwhicheachsidehaslibertyofmovementisopenground.Forsmall-business purposes, open ground is similar to contentious ground.BothHuynhand Huang, in their translations, emphasize the importance of keeping yourforcestogetherincloseproximity:

Onopenground,donotbecomeseparated.(Huynh)Withduallytraversablezones,donotleavegaps.(Huang)

Thisisgroundthatotherswillbeafter.Don’tallowyouradversarytodivideyou,andbesuretofocusonunityfromwithin.SunTzusays:

Onopenground,Iwouldkeepavigilanteyeonmydefenses.Onopenground,donottrytoblocktheenemy’sway.

Ground which forms the key to three contiguous states, so that he whooccupies it first has most of the Empire at his command, is a ground ofintersecting highways. Here Sun Tzu describes how to gain control of theempire.Thefirstmoverwhoexecuteswellwillbeentrenched.Butalas, ifyoudon’thave thekeys to theempire inyourmarkets justyet, considerwhatSunTzusaysofintersectingroadsunderhisdiscussionofavariationoftactics:

Whenindifficultcountry,donotencamp.Incountrywherehighroadsintersect,joinhandswithyourallies.Donotlingerindangerouslyisolatedpositions.

What does itmean to join handswith allies?As JayAbrahamnotes in hismarketingclassic,TheStickingPointSolution,theiconicimageofthetwentieth-centuryentrepreneur,theself-mademanorwomanwhoreliesonskill,character,andgrit,needstochangewiththetimes.Thetwenty-first-centurysmall-businessleader has to collaborate creatively with others. He cites Robert Hargrove’sprojection that the most defining characteristic of great entrepreneurs of thiscenturywillbehowwelltheycreativelycollaboratewithothers.3Notoneofus—notyou,notme,not thebrilliant entrepreneurwhohas fivemansionsonasmany continents—can build all the skills necessary to keep up and competetoday.Yetstill,manybusinessleadersoperateliketheycan.

SunTzusays:

Onthegroundofintersectinghighways,joinhandswithyourallies.Whentherearemeansofcommunicationonallfoursides,thegroundisoneofintersectinghighways.Iwouldconsolidatemyalliances.

You’ll read more about how to join hands with allies, including in someunexpected ways, in Chapter 6, “Sun Tzu for Customers and BusinessAlliances.”

When an army has penetrated into the heart of a hostile country, leaving anumberoffortifiedcitiesinitsrear,itisseriousground.Unlikefacileground,seriousgroundrequiresadeepcommitment:

Whenyoupenetratedeeplyintoacountry,itisseriousground.Whenyoupenetratebutalittleway,itisfacileground.

Chobanihassuccessfullymadeitswaytotheheartoftheyogurtmarket.Butit didn’t do so with just another yogurt. The company created somethingaltogetherdifferent,andofhighquality,andpackagediteffectively.

Seriousgroundrequiresresources:

Onseriousground,Iwouldtrytoensureacontinuousstreamofsupplies.

And,saysSunTzu,youshouldgatherresourcesasquicklyandefficientlyasyoucan,andmakethemostofthem:

Onseriousground,gatherinplunder.Indifficultground,keepsteadilyonthemarch.

Mountainforests,ruggedsteeps,marshesandfens—allcountrythatishardtotraverse: this is difficult ground. Entrepreneurs in countries like Lebanon,Indonesia,andSenegalareondifficultground.Whilethereisaswellingspiritofinnovationin theseregions,youngcreatorsface traditionsandcultures thatareaversetoinnovation.Apartfromthethreatofcompetition,theymusttraveloververydifficultterraintoachievesuccess.Butthereisbigrewardformakingthetrek.TheArabic-languageportalMaktoob.comwasboughtbyYahoofor$175million.Yahoohas20millionusersintheMiddleEast.4

SunTzusays:

Indifficultground,keepsteadilyonthemarch.Ondifficultground,Iwouldkeeppushingonalongtheroad.

Entrepreneurs in the Middle East, North Africa, and sections of Asia mustcontinuetomarch,eveninthefaceofextremelydifficultterrain.

Groundwhichisreachedthroughnarrowgorges,andfromwhichwecanonlyretirebytortuouspaths,sothatasmallnumberoftheenemywouldsufficetocrushalargebodyofourmen:thisishemmed-inground.SunTzucontinueshisdescription,advisingthat:

Whenyouhave theenemy’sstrongholdsonyour rear,andnarrowpasses in front, it ishemmed-inground.

Hemmed-in ground, also called encircled or surrounded ground, is a goodplace for small businesses to find a big-business adversary. On this ground asmallerforcecandomaximumdamage.SunTzuadvisesthat:

Inhemmed-insituations,youmustresorttostratagem.Onhemmed-inground,Iwouldblockanywayofretreat.

A stratagem is an artifice or trick inwar used to outwit the enemy.As forblockingretreat,SunTzudirectshisgeneraltounitehisforcessothattheymaynot be further weakened by defectors. Blockbuster is a classic example of abusiness hemming itself in with a traditional model.When Netflix and otherstreamingvideoservicescamealongwithafarsuperiordeliverymechanism,thefewcrushedthegiant.

Groundonwhichwecanonlybesavedfromdestructionbyfightingwithoutdelay, is desperate ground. This situation differs from hemmed-in ground,whichallows“narrowpassesinfront.”Withdesperateground,however,thereisnoplaceofrefugeatall.Thesituationisdire,indeed:

Ondesperateground,Iwouldproclaimtomysoldiersthehopelessnessofsavingtheirlives.

Thereisoneoption,saysSunTzu:

Ondesperateground,fight.

Priceline, which is profiled in “Perseverance” and mentioned again in“Adaptation”(Chapters8and12,respectively),isanexampleofacompanyondesperategroundthatwasturnedfromdespairtoadvantage.

For smallbusinesses, allgroundcanbedifficult.On intersectiongrounds,youneedtodependonpartnersandfriends.Whenisolatedandopen, takecoverormove.Whensurrounded,youneedstrategy.Whenyouhavenochoice,fight.

Ifyouhaveaviableconcept,you’llonlybeleftaloneforashorttime.Manysmall businesses opt to go to surrounded ground, where there is tremendousopportunity but also lots of competition. If you do that, you’ll need amplestrengthtohandlethechallengesthatwillcome.Rememberthatonsurroundedground,afewofthem,positionedwell,canattackanddefeatmanyofyou.But,ifyouareabletotakethesuperiorpositionandsurroundyourcompetitor(s),fewofyoucandefeatmanyofthem.

DON’TFOLLOWAPREPAREDADVERSARY

InonemorewarningfromSunTzu,besurenottofollowapreparedadversaryintohismarket:

Iftheenemyoccupies[narrowground]first,andisprepared,donotfollowhim.Ifheisnotprepared,followhim.5

Thispassage,fromSunTzu’sninestypesofterrain,speaksofanarrowpasswheremaneuveringisdifficult.Theapplicationforsmallbusinessesistoavoidastrong competitor’s well-guarded, highly satisfied, difficult-to-tap customerswhenthepassage isnarrow.Competitivemarketsequate tonarrowpasses. It’stheunpreparedadversary,particularlyonewithoutafirmholdoncustomers,thatyouwanttopursue.

KNOWWHENTOPIVOT

Aswe’llseeinthechapteronadaptation,sometimesthesolutionisn’ttodespairor to crumble, but to change your business model and overcome. Manybusinesseshaveseenvictorybycalculatingandtakinganewroute.

AIRWALK

Oneofmyfavoriteexamplesofabusinessgoingtoextraordinarylengths tounderstanditsmarketandposition itselfmostadvantageously isAirwalk.Theathleticshoecompanywasfoundedin themid-1980swith a focus on serious skateboarders.Airwalk developed a passionate cult following,and,afterafewshortyears, itwasa$13-million-a-yearbusiness.Theownersnextsought tobuildthis small business into an international brand. They branched out into surfing, snowboarding,mountainbiking,andbicycleracing.Theyalsohiredasmalladagency,Lambesis.Withintwoyears,Airwalkwashuge.

With a limited budget, Lambesis came upwith a series of outstanding images showing peoplerelating to theirAirwalks, followedbyverymemorableTVcommercials.Theadswerestunninglyvisual andmade powerful appeals to youth.But if theywere going tomakeAirwalk into a hugebrand,theyhadtodosomethingmore.Theyhadtocapturethetrendsettingskateboardingsubcultureandpackageitformassconsumption.6

To uncover these ideas, Lambesis developed a network of savvy young people in majorinternationalcitiesandputtogetherapictureofevolvingnewtrends.Bycomparingitsfindingswithwhatthemainstreamkidsweresayinganddoing,Lambesiscouldtracktheideasthatwerelikelytomakethejumpfromthecoolsubculturetothemainstream.Theseideaswouldbecomeintegraltothe

LambesisadsandtheAirwalkbrand.7Whattheteamwasabletodoisextraordinary.Theypickeduponnascenttrendsandcreatedads

toshowcaseandtranslatethemsothattheymadesense.Bythetimetheadsran,thosetrends(oratleastmany of them) had hit. For example, the subculturewas into kung fumovies. So LambesismadeakungfuparodyadwheretheAirwalkherofightsoffvillainswith,whatelse?Hisskateboard.Lambesistookthekungfuideaandmasheditupwithyouthculture.

But unfortunately for Airwalk, the company’s story also illustrates how not to apply Sun Tzueffectivelybecauseitfailedtoheedthisprinciple:

Ifweknowthattheenemyisopentoattack,butareunawarethatourownmenarenotinaconditiontoattack,wehavegoneonlyhalfwaytowardsvictory.

Themarketwasopen toAirwalk.But thebrandmoved its forcesoutofposition tocontinue toattackanddominate.Whiletheydemonstratedaprofoundunderstandingofthecustomer,theydidn’tsustain it. Following their peak in the mid-1990s, Airwalk experienced production problems.Distributors,oncesoloyal,lostpatience.8

Asanotherillustrationofthecompanynotbeinginaconditiontoattack,Airwalkalsolostfocuson its cutting-edge feel. The product became less cool. It was no longer a shoe for innovativeperformers.Airwalkevenmovedawayfromtheirstrategyofgivingsmallindependentskateshopsanexclusiveproductlineofmoretechnicalshoesthatweren’tavailableelsewhere.Atonetimethetrendsetterscouldwearabetter,moreexclusiveshoethaneveryoneelse.Butthen,Airwalkdroppedthisnichestrategyandofferedupthesameshoestomassmalls.9

PAYCHEX

If your small business uses a payroll-processing service, there’s a good chance it’s Paychex. Thecompany illustrates the power of understanding the market well enough to find the opening andcreateopportunity.

In1971,TomGolisanosawthepotentialinbringingaffordablepayrolloutsourcingtobusinesseswith fewer than 100 employees. Industry heavyweight ADP focused on businesses with moreemployees.Withonly5percentofitsrevenuefromsmalleremployers,ADPcontinuedtomaintainitstargetoflargercustomers.Golisanowenttohisemployeratthetime,aregionalpayrollprocessorforbigbusinesses,withhisplan.Thecompanywasn’tinterested,sohestartedPaychex.10

Paychexwentwherethecompetitionhadnotpreparedtogo,anddidn’twant togo.Sincethen,Paychexhashadarecordofsteadygrowth.AscurrentlyreportedonthePaychexcorporatewebsite,in fiscal 2013, the company reported revenues exceeding $2.3 billion. Growing from just oneemployee,Paychexhasmorethan12,000employeesandserveshalfamillionsmalltomedium-sizebusinessesnationwide.

6SUNTZUFORCUSTOMERSAND

BUSINESSALLIANCES

WiththeInternetconnectingusalltogether,companiesarebecomingmoreandmore transparent, whether they embrace it or are being dragged tointerconnected utopia kicking and screaming. A single unhappy customer ordisgruntledemployeecanshareonebadexperiencewith theworld inaboutasmuchtimeasittookyoutoreadthissentence.Theirstory,whichmaybetrue,false,orsomewhereinbetween,canspreadlikewildfireviasocialnetworks.

Thegoodnewsis that thereverseis trueaswell.Agreatexperiencewithacompanycanbereadbymillionsofpeoplealmostinstantaneously.

Socialmediagivessmallbusinessesunprecedentedpowertounderstandandengagewithcustomersandtherestoftheircommunity.Andthere’ssomethingelse that’s equally exciting: If you build a small company that demonstrates adesiretoengagewithinfluencers,they’llwanttoconnectwithyou—muchmoresothantheywillthebigcorporatebrands.Then,whenyoubecomeabigbrand,you can solve the enviable problemof how to stay dynamic and engagement-worthy,while also counting your billions. Zappos has figured out how to usesocialmediatothisveryend.

We’veexploredSunTzu’sdirectiononknowingtheenemyandourselves.Inthischapter,we’llextendSunTzu’svisionforalliesandstakeholders,includingcustomers. Maximizing relationships and value from customers, partners,suppliers,andotherinfluencersisamajorstrategicconsideration.

SunTzuwroteofstakeholdersandassets, includingspies, localguides,anddefeated forces within enemy ranks. He understood the need to influencecombatants and noncombatants alike, but he didn’t have to contend with adynamiclikethecustomer.Wedo,however.Andwecangaininsightfromhimabouthowtooptimizeallofourbusinessrelationships.

CUSTOMERS

Salesforce.comCEO and enthusiasticArt ofWar pupilMarcBenioff has saidthatthereisonecommitmentthatallsuccessfulsalespeopleandmarketersshare.That’sa“relentlessfocusonthecustomerandarealcommitmenttohisorhersuccess.”Theentireorganizationmustpursuethismantra.1

Small businesses, in particular, should extend Sun Tzu’s call for deepknowledgeofourselvesandouradversariestodeepknowledgeandcommitmenttothecustomer.Themandateforprovidingexceptionalcustomercareistheseachange differentiator for small businesses competing against large “facelessbrands.”RenownedbrandingconsultantandauthorJoeCallowayhasthreerulesfordevelopinganintimaterelationshipwiththecustomer,rulesthatwouldmakeSunTzuproud:

1.Knowmoreaboutthecustomerthananyoneelse.2.Getclosertothecustomerthananyoneelse.3.Emotionallyconnectwiththecustomerbetterthananyoneelse.2

They’resimple,butthesethreerulesseparateexceptionalbusinessesfromallothers. JamesBeard, thenamesakeof the culinary JamesBeard awards, put itbestwhenhewasaskedtodivulgehisfavoriterestaurant.Everyonewhocaresabout developing outstanding customer relationships should listen to hisresponse:“Myfavorite restaurant iswhere theyknowme; they treatme likeafamilymemberandafriend.”

This level of intimacy is so important thatBeard said that even if the foodisn’tquiteasgoodattheplacewheretheyknowhimbest,hewouldstillpreferto eat there and spend his money there. It’s the same with restaurants andhotels.3

Small businesses are uniquely capable of getting to know the customerextremelywell.Atari’sdecisiontohaveitsengineersvisittestlocationsmoved

these developers much closer to the customer. It also gave the video gamedeveloper rapid feedback on game popularity. All they had to do was countquarters. They could test themarket and predict earnings for new games, andgivedistributorsaninformedideaofwhattoexpect.4Areyouasclosetoyourcustomersasyoucouldbe?Doyouknowthemaswellasyoucould?

ALLIES

We’rewell into theeraofalliances.Strategicalliancesareon theupswing forlargeorganizations.ManagementguruPeterDruckerhasnotedthatwe’reinthemidstof“aworldwiderestructuring”takingplaceintheshapeofalliancesandpartnerships.5Andifthebiggestbusinessesarepullingresourceswithotherhighrollers,howmuchmoredosmallbusinessesneed tobuildstrongalliancesandrelationships?

Toomany people think very narrowly about strategic alliances. They thinkonly aboutwhat a potential partner can do for them in the short term. If theycan’t come up with a home run, then they dismiss that opportunity. Instead,smallbusinessesmustthinkstrategicallyaboutbuildingallianceswiththerightorganizations togain an advantage that benefits bothparties.Small businessesshouldactivelyandcarefullyseekallies, includingwithvendorsandsuppliers,peer companies, strategic partners, joint venture partners, funders, go-toconsultants, colleagues, and friends.Successful small businessesmust think intermsofcollaboration,todaymorethanever.Themoreresourcesyouhave,thegreateryourfootprint.

While still at eBay, Meg Whitman noted this cooperative alliance shift.Speaking toFinancialTimes, she remembersearlier inhercareer that teamingwithacompetitorwastaboo.HasbroneverworkedwithrivaltoymakerMattel.Procter & Gamble didn’t cooperate with Colgate. But, she noted of eBay’spartnershipwithYahoo, it’sallchanged.Google, too,wasaneBaypartner,aswell as a competitor.6 Alliances are important to Sun Tzu, as they are for allshrewd business and military leaders. Disruption of the adversary’s alliances,too,isaworthwhilepursuit:

Thesupremeexcellence inwar is toattack theenemy’splans.Nextbest is todisrupthisalliances.Thenextbestistoattackhisarmy.Theworstpolicyistoattackcities.7

AlliesCanHelpClosetheGap

Ifyouaresituatedatagreatdistancefromtheenemy,andthestrengthofthetwoarmiesisequal,itisnoteasytoprovokeabattle,andfightingwillbetoyourdisadvantage.

Whilethispassagereferstoevenlymatchedadversaries,it’simportantforsmallbusinesses.Ifyouhavetofighthardtogettothecustomerbaseinanindustry,you’llbeatadisadvantage.Howyoucanyoumakethefight lighterandmoreeasily shore up the gap? Sun Tzu says to engage with superior, not equal,strength. By leveraging carefully picked allies, you can help close the chasmbetweenyoursmallbusinessandthebiggeronesyouseektodominate.

CarefullyConsiderAlliances

Regardlessofthespecificnatureofthebusinessagreement,alliancesshouldn’tbeentered into lightly.Deepunderstandingofpotentialpartners is requiredbySunTzu:

Wecannotenterintoalliancesuntilweareacquaintedwiththedesignsofourneighbors.

Alliances require due diligence to guard against conflicts of interest anddamage to your reputation and bottom line. Small businesses can easily fallvictimtothetrapofgatheringasmanystrategicalliancesastheycan,butneverreally understanding how best to leverage these partnerships. Iworkedwith acompanyinthetelecomspacewhenthedotcombubbleexploded,tothechagrinofsomanyofus.Thisreasonablywell-fundedcompanyhadaplethoraofsignedagreementsofstrategicalliancesbutneverreallydidmuchwiththese“partners”outsideofcollectingsignaturesonpapers.Unabletomakesubstantivesales,thecompany ran out of cash and closed up shop. Its partners were either poorlyeducatedabouthowtopromotethetelecomserviceprovider’swares,orpoorlyincentivized,orboth.

Thesmartgeneral,SunTzuwrites, “doesnot strive toallyhimselfwithallandsundry.”If theallianceisn’tdesignedtoplayaroleingeneratingrevenue,it’sprobablyawasteoftime.

Instead, smart business leaders develop clear objectives with all of theirpartners.Anobjectivecanbetobetterunderstandanewterritory:

Weshallbeunabletoturnnaturaladvantagestoaccountunlesswemakeuseoflocalguides.

How can you make use of “local guides” when you seek to become“acquaintedwith the designs of [your] neighbors”? If you are entering into anewmarketorregion,you’llneedaguidewhounderstandsthislandscapebetterthan you do, whether it’s on the employee side or the consultant side. Theconsulting model works well for many small businesses, but consultantsnaturallylacktheloyaltyandaretypicallylessvestedthanemployees.Nomatterwhatyourresources,ifyouareusingthesamelocalguidesasyourcompetitors,areyoureallygettingahead?

BOURBONINDUSTRY

One of my favorite examples of Sun Tzu’s direction to “join hands with your allies” while onintersectingground is seen in thebourbon industry.Whenmyhusbandand I toured theKentuckyBourbon Trail®,wewere struck by the spirit of community among the different distilleries. TheBourbonTrailfeatureseightmajordistilleries,andhassinceaddedaCraftTourtohighlightsmallerbourbonproducers.Noonehadanunkindwordtosayaboutanyotherdistiller,thoughyoushouldbereadyforsomegood-naturedhecklingif,forexample,yougotoBuffaloTracewearingaMaker’sMarkT-shirt.

Bourbon has been booming in recent years. We were in good company at the distilleries wevisited,onandoffthetrail.In2012,morethanhalfamillionpeoplevisitedoneormoredistilleriesinKentucky, the statewhere95percentof the country’sbourbon isproduced.Bourbongenerated$4.5billioninretailsalesin2012.8

The family tradition ofKentucky bourbon runs deeply in the lime-richwater of theKentuckyRiver.The JimBeam family has had a hand in just about everymajor distillery in the state. Thefamilyconnectionflowingthroughsomanygenerationsofbourbondistillingisacontributingfactorto,well,thespiritbehindthewhiskey.

But before bourbon became a billion-dollar industry, it faced some tough times. It had beendeclining since the early 1970s, as drinkers preferred more neutral gins and vodkas. In 1984,renowneddistillerElmerT.LeeproducedthefirstbatchofBlanton’sSingleBarrel.Hehadnothingtolose,butasachorusofbourbonaficionadoswilltellyou,wehadsoverymuchtogain.BuffaloTrace, where the late Elmer Lee served asmaster distiller, sold this premium bourbon for $30 abottle,twotothreetimesasmuchasaveragepricesofotherbourbonsatthattime.9

Slowly,Blanton’s SingleBarrel built loyal customers. Today,manyKentucky distilleries offerpremium products. They have Lee to thank. His innovation architected the turnaround that haschartedthecoursetothisexplosioninpremiumbourbons.10Andit’smetwithsolidmarketdemand.

The reasons for thesestrongalliancesamongbourbonmakerscanprobablybeseenboth in thefamilial ties of the generations who produce it, as well as the need to band together to protectinterests from threats posed by taxes and trade barriers. And perhaps collectively they see gins,vodkas,andotherconcoctionsascompetitorsthattheyneedtobandtogethertofight.

AllianceBuildingforYourSmallBusiness

Herearesomepowerfulalliance-buildingtipsandexamplesyoucanusetobuildyoursmallbusiness.

Marketing strategist and author JayAbraham suggests sharing resources. Ifyouneedasalesforce,butyouryoungorstrugglingbusinesscan’taffordit,finda noncompeting partner in your field who has a force that isn’t being fullyutilized, set up a joint venture (JV), and share in the profits. If you need awarehouse,findabusinesswithextrastoragespaceordeliverycapacity,anddoaJVtoshareinthegrowth.11

Bartering, too, can be a boon to your business, although it is often viewedwith skepticism.After all, it’s aboutmakingmoney, not breaking even, right?Notsofast.ConsideranexperienceAbrahamhad.Heworkedwiththenumberthreetravelmarketmagazinepublisherthatwasstrugglingtoselladsinanysortof predicable way. The publisher had offers from businesses to barter, but itturnedthemdown.ButAbrahamandhisteamconvertedthosebarterstocashat50centsonthedollar.Thisequatedtofivetimestheadcost.Themagazinewasabletotradeadspaceforgoodsorserviceworth$10,000perpagetobusinesseshappytopay50centsonthedollarfortheexposure.12

Inanotherbarteringsuccessstory,CarnivalCruiseLinesstartedout tradingotherwiseemptycabinsforradio,TV,andnewspaperadvertising.Whatitgotinreturnwascontinuousadvertisinginahundredcitiesoveraperiodofmorethantenyears.Plus,thesemediapassengersspentahealthyamountatthebar,casino,and gift shop. Abraham conservatively estimates the amount of sales in thehundreds of millions of dollars. The owner became a billionaire and one ofForbesRichestPeopleinAmerica.13

That’sthepowerofbartering!Ittakesvisionandcreativity,butitcanpayoffinverybigways.

WorkYourNetwork

Ultimately, your success hinges on who you know. If you are not out theretalkingtopotentialcustomersandindustryexperts,you’llmissoutoncountlessopportunities.Thinkabouthowyoucanbuildapowerfulnetwork.

Pete’s Greens is a certified organic, four season vegetable farm inCraftsbury, Vermont. Company president Pete Johnson was involved in abusiness owners group thatmet regularly for potlucks. At eachmeeting, theywoulddiscussatopicthatoneofthememberswasstrugglingwith.Thatwasacreativewaytointroducesolutionsandshapenetworks.14

EBAY

Allianceswereat theheartofMegWhitman’sstrategyateBay.InSunTzuforWomen, IwroteofWhitman’sincredibleabilitytobuildpartnershipsandalliances.ShewenttoeBay’schannelpartnersto learn how the company could enhance their businesses, which is credited as a driving factorbehind the success of the online auction house.Called the chief executive enabler because of theoutstanding teams she built,Whitman is a case study in Sun Tzu for customers, employees, andalliances.Whenshe joinedeBay in1998, ithad thirtyemployeesandapproximately$4million inrevenue.Tenyearslater,sheleftapubliclytradedglobalpowerhouseboasting$8billioninrevenue.Now,it remainstobeseenhowshe’ll translatepastperformanceintoachannelpartnerstrategyatHP.

DENNISPUBLISHING

HPhasawealthof resources.ButwhenI thinkofhowentrepreneurswithveryfewresourcescanapply their savvy to build partnerships and alliances to catapult them forward, I think of FelixDennis.He ownsDennis Publishing and itsmore than fiftymagazine titles,websites, andmobilesites.OneofthewealthiestmeninEngland,he’sbuiltan$800millionpublishingempire.15

But in1972,Dennishadnothingbut ideas.The storybehind the earlydaysofhis success is atestamenttothepowerofpartnerships.Hewaseitherpersuasive,pitiful,orincorrigible,orperhapsall three.Dennissoughttostartacomicbookcompany.Withlittlemoney,hehiredaclosefriend,DickPountain, tobecodirectorandproductionmanager.They foundundesirablebutusefulofficespace whose previous occupants included notorious heavy metal legend Lemmy Kilmister fromMotörheadandapuppybreedingoperation.HepersuadedayounglawyernamedBernieSimonstohelp him register his LLC.He paid Simons a small nominal fee for his services. Dennis said he“amused”abankmanagerenoughtoopenacompanyaccount.Amagazinedistributorhe’dknownagreedtocarryhisfirstproduct,thoughDennishadnomoneytoexchangeforit.Asforcontent,heandDickknewillustratorswhowouldn’texpecttobepaidinadvance,oratall,fortheirefforts.16

Printing was an expensive and formidable obstacle. Dennis persuaded a printer to providemachine time and paper to produce the comic, substantially reducing the costs to a few thousanddollars.Buttheprintersneededsomeguaranteethattheywouldbepaid.Dennispersuaded(there’sthatwordagain)theownersofhispotentialcomicdistributorstowritetotheprinterandpromisethemoney.Theyknewbetter than tooffer a legalguarantee,but theymade it soundconvincing.Thedistributorheengagedhadconsiderablecloutintheindustry.Theprinteragreed.17

The first issue ofCozmic Comics barely made a cent, but it provided a framework for more

publishingventures.Within twoyears, ourherohad theequivalentof roughlyUS$800millionbytoday’sstandard.Hewasabletopayhisprinters,contributors,designers,landlord,attorney,Dick—and himself—as he retained complete control of the company. All these people who helped himduringthoseformativemonthswereinstrumental.Withoutthem,herecognizes,henevercouldhavedoneit.18

Dennis’sadviceisthatyoumaybesurprisedathowmanypeoplewillwanttohelpyou.And,inSunTzufashion,thepeoplewhohelpedhimwerewellcaredfor,fromtheyounglawyerwhowouldlater establish the law firm thatwould representDennis throughout his career, to the printerwhocontinuedtoprintforhim,atleastuntilthedateofhisautobiography.Yes,intheend,theymadeoutjustfine.19

HisstoryalsoillustratesanotherSunTzuprinciplethat’susefulforsmallbusinesses:Makeforaysinfertilecountryinordertosupplyyourarmywithfood.Theinitialprintingofthatcomicbookwaslike a quick, sudden raid or attack that supplied the growing businesswith the bareminimums itneeded tokeepmoving.From there itgrewandgrew.LikeDennisandSunTzu, evenasyouareenvisioninghowyou’llbuildyourempire,rememberthatyouneedtofeedthebeast.

TheDefeatedEnemyIstheNewAlly

In a continuation ofSunTzu’s direction on capturing chariots (seeChapter 3,“UnderstandYourself”),hesays:

Ourown flags shouldbe substituted for thoseof the enemy, and the chariotsmingledandused inconjunctionwithours.Thecapturedsoldiersshouldbekindlytreatedandkept.

Thisdirectiononhowtocarehumanelyforcapturedsoldiersmaystrikesomeasunexpectedfromacareerwarrior.Butconsiderhowrelevantthisadviceisforbusiness.We’veallseenourshareofproverbialbridgesgetburned.Maybeweweretheonesholdingthetorchorleftstrandedinhostileterritory.Regardless,we’veseenenemiesmade.Apartfromashort-termegoboost,whatgooddoesitdotowrongothersordealhostilelywiththem?

Vengeancemay feel good in the short term, but beware if you spend yourcareerinasingleindustryorthesametown,evenifit’sabigcity.Thebridgesyou burnwill one day cut you off. It’s a brutalworld. Small-business leadersneedallthefriendswecanget.

Whenyouovertake competitors, or acquire them, considerhowyou’ll treatthose new employees. Sometimes carnage ensues. But remember that theseperformers can be sources of intellectual property and informal information.Think about how proper treatment of top talentwill benefit your business, as

wellasthedamagetheymaydotoyoubygoingtoyourcompetition.For competitors who aren’t doing very well, consider a friendly takeover.

Youcanacquire theircustomersandallowyourcompetitor tosaveface. It’sacomparativelylow-cost,high-impactwayforyoutogrowyourbusiness.

SUPPLIERSANDDISTRIBUTORS

Small businesses should maximize the value of their supplier and distributorrelationships. These are often underappreciated and underutilized. For smallbusinesses,cashflowisking.Whenneeded,creativelyworkwiththesepartnerstohelpkeepthecashflowing.Also,thebetteryouknowthem,thebetteryoucanleveragethemagainstoneanotherforyourmaximumgain.Butdon’tbeabusiveor dishonest. Suppliers have important competitive and market information.Treatthemwell.Buildtheirtrust.Makeitapointtomeetwithkeysuppliersanddistributorsoverlunchordrinkssothatyoucanferretoutinformation.

Humility is an attribute for small-business leaders. Video game innovatorAtarihadseriouscashflowproblemsintheearlydays,asthecompanywasstillbuilding traction. Cofounder Nolan Bushnell was running out of options. Heturned to what he calls “a community of help.” He went to microprocessorproducerAMD.Heowedthissupplierforpartsshippedmorethanninetydayspreviously, but he told themhe still neededmore parts.He explained howhecouldpayforallofthepartsoncehegotAtarioveranimminenthurdle.AMDconsented,andthatsolidifiedarelationshipthatwouldleadtomanylargefutureorders for the microprocessor. It worked out well for Atari, too. They soldmillions of gaming consules and computers and became the fastest-growingcompanyinthehistoryoftheUnitedStatesupuntilthatpoint.20

Even consider your customerswhen you need help. JeffHoffman, founderandformerCEOofPriceline,suggeststurningtoyourcustomersforhelpwhenyou’re stuck, or even when you’re desperate. Tell them you want to dosomethingor build something, explain how itwill benefit them, and tell themhow theycanhelpyou.21For thisapproach towork,youhave tohaveagoodrelationshipwithyourcustomers,andtheyhavetotrustyou.

The motivation and character of leadership, which will be coveredextensivelyinthenextchapter,“EmbodytheGeneral,”isprecioustoSunTzu.The best leaders seek the best interests of the people who contribute to theirsuccesses,fromemployeesandcustomerstoallvarietyofpartners.

PARTTHREE

PRINCIPLESFORTHE

BATTLEFIELD

The four chapters in this part build from the essentials of understanding into progressivelymoreadvancedSunTzu.Herewe’ll focuson the characternecessary tobe a successful small-businessleaderandpractitioner,soyoucaninternalizemanyofSunTzu’sprinciplesandapply them.ThismaterialpresentsanintermediatelevelofunderstandingSunTzuforsmallbusiness.

7EMBODYTHEGENERAL

SunTzu isoftenstudied in thecontextof leadership,and forgood reason.Hecallsforhisgeneraltohavesuchattributesasboldness,decisiveness,foresight,disciplinedorganization,resourcestewardship,andsensitivitytothearmy.Thisextendstopropercareofdefeatedarmies,aswesawinthepreviouschapter.SunTzu is not singularly concernedwith winning the battles that are before him.Likeyou,he’sconcernedwiththelonggame.

Sun Tzu offers much for leaders seeking to overcome the challenges thatmanysmallbusinessessuccumb to, suchas failing toconsolidategains, losingfocus, allowing fragmentation to occur within the ranks, and mismanagingresources.It’sonlyfrombehindastrongleaderthatasmallbusinesscanexecuteonitsgrandstrategy.

Thewordfor“general,”translatedasj-iang,meansheadofthearmy.Italsomeansanofficialpositionlikeaciviliangovernorordistrictchief.SunTzu’sj-iangwasacivilianadministratorofbothpeopleandmilitaryaffairs.The termroughlycorresponds toaproconsulof theRomanEmpire.While there’snot apreciseEnglishequivalent,Huangsays“general”isalooseinterpretation.1SunTzusaid:

TheCommanderstandsforthevirtuesofwisdom,sincerity,benevolence,courage,andstrictness.

WeexploreSunTzubasedonthosevirtues.

VIRTUE1:WISDOM

SunTzu’sdirectiononwisdomfortheleaderisextensiveandmeaningful.Areyoufollowingtheseprinciples?

MaximizeResources

Theskillfulleadersubduestheenemy’stroopswithoutanyfighting;hecapturestheircitieswithoutlayingsiegetothem;heoverthrowstheirkingdomwithoutlengthyoperationsinthefield.

Thewisegeneralaspirestowinwithoutfighting.ThisisanimportantthemeofTheArtofWar,andonethatprobablydefiespreconceivednotionsaboutabookonmilitarystrategy.Howdoyoudefeattheenemywithoutfighting?Theansweris inmaking theabsolutebestuseof the resourceswithinyourorganization todefeat the bigger budgets of your adversaries. If possible, you can buy thecompetition.Youcan innovate to take theircustomers,withoutamessybattle.Usebettersuppliers,andusethemexclusively.Findbetter,cheaperwaystogetyourproducttomarket.Hirebetterpeopleandkeepthemlonger.Createecstaticcustomerswhowon’tbewooedawaybyyourcompetitors.

AlwaysseektochoosethestrategymostinlinewithSunTzu’scounsel,andmakethemostofyoursmallbusiness’slimitedresources.Smallbusinesseshaveunprecedented access to low-cost advertising and marketing options that cangeneratehugereturnsoninvestmentforthosethatusethemwisely.Socialmediahas far-reaching influence over consumers’ purchasing decisions. As with allinitiatives, if you use these resources, be sure that they are integrated into theoverallstrategicplansothatallthewoodisbehindonearrowhead.

Also, when it comes to maximizing resources, don’t make the commonmistakeofbeingsoconsumedwithacquisitionofnewcustomersthatyoulosesightofthecriticalityoffullyleveragingyourpresentandpastcustomers.Thiscostly and foolish oversight happens too commonly, and small businesseslooking to overtake all comers can’t afford tomake thismistake and sacrificeanytractionthey’vegained.

Makingwiseuseofresourcesisfundamental:

Hence the saying:The enlightened ruler lays his planswell ahead; the goodgeneral cultivates hisresources.

Wiseleadersdon’tallowtheirsmaller,weakerforcestofighttoe-to-toewithlargearmies:

Whenageneral,unabletoestimatetheenemy’sstrength,allowsaninferiorforcetoengagealargerone,orhurlsaweakdetachmentagainstapowerfulone,andneglectstoplacepickedsoldiersinthefrontrank,theresultmustberout.

ProvidetheRightResources

Employees at small businesses have to bewilling tomake the best of limitedresources.Largercounterpartshavemoresophisticatedenterprisesoftwaretoolsandotherinfrastructure.Despitebeingasmallerplayer,it’sessentialthatsmall-businessleadersgivetheirteamstheresourcestheyneedtobesuccessful,evenif it’s the cost-effective yet sometimes cumbersome minivan instead of thehotshot’sshinynewsportscar.Andleadershavetolistentotheirpeoplewhenthey tell themwhat theyneed.SunTzu said there are threeways “a ruler canbringmisfortuneuponhisarmy.”Oneofthemis:

Bycommandingthearmytoadvanceortoretreat,beingignorantofthefactthatitcannotobey.Thisiscalledhobblingthearmy.

Yourorganizationmusthave the resourcesnecessary todowhat its leadersaskittodo.

DeviseUnfathomablePlans

We examined Sun Tzu’s direction on how you should treat employees inChapter 3, “UnderstandYourself.” The strong leaderwisely uses resources toensureherpeoplearen’taskedtodomorethanismanageable.Instead,shestoresupstrengthsothattheseresourcescanbeutilizedmosteffectively.Inthisway,she’sabletodevelopschemesthatthecompetitiondoesnotandcannotgrasp:

Carefullystudythewell-beingofyourmen,anddonotovertaxthem.Concentrateyourenergyand

hoardyourstrength.Keepyourarmycontinuallyonthemove,anddeviseunfathomableplans.

LeverageExperience

Wisdomisgainedthroughexperience:

Itisonlyonewhoisthoroughlyacquaintedwiththeevilsofwarthatcanthoroughlyunderstandtheprofitablewayofcarryingiton.

Of course, Sun Tzu’s general is experienced. If you are not deeplyexperienced in your domain or are entering ground that is terra incognita, thesolutionistoworkwithexpertswho’vedoneitbefore.

Withexperiencecomesperspective.Themoredifficultthesituationsyou’veencounteredinbusiness,thebetteryou’reabletocalibrateandadapttothenextchallenge.

OvercomeAnger

Battleshouldneverbefoughtforegoorpride.SunTzu’sgeneralisn’tpronetoanger:

Thegeneral,unable tocontrolhis irritation,will launchhismen to theassault like swarmingants,withtheresultthatone-thirdofhismenareslain,whilethetownstillremainsuntaken.Sucharethedisastrouseffectsofasiege.

Angermay in timechange togladness;vexationmaybe succeededbycontent.But akingdomthathasoncebeendestroyedcannevercomeagainintobeing;norcanthedeadeverbebroughtbacktolife.

Wise leaders know their decisions have consequences and they behaveaccordingly.OtheremotionsthatcanbedangeroustothegeneralarehighlightedinthediscussionofVirtue5:Strictness.

PerfectPatience

Whiledrivenandcapableofmovingwithblazingspeed to reachanobjective,

the general has the wisdom to wait for the best opportunity to defeat theadversary:

When, in consequence of heavy rains up-country, a river which you wish to ford is swollen andfleckedwithfoam,youmustwaituntilitsubsides.

VIRTUE2:SINCERITY

Leadershipisseriousbusiness,indeed:

The leader of armies is the arbiter of the people’s fate, theman onwhom it dependswhether thenationshallbeinpeaceorinperil.

BeConsistent

Sincereleadersareconsistent.Leaderswhogobackandforthondecisionsandpriorities raise doubts among their people, yet these tendencies are all toocommon amongmany growing businesses. Honoring your word is amark ofsincerity. Some leaders lose sight of the importance of keeping commitmentsanddoingwhattheysaythey’regoingtodo.

WhenJerryMurrellstartedtheFiveGuysburgerchain,hestillhadadayjob.Unable to get a loan froma financial institution, he turned to 100 friends andacquaintancesandaskedeachforloansof$10,000to$30,000.Inexchange,theyreceivedhigh interest andMurrell’s commitment to alwayspay themon time,eachandeverymonth.2Detailsliketheseareimportanttoyoursmallbusiness.Soarefriends.

Onbeingconsistentandkeepingyourword,JasonCohen,presidentofILMCorporation, a data entry, scanning, indexing, document management, andclericalservicessmallbusiness,says:“Itcomesfromyourmother.Andshesayswhenyoutellsomebodyyou’regoingtodosomething,doit.”Thisruleappliestoemployees,vendors,customers,andprospects,hesays.Keepyourword.3

UniteThemAroundaCause

The army should never question their leader’s conviction. Instead, he must

effectivelyrallytheforcestohiscause.ForSunTzu,onemethodofunityisinthedireconsequencesoflosing:

Throwyoursoldiersintopositionswhencethereisnoescape,andtheywillpreferdeathtoflight.Iftheywillfacedeath,thereisnothingtheymaynotachieve.Officersandmenalikewillputforththeiruttermoststrength.

InChapter10,we’llfurtherexploreSunTzu’sdirectiononunity.

UnderstandtheSincerityParadox

There’sanaspectofsincerelyinSunTzuthat,atfirst,seemscontradictory:

Hemustbeabletomystifyhisofficersandmenbyfalsereportsandappearances,andthuskeepthemintotalignorance.

This challenging, even off-putting passage is from a section on changingplansandkeepingtheenemyfromknowingyournextmove.Huynhexplainsitasthedesiretopreventthesoldiersfromknowingthegeneral’soverallstrategy.Bykeepingthem“intotalignorance,”thegeneralinsulateshissoldiersfromthespecific troubles and complexities he faces as a leader. But it is an act ofbenevolence too, because it frees them to concentrate fully on their individualroles, which are essential to the prescribed execution. Think about howinsulating your people from high-level burdens will positively impact theirperformance. Keep them from being taxed by matters they don’t need to beconcernedwith,orthatwillonlyconfusethem,hinderthem,ordrainmorale.4

Huang explains that our modern understanding of this impetus to keepwarriorsandsoldiersfiguratively in thedarkrepresentsagap inmeaning.It isnotto“fool”them,butrequiresacompletecalibrationofaction,hebelieves.5

WhileGuidewireSoftwareCEOMarcusRyuhasn’tsuggesteddeceivinghispeople,hehasnotedacommunicationsdynamicthatshedslightonthisaspectofSun Tzu. As he noted in a New York Times interview, when you arecommunicatingtoalargenumberofpeople,evenverysmartpeople,theytendtoappear toget“dumber” ina largercollectivegroup.Witha largeraudience,themessagehastobesimpleandbrief,Ryusaid.6

VIRTUE3:BENEVOLENCE

Farfromawarmonger,SunTzucallshisgeneraltobegovernedbyjustice:

Itisthebusinessofageneraltobequietandthusensuresecrecy;uprightandjust,andthusmaintainorder.

In a demonstration of benevolence that also benefits the general, Sun Tzuurgescareforcapturedsoldiers:

Thecapturedsoldiersshouldbekindlytreatedandkept.

Similarly, your competitors’ employees, past and present, could have somevalueforyou.

Thepeopleinthetrencheswhomakesuccesshappenmustberewarded:

Nowinordertokilltheenemy,ourmenmustberousedtoanger;thattheremaybeadvantagefromdefeatingtheenemy,theymusthavetheirrewards.

Strictness is important forSunTzu,butnote thatdiscipline is coupledwithhumanityinthispassage.Leadersaresmarttorememberthisorder:

Soldiersmustbetreatedinthefirstinstancewithhumanity,butkeptundercontrolbymeansofirondiscipline.Thisisacertainroadtovictory.

CheckYourMotivations

SunTzuacknowledgesthat“warisacostlyendeavor.”Thebenevolentgeneralmaintainsahealthyperspectivethatislargerthanheis:

Tobeparsimoniouswithpositions,compensations,orhundredsofpoundsofgold,andtherebyblindtotheenemy’sstatus,istobeextraordinarilyinhumane.7

Leaders shouldn’t let their concerns for personal gains cloud their duty toperceivetheenemy.Aswe’llreadinthe“Deception”chapter,spies,too,aren’ttobeusedforpersonalgreed,buttoadvancethearmy’sstrategicobjectives.

VIRTUE4:COURAGE

Strongleadershaveenoughcouragetosetandkeeptheirpeoplefocusedonthegoal.They’reabletoharnessthepoweroftheirteamstoenabledecisivevictory.

MaximizeEnergy

As discussed already, maximizing resources and providing your team withneededtools,processes,andinfrastructurearenecessaryforasmallbusinesstosucceed. Extending this idea further, the extraordinary general makes theabsolutemostoftheenergyofhisforces.Here’swhatSunTzusaysaboutthisimportantconcept:

Theclevercombatant looks to theeffectofcombinedenergy,anddoesnot require toomuchfromindividuals.Hencehisabilitytopickouttherightmenandutilizecombinedenergy.

Timinganddecisivenessareessentialformaximizingenergy:

Energymaybelikenedtothebendingofacrossbow;decision,tothereleasingofatrigger.

Thequestionfortheleaderis,howareyousettingthecrossbowandmakingpowerfuldecisionsthatequatetothereleaseofatrigger?

Sound decisions acted on decisively lead to more rapid victory, which isimportanttosmallbusinessesthatneedtohusbandtheirresources:

Inwar,then,letyourgreatobjectbevictory,notlengthycampaigns.

Successful leaders make decisions and conduct operations by asking:Willthis action further our objectives? If so, how?Will it make usmoney? It theactivity isn’t tied towinning, the leader doesn’t pursue it.He keeps everyoneunifiedbythesameobjectivesandgoals:

Whenthemenareunited,thebravecannotadvancealone,thecowardlycannotretreatalone.Thesearetheprinciplesforemployingalargenumberoftroops.8

VIRTUE5:STRICTNESS

SunTzuhasmuch to say about thedisciplinesnecessary for an army tomeetwithsuccess.Controllingalargearmyrequiresadherencetothesameprinciplesasdoescontrollingasmallforce.

Hierarchy

Hierarchyandstructurearefundamentalcomponentsofstrictness.

Bymethodanddisciplinearetobeunderstoodthemarshalingofthearmyinitspropersubdivisions,thegraduationsofrankamongtheofficers,themaintenanceofroadsbywhichsuppliesmayreachthearmy,andthecontrolofmilitaryexpenditure.

Thisishowevenalargeforceisled.

Thecontrolofalargeforceisthesameprincipleasthecontrolofafewmen:itismerelyaquestionofdividinguptheirnumbers.

Traitsofhierarchyandconsistencyareevidentinthispassage:

When the general isweak andwithout authority;whenhis orders are not clear anddistinct;whenthere are no fixed duties assigned to officers and men, and the ranks are formed in a slovenlyhaphazardmanner,theresultisutterdisorganization.

This, too, tellsusof the importanceofconsistencyandclarity if thepeoplearetorespondtodirectioninapredictableandeffectivemanner:

Ifintrainingsoldierscommandsarehabituallyenforced,thearmywillbewelldisciplined;ifnot,itsdisciplinewillbebad.

If small businesses are to take advantage of their competitive advantages,orders and roles must be clear. But leaders should never confuse openness,transparency,andcollaborationwithanineffectualflatstructurethatentailsslowdecisionsandaweakandnebulouschainofcommand.

FiveDangerousFaults

SunTzutellsusofthefivedangerousfaultsthatcanhinderageneral:

1)Recklessness,whichleadstodestruction2)Cowardice,whichleadstocapture3)Ahastytemper,whichcanbeprovokedbyinsults4)Adelicacyofhonorwhichissensitivetoshame5)Over-solicitudeforhismen,whichexposeshimtoworryandtroubleThesearethefivebesettingsinsofageneral,ruinoustotheconductofwar.

If you’re reckless, you’ll make mistakes, just like the ones you want theenemytomake.Ifyou’reacoward,goodpeoplewillnottrustyouorworkwithorforyou.Ashortfusecausesmistakesanddoingbattleforthewrongreason.Adelicacy of honorwill also lead you to fight thewrong battles for thewrongreasons.Excessivesensitivitytothepeoplewhoworkwithyouwillpreventyoufromleadingthemandmakingthetoughdecisions.

Despite the difficult and bloody business of leading troops into battle, SunTzuputstheroleofthegeneral,andtheenlightenedruler,intoperspective.Thispassage comesat the endof a chapteronhow to attack anddestroywith fire,impartingtousSunTzu’swiseperspective:

The enlightened ruler is heedful, and the good general full of caution. This is the way to keep acountryatpeaceandanarmyintact.

PerhapsthemosttellingofallofSunTzu’sobservationsaboutthecharacterofageneralisthissentence,whichwe’llusetoconcludethischapter:

Thegeneralwhoadvanceswithoutcovetingfameandretreatswithoutfearingdisgrace,whoseonlythoughtistoprotecthiscountryanddogoodserviceforhissovereign,isthejewelofthekingdom.

8PERSEVERANCE

Entrepreneursknowwhatitmeanstofail.Buttheoneswhosucceedaretheoneswho persevere towin the next battles. The peoplewho lead small businessesmustenduremanychallenges,and theymuststaredownandovercomedefeat.Perseverance,ofcourse,isaprimarydifferentiatorbetweenthesuccessfulsmallbusinessesandeverybodyelse.It’salsointegraltoSunTzu.

For the sage, even themostdisadvantagedarmycanbe successfulwith theright spirit. He directs us to turn disadvantage to advantage and miss noopportunitytodefeattheenemy.Whendifficultiescome,smallbusinessesdon’thavetheresources towait itout.Wemust takeaction,andarewelladvisedtofollowtheprinciplesofSunTzu.

Perseverance has been the watchword of entrepreneurs since people firstdecidedtheyweregoingtofindorbuildsomething,andthensellit.Thesuccessliterature starting in the firsthalfof the twentiethcentury is all about stick-to-itiveness. No study of Sun Tzu, or of small-business champions, is servedwithoutanexaminationofperseverance.

NoahThomasLeask,presidentandCEOofISHP,aninformationtechnologyfirm that serves the cybersecurity anddefense sector, put it thisway: “Donotunderestimatetheamountofeffort,perseverance,anddisciplinethatisrequiredto be successful. I cannot stress that enough.Therewill be problems and youmustbereadymentally,physically,andspirituallytodealwiththem.Ifyouarestartingabusinesstogetrichandworkless,thenyouareonthewrongpath.One

shouldbeworkingonenjoying the journey,not thinkingabout thedestination.Theriches-seekersneverreachit.”1

Leask’scharacterization is similarhere toSunTzu’sprecious“jewelof thekingdom,”describedinthepreviouschapter.

READINESSTOSEIZEADVANTAGES

HereisoneofmyfavoritepassagesfromSunTzu,andIbelieveit’sonethatallsmallbusinesswarriorsshouldhaveetchedintheirpsyche:

If,ontheotherhand,inthemidstofdifficultieswearealwaysreadytoseizeanadvantage,wemayextricateourselvesfrommisfortune.

Weshouldalwaysbepreparedtoextractvictoryfromdefeat,andbepreparedtoweathermisfortune.Thepeoplebehindmallbusinessesunderstandadversity.Theyareusedtotheoddsbeingstackedagainstthem.Butbeyondthat,youneedto be ready for the unexpected so that your team can turn disadvantage toadvantage. A difficult economy provides a good example of this principle. Ifyourcompetitorsarestruggling,theymaycutcorners;goforshort-termgainsattheexpenseoflong-termprofit;makerash,reactionarydecisions;andlosesightofthebigpicture.Howcanyouusethissituationtoyouradvantage?

MarketingexpertandauthorJayAbrahambelievesthatstrategicallyorientedcompaniesthatarereadytoseizeanadvantagestandtocapture15percentto20percentofthebestbuyersfromtheircompetitorsduringhardtimes.Bytakingagrowth-minded strategy, these businesses capture the vast majority of newclientsinthemarket—includingthosecustomersthatpreviouslydidn’thavetheneed for that product or service.So, he explains, if you arepositioned to takeadvantage of adversity, such as a down economy, you can attract all the newbuyers in the market. Combine that with the approximately 15 percent to 20percentofthebest,mostprofitable,mostrepetitivebuyerswhousedtobuyfromyour competition, and you can double what youmight accomplish, even in astrongmarket.2

There are some caveats in being ready to seize the advantage, however. Itrequires courage, tenacity, and foresight to be ready to endure. It requires anadmissionwhenthere’s trouble,andaproactive impetus toovercomeit,not tobeavictimofit.Inmyself-defensetrainingandobservanceofothers,I’veseentwo kinds of people.And these two categories span both relative novices and

thosewithsignificanttraining,quiteliterally,undertheirbelts.Thefirsttypeofpersondoesn’tlivewithanawarenessthathewilleverreallybethevictimofanattackor an assault, andwill bewhollyunprepared if such an incident shouldever occur.Caught unawares, this personwillmake amore compliant victim.Thesecondtypeisthosepeoplewholiveandtrainliketheirlifedependsonit—because they believe that such an event could occur. They understand thatsomeone,somewhere,couldattempttomakethemthevictimofaviolentcrime,andtheyrefusetoacceptit.

One group internalizes the premise that being attacked is a possibility and,readytoseizevictory,won’tbedefeated.Thesameistruewithsmall-businessleaders.Ifyouunderstandthethreatsyouface,andarereadyforthem,you’llbeabletomanagedisadvantage.Ifyou’rereadytoturnadversitytoadvantage,youcanandwillexemptyourorganizationfromdisaster.

Part of readiness is having taken a position that prevents you from beingsuccessfullyattacked.Theenemywillcome,butyoucancontrolyourreadiness:

Theartofwar teachesus torelynotonthe likelihoodof theenemy’snotcoming,butonourownreadinesstoreceivehim;notonthechanceofhisnotattacking,butratheronthefactthatwehavemadeourpositionunassailable.

Sun Tzu tells us that adversity can be a positive force, not just forpersevering, but for reigning triumphant. Take to heart this guidance on thestrategicvalueofdisadvantage:

Foritispreciselywhenaforcehasfallenintoharm’swaythat[it]iscapableofstrikingablowforvictory.

KEEPAPOSITIVEFOCUS

If you are able to inspire and maintain a positive outlook throughout yourorganization,you’llbewellonyourwaytocreatingtheconditionsnecessarytostrike “a blow for victory.” A common reaction to adversity is disunity anddisharmony, which leads to commiseration and negativity among people.Positivity in leadership isparticularly importantduring these times.Teamscanovercomeseeminglyinsurmountablechallengeswhentheyareinspiredthattheirfightisworthwhileandsuccesscanbeachieved:

Whenthearmyisrestlessanddistrustful,troubleissuretocomefromtheotherfeudalprinces.This

issimplybringinganarchyintothearmy,andflingingvictoryaway.

Restlessness, distrust, and other forms of negativitymust be addressed andovercome. They’re a disease that will spread viciously throughout a smallbusiness.Instead,strongleaderscreateacultureofpositivityandtriumph,eveninthefaceofadversity,andpeopletrustthemtoleadthemtovictory.

MarcusRyu,CEOofGuidewireSoftware,cofoundedtheinsurance-industrysoftwarecompanyin2001,followingthetechcrashand9/11.Heacknowledgesthat it was a counterintuitive time to start a company. As such, a foundingprinciplewas toembraceadversityanddifficulty.He told theNewYorkTimesthat thepeoplebehindGuidewireSoftwaresought tomakethatafurtherproofpoint to their ability to solvedifficultproblems for clients.3Today,GuidewireSoftwareispubliclytradedontheNYSE.

Optimismforthefutureisoneoftheprimarythingsteamswantandneedtohearfromtheirleaders,saidRyu.Theywanthonesty,buttheyalsoreallywanthope for the future, a message like: “I stand before you. I’m here for theduration.We’vegotsomechallenges.We’reequaltothem,”hesaid.4

Theleaderwhowilldrivetheteamtovictorydespitebeing,asSunTzusays,“in themidstofdifficulties,”knows that thismessagehas tobedelivered,notonceortwice,butconsistentlyoverandoveragain.

KNOWWHENTOFIGHT

Discerningwhen to fight andwhen to slip out and save the battle for amoreadvantageousdaywithbettercircumstancesisaquintessentialprincipleofSunTzu.Sometimes,likeondesperateandsurroundedground,fightingisnecessary.Othertimes,it’stoyouradvantagetoengage.

Ondesperateground,immediateactionisrequired.Remember:

Ground on which we can only be saved from destruction by fighting without delay, is desperateground.

As Felix Dennis has concluded of his “victory” over Ziff Davis, and thesubsequentcarnage(asmentionedinChapter2),“Myadviceoncompetitionisalways to ensure that you want to fight, and ought to fight on a largercompetitor’sground.Ifheisanxioustobuyyou,determinedtoparkhistanksonyourlawn,maybeyoushouldlethim.Fortherightprice.”5

Asforsmallerplayers,Dennisadvises,“Ifyourcompetitorissmaller,trytohirehimorbuyhimorjoinwithhim.Ifhewon’tbudge,takedrasticactionandsmashhim.If thatwon’twork, thenlearntobefriendsandcolludeagainst thewoollymammothstogether.Butdon’tfighttigers,myfriend.Notifyouwanttogetrich.”6

SunTzugivesusan insightful litmus test forwhen toengage inbattle,andwhen to abstain. This, too, is a veritable commandment for small-businessleaders:

Movenotunlessyouseeanadvantage;usenotyourtroopsunlessthereissomethingtobegained;fightnotunlessthepositioniscritical.

In thatpassageabove,wesee theculminationofperception,understanding,andrestraintthatthestronggeneralusestodiscernwhenbattleisadvantageous.HereSunTzuprovidesdirectiononhowtoshapeawayoutofabadposition:

Ifwedonotwant todobattle,even ifwemerelydrawa lineon theground,hewillnotdobattle,becausewediverthismovements.7

DYSONINC.

Onavisit toWesternEurope, I rememberusingwashrooms inLondon,Paris, and Italy,andeachtime being amazed by a powerful, efficient hand dryer. Really, these are the things that make alasting impression. For years I had wondered why no one has been able to come up with thetechnologytoactuallydryapatron’shandsinareasonableamountoftime.Becauseofmyaversiontotouchinghandlesonbathroomdoors,Ioftendefaulttoincineratorfuelinghandtowels.Imaginemyjoyupondiscovering theAirblade, the inventionofDyson.This fanwithout external bladesdrieshandsintensecondsinsteadofforty,anduseslessthanaquarteroftheenergy.8Afterall,speedisimportant.As JerrySeinfeld sarcastically saiddecadesagoofusinga“handblower” in themen’sroom:“Ilikethehandblower,Ihavetosay.It takesalittlebitlonger,butIfeelwhenyou’reinaroomwitharevoltingstenchyouwanttospendasmuchtimeasyoucan.”9

Mostentrepreneurshavecompellingstoriesofbeatingadversity.ButSirJamesDyson’sreadslikeaninventor’sgrandsuccessstory.Hefinallygotasalablevacuumcleanerconceptafter5,126triesandfifteenyearsofpractice.Itpaidoffinaveryrealsense,astodayhe’samongEngland’srichestpeopleandDysonmakesthebestsellingvacuumcleaner,byrevenue,intheUnitedStates.10

But,aswithmostcreators,successwasn’texactlyaforegoneconclusion.Dysonspentnearlyhisentiresavingstodevelophisbagless,transparentcreation.Inadditiontodebt,frustration,and“soul-destroyingdrudgery”battlingspecialistswhosoughttoshootdownhisideasbasedontheirspecificexpertise,thepriceofsuccessincludedlawsuits,too.11

Dyson thinks favorably about failure and believes it should be celebrated more, including in

schools.Small-businesscreatorsneedtobeabletohandlecriticism,andtheymustbeendowedwithhumility,curiosity,determination,andawillingnesstotryandtofail.Afterall,hetoldEntrepreneur,“If you want to do something different, you’re going to come up against a lot of naysayers.”12Innovatorseverywhereareincompleteagreement.

Competitors naturally followed the successful Dyson, and othermajormanufacturers began tomarket their own cyclonic vacuum cleaners. Dyson sued rivals, including Hoover, for patentinfringement.Thecompanywonmorethan$6millionintheHooversuit.Inthisway,andthroughpersistinginnovation,Dysonhaskepttheenemyonthemove.13

PRICELINE

Pricelinehadall themarkingsofoneof themost tragicdotcomfalls fromgrace. Itwentonline in1998,whenloadsofdotcoms,includingmanyofmyclients,wererunningoutofallthatmoneythathadbeengrowingontreesandscatteringthroughoutthewoods,someonfertilesoil,somenot.Youprobably remember the earlier and high-visibility days of Priceline’s “Name Your Own Price”serviceforairlinetickets.Beforeevermakingaprofitinthedaysofyore,thedotcomhadexpandedinto gas fill-ups, groceries, insurance,mortgages, long-distance phone service, and new car sales.Withtheseinitiativeslargelyunsuccessful,Pricelinelost$1.1billionin1999,andin2000,itsstockdippedfrom$974to$7ashare.14

ButthePricelinejourneydidn’tendthere.Theturnaroundstartedin2002,whenJefferyBoydwaspromotedfromgeneralcounseltoCEO.He’stakenPricelinefromalossof$19millionin2002to$1.1billion inprofit in2011,making itoneofFortune’s fastest-growingcompanies in theUnitedStates.15

Despitepreviousdownsandfurtherdowns,thetremendousassetPricelinehadthroughitallwasexcellentbrandequity,duelargelytothecompany’sassociationwithWilliamShatnerinitspopularTVcommercials.(Ifyou’renotsurewhoShatneris,you’renotoldenoughtoreadthesectionsonSamuelAdamsorbourbon.)

To liftPricelineoutof thedoldrums,Boydshifted focusback to the travelbusiness,expandingintohotelbookings.WhilePricelineearneditsfirsteverprofitin2003,therealshiftoccurredin2004and 2005, when the company acquired two hotel reservation sites, in the United Kingdom andAmsterdam, respectively. These buys have been responsible for much of Priceline’s growth andstockmarketsuccess,makingthemoneofthebestacquisitionstoriesinInternethistory.

TheEuropeanmarketforonlinetravelserviceshassubstantialroomforgrowth,andPricelineisnowventuringintoAsia,too.16

9FOCUS

Those of uswho’veworked for and in small businesses know it all toowell.Veryoftenalessstructuredandevensporadicculturecanleadtolackoffocusandpoororganizationaldiscipline. Itsgenesis isunderstandable, entrenched inthebreakneckpaceandconstantchange that’s required tokeepupand to leadthepack.Butasweallalsoknow,thissituationbringswithitsomeunwelcomeby-productsthathindersmallbusinessesandforceustoplaycatch-up,duplicateefforts, andotherwisewaste time.SunTzu called for single-purpose focus forhis armies to be successful. Small businesses need this focus, too, if they aregoingtobemarketdominators.Ifthat’syourgoal,you’lldowelltoimplementsome of Sun Tzu’s instruction on developing and maintaining a focusedorganization.

Smallplayershavealottoloseiftheydon’tfocustheirlimitedresourcesonstrategicpriorities.Whetherit’slaunchingaproduct,startinganewdivision,orunveilingamarketingcampaign, it’s important todoitright.Yetfar toomanyideasfailduetoaslowlaunch,stagnantdecisionmaking,orgeneralconfusionofpurpose.Thesmallbusiness’sadvantageshouldbespeedtoconsensusand/ordecision making, and rapid mobilization and achievement of goals. It’s theunfortunate small business that forsakes that advantage and drains away timetweakingideasandfeaturesinanefforttoachievego-to-marketnirvana.Don’tget stuck.Build it, release it, andgauge themarket’s reaction.Always remainfocusedonthebusinessobjectives.

THELONGGAME

Precisiondisciplinedfocusisnecessaryforbigresults.It’seasytogetdistractedfromstayingthecourse,butthosewhodoitwillhaveadistinctadvantageoveralltheothersincohesive,long-rangeresults:

When invading hostile territory, the general principle is, that penetrating deeply brings cohesion;penetratingbutashortwaymeansdispersion.

Becomingthedominantplayerinthelonggamerequiresforesightintowherethebattleswilloccurandtheabilitytomobilizeforcesforvictory:

Knowingtheplaceandthetimeofthecomingbattle,wemayconcentratefromthegreatestdistancesinordertofight.

Oftheenemy,SunTzusays:

If he prepares to the front the rearwill beweak, and if to the rear, his frontwill be fragile. If hepreparestotheleft,hisrightwillbevulnerableandiftotheright,therewillbefewonhisleft.Andwhenheprepareseverywherehewillbeweakeverywhere.1

The laser-focused small-business leader has fewer vulnerabilities to defend.Thebetteryourfocus, thefeweryourbattlefields.Andthegreater thedepthofyourfocus,thebetterandmoreaccuratelyyou’llbeabletoplanevenlong-rangestrategies.

ACTONVICTORIES;CONSOLIDATERESOURCES

This passage is one of the cardinal principlesTheArt ofWar holds for smallbusinesses.It’ssoimportantbecauseit’ssocommonlyforsaken:

Now, to win battles and capture lands and cities but to fail to consolidate these achievements isominousandmaybedescribedasawasteofresourcesandtime.2

Huynh’stranslationismoreclearlyandseverelyworded:

Ifonegainsvictoryinbattleandissuccessfulinattacks,butdoesnotexploitthoseachievements,itisdisastrous.

It’sbeenmyexperiencethatthispassagegetstotheheartofoneofthesinglemost costly and detrimental mistakes that small-business practitioners make.Because of shortsighted vision, changes in direction, and limited resources,smallbusinessestoooftenwinvictoriesgreatandsmall,butdon’tfullyleveragethoseopportunities.Asamarketingpractitioner, I’ve seensomeof these samescenarios get repeated in multiple organizations. Trade shows are a commonplace for companies of all sizes to lose the plot. These gatherings areconsiderable spends for organizations, requiring staff resources and carryinghefty costs for the design and production of exhibition booths. Add insponsorshipandother factors,and tradeshowscandrainanexhibitor’sbudgetby tens of thousands of dollars in one fell swoop.But trade shows are also atremendous opportunity for interfacing with high-powered partners, existingcustomers,andfuturebuyers.Sowhat’stheproblem?

Many times, I see trade showstaff aimlessly snatchat “leads” as if they’re$100billsblowingaroundinawindtunnel.Theygrabthemandstuffthemalltogether in a lead box or database. But as anyone who is observant and hasworkedaboothformorethanafewminutesknows,notall leadsarevaluable.Sure,you’llleavetheshowwithanicehaulofso-calledleads,buthavenosenseofwhichonesarewellqualifiedforimmediatefollow-up.Reallivehotleadscanquickly grow cold if prospects are waiting, with credit card in hand, for asalesperson—whodelays incalling,becausehe’ssiftingthroughsqualor togetto the good opportunities. This is an example of failure to effectively exploitachievements. But it gets worse. Turnover in sales professionals and othermishandlingoftradeshowleadsthatyou’vesotirelesslyworkedtoachieve,andatapremiumrate,areothersadstories thatendup inwasted time,effort,andmoney.

On the topic of sales professionals, they can be a small business’s boon orbane. Some organizations hire, reward, and retain eminently skilled highperformers.Othersseemtogothroughsalesprofessionalsliketheygothroughsocks.Churningthroughsalesprofessionalsisnowaytobuildabusinessortoconsolidategains.Andifthispracticedescribesyourorganization,there’saverygoodchancethattheproblemisn’tthesalespeople,butyourprocessofselecting,training,retaining,andrewardingthem.

I’vesatinmyshareofexecutivemeetingsatsmallbusinesses,whereleaders,whomusthavehadbetterthingstodo,quibbledovermundanedetailsthathaveabsolutelynobearingonthebottomlineandwon’tearnthebusinessonesolitary

dollar.Thesepracticesdrainthetimeandenergyofsmartpeople.Andthat’stoobad,becausesmallbusinessesdesperatelyneedtoleveragethetimeandenergyofalloftheirpeople,especiallythesmartestones.

Distribution and delivery problems are a devastatingway to fail to exploitachievements. (Recall the story of Airwalk in Chapter 5, “Understand theMarket.”)Focusisrequiredtoconsolidatehard-foughtgains.

EXTENDKNOWLEDGETHROUGHOUTTHEORGANIZATION

Scattering and regroupingwas the strategy that Sun Tzu advisedGeneralWuZixutodeploytoovertakethemightyChustate.Ofthishesays:

Forces achievemissionswith unexpectation, take action to fit the advantages, and create diversitythroughscatteringandregrouping.3

Largeandevenmidsizeorganizationsareoftendescribedassiloed.Businessunits oftenwork independently, unawareofwhat’s goingon in the rest of theorganization.Butassmall-businessforcesknow,siloeddoesn’tonlyapplytothebigger guys. Business and technology consulting firms are notoriously siloed.Thosewho deliver services to government are the guiltiest of all. Consultantsoftenworkonlong-termcontracts insupportofagovernmentagency.They’reoftendedicatedon-sitewith theclientandbecomeentrenchedin thecultureofthatagency.They identify their jobwith thatagencyasmuchormoreso thanthey do with the company that employs them. This is outstanding for therelationship with the customer, but it creates a barrier in the sharing ofinformation,innovations,andlessonslearnedwiththerestofthebusiness.Thissituationcreatesinefficienciesandpocketsofinsularknowledge.

InmyyearsofworkingwithgovernmentcontractorsintheWashington,DC,area,Iknowofoneinparticularthatworkedtobreakthatfenced-inmodel.Thisintelligenceanddefensecontractor, likemanyof itspeers,prefers thecloakofanonymity. The company makes a concerted and fruitful effort to extendexperienceandknowledgegainedononeprojectandforoneagencythroughoutotherprojectsandcustomers.Onceaquarter,allemployeesareassembledandspendthedaysharingtheirbestlessonslearned,innovations,andmethodologiesthatcanbeadaptedandapplied toothercustomers.Onceayear, thecompanyholdsafull-scaleinternalconferenceforthesamepurpose.

These sessions take time away from customers. The hours required in the

sessionsaren’tbillablehours,andneitheristhetimespentintravel.Butthisfirmunderstands thatcoming together, thendistributingevenbetter-informed teamsbackouttocustomersites,makesforstrongeremployeesandhappiercustomers.And, importantly, itmakesforamorepowerfulanddynamicorganization inahighlycontestedandcompetitiveplayingfield.Thisisarareandcommendablepracticethatmoreconsultantsandotherorganizationswoulddowelltoemulate.

FOCUSREDUCESMISTAKES

Be firmly fixed on your objectives and the strategies that will lead you tovictory,and forsakeancillaryactivities.Thiscrispnesswill contributemightilytostrongdecisionmakingandreducemistakes:

Whattheancientscalledacleverfighterisonewhonotonlywins,butexcelsinwinningwithease.

Ofhisstandardforachievingvictory,SunTzusays:

Hewinshisbattlesbymakingnomistakes.Makingnomistakesiswhatestablishesthecertaintyofvictory,foritmeansconqueringanenemythatisalreadydefeated.

DETECTTHEADVERSARY’SDISORDER

Disciplined,waitfordisorder;calm,waitforclamor.4

By exercising patience and observance, and having enough resources andperspective towait, perceptive small-business practitioners can detect disorderandclamoramongcompetitors.Or,inthecaseofChobani,forexample,youcanenteramarketthat’sunpreparedforyouandfillapreviouslyundetectedvoid.

KEEPTHEENEMYONTHEMOVE

This is a concept SunTzu visits repeatedly. Stretch your resourceswhile youdeplete thoseofyouradversary,andseize thesuperiorpositionbykeeping thecompetitioninsecureandonthemove.SunTzu’sdirectionforsmallerforcesissomethingthatallsmall-businessleadersshouldtaketoheart:

Numericalweaknesscomesfromhavingtoprepareagainstpossibleattacks;numericalstrength,fromcompellingouradversarytomakethesepreparationsagainstus.

Byencouragingyouradversarytoalwaysbeinpreparationforanattackthatmay come from you, you keep the competition insecure. Legal actions are apublicwaytodothis,andthey’reoftennecessarytoprotectintellectualproperty.OnceJamesDysonbecamesuccessfulwithhisbaglessvacuumconcept,othersbegantomarkettheirowncyclonicvacuumcleaners;hepursuedthemforpatentinfringementandwon.5

Repletewith the necessary infrastructure and resources, large organizationsare often quite savvy at keeping the competition on the move. After SamuelAdams went public in 1996, Anheuser-Busch (now Anheuser-Busch InBev)wentontheoffensive.ThebeergiantranadsaccusingSamuelAdamsofmakingbeer outside Boston and claiming founder Jim Koch was a phony. Kochresponded by securing a cease-and-desist ruling from the Better BusinessBureau’s Advertising Self-Regulatory Council.6 The better you are able toemulatethestandardsofSunTzu,themorepreparedyou’llbeforanything.

FOCUSONWHAT’SVIABLE

Egoandshortsightednesscanalsocauseustofallinlovewithaconceptthathasno realmarket viability.Don’t get caught up in drinking your ownKool-Aid.Focusonwhatwillmakeyoumoneyandenableyoutoachieveyourobjectives,notonthecoolnewtechnologyorwindowdressing.

JamesDysonisaninventorandanengineeratheart.In2001,hebroughtinMartin McCourt as CEO and launched Dyson in the United States. TheydevelopedadditionalvacuumcleanersandintroducedtheContrarotatorwashingmachine.TheContrarotatorlostmoney,andthecompanypulledtheplugonthecoolnewappliance.Describinghis creationsasbeing likehis children,Dysonsaidhedidn’tlikethedecision.That’swhyhehadaCEOwhowasabletomakethose kinds of tough choices and balance his emotional connection to theproducts.7

Inwar,then,letyourgreatobjectbevictory,notlengthycampaigns.

Inwarandinbusiness,putyourenergybehindwhatworksanddon’twastepreciousresourcesonproductsandservicesthathavenosignsofpromise.

SamAdams’sKochisn’tafraidtofail.Heknowsnotallbeerswillbestars.That’s why Boston Beer Company discontinues creations that don’t gain afoothold. The formula is simple, he told CNN Money: “I’m just focused onmakinggreatbeerandworkinghardtosellit.Ifwecangetgreatbeerintothemouthsofourconsumers,we’lldojustfine.”8

WEGMANS

ThefirsttimeIheardoftheWegmansgrocerystorechainwaswhenoneopenedupneartheofficeofanadagencyIworkedfornearWashington,DC.Itseemedlikejustabouteverydaysomeonewouldshop or eat there for the first time and come back raving about it. I joked that itwas like a cult.Peoplegointhere,havesomesortoftransformationalexperience,andtheycomeoutconvertedanda littlechanged.ForweeksIheldoutbecause,afterall, it’s justagrocerystore.Whogetsexcitedaboutgroceryshopping?Then,whenIfinallystoppedinduringlunchoneafternoon,Iunderstood.I’vebeenaconverteversince.

If you live or travel between Massachusetts and Virginia, you are probably familiar withWegmans.Foundedin1916,thechainhasbeengrowingsteadilyandsmartlysinceitfirstbranchedoutofNewYorkState.Thegrowthhasbeencalculated.Privatelyowned,Wegmansanswerstoitsemployees and customers. To date, the companymaintains locations in six coastal states, despitefrequentrequeststomoveoutsideofitsregion.In2011alone,Wegmanssaiditreceivedmorethan4,400 requests from consumers asking for stores to open in their communities. In that sameyear,Wegmansmarkedrevenuesof$5.6billion,accordingtoForbes.com.9

ButWegmanswon’tbeluredintoterritorieswhereit’snotpreparedtogo,norwillitgrowmorequickly than its plans call for.On its corporatewebsite,Wegmans states itwill open only two tothreenewstoresayear.Ifyouhappentohaveoneinyourcommunity,you’reoneoftheluckyones.

5-HOURENERGY

You’ll readmore lateraboutManojBhargava, founderofLivingEssentials, themakersof5-HourEnergy,becauseheillustratessomeotherSunTzuattributes.Sincehefirstcreatedhisenergyshot,Bhargava has known how the product should stand out in the market. He created advertisingcampaigns that articulated his vision for how best to connect with buyers who had never seenanything like his product. The early 5-Hour Energy TV commercials received very poor industryreviews.ButBhargavaisindifferent.Hedidn’tuseanadagencybecause“theywanttowinawards;wewanttosellstuff,”hesaidinakeynoteaddress.“Wewantedtotellpeoplewhatitdoes,andtheycanbuyit.”10Thatis,afterall,themainidea,isn’tit?

Thecommercialsdidn’twinanyprestigiousawards,buttheydidincreasetheproduct’ssalesby50percent in threemonths,according toBhargava.Hismessagewas tofocuson5-HourEnergy’s

valuepropositionandhowitwouldcreateanentirelynewcategory.11

FIVEGUYS

FiveGuysisalsomentionedinChapter3,“UnderstandYourself.”That’snocoincidence,becauseabusinesscan’texemplifyfocusifitsleadersdon’tknowwhotheyareandwhattheydoanddon’tdo.Fromthebeginning,JerryMurrell,thefounderofFiveGuysrestaurants,wasadamantthatthemenushould stay the same:burgersand friesonly, andgoodones.Qualitywasparamount.Theburgerswere handmade, and like everything else in the restaurant, never frozen. Frieswere hand-cut andcarefullyselectedfromnorthernU.S.climates.12

Nowanationwidechain,FiveGuysputatoeinthewatertotestothermenuitems.Coffeewasadisaster,Murrellsaid.Achickensandwichdidn’twork,either.Today,youcangetahotdog,veggiesandwich,andgrilledcheesesandwichattheburgerjoint.Buttheseadditionswereconsideredandimplementedcarefully.AsMurrelltoldForbes,“Myfearwasthatwe’daddsomethingnewandnotbegoodatit,thensomereviewerwouldwriteabouthowbadourcoffeewasandnothowgoodourburgersandfriesare.”13

WhereasWegmanshaspursuedslowandverycalculatedgrowth,FiveGuysfranchiseshavebeenpropagatingrapidly,withlocationsinalmosteverystate.AccordingtoMurrell,thebiggestproblemhe has with his franchisees is their desire to get him to add more menu items. But Murrell haswatchedotherfranchisesstruggleandhe’sseensomecommonthemes.He’sobservedthat they’vemovedawayfromtheircoreproductsandtriedtodosomuch,totheirdetriment.14

10UNITY

Unity is a critical and recurrent theme of Sun Tzu’s Art of War, but notnecessarilyonethatishighlightedbymostauthorsandSunTzuscholars.Iamabsolutely convinced that this attribute is just as important for small-businesspractitioners to be able to survive and thrive as it was for Sun Tzu and hismilitary forces. This chapter follows from “Focus” (Chapter 9), because for ateam to be unified, itsmembersmust understand and share the organization’sfocus.

This passage speaks volumes about the importance of unity to the small-businessleaderswhowillseektoapplyit.HereweseeagainSunTzu’sstrategytousethemanytoattackthefew.Thisisparticularlypertinentforsmallforces:

Wecanformasingleunitedbody,whiletheenemymustsplitupintofractions.Hencetherewillbeawholepittedagainst separatepartsofawhole,whichmeans thatweshallbemany to theenemy’sfew.

As Sun Tzu experienced in his distinguished military career, dividing theenemyisasoundwayforasmallerforcetoseevictory.Similarly,it’sessentialthatthesmallforceremainsunited,eveninthefaceofgreatadversity.

Joe Calloway has made some observations in his study of extraordinarycompanies. While these conclusions are important, they certainly aren’trevolutionary. It’s somethingwe can see and experience in the companieswe

work for andwith and follow in themedia. Calloway says that each of theseexceptional performers has a clear sense of who they are. They don’t definethemselvesbywhattheysell.Instead,theirsenseof“whotheyare”ismeasuredby their impact on employees, stakeholders, and customers. They’re driven toserve, accomplish, and achieve. They also share an ability to differentiatethemselvesclearlyandpowerfully.1

A small-business leader who can develop this sense of unity would surelyrevolutionize that entire organization. And a unified organization is one thatknows itselfwell enough tohaveclearandpowerfuldifferentiators. It’sa rareandspecialsmallbusinesswhoseentireforcehasthesamegoalsandobjectivesandismovingasoneunifiedforce.It’smuchmorecommontoseeeachplayerconcernedonlywithherdomainandnotcognizantofhowthatworkimpactstheorganization overall. The tolerance for silos in many small businesses isalarminglyandinexplicablyhigh.Instead,smallplayerswhowant todominateneed to collaborate, learn fromeachother, andput that learning into action togrowtheorganization.

SunTzucontinueshisdirectiononhowasmallforcecandivideanddefeatalargerone:

Andifweareablethustoattackaninferiorforcewithasuperiorone,ouropponentswillbeindirestraits.

Toovertakealargeradversary,beunifiedandseektoseparatetheenemy.

SEPARATETHEENEMY

Ifhisforcesareunited,separatethem.

This passage on reading cues from the enemy doesn’t apply only to physicalseparation, but also to separating morale and causing confusion among theenemy’sranks:

Thosewhowerecalledskillfulleadersofoldknewhowtodriveawedgebetweentheenemy’sfrontandrear;topreventcooperationbetweenhislargeandsmalldivisions;tohinderthegoodtroopsfromrescuingthebad,theofficersfromrallyingtheirmen.

Theconsequence,saysSunTzu,is“tokeepthemindisorder.”

How,then,doyouapplySunTzu’steachingstouniteyourforces?

INSPIREUNITY

JimKochwas drivenby a purpose: “to create a beer revolution in theUnitedStates in the samewaySamuelAdams created a political revolution,” he toldCNNMoney.2

Leadersworthfollowinginspiretheirpeoplenotjustwithcleardirection,butwithaunifiedpurposeandpassionatecommitmenttoacause:

Hencetheexperiencedsoldier,onceinmotion,isneverbewildered;oncehehasbrokencamp,heisneverataloss.

When the riskand theoddsaregreatest, inspiredunity ismorecritical thanever,SunTzusaysinhisdirectiontoaninvadingforce:

Thefurtheryoupenetrateintoacountry,thegreaterwillbethesolidarityofyourtroops,andthusthedefenderswillnotprevailagainstyou.

The greater the challenge and the mightier the adversary, the stronger thesolidaritythatwillberequiredofyourbusiness.

MAINTAINTHEINSPIRATION

Speed is a tremendous asset in combat, and the advantage of more nimble,flexible small businesses. But as we all know, some campaigns go on longerthanwe’dlike.Thisisnotidealandcancausestagnation:

Whenyouengageinactualfighting,ifvictoryislongincoming,thenmen’sweaponswillgrowdullandtheirardorwillbedamped.Ifyoulaysiegetoatown,youwillexhaustyourstrength.

Inspiring forces to unity is an ongoing initiative, not a once and doneproposition. It’s critical to ensure that your people hear a clear, consistent,positivemessagethatunitestheirranks.Iftheydon’t,yourorganizationwillbeopentorisksfromwithoutandwithin:

Whenthearmyisrestlessanddistrustful,troubleissuretocomefromtheotherfeudalprinces.

SunTzu’sconclusionisclear.Ifdissentionisallowedamongtheranks,itwillcreateopportunitiesfortheenemy.

The following passages from the sage may, at first pass, seem difficult totransmitfromamilitarytoabusinesscontext.Butonlyatfirstpass:

Throwyoursoldiersintopositionswhencethereisnoescape,andtheywillpreferdeathtoflight.Iftheywillfacedeath,thereisnothingtheymaynotachieve.Officersandmenalikewillputforththeiruttermoststrength.

Business isserious,but it’snot thatserious,at leastnot tomostemployees.But, ifyouareable to instilldeep loyalty,you’llbuildexceptional teamswhowillserveyourcustomersinexceptionalways.Inspireyourpeopletobehaveasif it’s not just a job, but a cause, and they’ll put forth their utmost strength—which, ultimately, will help the entire organization toweather the storms andmaintainitstalent.Thesameistrueforbuildinganexceptionallyloyalcustomerbase.

ZAPPOS

Thiskindofunitycreatesaconsistentexperienceforthecustomer.ZapposCEOTonyHsiehledtheonlinecompanyfromalmostnosalestomorethan$1billioningrosssalesannually.ThenhesoldthecompanytoAmazoninadealvaluedat$1.2billion.Thekeytohissuccesshasbeenacultureofcustomerserviceandvaluingemployees.Hisformulahasbeentocombineprofitsandpassionandgivepeopleanopportunitytobepartofsomethingbiggerthanthemselves.Inhisbook,DeliveringHappiness,Hsieh shares some radical concepts, includinghowZappos seeks to change theworld,andunifycustomersandemployeesinthatcrusade.3

HsiehhassaidthatZapposdecidedalongtimeagothatthebrandwasn’tgoingtobelimitedtotheshoesand,later,clothingthatthecompanysold.Instead,Zappossetouttobuildabrandthatwasabout the very best customer service and customer experience. “Webelieve that customer serviceshouldn’tbejustadepartment,itshouldbetheentirecompany,”hehassaid.4

AccordingtoHsieh,iftheygotthecultureright,everythingelse—exceptionalcustomerservice,astrong long-termbrand, and passionate employees and customers—would occur naturally. To thisend,Zapposhasturneddownmanyverytalentedandpromisingjobcandidateswhocouldprobablyverywellhavebrought short-termgains to thebottom line,butwho itdidn’tbelievewere fits forZapposculture.Thepriceofthatshort-termbenefitiswellworthsacrificingtoprotectthebrandinthelongterm,hebelieves.5ItlookslikeAmazonagrees.

DISUNITYHASCONSEQUENCES

ThesepassagesspeaktoSunTzu’scommitmenttothecause,buttheyalsotapintosomethingelse.AccordingtoSunTzu:

Whatmustuniteyouisthedireconsequencesoflosing.

Small-business leaders have to be inspiring and uplifting. But shouldinspiringtheforcesbedoneattheriskofomittingtheconsequencesoflosingonyourbusinessbattlefields?NotaccordingtoSunTzu.Yourpeoplemustbewellacquainted with the consequences of not making their numbers, not hittingdeadlines,notdelivering,andnotaccomplishing themission.Theymustknowwhat failure will look like to them personally, and to the organization in theaggregate.

RAISEPEOPLETOGREATNESS

Gongsanddrums,bannersandflags,aremeanswherebytheearsandeyesofthehostmaybefocusedononeparticularpoint.

In warfare, signals show soldiers when and how to maneuver. Here’s thequestion from the above passage: Is there one particular point onwhich yourpeople’s ears and eyes are focused? Are they poised to act based on thosesignals?Dotheytrustthesourceofthecommandsandfollowaccordingly?

Iftheyareunited,thebondtheybuildwillbefeltacrosstheorganization:

Whenthemenareunited,thebravecannotadvancealone,thecowardlycannotretreatalone.Thesearetheprinciplesforemployingalargenumberoftroops.6

Evenwithasmallforce,youmusthaveaunitedbodythatadvancestogetheranddoesn’t retreat.Toovertakea largeradversary,unity isevenmorecritical.Inspireyourpeopletogreatness,whilekeepingthemcognizantofthesteeppriceof losing. Leave mediocrity for the large organizations, while you demandcommitment,loyalty,andperformancefromeveryoneonyourteam.

UNITEWITHTHEDEFEATEDENEMY

Remember SunTzu’s declaration that “the captured soldiers should be kindlytreated and kept.” Keep this thought in mind in your treatment of formercompetitors who join your fold, either willingly or less enthusiastically,followingamergeroracquisitionorthecollapseofacompetitor.

STAYUNITEDONALLBATTLEFIELDCONDITIONS

Aswesawinthediscussionofthevarioustypesofgroundin“UnderstandtheMarket” (Chapter 5), keeping troops moving together is Sun Tzu’s explicitdirectiononmanytypesofground:

Ondispersiveground,Iwouldinspiremymenwithunityofpurpose.On facile ground, I would see that there is close connection between allpartsofmyarmy.Oncontentiousground,Iwouldhurryupmyrear.Onopenground,donotbecomeseparated.7

Onthegroundofintersectinghighways,Iwouldconsolidatemyalliances.Onhemmed-inground,Iwouldblockanywayofretreat.

REDUCEDIVISIVENESS

The converse of unity is divisiveness, which can lead to a wave ofinsubordination that can infect the entire organization. If it’s not addressed, itwon’tgoaway,butfester,anditsramificationscanbedisastrous.SunTzusays:

Whenthehigherofficersareangryandinsubordinate,andonmeetingtheenemygivebattleontheirownaccountfromafeelingofresentment,beforethecommander-in-chiefcantellwhetherornotheisinapositiontofight,theresultisruin.

WEGMANS

LeadershipattheWegmanssupermarketchainunderstandsthatloyalandcommittedemployeeswill

foster a spirit of loyalty and commitment among customers.To that end,Wegmansoffers collegescholarships.Full-timeemployeescanbeeligibleforfour$2,200scholarshipswithnorestrictionsoncourses of study. Many employees who receive the scholarship decide to build careers withWegmans.8

Accordingtoacompanyspokesperson,commentingtotheBaltimoreBusinessJournal,Wegmanshasneverlaidoffanemployee.Evenwhensaleshaveslumpedandstoreshaveclosed,thecompanyhas alwaysoffered employees jobs in other areas.TheFoodMarketing Institute reports that staff,whoarenonunion,haveaturnoverratethat’shalftheindustrystandard.9

Wegmans’ high standards may be behind its low turnover rate. In another example of unity,cashiers may not engage with customers until they’ve completed forty hours of training. Thecompanysendshundredsofstaffersacrossthecountry,evenaroundtheworld,tobecomeexpertsintheirproducts.Thecompany’sleadersdon’tjustsayemployeesareimportant.Theyshowit.Whentheymakedecisions,thequestionis:“Isthisthebestthingfortheemployee?”10

Their premise is that thinking about employees first will carry through to the customers. Aknowledgeable,highlytrained,andsatisfiedemployeecreatesabetterexperienceforcustomers.Thiscreates loyalty, both inworkers and shoppers. The premise isworking for the supermarket chain.Across the East Coast, Wegmans stores have the highest average daily sales volumes in theindustry.11

TheWegmansmissionisn’t tocurecancerorsolveworldhunger.It’sagrocerystore.But, likeZappos,itwon’tbelimitedbyadefinitionofwhatthestoressell.TheWegmansbrandisalsoabouthow the company does business. It encourages employee involvement in various communityphilanthropyprograms,whichempowersthemtoseetheirjobsaspartofsomethingmuchlarger.Inone philanthropic initiative, Wegmans donated 14.9 million pounds of food to community foodbanks.12

“It’sreallyaboutthecommunity,notthecompetition,”saysoneWegmansstoremanager.13Butasbusinesseswiththewisdomtobeinvolvedinthecommunityknow,givingbacktothepeoplewhosupportyou, inanauthenticandmeaningfulway, isacompetitiveadvantage thatcreatesaunifiedsenseofpurposeamongeveryoneittouches.

SALESFORCE.COM

MarcBenioff ofSalesforce.com is an essential executive to include in any studyof applyingSunTzu.Protégéofself-proclaimedSunTzustudentLarryEllison,BenioffhasappliedSunTzu’stenetsthroughouthiscareer.He’sledSalesforcetochangethefaceofcustomerrelationshipmanagement(CRM), and grown it into a global cloud computing company. Benioff told the Sonshi Sun TzucommunitythattheconceptfromTheArtofWarthathasbeenmostimpactfultohimisthatpeoplecan’tbeunitedor focusedunless theyshareacommonphilosophy thatgives theireffortagreatermeaning.Salesforcebelievesthatcompanies’missionsneedtobebiggerthanmakingaprofit.Thecompany itself gives one percent of its equity, one percent of its profits, and one percent of itsemployees’timetothecommunity.Thishelpsuniteandfocusthem,andmakesformorepassionate,valuableemployees.Benioffcallsitthecompany’s“secretweaponthatensureswealwayswin.”14

Benioffdoesn’tseemtoseeanyriskinbringingtheweaponoutofsecrecyandsharingitwiththeworld.Heknows,ofcourse,thatthisisthesortofcommitmentacompetitorcan’tseektoartificiallyemulate. It’snot likestartinganewdivision,hiringmoresalespeople,or rebranding thecompany.

No,thisisadeeporganizationalcommitmentthatfewarewillingtoliveout.AswithWegmans,thisspiritofunityatSalesforcehasbeenextendedtothecustomercommunity.

Benioff toldSonshi it’s an exampleofTheArtofWar’s “strategic thinking rather thancombativethinking.”ThatspiritwasfoundationalinSalesforce’sdecisiontoopenitsplatform,whichBenioffbelieves positions the business so that people want to join its mission, instead of attacking it.15Nonetheless,therearesomegreatcreativecombatstoriesinvolvingSalesforcethatyou’llreadaboutinthechapteronspirit.

Think about how, on its face, this business decision to open the company’s platform soundsantitheticaltoSunTzu.Mostleaderswouldbegrippedwithterrorthattheircompetitorswouldlearntoomuchorbeequippedtodiscerntheirmoves.ButnotSalesforce.ThecompanyallowedcustomerstoextendtheirSalesforceapplications,andevencreateandrunanytypeofapplicationondemand.Here’showBenioffcharacterizedtheconsequence:“Byinspiringpeopletojoinusandworkwithuscreatively,wegatheredanarmyof innovatorswhoarededicated tomakingusbetter.”16That’sacommunityofunity,andit’sprovedtobeapowerfulforceforSalesforce.

It is in Salesforce’s competitive tactics, outlined in Chapter 13, “Spirit,” where this unity ofpurposecomes togetherquiteextraordinarily.Thecompanyhasmanaged tobrilliantlyuniteausercommunitywith its“endofsoftware”mission. Ithasbeenfueledbyapurpose tochangehowthesoftwareindustryworks,byleveragingthelowercostandmorerobustpoweroftheweb,whichwasawhollynewconceptwhenSalesforceintroducedittotheburgeoningCRMworld.17

PARTFOUR

ADVANCEDSUNTZU:STRATEGYFORYOUR

SMALLBUSINESS

ThisparthighlightsthemostdifficultandcomplexaspectsofSunTzu’sgrandstrategy.Thesearetheelementsthataremostchallengingforreaderstounderstandandapply.Thispartwillexploreindetailtheabsoluteprimacyofstrategyinrunningasmallbusiness,asadaptedfromSunTzu,whilemaintainingthefocusonkeepinghismoredifficultteachingspracticalforyoursmallbusiness.

Thismaterialwillchallengeyoutothinkdifferentlyabouthowyouwagebusiness.

11MANEUVERING

The seventh chapter of Giles’s translation is titled “Maneuvering.” Huynhtranslates this chapter as “armed struggle” andHuang as “armed contention.”Our look at the key theme ofmaneuvering herewill be a bit different.We’llfocusonadaptingTheArtofWar’steachingsonplanningmovements,shiftingposition,andchangingdirection—allfundamentalconceptsforSunTzu.Whilecriticalelementsoftheso-titledchapterareincludedhere,sotooareelementsofother chapters of The Art of War that illustrate how a small business shouldmaneuvertoseizeandmaintaintheadvantageousposition.

Two essential maneuvering concepts discussed previously bear repeating.Keepyourcompetitorsmoving,anddividethem:

Ifheistakinghisease,givehimnorest.Ifhisforcesareunited,separatethem.

Unity,weknow,isfundamentaltothehealthofyourbusiness.Seektodivideyouradversary.

Let’sbeginwiththiswonderfullyinsightfulpassagefromSunTzuontacticalmaneuvering:

The best policy in war is to attack the enemy’s strategy. The second best way is to disrupt hisalliancesthroughdiplomaticmeans.Thenextbestmethodistoattackhisarmyinthefield.Theworstpolicyistoattackwalledcities.Attackingcitiesisthelastresortwhenthereisnoalternative.1

Thequestionyoumust ask is:Whatare themost effectiveways foryou toattacktheenemies’strategies?Itismyhopethatasyoustudythischapter,you’llrememberthisquestionandseektoansweritforyoursmallbusiness.

FIGHTINGWITHOUTFIGHTING

As the previous passage indicates in its preference for attacking strategy anddisrupting alliances over directly engaging soldiers, the bestway to engage inbattleistofightwithoutfighting.Attackingcitiesistheworstoption:

Thereforetheskillfulleadersubduestheenemy’stroopswithoutanyfighting;hecapturestheircitieswithoutlayingsiegetothem;heoverthrowstheirkingdomwithoutlengthyoperationsinthefield.

There are many ways for you to capture your competitors’ cities withoutlayingsiegetothem.Youcanmovequietlywithoutgainingtheattentionoftheindustryuntiltheappropriatetime,buycompetitors,hiretheirtoppeople,absorbordevelopexclusiverelationshipswiththeirbestsuppliers,andjoinforceswithothersmallerforces,aswellasothermethods.Forservicebusinesseswithalowvolumeofcustomers,youcanclandestinelytaketheirbestaccountswhentheyareunprepared.Youcanobtainbettersuppliersandfindbetter,cheaperwaystogetyourproductstomarket.Youcanhirebetterpeopleandretainthemlongerthananyoneelseinyourindustry.SunTzutellsustoneverresorttobattleunlessit’snecessary,andnevertoattackstrengthforstrength.

AVOIDSTRENGTHANDATTACKWEAKNESS

Thistenetshouldbethemantraofeverysmall-businesspractitionerwhowantstowin.SunTzuputsitsuccinctly:

Inwar,thewayistoavoidwhatisstrongandtostrikeatwhatisweak.

Paychex went where ADP wasn’t, and was unwilling to go, instead offightingthiscompetitorforlargeandmid-tierpayrollaccounts.NetflixattackedBlockbuster’s inability to adapt. It didn’t try to open stores to compete withvideo rental. Samuel Adams doesn’t endeavor to compete with the corporatebeer industry monolith Anheuser-Busch InBev or number two, Miller-Coors.

Instead, it iscompetingwithothercraftbeers.Thesenicheplayerswentwheretheenemywasnotandattacked,therebyexploitingtheadversary’sweakness.

POKEHIMTOSEEWHATHE’LLDO

Rousehim,andlearntheprincipleofhisactivityorinactivity.Forcehimtorevealhimself,soastofindouthisvulnerablespots.

Test your adversary with feints to gauge his strength and how he’ll react. Inmartialartsorcombatsportslikeboxingandwrestling,thepractitionercanleadwith some feints to gauge how the opponent will react. By feigning, she canlearnthatheropponentdropsherhandswhenshecountersapunch,orbecomesstiff and immobile when she blocks.When you see how your adversary willreacttomeasuredattacks,youcanmaximizefutureengagements.

TURNDEVIOUSTODIRECT

Oftacticalmaneuvering,SunTzusays:

. . . [T]here isnothingmoredifficult.Thedifficultyof tacticalmaneuveringconsists in turning thedeviousintothedirect,andmisfortuneintogain.

Aswesawinthechapteronperseverance,andasentrepreneursknow,thosewhowinareabletoturnevenapotentiallosstogain.

SunTzucontinues:

Therefore,ifyoumaketheenemy’sroutecircuitousandbaithimwithadvantages,thoughyoustartoutbehindhim,youwillarrivebeforehim.2

SunTzudirectsthegeneraltocausetheenemytotakethelongwayaroundso thatyoumayget to thedestination sooner.Smallbusinesses shouldbe lessinclined to reach the same battleground that’s being targeted by the biggerbusinesses. Insteadof trying todo something similar towhat thepowerhousesaredoing,buildsomethingpeoplewillneedorwantandthattheycan’tgetinthewayorat thelevelofqualitythatyoucanprovide.Thisistrueforreallygood

bourbon,better-qualityyogurt,andmoviesthatcometoyourmailboxorstreamtoyourTV.Youmaystartoutafteryouradversary,butyoucangettomarketsfullofnewopportunityifyouarriveatthosenichesfirst.

SEIZEWHATTHEENEMYCARESABOUT

Question:Iftheenemyisnumerousandisadvancinginwell-orderedarrays,howaretheyhandled?Answer:Firstseizewhattheycareaboutandtheywilldoaswished.3

This passage requires some examination. How do you capture what youradversarycaresabout?

AmazonboughtalloutstandingZapposshares,options,andwarrants for10million shares ofAmazon’s common stock, a value of $807million.ThedealalsocostAmazon$40million incashandrestrictedstock thatwent toZapposemployees.4

BenParristhemanagingpartneroftheVCfundDominate-Fund.Inadditionto recognizing Zappos’ growth potential, Parr believes Amazon acquired thecompanyforitsextraordinaryculturethathasledtoitsdynamicsuccess.Zapposcustomerservice,wehavealreadyestablished,isanessentialpartofthisculture.So too are its leadership and employees,which are also core towhyAmazonbought the smaller ecommerce rival. The gigantic Amazon cared about theculture,marketshare,growthpotential,and thecoredifferentiators thatcausedZappos to stand out. They paid handsomely for these attributes. This is avaluable lesson in how a smaller business doesn’t need to lose its identity ordifferentiators if it decides tomerge or sell. A condition of the deal was thatZapposwouldstilloperateinLasVegas,andthemanagementteamwouldstayintact.5

MOVEWITHSPEED

Speedistheessenceofwar.6

Speed is fundamental in business and war. It’s even more critical for smallbusinesses, and an easier asset to leverage. With limited resources, smallbusinesses must move with precision in launching attacks and maneuvering.

Moving quickly can allow you to achieve a better position than yourcompetitors.

Whoeverisfirstinthefieldandawaitsthecomingoftheenemy,willbefreshforthefight;whoeverissecondinthefieldandhastohastentobattlewillarriveexhausted.

Speed, of course, doesn’t just apply to how quickly youmove against thecompetition. It also applies to your service and delivery. Agility andresponsivenessareamongthechiefadvantagessmallbusinesseshaveoverlargecompetitors.

TIMING

Attackhimwhereheisunprepared,appearwhereyouarenotexpected.

SunTzu’sdirectionontakingadvantageofopportunityisimportant,butsotooismovingwhenthemarket is ready.AswesawinChapter2onapplyingTheArtofWar,Heaven—whichsignifiestiming—isoneofSunTzu’sfiveconstantfactors:

Heavensignifiesnightandday,coldandheat,timesandseasons.

Pascal-EmmanuelGobry,aBusinessInsiderIntelligenceanalyst,remindsusof theoldstart-upsaying,“Beingearly is thesameasbeingwrong.”Let’susethree of his examples for illustrations of the importance of timing inmaneuvering.7

YoumayrememberusingAskJeeves.Itstillexists,nowasAsk.com.Ilovedthatsearchengine,backbeforeGooglewaspartofthevernacular.Itwasoneofthego-tosourcesforinformationonline,asgoingtothewebforanswersbegantobethewaywefoundinformation.

Created in 1998, itwas powered bymore than 100 editorswhomonitoredhuman searches, then selected sites that they thoughtwouldbest answer thosequeries. The concept was on point, but the technology was not. While AskJeeves had pioneered the search engine concept, flaws in the technology andorganizational problems, exacerbated by competitors like Google with theirnatural language search engines, spelled the end of a good run.8 Ask Jeeves,

however, did employ many of the techniques that later made their way intoGoogle,likesemanticsearchandrankingwebpagesbyhyperlinks.9

HowaboutSixDegrees.com,theoriginalsocialnetwork?Itwasbasedontheidea that, justasallactorsaresixdegreesor less removedfromKevinBacon,we’re all six degrees away fromeveryone else on earth.Unfortunately for thecompany,theworldwasstillflattoasocialmediainnovation.10

Then there’sLetsBuyIt.com.This pioneeringonlinebuying service allowedgroups of family and friends to make joint purchases and qualify for bigdiscounts.Butthiswasbeforesocialnetworkswereaplentytopropagateoffers.Without the intersection of buyers, sellers, and a ubiquitous way to connectthem,LetsBuyItdidn’tsell.Grouponseemstohave learnedfromthis ill-timedfailure,asittargetslocalservicesfromsmallbusinesses.11

It’snotenoughforyoutobeready.Themarkethastobeready.

ACHIEVINGVICTORYVS.DETERMININGVICTORY

Establishing your strategy is at the heart of small-business genius. It requiresformlessness, so itwill be amystery to your competition.On being formless,SunTzusays:

Howvictorymaybeproducedforthemoutoftheenemy’sowntactics—thatiswhatthemultitudecannot comprehend.Allmen can see the tacticswhereby I conquer, butwhat none can see is thestrategyoutofwhichvictoryisevolved.

Or,asHuynhtranslates,withformation,thearmyachievesvictories,yettheydonotunderstandhow.

Theworldmaybeabletoseehowyouachievevictory.Peoplemayseewhatyouaresellingandwho’sbuyingit.Theycanseewhoyourpartnersareandtalktotheircolleaguesaboutthemovementsyoumakethatcanbediscerned.Butifyou are a brilliant strategist, they can’t comprehend how you created yourvictories.

TAKETHEBESTPOSITION

Thepurposeofmaneuveringistobeoptimallypositionedforsuccess:

Thegoodfightersofoldfirstputthemselvesbeyondthepossibilityofdefeat,andthenwaitedforanopportunityofdefeatingtheenemy.

Total preparation to seize every advantage is a cornerstone of Sun Tzu’sdirection.SunTzu’sadditionaldirectionheremaysoundobscure,butlet’sthinkabouthowwecanapplyit:

Allarmiespreferhighgroundtolowandsunnyplacestodark.

Howgoodisyourvisibilityofthelandscapethatsurroundsyou?Doyouhavehigh ground that comes with good information, trusted sources, and effectivecommunicationsandintelligencenetworks?Ordoyouhavelowanddarkspotsthatare rifewith theunknown?If the latter,youwon’tbeable toputyourselfbeyondthepossibilityofdefeatandkeepyourenemyonthemove.

Be before the enemy in occupying the raised and sunny spots, and carefully guard your line ofsupplies.

Guarding your line of supplies speaks to your relationshipswith suppliers,vendors, and industry partners. By developing alliances and securinginvestments,you’llkeepprovisionscoming.Shortsightedmanagersandleadersmay treat their vendors poorly, paying them late and even cheating them, andotherwisebehavingunprofessionally.Theattitudemaybethatthereareplentyofother serviceproviderswhowill take thebusiness’smoney.Thatmaybe true,but industry and geographic sandboxes are only so big. Eventually, theseshortsighted,selfish,scorch-and-burnpolicieshaveconsequences.

Iworkedwithafirmthatmadeapointofpayingprintvendorsverylateandthen hagglingwith them post-delivery on prices that had already been agreedupon.Isupposetheythoughttheywon,payinglowerrates,andontheirterms,but the consequence was that they were blacklisted from the best and mostcapable printing outfits in town. They were even dropped by a one-of-a-kindshopandunable to findanother supplier tomeet their requirements.That’snowaytodobusiness.

Small-business leaders need all the friends we can get. It’s much betterbusiness to develop loyal associates and friends, and even develop exclusiverelationships,when possible, so the best performerswon’t provide services orsupplies to your competitors.Make enemies of them, and they’llwant to helpyourcompetitors.They’llevenbedriventodoso.

BEPROACTIVE

Successful business leaders know that they can’t expect to achieve aggressivegrowthgoalsiftheysimplyopttoholdground.Noneofthecompaniesprofiledinthesepagesachievedanysuccesswithapurelydefensivelong-termstrategy:

Iflessinnumber,becapableofdefendingyourself.Andifinallrespectsunfavorable,becapableofeluding [the enemy].Hence, aweak forcewill eventually fall captive to a strong one if it simplyholdsgroundandconductsadesperatedefense.12

Itisinattackingthatyou’llbestrong,notindefending:

Standingonthedefensiveindicatesinsufficientstrength;attacking,asuperabundanceofstrength.

THEARMYONTHEMARCH

Ifyourarmyisonthemove,SunTzusays:

Wecomenowtothequestionofencampingthearmy,andobservingsignsoftheenemy.Passquicklyovermountains,andkeepintheneighborhoodofvalleys.

Donotbeobservedbytheenemyasyoumakeyourplansandcarrythemout.Keepingyourintentionshiddenisespeciallydifficultnowthatsomuchisinthepublic domain, so youmust work tomask your secretmovementsmore thanever.Whilekeepinganeyetostrategyandhidingyourmovements,considerthepathofleastresistancesothatyoumaymovequicklyoverdifficultterrain.

Aftercrossingariver,youshouldgetfarawayfromit.

TheArtofWarapplicationhereisthatonceyou’vesucceededinamaneuver,don’tallowyourbusinesstogetpushedbackintoalessfavorableposition.It’snotenoughtoachieveavictory.Youmustbeabletosustainit.NotlongagoImet with a small business that’s poised to exploit a void in the market. Thecompany’sleadershaveaninnovativesolutionfornichemedicalpractices.Oneofthewaystheyvalidatedopportunitywasbywatchingacompetitorthatmadesignificant inroads by selling into the base. But that competitor soon burnedthroughsomanyresourcestoacquirethesecontractsthatitwasunabletodeliver

andhadtoclosethebusiness.If you don’t have a strategy and resources to continue to maneuver amid

obstacles,thistragicstorycouldbeyoursaswell.

Incrossingsalt-marshes,yoursoleconcernshouldbetogetoverthemquickly,withoutanydelay.

Don’tlingeronunwelcomeground.Wheninacompromisedposition,makeyour decisions quickly and don’t waver. Many executives cite one of theirgreatestregretsasclutchingontounderperformersforlongerthanwassensible.David Astorino, a senior partner at RHR International, said that when manyCEOsreflectonwhatthey’ddodifferentlyintheircareers,“theyalmostalwayssay, ‘I knew inmygut thatwasnot going toworkwith that individual, and IwishIhadtrustedthatgutfeelingandmadethatdecisionfaster.’”13Thiskindofwell-intendedprocrastinationcancauserealdamagetoasmallbusiness,andsparkdelaysandstagnationthroughouttheorganization.

NETFLIX

TheNetflixstorybeganin1997whenfounderReedHastingsgota$40latefeefromavideostorefor anApollo 13 VHS rental. Then and there, he started thinking about the viability of amovie-rental-by-mail concept. He began by mailing DVDs to himself. When they arrived in pristinecondition,hebelievedhewasontosomething.HedescribedtoCNNMoneytheenchantingmomentwhenheknewitwasgoingtowork:

“Iwas down inArizona in 2003, visiting one of our distribution centers on the outskirts ofPhoenix.Itwasraining,andmyumbrellawasn’tworking,soIwalkedthehalfmilefromthedistribution center to the hotel. I got the message onmy BlackBerry that we hit a million[subscribers] thatdaywhile Iwaswalking in the rain. Itwas thisbeautifulmomentwhere Iwas just soelated thatweweregoing tomake it, and thatwasalso the firstquarter thatweturnedprofitable.Itwasamagicwalk.”14

Netflix has been well positioned to succeed. Consumers have an insatiable hunger forentertainment,andtheyareincreasinglyleveragingstreaming.HastingsandtheleadershipatNetflixhavedemonstratedtheirskill instayingonthecuspofthemarket’sdemands,evenwithiconoclastmoves thathavebeencriticized.Theirdecision topromotestreamingat theexpenseof theirDVDbusinesspromptedconsiderableskepticism.In2011,HastingssplitNetflixintotwobusinesses,DVDand streaming, and allowed them to compete with each other for customers. Most consumerswouldn’twanttopayforboth,sotheyhadtopickone.15

Tothecritics’surprise,Netflixgrewrevenueandprofitswhileencouragingcustomerstomakethetransition fromDVDs to streaming.But in retrospect,wecanseewhy thisdecisionworked.They

refusedtosacrificeweaknessforstrengthandclingtoamodelthatwascomingoutmoded.Hastingswasable topullcashoutof theDVDsideof thehouse topay forbuilding the faster-growingbutlower-marginstreamingbusiness.Netflix succeeded ingrowing revenueandprofits,whilemakingthemarkettransitionfromtheDVDplatformtostreaming.16Thisisabrilliantmovethatillustrateshow tocarefullyguardyour lineof supplies.Theon-demandstreamingmarket isheatingupwithcompetition,butNetflixremainswellpositioned.

AdamHartungconcludedinForbestherarityofthisvictory:“Almostnocompanypullsoffthiskindof transition,”hewrote. Instead,most fight toothandnail todefenda losing territory for toolong,andmissopportunitiestoevolve.Itwasamuchsmartermovetocapturetheburgeoningmarketforstreaming,insteadofclingingtoawaningbusiness.PerhapsNetflixlearnedfromBlockbuster.17

It’salsopossiblethattheylearnedfromSunTzuinthepassageearlierinthischapter:

Aweak forcewill eventually fall captive toa strongone if it simplyholdsgroundandconductsadesperatedefense.18

12ADAPTATION

Connected tightlywithmaneuveringandoverall strategy, innovation ispartofthecultureofmanysmallbusinesses.It’sthenot-so-secretsaucethathasforgedthepathto industryhegemonyfor theplayerswhomaintainthat intrepidedge.Small businesses have an advantage in being better able to apply tactics to adynamic, fluid reality than their larger competitors.But to remainviable, theymustcontinuetoinnovate.

Small-businesspractitionersarealltoofamiliarwiththegrimstatisticsthat80percentofnewbusinessesfailwithinthefirstfiveyears.Butwhat’sevenmoreinterestingisthatmanyofthe20percentthatsucceedtakeadifferentpaththantheonetheystarteddown—insomecasesmuchdifferent.We’llturnnowtoSunTzu’sdirectiononthrivingbychangingstrategiesandtactics.

VARYPLANS

SunTzu’ssuccessfulgeneralmustbeadeptatvaryingplans.Eventhoughhe’swellversed in the fiveconstant factorsasdescribed inChapter2—MoralLaw(i.e.,“TheWay”),Heaven,Earth,theCommander,andMethod/Discipline—thatwon’tbeenough:

The student of war who is unversed in the art of war of varying his plans, even though he be

acquaintedwiththeFiveAdvantages,willfailtomakethebestuseofhismen.

TheabilitytovarytacticsiscriticalforSunTzu.Theleaderwhoisskilledinthisregardiscapable,buttheonewhoisn’twillbeunabletogaintraction:

Thegeneralwho thoroughlyunderstands theadvantages thataccompanyvariationof tacticsknowshowtohandlehistroops.Thegeneralwhodoesnotunderstandthese,maybewellacquaintedwiththeconfigurationofthecountry,yethewillnotbeabletoturnhisknowledgetopracticalaccount.

Flexibilityinaccordancewithrealanddynamiccircumstancesisessentialinwar,asisitinbusiness:

Beflexibleanddecideyourlineofactionaccordingtothesituationontheenemyside.1

THEWATERMETAPHOR

Sun Tzu, like many Asian and Asian-inspired philosophers, including martialartistBruceLee,useswatertomodelhowweshouldengagewithanadversary.Waterflowsaroundoroveraforce.Itadaptsandchangesshape.Itencompassesaninfinitevarietyofplans,toavoidwhatisstrongandtostrikeatwhatisweak.You’ve seen this concept illustrated repeatedly in these pages. Rather thanrigidly committing to staying a course, the businesses that have overcome theodds have illustrated Sun Tzu’s meditations on water. Their tactics havemodeledwaterintheiradaptability,fluidity,andshapelessness.BelowwehaveafewpassagesfromSunTzuonwaterasametaphorforbattle:

Military tacticsare likeuntowater; forwater in itsnaturalcourse runsaway fromhighplacesandhastensdownwards.

Water shapes its course according to the nature of the ground overwhich it flows; the soldierworksouthisvictoryinrelationtothefoewhomheisfacing.Therefore,justaswaterretainsnoconstantshape,soinwarfaretherearenoconstantconditions.

SunTzumakesthatpassageevenmoreapplicablewiththisnextsentence:

Hewhocanmodifyhis tactics inrelation tohisopponentand therebysucceedinwinning,maybecalledaheaven-borncaptain.

Onlinephoto-sharing,video-sharing,andsocialnetworkingserviceInstagrambeganasthelocation-basedsocialnetworkBurbn.Uploadingandsharingphotoswas just one feature of Burbn, but it’s the one that took off with users andshaped Instagram into the service it is today.2 There are many other, similarsuccess stories of businesses that plotted a very different course than the onetheyinitiallyconceived.Thecommonalityamongthemallistheabilitytoadaptandrespondtoopportunity.

Identifyandfollowthetrendsinyourindustry.Don’tfightagainstthecurrentof change. Instead, recognize these as anopportunity and seize the advantage.Tablet and smartphone sales were exploding, as sales of DVD players wereleveling.Netflixhascapitalizedonthistrendandsoughttocaptureaburgeoningmarket,ratherthanonewithwaningdemand.

INFINITEVARIETY

Sun Tzu says that to always stay ahead of the enemy, you must continuallydevisenewtactics,notreturntothosepreviouslyused,evenifusedsuccessfully:

Donotrepeatthetacticswhichhavegainedyouonevictory,butletyourmethodsberegulatedbytheinfinitevarietyofcircumstances.

This is one more reason not to openly engage in battle any more than isnecessary. You won’t have to keep coming up with new methods andunexpectedmethodsofattack.Tobeinnovativeistohideyourobjectivesfromyourcompetitors:

He shifts his campsites andundertakesmarches bydevious routes so as tomake it impossible forotherstoanticipatehisobjective.3

Bymakingcontinuous improvements inyourbusiness,youarecontributingtoSunTzu’scalltodevelopaninfinitevarietyoftactics.BusinessauthorJohnSpencehas said that the competitive advantagesof oldwere access to capital,proprietary technology, location, one-of-a-kind distribution channels, andeconomies of scale.These are less essential today. Instead, thewinners of thefuture, he says, will forge new competitive advantages based on ongoing andincrementalimprovementstoeverysingleaspectoftheirbusiness.4Howareyou

continuallymakingongoingandincremental,orevenverylarge,improvementsineveryaspectofyourbusiness?

BEDISRUPTIVE

If you’re like me, you heard the word disruptive a lot as a kid. But when itcomes to innovation, disruption can be a very good thing. In 1997, HarvardBusinessSchoolprofessorClaytonChristensendetailedaninterestingpremiseinhis book, The Innovator’s Dilemma. He said that as companies innovate at amore rapid pace than their customers’ needs demand, most organizationseventuallydevelopproductsor services thatareoverkill formostcustomers intheir market. They’re too sophisticated, expensive, or complicated for themajority of buyers. Nonetheless, businesses pursue the higher-priced productsandservicessuitablefortheirmostlucrativecustomers.It’swiththesebuyersatthe higher tier of the market where they’ll make most of their money. Thisdynamic, he says, creates an opportunity for “disruptive innovation,” to servelessprofitablecustomersatthebottomofthemarket.5

Examples of this disruption include the changeover from mainframecomputers to minicomputers, film to digital, four-year colleges to communitycolleges, traditional doctor’s offices to retail medical clinics, to name a few.With disruptive innovation, smaller businesses bring solutions to market tocapitalizeontheopportunitiesposedbylower-marginproductsandsolutions.Insodoing,theycanrevolutionizeindustries.6

This is an extremely important dynamic for innovative small businesses tounderstand. In the years since The Innovator’s Dilemma was published, thistrendhasaccelerated.AsSteveDenningwroteinForbes,thelifeexpectancyofFortune500firmshasdroppedtolessthanfifteenyears.7

Christensen uses the example of router technology. Cisco Systems was adisruptor, offering an alternative to the circuit switching equipment made byLucent and Nortel. Router technology was cheaper, but not good enough forvoicedatatransfer.Andascustomerswereunfamiliarwiththepotentialofthistechnology, there was absolutely no customer demand for it. However, withcontinuousimprovementtoitsroutertechnology,Ciscosucceededinmakingitfast enough for voice. While Cisco is a case study of a business capable ofadapting to change during its years in business, it is now threatened byinnovatorsofbladeserversandsoftswitches.8

Salesforce is one of those smart larger organizations. Like Apple and

Amazon,itiscitedbyChristensenasemployingamodelfocusedonmorethanshort-termprofitability,butalsooncontinuousinnovationandexperimentation.These companies also share very high marks for satisfaction from theircustomers.Thismodeldrivescompaniestoconsistentlyinnovateandtodisrupt—evenwithintheirownbusinesses.9

STEALTH

Ifyousetafullyequippedarmyinmarchinordertosnatchanadvantage,thechancesarethatyouwillbetoolate.Ontheotherhand,todetachaflyingcolumnforthepurposeinvolvesthesacrificeofitsbaggageandstores.

Ifalargearmyoralargedivisionadvancesentirely,itmustdosomoreslowlythanitssmaller,stealthiercounterparts.Bysendinginasmallerforce,thelargearmyhas only a portion of its strength and resources, lacking the full bore ofarmaments and provisions to attack and defend. This is another reason whykeepingtheenemyonthemoveisimportant,especiallyforsmallerplayers.

Thus,ifyouorderyourmentorolluptheirbuff-coats[whichHuynhtranslatesasarmor],andmakeforcedmarcheswithouthaltingdayornight,coveringdoubletheusualdistanceatastretch,doingahundredLI inorder towrest anadvantage, the leadersof allyour threedivisionswill fall into thehandsoftheenemy.

Hegoesontowarnthataforcedmarchwillmeanthatsignificantportionsofthearmywon’treachitsdestination,divisionleaderswillbelost,andprovisionsand supplies will be sacrificed. It’s far more burdensome and logisticallyintensive to keep a large entity supplied and functioning than it is tomove asmaller, more nimble counterpart. You should always seek to leverage youradvantageofstealthforyourbusiness.

PAYPAL

IttookseveralyearsoftrialanderrorandovercomingseriousproblemswithuserfraudforPayPaltobecomethedefaultonlinepaymentsystemformillionsofusers.Theinitialstart-upconceptin1998wasabusinesscalledFieldlink,whichdevelopedcryptographyforhandhelddevices.Afterbuildingaplatformthatnevercaughton,foundersMaxLevchinandPeterThielchangedthebusinessnametoConfinityandmovedintosendingIOUsfromonePalmPilotusertoanother.Withnotractiongained

there,andsuccesscontingentontheubiquityandhealthofthePalmPilotmarket,theyshiftedcourseagain,thistimetoapaymentsystemcalledPayPal.Thisconceptmovedthemtoe-mailpaymentsviathe web. All of these very rapid changes occurred within the course of about fifteen months,accordingtoReidHoffman,formerPayPalexecutivevicepresident.10

Much of PayPal’s early growth as a payment system can be attributed to eBay users. Thiscommunity promoted the platform to others as an easy, safe, and trustworthy way to exchangemoney.While eBayhad an internal payment business,Billpoint, users preferredPayPal.Hoffmanaskedtheteam,“What’sthiseBaythingandwhyarepeopleusingit?”Theanswerfollowedquickly:“Ohmygosh,thereareourcustomers,”Hoffmanrememberedthinking.Thoseusersprovedtobeavery fruitfulmarket forPayPal.11 In 2002,PayPalwent public andwas bought by eBay for $1.5billion.Theentirestoryunfoldedinlessthanfouryears.Notbadforafewdrasticcoursecorrections.

PRICELINE

Priceline.comiscoveredinChapter8,“Perseverance.”But theirs isalsoastoryofadaptation,andthevalueof folding inpowerfulalliances.JayWalkerwas thebrainbehind the“NameYourOwnPrice”system,whichhedevelopedandappliedtotheairlineindustry.By1997,hiscompany,WalkerDigital,implementedtheconceptforPriceline.com’sticketingservice.Theairlinesresistedthisboldnewmodel.Afterall,theindustrydidn’tinventit,sohowgoodcoulditbe?Thatwastheold-timey,traditionalthinking,anyway.Walkerwassuccessfulinattractingtworelativelysmallairlines,TWAandAmericaWest.12

The popular advertising campaign featuring William Shatner would follow. Pre-revenue, thecompany paid Shatner in part with shares in Priceline.com. The ads were a success. But drivingpeopletothewebsite,itturnedout,wasn’tapanacea.Pricelinesoldmorethan30,000ticketsinitsfirsttwomonths,butitcouldn’tmeetthedemandthroughTWAandAmericaWestalone.Tomakeupforthisshortfall,ithadtobuyticketsforotherairlinesontheretailmarketandsubsidizecustomerorders.Thecompanylostmoney.13

By bringing in the former president of Citicorp, Richard Brad-dock, as CEO, the companybolstered its legitimacy.Pricelinewas thenable to sign its firstmajorairline,Delta, inadeal thatincludedgiving12percentofitsstocktoDelta.Otherairlinesfollowedthisbigdog.14

Priceline went public on the NASDAQ in 1999, and became a cool tech-boom rock star.Followingthat,hardtimescamefromvarioussources:overreachintodisparatemarkets,theburstingof the dotcom bubble, trauma in the airline industry, and the opening up of ticket sales via theInternet.15You’ll findmore about how the story is playingout in “Perseverance,” includinghowPricelinehasadapteditsmodeltoaccommodatechangesinthemarket.

PayPal and Priceline represent two very different examples of adaption. ThePricelinestoryisoneoffittingtheconcepttoahugeandchangingmarket,andreadaptingwhenitwasn’tsuccessful.ThePayPalstoryisofquicklyadaptingthe

coreofthebusiness,andthendoingsoagain...andagain...untilavalidideatakesroot.Inbothcases,theseadaptationsaremuchmorethanfootnotesforthearchives. They opened up new revenue opportunities, blazed new trails, andharnesseddisruption.Companyleadersdemonstratedtheforesighttoseethatthecourse theywereonneeded tobemodified, or shifted entirely, and theywerewillingtodoit.

Areyou?

13SPIRIT

It’susuallycalledsomethinglike“attitude.”Motivationalbusinessliteratureandlifecoacheryare repletewith it.The lawofattraction tellsus that likeattractslike.Themorepositiveandupbeatweare,themorelikelywearetoattractotherpositive and encouraging people. But for Sun Tzu, this quality is a uniquelypowerful force capable of shaping military hegemony. The Art of War can’treallybeunderstoodwithoutastudyofthesomewhatabstractelementofspirit.

THE SPIRIT OF WIND, FOREST, FIRE, MOUNTAIN, NIGHT, ANDTHUNDERBOLT

ThispassagecombineselementsofclassicalwritingsfrombeforeSunTzu’stime:1

Letyourrapiditybethatofthewind,yourcompactnessthatoftheforest.Inraidingandplunderingbelikefire,inimmovabilitylikeamountain.Letyourplansbedarkandimpenetrableasnight,andwhenyoumove,falllikeathunderbolt.

Let’sexploretheseattributesandwhattheymeanforyoursmallbusiness:

Rapidlikethewind.Windisformless.Itfeelslikeitcomesfromnowhere.Itcan’t be grasped, and it easily shifts and changes direction. It can beextraordinarilypowerful.SunTzucallsformovementlikethewind,notonlyinspeed,but inadaptabilityandcoordinatedforce.Theapplicationforyoursmallbusinessitthatyourmaneuversshouldbeunabletobepredicted.Theyshouldhappenquickly, and they shouldbepowerful enough to achieve theintendedresults.

Compactness like the forest. Compactness, when coupled with rapidity,speaks tomovement that is tightandcoordinated. In fact,other translationsprefermarch like the forest. If your people are unified andmove together,theywillbemuchmoredifficult todivide.Forestsarealsothickanddense.Thecompetitioncan’tseethroughtotheendorexploitweakopenings,soitmay be overwhelmed by the appearance of force. Your small business’smovement should have every appearance of coordination and unification,unlessyouaretryingtolurehiminbyfeigningdisorder.

Raidandplunderlikefire.Fireburnsanddestroysrapidlyandcompletely,asitcreatesfearandchaos.Whenyouexecuteaclearstrike,youshoulddosowithunabashedpowerandcommitment.Speedisagainessential.

Immovabilitylikeamountain.Despitehowwellhiscourseisplanned,theextraordinary leader is able to modify his tactics in relation to shiftingcircumstances.Youmustadapttochangingconditions,butbeasdeterminedfor victory as an immovablemountain.Theunity of your team is a criticalfactor here. Division within your ranks will have the opposite effect,undermining your determination and making you more vulnerable to thestrikesofyourcompetition.

Plans as dark and impenetrable as night. Your next steps should be amystery to the competition, and your business should have safeguards inplacetoensurethatthisisthecase.

Fall like a thunderbolt. In his translationHuang refers to the darknessasunpredictable as rain clouds, striking like thunder and lightning. Lightningwillgothroughanythingtoreachtheground.Likefire,thunderandlightningcancausechaos,andlightningcanbefatal.Likethewind,itappearstocome

fromnowhere.Atcloserange,thundercanbedeafening,whichonlyaddstotheclamorandconfusion.Allofthesephenomenaspeaktothecriticalityofmakingyourattacksdefinitive,wellcoordinated,andimpeccablytimed.

These elements illustrate the importance of creating chaos and uncertaintyamong thecompetition,bringing fullpowerandconcertedenergy tobear, andleveraging intensespeed.Theyareall importantattributes foreffectivemartialartists,too.

Speed,economicalmovements,andveiledintentionsallowstrikesandthrowstohave exponentiallygreater impact. It’s the ideaof falling like a thunderboltthat resonates most deeply for me. In jujitsu, we train to be ready for anyconceivableattack.Rather thanallowing themindtobedistractedby trying toguesswhatattackwillcomeduringtheheatofcombat,theideaisthis:Itdoesn’tmatter what comes. I’m ready for it. That doesn’t just mean being ready todefendagainstaferociousattack,butpreparednesstoturnthatattackonitsheadanddiscourage,damage,ordestroyanadversary.Likethunder,adefensecanbecoupledwithadeafeningandpowerfulyellthatcomesfromthecenterthatwecallakiai.Andlikelightning,westopatnothingshortofgoingthroughenemieswhoaimtoharmus.

WINFIRST

This is one of the single most important concepts from all of Sun Tzu. It’smeaningfulbothforbusinessleadersandforindividualsontheircareerpath:

Inwar thevictoriousstrategistonlyseeksbattleafter thevictoryhasbeenwon,whereashewhoisdestinedtodefeatfirstfightsandafterwardslooksforvictory.

Theideahereisthatifwearetobetriumphant,thevictorymustoccurbeforethe battle.This directive applies to preparation, aswell as to all ofSunTzu’sdirectionstobewelltrainedandwellpositionedforvictory.Butit’sgreaterthanthat. If you’ve done all the proper planning and preparation, yet you don’tbelieveyouwillwin,yourchancesareprofoundlydiminished.AsHenryFordfamously said, “Whether you think you can, or you think you can’t—you’reright.”SunTzuwouldsayFordwasright.

Martialartscontainthisirony.I’vetrainedwithmanypeopleinavarietyofdifferent schools. The purpose ofmartial arts, forme at least, is self-defense.

Themostimportantconsiderationinallofself-defensetrainingisthis:Canyoudefendyourselfinthefaceofviolentadversaries?Itcomesdowntothedecisionyou’ve already made either to be a victim or not to be a victim. Rank andexperience are less important than the spirit and “win first” mind-set of theindividual. I’ve seen black belts who I don’t think could defend themselvesagainstamoderatelyskilledadversary theirownsize, letalonemultiplearmedattackers.I rememberawomanwhohadbeentrainingforseveralyears tellingme,“Idon’tthinkIcouldeverhitamanandhurthim.”

“Never hit aman and hurt him . . .” If I believed that, I’d never leavemyhouse.

SunTzu’sideahereisthatvictoryproceedsbattle,bothinpracticaltermsandin the spirit that says, “I won’t be a victim,” or “I’m going to get thispromotion,”or“Thisaccountismine.”Muchmorethanwishfulthinking,ifyouadoptandapplyit,thecharacterofwinningbeforefightingwillforeverchangehowyoudobusiness.

KEEPTHEMSHARP

SunTzuisadamantthatvictoriesshouldbeachievedasquicklyaspossible.Oneofthemostimportantby-productsofthatisthemoraleofthepeoplefightingforhim:

Again,ifthecampaignisprotracted,theresourcesoftheStatewillnotbeequaltothestrain.

Oneofthegreatestresourceshehad—andthatyouhave—arepeople.

Now,whenyourweaponsaredulled,yourardordamped,yourstrengthexhaustedandyourtreasurespent, other chieftainswill spring up to take advantage of your extremity.Then noman, howeverwise,willbeabletoaverttheconsequencesthatmustensue.

When you are depleted, you’re weak and vulnerable. Look for these sameindicatorsinyourcompetitorsandtimeyourmovementsagainstthem.Theseareopportunitiestoturntheirdisadvantagetoyouradvantage.

Small-business leaders should always remember SunTzu’s call to be goodstewardsofthepeoplewhotrustyou,tohonortheirstrengthandskillandgivethemtheresourcestheyneedtowin.Sharppeoplewon’tworkforverylongfordullorganizationsthatdon’tendeavortobringouttheirbest.

Theywon’ttolerateorganizationsthatcan’taccomplishobjectivesandseizeopportunities,either.AsSunTzusays:

Thus, thoughwehaveheardofstupidhasteinwar,clevernesshasneverbeenseenassociatedwithlongdelays.

Therefore,inthebeginningmoraleishigh,thenslackens,andatlastdissipates.2

Youmustkeepmoralehigh,notonlyinthebeginning,whenit’seasiest,butcontinuallybetweenandthroughoutengagements.

TAKEADVANTAGEOFTHEOPPOSITION’SLOWSPIRIT

Studyyouradversarysothatyoucanusetheebbsandflowsofthestrengthofhisspirit:

Aclevergeneral,therefore,avoidsanarmywhenitsspiritiskeen,butattacksitwhenitissluggishandinclinedtoreturn.Thisistheartofstudyingmoods.

Howwillyoutakeadvantageofit?

DESTROYTHEIRALLIES’MORALE

Notonly shouldyou look todamage the spirit andunityof the adversary,butalsolooktoharmthatoftheiralliesandsupportnetworks:

When a warlike prince attacks a powerful state, his generalship shows itself in preventing theconcentrationoftheenemy’sforces.Heoveraweshisopponents,andtheiralliesarepreventedfromjoiningagainsthim.

You can look to develop exclusive and/or more fruitful relationships withyour competitors’ allies, or position yourself with key trusted sources to gainintelligenceonyourcompetition.Howelsecanyoudisruptyourcompetition’salliances?

EXPLOITTHEOPENING

Preparationand timingare critical in creatingand takingadvantageofgaps intheenemy’sability to launchattacksorprovidedefenses.But theroleofspiritthatactsdecisivelyisunrivaled:

At first, then, exhibit the coyness of amaiden, until the enemy gives you an opening; afterwardsemulatetherapidityofarunninghare,anditwillbetoolatefortheenemytoopposeyou.

Nowonlycanyouexploitopenings,butforSunTzuit’samandate:

Iftheenemyleavesadooropen,youmustrushin.

CONQUERANENEMYALREADYDEFEATED

Hewinshisbattlesbymakingnomistakes.Makingnomistakesiswhatestablishesthecertaintyofvictory,foritmeansconqueringanenemythatisalreadydefeated.

Whatdoesitmeantoconqueranenemyalreadydefeated?Flawlessexecutionisclearlypartofthisdirective.ButSunTzugoeson:

Hencetheskillfulfighterputshimself intoapositionwhichmakesdefeat impossible,anddoesnotmissthemomentfordefeatingtheenemy.

SunTzu calls for vigilance to seize everyopportunity to defeat the enemy.The strong leader knows when she has the superior position, understands thecondition of the adversary’s relative strength or weakness, and has thewherewithaltorapidlyanddecisivelyattackandwin.

Huynhtranslatesthispassageasfollows:

Nomiscalculationsmeans thevictories are certain, achievingvictoryover thosewhohave alreadylost.

Follow Sun Tzu’s direction and take on the battles wherein there are thefewestopportunitiesformiscalculations.

BEIRRESISTIBLE

Thisisanothermandateforastrongspiritthatthesmall-businessleadershouldheed:

Thereforethegoodfighterwillbeterribleinhisonset,andpromptinhisdecision.

Huangtranslatesthepassagethisway:

Thosesophisticatedinbattlehavecombatpowerthatisirresistibleandarestrainedreleaseofforcethatisinstantaneous.

Consider the importanceofpromptandcommitteddecisionmaking inyourorganization’sabilitytodelivera“restrainedreleaseofforce.”

SunTzucontinueshisdiscussionofdispensationofenergy:

Energymaybelikenedtothebendingofacrossbow;decision,tothereleasingofatrigger.

Timing and decisiveness are key points. The question for the entrepreneurand small-business executive is, How are you setting the crossbow? Do youknowwhentoreleasethetrigger?

Not all business leaders are good, reliable decision makers. Many timesyounger, less experienced, and uncertainmanagers have tendencies to second-guess their decisions and shift directions. This causes the workforce to stall.Eventually, they’llbeconditioned tooperate at a sluggishpacebecause it’s intheirbest interests.Whyshould theymovequickly toput aplan intoaction ifthey believe their leadership will shift course the next day? That’s failure toconsolidate wins, and it’s at best foolish and at worst disastrous for smallbusinesses.

Inadditiontocausingslowmovement, therebydullingakeysmall-businessadvantage, this muddy decision making also mutes enthusiasm and causesconfusionintheranks.Ifyou’vemadeitthisfarintoTheArtofWarforSmallBusiness, you know that these are all very dangerous by-products that willthreatenthesmallbusinessthatsuffersfromthem.

WHATATTACKINGWITHFIRETELLSUSABOUTSPIRIT

Chapter 12 of The Art of War is a short chapter on use of fire in attacks.Elementsofthischapterareanillustrationofspirit.

Inorder tocarryoutanattack,wemusthavemeansavailable.Thematerial for raising fireshouldalwaysbekeptinreadiness.

Weshouldalsobephysicallypreparedandofsubstantialspirit to launchanattack. Sun Tzu writes of preparation to meet five possible developments,includingfire:

Whenfirebreaksoutinsidetoenemy’scamp,respondatoncewithanattackfromwithout.

Beprepared to swoop inwhen there is confusion, disruption, and disorder.This is true whether you attack, as Sun Tzu directs here, or if you seize anopportunitycausedbyotherconditions,includingtheenemy’smisfortune.

Or asChicagoMayorRahmEmanuel has said, “You neverwant a seriouscrisistogotowaste.”

SALESFORCE’SSPIRIT

TheArtofWargaveMarcBenioff,CEOofSalesforce.com, theconfidenceheneeded toenteranindustrydominatedbymuchbiggerplayers.“Ultimately, it’show[we]tookontheentiresoftwareindustry,”Benioffwrote in theforeword toTheArtofWar:Spirituality forConflict.3Benioff isatech industry rock star—and an enthusiastic student of SunTzu. InBenioff’s example you’ll findsomeveryrichillustrationsofSunTzu’stactics,asexecutedbyaprofessionalwho’swellversedinthe sage’s teaching. Benioff also has quite a sense of humor. (Kudos to Julie Bort of BusinessInsider,forprovidinganicesummaryofthetopscenesfromthehighlightreel.)

A famous incident occurred shortly after Salesforce.com’s launch. In a very clever move, thecompany hired actors as “protesters,” along with a fake TV crew, at a Siebel Systems userconference. A huge player, Siebel (now part of Oracle Corporation) was Benioff’s biggest rival.Salesforcewas introducing a bold newway to deliver customer relationshipmanagement (CRM)softwareviatheweb.The“protesters”picketedthevenuewithsignschanting,“TheInternetisreallyneat...Softwareisobsolete!”and“NOSOFTWARE.”4

That incident was so high profile, it encouraged Siebel to protest in its ownway and call thepolice.Benioffsaidtheplayarousedtheadversary’semotions,whichherecognizesasapageoutofthesage’sArtofWarplaybook.5

ButIthinkthisnextexamplefromtheBenioffchroniclesismyfavorite.At yet another Siebel event, this one in Cannes, France, Benioff and company rented all the

airport taxies that went from Nice to Cannes—“capturing” most of the attendees—then used the

forty-five-minutedrivetopitchSalesforce.Again,Siebelcalledthepolice.6Microsoftwaspayingattention toBenioff’sattention-generating,over-the-top,hit-and-runways

togettothecompetition.In2010,MicrosofthiredpeopletorideSegwaysataSalesforceconferenceandcarryanadfeaturingaman,presumablyacorporateuser,thatsaid,“Ididn’tgetforced.”Asin“salesforced.” If Microsoft’s play on words was clever, Benioff’s response was incomparable.During his keynote speech he brought to the stage themanwho had been featured in the ad andbeggedthefakecustomertouseSalesforce.Theactoragreed,andthecrowdstoodandcheered.7

In another high-profile exhibition, Benioff was slated as the keynote speaker at Oracle’sOpenWorldconferencein2012.LarryEllison,OraclecofounderandCEO,isBenioff’smentorandformerboss.He’salsoastudentofSunTzu,andthefirmsarerivals.Thatcombinationmakesforaveryinterestingplayingfield.WhenOracleannounceditwouldmoveBenioff’sspeechtolaterintheweek, he protested, saying, “The show is over.” Benioff issued a press release and tweeted thatOraclehad“canceledhiskeynote”andthathewoulddeliveritatanearbyhotelrestaurant.8

TheSalesforceCEOusedthevenuechangetoshowcasetheChatterproduct,inaturnofeventsthatjustmighthavemeanthereachedamuchbiggerliveaudience.Hedrewcharacteristicattentionbypostulatingthathiscompany’scloud,nonproprietarysoftwareis“contrarian,”andthathisspeechwas rescheduledbecauseof the threatSalesforceposes toOracle.Benioff took iteven furtherandused the situation to illustrate how quickly and effectively his people couldmove to get the newvenue, posters, and promotion, all using Salesforce’s Chatter social network. Benioff said it wassomething he doubted the company could have pulled off a few years earlier,9 although theyprobablycouldhavedonesomethingtogetattention.

OfhistacticstoraisetheireofSiebel,BenioffsaidtheyillustratedtwoofSunTzu’sdirectives:

Appearatplaceswherehemustrushtodefend,andrushtoplaceswhereheleastexpects.

Thoseskilledinwarfaremovetheenemy,andarenotmovedbytheenemy.10

14DECEPTION

Small businesses can leverage deception to confuse and disrupt theircompetitors. You can even allow the misperceptions of competitors to workagainst them and in your favor. You know that the current business cosmosoffers unprecedented opportunity for forward-thinking start-ups and virtualbusinesses to create and shape a perception that allows them to survive andthrive among big business adversaries. Should small businesses puff up howthey are perceived in order to look bigger than they are? Or should they flyunder the radar until it’s time to leverage a well-timed assault? Or can theanswerforyourbusinessbeacombinationofboth?

My focus in this chapter is on ethical ways of leveraging deception,misinformation, and intelligence to wage business. I’m not suggestingdishonestly because it’s not how I do business.War, on the other hand, is adifferentmatter.

Allwarfareisbasedondeception.

DeceptionisakeystoneofTheArtofWar.Butwhatdoesthisquintessential,oft-citedpassagefromSunTzumeanforsmall-businessleaderstoday?

CONTROLANDSHAPEAPPEARANCES

Sun Tzu instructs that the superior general will shape how his forces areperceivedby theadversary, and thathewillkeephisplanshidden. In“Spirit”(Chapter 13), we studied his direction on how to be like wind, forest, fire,mountains,dark,andthunderinyouractions.Rememberthismandate:

Letyourplansbedarkandimpenetrableasnight,andwhenyoumove,falllikeathunderbolt.

Beyondkeepingourplansoutof thereachofadversaries,SunTzucallsforcontrollinghowtheenemyperceivesus:

Whenabletoattack,wemustseemunable;whenusingourforces,wemustseeminactive;whenweare near, wemustmake the enemy believewe are far away;when far away,wemustmake himbelievewearenear.

The example I use in Sun Tzu for Women to illustrate this principle ofappearing tobesomethingwe’renot is stillmyfavorite.MarshaSerlinstartedUnitedScrapMetal Inc., in1978,withonly$200anda rented truck.Shewasrepeatedlyunderestimated in thoseearlyyears, the lonewoman inaboys-onlyclub.After the noveltywore off as far as the competitionwas concerned, sheflewundertheradar,SunTzustyle.Heroperationswererunoutofaramshackleold building she saidwas reminiscent of theSanford and Son set. The façadewas intentional. As the business grew, Serlin clandestinely purchased all theproperty behind it. She successfully turned the devious to the direct. Today,UnitedScrapprocesses140,000tonsofsteelayearandachieved$250millioninrevenuein2012.

Another excellent example of a business shaping perception is CarnivalCruiseLines, the largestcruise line in theworld.Yes, thebrandhashadsomeverypublicdisasters,andwe’llseehowsmooththesailingisforthecompanyinthe near and long term. But Carnival’s early days provide some usefulillustrations of shaping perception, as well as forging mighty alliances, asmentionedinChapter6.Whenthecruiselinestarted,ithadoneshipandnorealcapital. Because it could only afford to paint one side of the ship, Carnivaldockeditwiththepaintedsidefacingout.1

USINGANDCREATINGCHAOS

Sun Tzu is a proponent of creating the outward appearance of chaos andconfusion to lure in the adversary.This strategy bringswith it certain risks tobusinesses operating in an open and transparent world. You don’t want anyappearanceofweaknessorconfusion to influenceyourcustomers,partners,orpotentialinvestors.

ThestoryofUnitedScrapMetal’searlydaysonceagainillustrateswhatSunTzusaysabouttheappearanceofchaos:

Amidtheturmoilandtumultofbattle,theremaybeseemingdisorderandyetnorealdisorderatall;amidconfusionandchaos,yourarraymaybewithoutheadortail,yetitwillbeproofagainstdefeat.

Butcreatingsuchanappearanceofdisorderandweakness requiresstrengthanddiscipline:

Simulated disorder postulates perfect discipline, simulated fear postulates courage; simulatedweaknesspostulatesstrength.

SunTzu is saying that only the structured, strategic, and strong leader cansuccessfullydemonstratetheappearanceofchaosandweaknesstotheadversary—anduse it to his advantage.This is amuchmorenuanced consideration foryour small business, however. Appearances of weakness, disorder, and fearshould never be allowed to damage the public perception of your business,unlessitisforaveryshortperiodoftimeandwiththevictorycloseathand.Thebalanceofpowermustquicklyshiftbackinyourfavor.Nomatterhowwellorhowpoorlyyouaredoing,whatmattersmost ishowwellyourcustomersandmarketinfluencersthinkyou’redoing.Employees,ofcourse,mattertoo.

LURETHEENEMY

Thus one who is skillful at keeping the enemy on the move maintains deceitful appearances,accordingtowhichtheenemywillact.Hesacrificessomething,thattheenemymaysnatchatit.

Thisadviceiseasiesttoapplyattheinterpersonallevel.Iknewtheownersofa small firm that was facing a shrinking customer base in an unfavorableeconomy.Theywerelookingtosellthebusiness.Thevalueofthebusinessforabuyerwasn’t significant, but they conceivedof oneway tomaximize it.Theycontacted the owner of a competing firmwho theywell knewmadedecisions

basedonegoandcharacteristicinsecurity.Theyhadworkedwithhiminthepastandunderstoodhismotivations.Theywereabletogetanamountseveraltimesover the value of their business in this acquisition by appealing to thecompetitor’segoandhelpingmakehimfeellikeabigshot.

Holdoutbaitstoenticetheenemy.Feigndisorder,andcrushhim.

The owners didn’t seek to crush the competitor, but to sell their firm andmoveontootherpursuits.Theysacrificedpersonalprideinstrokinghisego,butintheend,theyreceivedmoremoneythantheywouldhaveotherwiseandwereabletotieatidybowonthebusinessandthateraoftheircareers.Thebetteryouknowtheenemy,thebetteryouareabletogivehimthelurehewilltake.

PROTECTYOURSECRETS

Keeping the enemyon themove alsomeans shifting appearances tokeephimguessingaboutyourtruenextsteps:

Byalteringhisarrangementsandchanginghisplans,hekeepstheenemywithoutdefiniteknowledge.By shifting his camp and taking circuitous routes, he prevents the enemy from anticipating hispurpose.

SalesforceCEOMarcBenioffclearly isn’tafraid toantagonize the industrygiants,includingMicrosoft,andkeepthemguessingastohisfirm’snextmove.ButwhenMicrosoftshotbackwithits“Ididn’tgetforced”SegwaypromotionataSalesforceconference(usingwordplayonitscompetitor’sname),Salesforceresponded as if it had been lying in wait for Microsoft’s attack. When theadversaryfallsintoyourtrap,evenifit’satrapyouconstructseeminglyonthefly,bereadytocapturehim.SunTzu’sdirectiontouse“abodyofpickedmen”is instructive.Aneffort like this shouldonlybe left to themostconscientious,responsive,sharpplayers.Otherwise,itcan’tbetrustedtobeeffective.

Don’tallowadversariestounderstandyourplansorgaininsight:

Onthedaywarisdeclared,closeoffallborders,destroyallpassports,anddonotallowtheirenvoystopass.2

Think about how your borders may be open to those seeking to gainintelligence for your competition. Are you vulnerable? Are your intellectualproperty, tradesecretsaresecretmaneuversat risk. If so, thesemistakescouldjeopardizeyourfuture.

Ifasecretpieceofnewsisdivulgedbyaspybeforethetimeisripe,hemustbeputtodeathtogetherwiththemantowhomthesecretwastold.

Okay, that may be a bit drastic for business. But the idea is important.Penalties for leaking information andviolating the organization’s trade secretsandinsideinformationonmovementshouldbesevere.Shortofputtingtraitorsto death, all businesses, including small ones, should take the proper legalprecautions. Nondisclosure agreements (NDAs) help protect your business’sprivate information. NDAs establish confidential relationships withsubcontractors, new employees, business partners, and anyone and everyonewhohasanybehind-the-scenesaccesstoanyofyourcompetitiveinformation.

Noncompetesandnonsolicitationdocumentsprohibitemployeesfromleavingtheirjobstostartcompetingbusinesses.Dependingontheagreement,itcanalsopreventemployeesfromworkingforcompetingemployersforaspecificperiodoftime.Nonsolicitationagreementspreventemployeesfromwooingawayyourcustomers for their own purposes. They may also restrict employees fromsolicitingcoworkersfromyourcompanytojoinanemployee’snewcompetingventure. Consider all of these risks as you develop legal protection for yoursmallbusiness.

I worked with a small software development firm that either didn’t havenoncompetes in place or thought it would never need one for its all-staremployee. This company didn’t have a nonsolicitationwith its clients to keepthem from hiring away employees, either. Then, the inevitable happened. Thecompany’s largestclienthiredaway itsmost talentedsoftwaredeveloper.Thiseventwasdevastating to theyoungbusiness,caused irreparabledamage to theclientrelationship,andledtoasteepreductionintheprojectvalue.Theseweredarkdaysforthatcompany.Learnfromitsverycostlymistakesandhavetheseagreementsinplace.

DIVIDETHEENEMY

Unity,too,isanessentialelementforSunTzu.Whileyouuniteyourforces,how

canyoudivideyourenemy’s?Bykeepinghimguessingastowhereyou’llfightnext,youkeeptheadversaryonthedefensive:

Thespotwhereweintendtofightmustnotbemadeknown;forthentheenemywillhavetoprepareagainst a possible attack at several different points; and his forces being thus distributed inmanydirections,thenumbersweshallhavetofaceatanygivenpointwillbeproportionatelyfew.

Here again is the call to keep the enemy insecure about how, where, andwhenyou’llstrike:

Therefore,ifwecanmaketheenemyshowhispositionwhileweareformless,wewillbeatfullforcewhiletheenemyisdivided.3

Formlessness is anadvancedprinciple in somemartial arts.Here again,weusewatertoconnotesupplenessandtheabilitytoadapttoasituation.Thegoalis“flowing”withanattacker.Letmeshareanexample.

Myjujitsuinstructor,RandyHutchins,isadifficultpersontoputajointlockon.He’smasteredflowingsothatlockinghimislike,well,lockingwater.Justwhenyou thinkyouhavehim,he relaxeswhatever it is you thinkyouhaveagood hold on, then he shifts and redirects. You end up on your posterior,generallyaccompaniedbyasignificantamountofpainand,ifyouhaveasenseofirony,appreciation.

He’salsoaverydifficultpersontoescapefrom,oncehehasaholdonyou.Icancounter joint locks fromothers,but fromhim, it’sawholedifferent story.Untiloneday,whenInailedit.Hehadmeinoneofhisfamouswristlocks,whenIsurprisedmyselfbyfinallydoingwhathe’dbeentellingmetodo,andrelaxedandslippedout.Itwaseffortless.Formless.Likewater.

Iwasamazed.Itworked!I thinkhewasmorepleasedthansurprised,ashehadwaitedformetofinally“get”thatconcept.Inashowofcongratulations,heextendedhishand.Thrilledwithmyself, Ihappilyshookit.Andhe lockedthe[chooseyourexpletive]outofme.Itwaspriceless.

BESELECTIVE

Hencehedoesnotstrive toallyhimselfwithallandsundry,nordoeshefoster thepowerofotherstates. He carries out his own secret designs, keeping his antagonists in awe. Thus he is able tocapturetheircitiesandoverthrowtheirkingdoms.

WediscussedthispassageinthestudyofbuildingalliancesinChapter6.Butrememberit,too,inthecontextofdeception.Inadditiontochoosingallieswhoplayaclearroleinyourstrategicobjectives,youmustbesuretheyareloyal.Besure to remind themon anongoingbasis that you are apowerful partner, andworkingwithyou is verymuch in their best interests.Gaining strongallies toyoursidefurtherhelpskeepantagonistsinawe.Butremember:Leveragingalliestodominateyourmarketisn’taboutcollectingpartnershipagreementsorabatchof logos. Ifyoushare thesamealliesandpartnerswithyourcompetitors,howdoesthatrepresentanadvantagetoyourbusiness?

INTELLIGENCEMUSTILLUMINATEMOVEMENT

SpiesareindispensableresourcesforSunTzu:

Itisonlytheenlightenedrulerandthewisegeneralwhowillusethehighestintelligenceofthearmyforpurposesofspyingandtherebytheyachievegreatresults.Spiesareamostimportantelementinwar,becauseonthemdependsanarmy’sabilitytomove.

Let’slookfurtheratjusthowimportantthisintelligenceis.SunTzusays:

What enables the wise sovereign and the good general to strike and conquer, and achieve thingsbeyondthereachofordinarymen,isforeknowledge.Nowthisforeknowledgecannotbeelicitedfromspirits; it cannot be obtained inductively from experience, nor by any deductive calculation.Knowledgeoftheenemy’sdispositionscanonlybeobtainedfromothermen.

These“othermen”arespies,“themostimportantelementinwar.”Let’slookatSunTzu’sclassificationsofspies.

TypesofSpies

SunTzutellsusoffivetypesofspies:

1)Localspies;2)inwardspies;3)convertedspies;4)doomedspies;5)survivingspies.

Here,then,areSunTzu’sdescriptionsofeachofthem,withcommentaryontheapplicationtoyourbusiness.

1.Forlocalspies,weusetheenemy’speople.4Theycanbetheemployeesofyourcompetitionwhohavelittleloyaltybutusefulinformation.

2. Having inward spies, making use of officials of the enemy. Officials canapply to executives and senior-level personnel. They can provide informationpubliclyorprivately,fromunguardedconversationstostatementstheymakeinthepressandsocialmedia.

3.Havingconverted spies,gettingholdof theenemy’s spiesandusing themfor our own purposes. This description can apply to former employees andbusinesspartnersofthecompetition.Itcanalsodescribefriendlysuppliersandvendors.Butbeware,naturally,thatjustassuppliersmayshareinformationwithyou,theymayalsoshareinformationwiththecompetition.Thisisallthemorereasontobeselective:Choosereputable,high-integrityvendorsandpartnersandtreatthemwithdignityandhonor.

Convertedspiescanleadtoevenmoreresources:

It is through the informationbroughtby theconverted spy thatweareable toacquireandemploylocalandinwardspies.

4.Havingdoomedspies,doingcertainthingsopenlyforpurposesofdeception,andallowingourspiestoknowofthemandreportthemtotheenemy.Doomedspiesarethosewhohavenovaluetoyouandwhoyoucan’ttrust.Theycanbeusefulincarryingfalsesignstotheenemy,whichhecanusetodrawerroneousconclusions.

5.Surviving spies, finally, are thosewhobringbacknews from the enemy’scamp. For your purposes, surviving spies are similar to local spies. Thedifference is that surviving spies are perhaps competitors’ very poorly treatedemployees,orevenvendorsandpartners,whowillbehighlymotivatedtoshareintelligencewithyou.

Rememberalwaysthatthesmartsmall-businessleaderisonewhorecognizesthevalueofhavingtrustedfriends,andwhoknowsthecostofcreatingenemies.

SunTzufollowshisdescriptionsofthefivetypesofspieswiththispassage:

Therefore,ofthoseclosetothearmy,noneiscloserthanspies,norewardmoregenerouslygiven,andno matter in greater secrecy. Only the wisest ruler can use spies; only the most benevolent and

uprightgeneralcanusespies,andonly themostalertandobservantpersoncanget the truthusingspies.5

Clearly, intelligence gathering is serious business that requires secrecy,generosity,benevolence,andalertness.Italsorequirestheabilitytoofferworthyrewards.SunTzusaysyouarewisetokeeptheseinformantsclosetoyou.

HowtoTreat“Spies”

PropercareandfeedingofintelligencesourcesisessentialforSunTzu:

Theenemy’sspieswhohavecometospyonusmustbesoughtout,temptedwithbribes,ledawayandcomfortablyhoused.Thustheywillbecomeconvertedspiesandavailableforourservice.

SunTzucallsforparticularlygenerouscareofconvertedspies:

Theendandaimofspyinginallitsfivevarietiesisknowledgeoftheenemy;andthisknowledgecanonlybederived,inthefirstinstance,fromtheconvertedspy.Henceitisessentialthattheconvertedspybetreatedwiththeutmostliberality.

PRACTICALWAYSTOWINWITHDECEPTION

ThereareaplethoraofSunTzu–inspiredmethodsthatyoursmallbusinesscandeploy tooutmaneuver thecompetition.Hereare some ideasyoucanconsideradoptingorenhancing:

PoachSalespeople

Hiringyourcompetitors’ salespeople is a smartway togain intelligenceaboutwhatthey’resellingandhowthey’repositioningit.It’salsoatoolforcapturingcompetitors’ outstanding performers for your business’s benefit. JayAbrahamhas narrowed this idea down to a science. He says to determine your grossincrementalprofitforafirst-timesale(i.e.,profitbeforeallamortizedoverhead)after hard direct expense. Then, once you know that number, go to yourcompetitors’ top salespeople.Offer tohire themandgive them100percentof

the profit (or more) for all new accounts they bring in, provided they switchemployersandcometoyou,andstayforanagreed-onperiod.6

Felix Dennis has said he’s never known a single person in a rivalorganization, even onewell paid and cared for,whowouldn’tmeet him for aquietdrinkafterhours.Heputthesemeetingstoverygooduse.“I’vediscoveredmore aboutwhat rivals have been up to in thismanner than any other.And Ipoachedthegoodones,”hesaidinhisautobiography.7

GetChummywithProspects

If your customers like you, and especially if they don’t like or respect yourcompetitors, they’ll show you your adversary’s sales materials, presentations,and even proposals. It is ethical? It depends on who you ask. Are penaltiesagainstthispracticeenforceable?Probablynot.

Gather intelligence in pitchmeetings, too. Find outwho you’re up against,andasmuchasyoucanabouthow they’re sellingagainstyou.Again, ifyourprospectslikeyoubetterthantheothercandidates,you’llbesurprisedhowmuchtheymaysharewithyou.Ifrequentlyhavebeen.

FindOutWhyYouWinandWhyYouLose

Whenyouwin find outwhy.Whatwas it about you that stood out above thecompetitors? Why does the customer think you’re the superior choice? Becarefulhere:Thequestion isn’twhyyou thinkyou’re the superior choice. It’swhythecustomersaystheythinkyouare.

Andwhileit’slessenjoyable,whenyoulose,it’sjustasimportanttofindoutwhy.Itmayevenbemoreimportanttofindoutwhyyoulostthanwhyyouwon.I’m consistently surprised at the number of sales professionalswho don’t askabout thebusinesses they’reupagainstandtheplayers they lose to.Theworstthingyourprospectscantellyouisthattheywon’ttellyou.Butifyouasktheright questions the right way, you stand to gain high-value intelligence.Relationshipsareeverything.Considertakingkeywould-beclientsouttolunchordrinkstogetthemostinformation,evenforbusinessthatyoulose.Peoplearemuchmore forthcoming in settings outside of the office and after one simpledrink.

Doalost-caseanalysis.Whenyoulosecustomers,don’tsimplyturninward

and listen towhat your team tells you.There are almost always far toomanyassumptions here. To find out why you lost customers, you should have anindependentpartyconductastudysothatyoucangettotherealreasons.Takingthis step is virtually guaranteed to illuminate some weaknesses in yourorganizationofwhichyou’reprobablycompletelyunaware.It’smorecostlynottodothisanalysisthantodoit.

TrackthePress

Keepingtabsonknowncompetitorsandlearningaboutnewcomersthroughthemedia is nothing new. Long before search engines ruled the day, companieswouldhireclippingservicestotrackthepress.Today,it’seasierthanevertogetaccesstomediastories,butwiththemyriadbusinessmediaoutletsavailable,it’sdifficult to digest all the information you find. Set upGoogleAlerts for yourbusiness,yourkeycompetitors,customers,andothermarketkeywords.Ifyou’rein a competitive space and need to monitor players, include local businessjournals and dailies from your competitors’ regions. Companies may be lessguarded in what they say to their local reporters than they would be with anationaltradeoutletorhighcirculationdaily.

ProbeatTradeShows

Trade shows are an exceptional way to generate leads. But what smallbusinessesoftendon’tfullyappreciateisthatshowsarealsoanoutstandingwaytogainintelligence.Youcansendemployeesandevenbusinesspartners,allies,and customers to listen inonbooth chatter andwatchdemos.Thewifeof theCEO of a health IT company I worked with is a nurse. She went to manyindustrytradeshowstogatherintelligencefromcompetitors,and,asanurse,shehad unfettered access to competitors’ unguarded sales pitches. Be sure your“spies”areequippedwiththerightquestionstogainusefulintelligence,andthattheydon’tsimplycomebackwiththesamebrochureseveryoneelsegets.

GetonTheirMailingList

Join your competitors’mailing lists so that you’ll know of news and product

announcements.Signupforwebinarsanddownloadwhitepapersanddemostogather as much information on the competition as possible. Because of theactions of competitors, I always suggest that companies make access tosubstantive information permission-based so that you can at least attempt toscreenoutrivals.

ShopforTheirSecrets

Ifyourcompetitorisinretailsaleswithaphysicallocation,youshouldmakeitapointtohaveanemployeeorhiredgunwalktheaislesandobserveasmuchaspossible about the facility, its customers, and its staff. You can call thecompany’s order and support lines and evaluate the strengthof their customerservice.Youcanhireamysteryshoppingfirm,too,topretendtobeaprospect.I’mnot a big fan of this tactic since it’s openly dishonest, but it’s also prettycommonpractice.Youshouldbeawarethatit’sdoneandremainvigilantagainstitinyoursmallbusiness.

FiveGuysusesasmartwaytoshopforsecrets—withinitsownbusiness.Therestaurant chain conducts audits of each store, every week. A secret shoppergoes in, under the guise of a customer, and rates the crew on bathroomcleanliness, courtesy, and food preparation. Unlike secret shopping ofcompetitors,thisisfairgame.Employeesareawareofthepolicy,whichisusedtokeepthemsharpandtocontributetoacultureofexceptionalservice.Winningcrewsareincentivizedwithcashrewards.CEOJerryMurrellsaidthecompanypaysasmuchas$12millionoutannuallytowinnersoftheseinspections.8Ifyouseethisasacost,yourthinkingislimited.

GoogleforHiddenPages

Youknow to searchpublicplacesonline for informationonyour competitors.Butdoyouknowaboutthehiddenpagesyoucanfind?Googlesearchesbyfileformat (filetype:doc, or pdf, xls, and ppt) and site or domain searches(site:companyname) can uncover data or presentations. Competitors or otherswhohave these resourcesmaypost them to a link theybelieve is hidden, andmayevenforgetaboutthem.9

PayAttentiontoSocialMedia

Thiseffortcanbemore thana little tedious,but theremayalsobeawealthofvaluable information about your competitors’ people on social networks. It’spossible that a competitor may have one or two key salespeople who areparticularlychatty.Salespeoplealsoliketosharetheirexcitementoverhotleadsandnewcustomers,hopingthisspirit iscontagious.Theymaybragaboutnewwins or upcoming pitch meetings, or otherwise give clues as to who they’resellingtoontheirpersonalsocialmediasites.Yes,ittakesawhiletominethisdata,butundertherightsetofcircumstancesitcanuncovergold.

Usesocialmedia toengagecustomersandgain intelligence.Gobeyond thetransaction and truly involve your customers. The dominant player in yourmarketmayspendalotofmoneyonthinktanks,focusgroups,andotherstudies.You can reap similar gains, but at a much lower cost than your big-budgetadversaries. Instead of incurring that hefty price tag, build a successful socialmedia presence. You can then have thousands of people willing to tell youexactlywhat theywant andwhy theywill buy it fromyou, as yougrowyouraudience.Howareyou leveraging these channels togain intelligence for yoursmallbusiness?

ScanTheirJobAds

Online job aggregators are excellent places to keep tabs on your competitors’hiringrequirements.Watchtheskillsacompanymaybehiringfor,andyoucansee what new initiatives may be coming. Of course, you can check yourcompetitors’websitestoo,buttheymaybelesspublicaboutstrategicchanges.

5-HOURENERGY

SometimeagoIreceivedane-mailfrommycolleagueatSunTzuStrategies,MarkMcNeilly,withalinktoanarticleonManojBhargava,thefounderof5-HourEnergy.ThatlinkwastoaForbespiecebyClareO’Connorthat,untilthatpoint,wasthemostsubstantivepublicinformationonBhargava.Theentrepreneurdoes few interviewsand remains somewhat enigmatic. (On thebasisof thatoneinterview,manyotherarticlesonhimwerewritten.)Markwas intriguedbyhowmuch thismonk-turned-businessmanexemplifiedmanycharacteristicsofSunTzu.Hegotourattention.

AsnotedinChapter9,“Focus,”5-HourEnergyisapictureofmanyprinciplesofSunTzu.Thecompany took the less direct route in creating a new category with its energy shot, rather than

competingforfridgespacewithCoke,Pepsi,andRedBull.Itshutdownrivalscompletelyandhasdriven someof themout of business.Also-rans like6-HourPower and8-HourEnergyhavebeensuedorotherwiseknockedoutofthemarketbylawyersatLivingEssentials,theparentcompanyof5-HourEnergy.

But it may be under the (ethical) deception banner where Sun Tzu is seen most vividly.Throughouttheriseinpopularityoftheproduct,Bhargavastayedundertheradar.Hewasamystery.He barely registered onweb searches.Hewas able tomake hismoveswithout drawing attentionfromcompetitorslargeorsmall.10

Despite the illustration of deception, the customer is the last person Bhargava, or any otherintelligentbusinessperson,wantstodeceive.AshetoldO’ConnorinthatForbesarticle,“It’snotthelittlebottle.It’snottheplacement.It’stheproduct.Youcanconpeopleonetime,butnobodypays$3twice.”

iGATE

SunTzuwritesofhowawisegeneralwill turndisadvantage toadvantage.ButPhaneeshMurthy,founder and formerCEO of iGATE, took it one step further. LikeNetflix did toBlockbuster, heturnedhiscompetitors’advantagestotheirdisadvantage.HeadquarteredinSiliconValley,iGATEisan Indian-owned IT firm that has grown to$1billion in revenue from$300million in under fiveyear.It’sregularlylaudedasoneofthebestIndiancompaniestoworkfor.AsMurthytoldKaihanKrippendorff, author of The Way of Innovation, he came from Infosys, one of two firms thattransformedIndiaintotheIToutsourcingpowerhousethatitistoday.Infosysdiditbytakingwhatcompetitors saw as an asset and turning it against them. The big-tech consulting giants saw theirlegionsof consultants as their top advantage.However, Infosys transformedhow software is builtandopenedthedoortoanentirelynewconsultingmodel.11

Murthyappliedthatsamepatternat iGATEandturnedtheadvantageof thatfirm’scompetitorsupside down as well. Peers, including his former employer, have legions of developers. Murthyturnedthisperceivedasset intoanopportunityfor iGATE.Theideaheputforthwastolearneachcustomer’sbusinesssothatiGATEcanmakeimprovementsunlikeanytraditionalITcompany.Forexample,iGATEappliedthislogictoconsumerloans,whicharetypicallydonemanuallybyhighlyskilledunderwriters.iGATEdemonstratedthattheunderwriterscouldbereplacedwithasetofrulesthatreducedloanapprovalturnaroundtimefromfortytoseventeendays,onaverage.12

UnlikealmosteveryotherITconsultingfirm,iGATEdoesn’tchargebythehour.Thismodel,saidMurthy,bringswith it“diametricallyopposedobjectives . . . thecustomeralwayswants to reduceandcompanywantstoincrease.”Icanattesttothisparadoxicalreality,becausemyownbusinessisbasedinWashington,DC,theconsultingcapitaloftheworld(oratleastahealthyterritory).Instead,iGATEbillsforperformance.13

15SUNTZUANDTHEFUTUREOF

YOURBUSINESS

Now that you’ve studied the twelve key attributes, here’s the question youshouldaskyourself:IfSunTzuwererunningyoursmallbusiness,whatwouldhedodifferentlytobringitintoaccordwithhisbattlefieldstrategy?

ThespiritofSunTzuwillbewithinyouifyouposethisquestiontoyourself.Take these principles to heart and use them to defeat even your biggestcompetitors.HowwillyouuseTheArtofWartodominateyourmarket?

KEYTHEMESFROMTHEARTOFWAR

Here is a summary of Sun Tzu’s fundamental principles that apply to smallbusiness.Usethemasanongoingreferenceyourbusiness:

Acquire a comprehensive understanding. A full understanding of yourorganization’sweaknessesandstrengths,inrelationshiptoyourcompetition,isarequirementforSunTzu.Thisisanongoingeffortthatdemandsconstantvigilance.

Buildalliances.Thinkaboutyourcommunityandinfluencers,everyonefrom

partners to employees, customers, vendors and suppliers, investors, andfriends.Yourstrengthwillbeasumoftheseparts.Todominate,youneedtoleveragethesecombinedforces.AgainIsay,small-businessleadersneedallthefriendswecanget.

Secure your position. To win, your business must take the mostadvantageous position. For Sun Tzu, a good position is high ground, on asunny spot, with the supply line that iswell guarded. Choose your groundcarefullyandconsidereverydetailgreatandsmall.

Control perceptions. Small businesses have many opportunities to shapehowtheyareviewedbycustomers,partners,andtherestoftheworld.Whileyoumay opt to deceive the enemy and shape appearances to advance yourposition,besurethatyou’realsodirectingwhatyourcustomersandalliessee,hear,andknowaboutyousothatyoucanpositionyourbusinessasfavorablyaspossible.Everysingleengagementyourcustomerhaswithyourcompanycounts.

Think growth. Successful business leaders know that they can’t expect toachieve aggressivegrowthgoals if they simplyopt toholdground.Alwaysthinkgrowth,notjusttakingadefensiveposition.

Playthelonggame.Strategyisframedbythebigpicture.Itisanendurancerace. Don’t let your business slip into sacrificing long-term objectives forshort-termbenefits.

Bepreparedtoturndisadvantagetoadvantage.Theseedsofopportunityareindisadvantage.Butyoumustbepreparedtoseizetheseopportunities.

Winfirst.ThisquintessentialSunTzuconceptisnottobetakenforgranted.It’soneofthemostimportantideasfromallofTheArtofWar.

Act decisively. While gathering intelligence and carefully planning everytactic around your strategic objectives is essential, it’s also fundamental tomake informed decisions, andmove quickly andwith convictionwhen thetimeisright.

Usingthefew,out-strategizethemany.Theonlywaytotakeonanddefeatthebig competitors is todo sowith superior strategy. Inonewell-executedbattleatatime,SunTzuusedasmallernumbertodefeatalargerforce,andyoumustdothesame.

Fight only when necessary. War is an incredible drain on resources,including human resources. Remember that the best way is to attack theenemy’sstrategy,followedbydisruptinghisalliances.

Time your attacks. Part of knowing your adversary and knowing thestrength of your organization is knowing when conditions are mostappropriate for an attack. A poorly timed concept won’t reach its fullpotential.

Makeuseoftheunexpected.Keepyourcompetitorsinthedarksothattheywon’tknowwhattoexpectfromyouorwhen.Theunexpectedisapowerfulweapon that keeps adversaries wholly unprepared. Keep the enemy on themove.

Go where the enemy isn’t. Remember (always!) Sun Tzu’s direction toavoidattackingalargeradversaryonhisterms.Nichesaresmallbutspecificandwell-definedsegmentsofbuyers.Youdon’thaveto“find”aniche.Youcancreateone, likeElmerT.Leedidwithpremiumbourbon.Gowheretheenemyisn’tandidentifyneedsandwantsthataren’tbeingsatisfied.

Attack their weak spots relentlessly. Large organizations are typicallyprepared to counterdirect competition,but theyarewoefullyunprepared torespond to guerilla insurgencies. How can you hone in on your bigcompetitors’weaknesses?

Createunity.Presentaunified,consistent imageandbrandexperienceandyou’llbeaheadofmuchofthecompetition.Worktomaintainunity,too.

Miss no opportunity to defeat the enemy. If you’re going to defeat thecompetition and dominate your market, you must take advantage of everysingleopportunity.

Adapttotrendsandvaryyourplans.Identifyandfollowthetrendsinyourindustry.Varyyourplansaccordingly.Don’tfightit.TabletandsmartphonesaleswereescalatingasDVDplayersaleswereleveling.Netflixfollowedthetrendinsteadoftryingtocaptureamodelwithwaningdemand.

Execute flawlessly. The success of every strategy comes down to oneessentialthing:execution.Onceyou’vedefinedyourself,youhavetodeliverthegoodsrepeatedlyandrelentlessly.Therearenodaysoff.

Turndevious todirect.Outplayyour adversaries so that theywillhave totakethelonger,circuitousway,andyouwillgettothedestinationsooner.

Maximize resources. Make the best use of the comparatively limitedresources you have.And don’t focus somuch on acquiring new customersthat you forget tomaximizeyour current customers.Take advantageof theopportunitiesinlevelingtheplayingfieldposedbytheInternet,socialmedia,andaglobalworkforce.

BONUSSUNTZUPRINCIPLES

While not expressly covered in Sun Tzu’s 2,500-year-old Chinese battlefieldstrategy, these principles are in concert with his direction. If Sun Tzu weredeveloping strategy foryour smallbusiness,he’d recommend these twobonusprinciples:

Differentiate yourself. Most small-business owners may intellectuallyunderstandtheimportanceofdifferentiatingthemselves,yetmanyaren’tableto execute this strategy in a way that makes a real distinction in themarketplace. For examples of how to differentiate successfully, look to 5-Hour Energy, which created the bold new category of energy shots. AndwhileFiveGuysdidn’tcreatethe“betterburger”category,itcreatedastand-outbrandbycombininganaggressivefranchisestrategywithacommitmentto quality control, never using frozen ingredients, rewarding employees forperformance,andofferingalimitedmenuofitemsdoneconsistentlywell.

Safeguard every customer interaction. Every single encounter that a

customer haswith your company is what ultimatelymakes up your brand.Howyouareperceived iseverything.Youneed tooccupyprimerealestateinside the brain of your customers, your business partners, and potentialemployees. Your goal should be to have legions of loyal customers whocomprise a powerful community. Think of the community of users whoturnedtoandpromotedPayPal,pavingthewayforthatbusinesstoexplode.RememberhowZappos leveragesa cadreof committedemployees tobuildextremely loyal customers. How can you build a powerful community foryoursmallbusiness?

APPENDIX:KEYSUNTZUPASSAGESFORSMALLBUSINESS

TheArtofWarinitsentiretyisbothusefulandmeaningfulforsmallbusinesses.Below,however,areexcerpts thatareparticularly impactful forsmall-businessleaders looking todominate theirmarkets.Referback to themfrequently forastrategicsanitycheck.

Standingonthedefensiveindicatesinsufficientstrength;attacking,asuperabundanceofstrength.

The best policy in war is to attack the enemy’s strategy. The second best way is to disrupt hisalliancesthroughdiplomaticmeans.Thenextbestmethodistoattackhisarmyinthefield.Theworstpolicyistoattackwalledcities.Attackingcitiesisthelastresortwhenthereisnoalternative.1

Numericalweaknesscomesfromhavingtoprepareagainstpossibleattacks;numericalstrength,fromcompellingouradversarytomakethesepreparationsagainstus.

Youmayadvanceandbeabsolutelyirresistible,ifyoumakefortheenemy’sweakpoints;youmayretireandbesafefrompursuitifyourmovementsaremorerapidthanthoseoftheenemy.

Whenageneral,unabletoestimatetheenemy’sstrength,allowsaninferiorforcetoengagealargerone,orhurlsaweakdetachmentagainstapowerfulone,andneglectstoplacepickedsoldiersinthe

frontrank,theresultmustberout.

Thecontrolofalargeforceisthesameprincipleasthecontrolofafewmen:itismerelyaquestionofdividinguptheirnumbers.

If,ontheotherhand,inthemidstofdifficultieswearealwaysreadytoseizeanadvantage,wemayextricateourselvesfrommisfortune.

For it is preciselywhen a force has fallen into harm’sway that is capable of striking a blow forvictory.

Wecanformasingleunitedbody,whiletheenemymustsplitupintofractions.Hencetherewillbeawholepittedagainst separatepartsofawhole,whichmeans thatweshallbemany to theenemy’sfew.

Question:Iftheenemyisnumerousandisadvancinginwell-orderedarrays,howaretheyhandled?Answer:Firstseizewhattheycareaboutandtheywilldoaswished.2

Iflessinnumber,becapableofdefendingyourself.Andifinallrespectsunfavorable,becapableofeluding [the enemy].Hence, aweak forcewill eventually fall captive to a strong one if it simplyholdsgroundandconductsadesperatedefense.3

Beflexibleanddecideyourlineofactionaccordingtothesituationontheenemyside.4

NOTES

CHAPTER1:ABOUTSUNTZUANDTHEARTOFWAR

1.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),xxx.

2.J.H.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation(NewYork:WilliamMorrow,1993),17–18.

3.Huang,ArtofWar—TheNewTranslation,18–19.4.Ibid.5.Ibid,15.6.Mark R.McNeilly, Sun Tzu and the Art ofModernWarfare (NewYork: Oxford University Press,2001),6–7.

CHAPTER2:THEPOWEROFAPPLYINGTHEARTOFWARFORSMALLBUSINESS

1.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),xxvi.

2. Marc Benioff, foreword to The Art of War—Spirituality for Conflict: Annotated and Explained(Woodstock,VT:SkyLightPathsPublishing,2012),ix.

3. Devon Pendleton, “Hidden Chobani Billionaire Emerges as Greek Yogurt Soars,” Bloomberg,September14,2012.

4. Dinah Eng, “HowWeGot Started: JimKoch: Samuel Adams’s Beer Revolutionary,”CNNMoney,March21,2013.

5.MarlaTabaka,“5TacticstoConquerGoliathCompetitors,”Inc.,April9,2012.

6. Felix Dennis, How to Get Rich: The Distilled Wisdom of One of Britain’s Wealthiest Self-MadeEntrepreneurs(London:EburyPress,2007),234.

7.NadiaGoodman,“JamesDysononUsingFailuretoDriveSuccess,”Entrepreneur,November5,2012.8. Scott Maxwell, “Small Business Innovation Lessons from Salesforce.com,”Open-View Labs Blog,January31,2013.

9.SteveDenning,“ClaytonChristensenandtheInnovators’Smackdown,”Forbes,April5,2012.10.IBISWorld,BusinessCoachingintheU.S.:MarketResearchReport,November2013.11.Mark R.McNeilly, Sun Tzu and the Art ofModernWarfare (NewYork: Oxford University Press,

2001).

CHAPTER3:UNDERSTANDYOURSELF

1.SylvieLeotin,“Atari:TheOriginalLeanStartup,”VentureBeat,October13,2010.2.BillTaylor,“WhyZapposPaysNewEmployeestoQuit—andYouShouldToo,”HBRBlogNetwork,May19,2008.

3. “Frequently Asked Questions,” Zappos Insights corporate website,www.zapposinsights.com/about/faqs#q5.

4. Dinah Eng, “HowWeGot Started: JimKoch: Samuel Adams’s Beer Revolutionary,”CNNMoney,March21,2013.

5.LizWelch,“HowIDidIt:JerryMurrell,FiveGuysBurgersandFries,”Inc.,April1,2010.6.MonteBurke, “FiveGuysBurgers:America’s FastestGrowingRestaurant Chain,”Forbes, July 18,2012.

7.Burke,“FiveGuysBurgers.”8.Ibid.9.Welch,“HowIDidIt:JerryMurrell,FiveGuysBurgersandFries.”10.Ibid.11.Burke,“FiveGuysBurgers.”12.Eng,“HowWeGotStarted:JimKoch.”13.Ibid.14.Ibid.15.Ibid.

CHAPTER4:UNDERSTANDTHEENEMY

1.GeraldA.MichaelsonandStevenMichaelson,TheArtofWarforManagers:5StrategicRules(Avon,MA:AdamsMedia,2010),121.

2.J.H.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation(NewYork:WilliamMorrow,1993),91.3.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation,160.4.DanielGross,“It’sAllGreek toHim:Chobani’sUnlikelySuccessStory,”TheDailyBeast, June12,2013.

5.Gross,“It’sAllGreektoHim:Chobani’sUnlikelySuccessStory.”6. Devon Pendleton, “Hidden Chobani Billionaire Emerges as Greek Yogurt Soars,” Bloomberg,September14,2012.

7.MariaBartiromo,“Bartiromo:ChobaniCEOatCenterofGreekYogurtCraze,”USAToday,June16,

2013.8.BryanGruley,“AtChobani,theTurkishKingofGreekYogurt,”Businessweek,January31,2013.9.Pendleton,“HiddenChobaniBillionaireEmergesasGreekYogurtSoars.”10.Ibid.11.Ibid.12.Ibid.

CHAPTER5:UNDERSTANDTHEMARKET

1. Dinah Eng, “HowWeGot Started: JimKoch: Samuel Adams’s Beer Revolutionary,”CNNMoney,March21,2013.

2.JamesDuval,“SecretsofSuccess:HowCiscoOutlastedItsCompetitors,”CustomerTHINKBlog,June3,2013

3.JayAbraham,TheStickingPointSolution:9WaystoMoveYourBusinessfromStagnationtoStunningGrowthinToughEconomicTimes.(NewYork:VanguardPress,2009),24.

4. Andy Sambidge, “Yahoo!’s Maktoob Deal Valued at $175m—Report,” Arabian-Business.com,September10,2009.

5.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),135.

6.MalcolmGladwell,The Tipping Point: How Little Things CanMake a Big Difference (NewYork:Little,Brown,2002),193–200.

7.Gladwell,TheTippingPoint,206–213.8.Ibid,213–215.9.Ibid.10.KathrynQuinnThomas,“GolisanoBuiltPaychex intoaSuccessStory,”RochesterBusinessJournal,

October8,2004.

CHAPTER6:SUNTZUFORCUSTOMERSANDBUSINESSALLIANCES

1.“InterviewwithMarcBenioff,”Sonshi.com.2. JoeCalloway,Becoming aCategory ofOne:HowExtraordinaryCompanies TranscendCommodityandDefyComparison(Hoboken,NJ:JohnWiley&Sons,2009),xii.

3.MarkCaro,“CharlieTrotterPreachesExcellencetotheExtreme,”ChicagoTribune,August28,2012.4.SylvieLeotin,“Atari:TheOriginalLeanStartup,”VentureBeat,October13,2010.5. John R. Harbison, Peter Pekar Jr., Albert Viscio, and David Maloney, The Allianced Enterprise:BreakoutStrategyfortheNewMillennium(LosAngeles:BoozAllen&Hamilton,2000).

6.“InterviewTranscript:MegWhitman,Ebay,”FinancialTimes,June18,2006.7.Mark R.McNeilly, Sun Tzu and the Art ofModernWarfare (NewYork: Oxford University Press,2001),34.

8. DanaMcMahan, “Craft Distillers Breaking into Kentucky’s Billion-Dollar Bourbon Industry,”NBCNews,August30,2013.

9. PaulVitello, “ElmerT.Lee,WhosePremiumBourbonRevived an Industry,Dies at 93,”NewYorkTimes,July21,2013.

10.Vitello,“ElmerT.Lee.”

11.JayAbraham,TheStickingPointSolution(NewYork:VanguardPress,2009),71.12.Abraham,TheStickingPointSolution,94.13.Ibid.14.MaxNisenandAlexandraMondalek,“InvaluableAdvice from18ofAmerica’sTopSmallBusiness

Owners,”BusinessInsider,June21,2013.15.SeanO’Hagan,“TheNineLivesofFelixDennis,”TheGuardian,June1,2013.16. Felix Dennis, How to Get Rich: The Distilled Wisdom of One of Britain’s Wealthiest Self-Made

Entrepreneurs(London:EburyPress,2007),84–86.17.Ibid.18.Ibid.19.Ibid.20.CRDFGlobal,“GISTTechConnectIdeation,”onlinepaneldiscussionJanuary23,2013.21.CRDFGlobal.

CHAPTER7:EMBODYTHEGENERAL

1. J.H.Huang,Sun-Tzu: The Art ofWar—TheNewTranslation (NewYork:WilliamMorrow, 1993),131–132.

2.MonteBurke, “FiveGuysBurgers:America’s FastestGrowingRestaurant Chain,”Forbes, July 18,2012.

3.MaxNisenandAlexandraMondalek,“InvaluableAdvice from18ofAmerica’sTopSmallBusinessOwners,”BusinessInsider,June21,2013.

4.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),166.

5.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation,230–231.6.AdamBryant,“FindingPurposeinTunnelingThroughGranite,”NewYorkTimes,April13,2013.7.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation,112.8.Huynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained,93.

CHAPTER8:PERSEVERANCE

1.MaxNisenandAlexandraMondalek,“InvaluableAdvice from18ofAmerica’sTopSmallBusinessOwners,”BusinessInsider,June21,2013.

2.JayAbraham,TheStickingPointSolution:9WaystoMoveYourBusinessfromStagnationtoStunningGrowthinToughEconomicTimes(NewYork:VanguardPress,2009),5–6.

3.AdamBryant,“FindingPurposeinTunnelingThroughGranite,”NewYorkTimes,April13,2013.4.Bryant,“FindingPurposeinTunnelingThroughGranite.”5. Felix Dennis, How to Get Rich: The Distilled Wisdom of One of Britain’s Wealthiest Self-MadeEntrepreneurs(London:EburyPress,2007),234.

6.Dennis,HowtoGetRich.7.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),73.

8.ChuckSalter,“FailureDoesn’tSuck,”FastCompany,April10,2007.9. Episode 29, “The Red Dot,” Seinfeld, NBC, December 11, 1991. www.seinfeld-

scripts.com/TheRedDot.htm.10.Salter,“FailureDoesn’tSuck.”11. Margaret Heffernan, “James Dyson on Creating a Vacuum That Actually, Well, Sucks,” Reader’s

Digest,February2009.12.NadiaGoodman,“JamesDysononUsingFailuretoDriveSuccess,”Entrepreneur,November5,2012.13.“VacuumMakersDyson,HooverSettleLawsuit,”ApplianceMagazine,October10,2002.14.JonBirger,“HowJefferyBoydTookPricelinefromDot-BombtoHighflier,”CNNMoney,September

11,2012.15.Birger,“HowJefferyBoydTookPricelinefromDot-BombtoHighflier.”16.Ibid.

CHAPTER9:FOCUS

1.Mark R.McNeilly, Sun Tzu and the Art ofModernWarfare (NewYork: Oxford University Press,2001),71–72.

2.GeraldA.MichaelsonandStevenMichaelson,TheArtofWarforManagers:5StrategicRules(Avon,MA:AdamsMedia,2010),138.

3.J.H.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation(NewYork:WilliamMorrow,1993),71.4.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),97.

5.“VacuumMakersDyson,HooverSettleLawsuit,”ApplianceMagazine,October10,2002.6. Dinah Eng, “HowWeGot Started: JimKoch: Samuel Adams’s Beer Revolutionary,”CNNMoney,March21,2013.

7.BurtHelm,“HowIDidIt:JamesDyson,”Inc.,February28,2012.8.Eng,“HowWeGotStarted:JimKoch.”9. Elizabeth Heubeck, “Wegmans’ Grocery List for Success,”Baltimore Business Journal, March 20,2013.

10.DanielDuggan,“ManojBhargavaonWhatMakesSuccessesLike5-HourEnergy:Don’tWasteYourEnergy,”Crain’sDetroitBusiness,May21,2012.

11.Duggan,“ManojBhargavaonWhatMakesSuccessesLike5-HourEnergy.”12.Welch,“HowIDidIt:JerryMurrell,FiveGuysBurgersandFries.”13.MonteBurke, “FiveGuysBurgers:America’s FastestGrowingRestaurant Chain,”Forbes, July 18,

2012.14.Burke,“FiveGuysBurgers:America’sFastestGrowingRestaurantChain.”

CHAPTER10:UNITY

1. JoeCalloway,Becoming aCategory ofOne:HowExtraordinaryCompanies TranscendCommodityandDefyComparison(Hoboken,NJ:JohnWiley,2009),xi.

2. Dinah Eng, “HowWeGot Started: JimKoch: Samuel Adams’s Beer Revolutionary,”CNNMoney,March21,2013.

3.TonyHsieh,DeliveringHappiness(NewYork:HachetteBookGroup,2010).4.TonyHsieh,“YourCultureIsYourBrand,”ZapposBlogs:CEOandCOOBlog,January3,2009.5.Hsieh,“YourCultureIsYourBrand.”

6.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),93.

7.Huynh,TheArtofWar—SpiritualityforConflict,157.8. Elizabeth Heubeck, “Wegmans’ Grocery List for Success,”Baltimore Business Journal, March 20,2013.

9.Heubeck,“Wegmans’GroceryListforSuccess.”10.Ibid.11.DavidRohde,“TheAnti-Walmart:TheSecretSauceofWegmansIsPeople,”TheAtlantic,March23,

2012.12.Heubeck,“Wegmans’GroceryListforSuccess.”13.Ibid.14.“InterviewwithMarcBenioff,”Sonshi.com.15.Ibid.16.Ibid.17.Huynh,TheArtofWar—SpiritualityforConflict,x.

CHAPTER11:MANEUVERING

1.GeraldA.MichaelsonandStevenMichaelson,TheArtofWarforManagers:5StrategicRules(Avon,MA:AdamsMedia,2010),25.

2.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),p.85.

3.J.H.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation(NewYork:WilliamMorrow,1993),96.4.BenParr,“Here’sWhyAmazonBoughtZappos,”Mashable,July22,2009.5.Parr,“Here’sWhyAmazonBoughtZappos.”6.MichaelsonandMichaelson,TheArtofWarforManagers:5StrategicRules,121.7.Pascal-EmmanuelGobry,“10BrilliantStartupsThatFailedBecauseTheyWereAheadofTheirTime,”BusinessInsider,May4,2011.

8.FundingUniverse,“AskJeeves,Inc.History.”9.Gobry,“10BrilliantStartupsThatFailedBecauseTheyWereAheadofTheirTime.”10.Ibid.11.Ibid.12.MichaelsonandMichaelson,TheArtofWarforManagers:5StrategicRules,27.13.SarahGreen,“WhoNewCEOsFireFirst,”HBRBlogNetwork,July8,2013.14.AlyssaAbkowitz,“HowNetflixGotStarted,”CNNMoney,January28,2009.15.AdamHartung,“Netflix—TheTurnaroundStoryof2012!”Forbes,January29,2013.16.Hartung,“Netflix—TheTurnaroundStoryof2012!”17.Ibid.18.MichaelsonandMichaelson,TheArtofWarforManagers:5StrategicRules,27.

CHAPTER12:ADAPTATION

1.GeraldA.MichaelsonandStevenMichaelson,TheArtofWarforManagers:5StrategicRules(Avon,

MA:AdamsMedia,2010),56.2.IlyaPozin,“9BiggestMistakesNewEntrepreneursMake,”Inc.,July20,2013.3.MichaelsonandMichaelson,TheArtofWarforManagers:5StrategicRules,36.4. JoeCalloway,Becoming aCategory ofOne:HowExtraordinaryCompanies TranscendCommodityandDefyComparison(Hoboken,NJ:JohnWiley,2009),236.

5.ClaytonChristensen,“DisruptiveInnovation,”Claytonchristensen.com.6.Christensen,“DisruptiveInnovation.”7.SteveDenning,“ClaytonChristensenandtheInnovators’Smackdown,”Forbes,April5,2012.8.AndrewKeen, “KeenOn . . .ClayChristensen:How toEscape the Innovator’sDilemma [TCTV],”videointerview,TechCrunch,April2,2012.

9.Denning,“ClaytonChristensenandtheInnovators’Smackdown.”10.AdamL.Penenberg,“ReidHoffmanonPayPal’sPivotedPathtoSuccess,”FastCompany,August9,

2012.11.Penenberg,“ReidHoffmanonPayPal’sPivotedPathtoSuccess.”12.FundingUniverse,“Priceline.comIncorporatedHistory.”13.FundingUniverse,“Priceline.com.”14.Ibid.15.JonBirger,“HowJefferyBoydTookPricelinefromDot-BombtoHighflier,”CNNMoney,September

11,2012.

CHAPTER13:SPIRIT

1.J.H.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation(NewYork:WilliamMorrow,1993),191.2.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation,73.3.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),x.

4.JulieBort,“OurFavoriteCrazyStuntsfromSalesforceLeaderMarcBenioff,”BusinessInsider,March15,2012.

5. Marc Benioff, foreword to The Art of War—Spirituality for Conflict: Annotated and Explained(Woodstock,VT:SkyLightPathsPublishing),xii.

6.Bort,“OurFavoriteCrazyStuntsfromSalesforceLeaderMarcBenioff.”7.Ibid.8.Ibid.9. MarketWatch commentary, “Salesforce CEO Pulls Off Excellent Stunt,”MarketWatch, October 5,2011.

10.Benioff,forewordtoTheArtofWar—SpiritualityforConflict,xii.

CHAPTER14:DECEPTION

1.JayAbraham,TheStickingPointSolution:9WaystoMoveYourBusinessfromStagnationtoStunningGrowthinToughEconomicTimes(NewYork:VanguardPress,2009),131–132.

2.ThomasHuynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained(Woodstock,VT:SkyLightPathsPublishing,2012),177.

3.Huynh,TheArtofWar—SpiritualityforConflict:AnnotatedandExplained,73.

4.Ibid.,193.5.Ibid.,195.6.Abraham,TheStickingPointSolution,250.7. Felix Dennis, How to Get Rich: The Distilled Wisdom of One of Britain’s Wealthiest Self-MadeEntrepreneurs(London:EburyPress,2007),236.

8.LizWelch,“HowIDidIt:JerryMurrell,FiveGuysBurgersandFries,”Inc.,April1,2010.9.CarolTice,“12Waysto(Legally)SpyonYourCompetitors,”Entrepreneur,November17,2011.10.ClareO’Connor,“TheMysteryMonkMakingBillionswith5-HourEnergy,”Forbes,February8,2012.11. Kaihan Krippendorff, “How Great Entrepreneurs Lure Their Competitors’ Sheep Away,” Fast

Company,May16,2012.12.Krippendorff,“HowGreatEntrepreneursLureTheirCompetitors’SheepAway.”13.Ibid.

APPENDIX:KEYSUNTZUPASSAGESFORSMALLBUSINESS

1.GeraldA.MichaelsonandStevenMichaelson,TheArtofWarforManagers:5StrategicRules(Avon,MA:AdamsMedia,2010),25.

2.J.H.Huang,Sun-Tzu:TheArtofWar—TheNewTranslation(NewYork:WilliamMorrow,1993),96.3.MichaelsonandMichaelson,TheArtofWarforManagers:5StrategicRules,27.4.Ibid.,56

BIBLIOGRAPHY

Abkowitz, Alyssa. “How Netflix Got Started.” CNN Money, January 28, 2009.money.cnn.com/2009/01/27/news/newsmakers/hastings_netflix.fortune/.

Abraham, Jay.TheStickingPoint Solution:9Ways toMoveYourBusiness fromStagnation toStunningGrowthinToughEconomicTimes.NewYork:VanguardPress,2009.

Bartiromo,Maria. “Bartiromo: Chobani CEO at Center of Greek Yogurt Craze.”USA Today, June 16,2013. www.usatoday.com/story/money/columnist/bartiromo/2013/06/16/chobani-ulukaya-yogart/2423611/.

Benioff, Marc. Foreword to The Art of War—Spirituality for Conflict: Annotated and Explained.Woodstock,VT:SkyLightPathsPublishing,2012.

Birger,Jon.“HowJefferyBoydTookPricelinefromDot-BombtoHighflier.”CNNMoney,September11,2012.tech.fortune.cnn.com/2012/09/11/priceline-jeffery-boyd/.

Bort,Julie.“OurFavoriteCrazyStuntsfromSalesforceLeaderMarcBenioff.”BusinessInsider,March15,2012. www.businessinsider.com/marc-benioff-salesforcecom-chief-has-pulled-some-crazy-stunts-2012-3?op=1#ixzz2eLsnA5K0.

Bryant, Adam. “Finding Purpose in Tunneling Through Granite.” New York Times, April 13, 2013.www.nytimes.com/2013/04/14/business/guidewires-chief-on-embracing-adversity.html?pagewanted=all&_r=0.

Burke,Monte.“FiveGuysBurgers:America’sFastestGrowingRestaurantChain.”Forbes,July18,2012.www.forbes.com/sites/monteburke/2012/07/18/five-guys-burgers-americas-fastest-growing-restaurant-chain/.

Calloway,Joe.BecomingaCategoryofOne:HowExtraordinaryCompaniesTranscendCommodityandDefyComparison.Hoboken,NJ:JohnWiley,2009.

Christensen, Clayton. “Disruptive Innovation.” www.claytonchristensen.com/key-concepts/#sthash.zukQNRiE.dpuf.

CRDF Global. GIST TechConnect Ideation online panel discussion, January 23, 2013.http://gist.crdfglobal.org/about-gist/events/2013/01/23/gist-techconnect-idea-creation-=-ideation.

Denning, Steve. “Clayton Christensen and the Innovators’ Smackdown.” Forbes, April 5, 2012.www.forbes.com/sites/stevedenning/2012/04/05/claytonchristensen-and-the-innovators-smackdown/.

Dennis, Felix. How to Get Rich: The Distilled Wisdom of One of Britain’s Wealthiest Self-MadeEntrepreneurs.London:EburyPress,2007.

Duggan, Daniel. “Manoj Bhargava onWhatMakes Successes Like 5-Hour Energy: Don’tWaste YourEnergy.” Crain’s Detroit Business, May 21, 2012.www.crainsdetroit.com/article/20120521/FREE/120529984/manoj-bhargava-on-what-makes-successes-like-5-hour-energy-don-t-waste-.

Duval,James.“SecretsofSuccess:HowCiscoOutlastedItsCompetitors.”CustomerTHINKBlog,June3,2013.www.customerthink.com/blog/secrets_of_success_how_cisco_outlasted_its_competitors.

Eng,Dinah.“HowWeGotStarted:JimKoch:SamuelAdams’sBeerRevolutionary.”CNNMoney,March21,2013.money.cnn.com/2013/03/21/smallbusiness/samual-adams-koch.pr.fortune/index.html.

Funding Universe. “Ask Jeeves, Inc. History.” www.fundinguniverse.com/company-histories/ask-jeeves-inc-history/.

Funding Universe. “Priceline.com Incorporated History.” www.fundinguniverse.com/company-histories/priceline-com-incorporated-history/.

Giles,Lionel.TheArtofWarbySunTzu:SpecialEdition.ElPaso,TX:ElPasoNortePress,2005.Gladwell,Malcolm.TheTippingPoint:HowLittleThingsCanMakeaBigDifference.NewYork:Little,

Brown,2002.Gobry,Pascal-Emmanuel. “10BrilliantStartupsThatFailedBecauseTheyWereAheadofTheirTime.”

Business Insider, May 4, 2011. www.businessinsider.com/startup-failures-2011-5?op=1#ixzz2cJz7BT3I.

Goodman,Nadia. “JamesDyson onUsing Failure toDrive Success.”Entrepreneur,November 5, 2012.www.entrepreneur.com/blog/224855#ixzz2e8H9o7ve.

Green, Sarah. “Who New CEOs Fire First.” HBR Blog Network, July 8, 2013.blogs.hbr.org/hbr/hbreditors/2013/07/who_new_ceos_fire_first.html.

Gross,Daniel,“It’sAllGreektoHim:Chobani’sUnlikelySuccessStory.”TheDailyBeast,June12,2013.www.thedailybeast.com/newsweek/2013/06/12/the-turkish-shepherd-behind-chobani.html.

Gruley, Bryan. “At Chobani, the Turkish King of Greek Yogurt.” Businessweek, January 31, 2013.www.businessweek.com/articles/2013-01-31/at-chobani-the-turkish-king-of-greek-yogurt#p2.

Harbison,JohnR.,PeterPekarJr.,AlbertViscio,andDavidMaloney.TheAlliancedEnterprise:BreakoutStrategy for the New Millennium. Los Angeles: Booz-Allen & Hamilton, 2000.www.smartalliancepartners.com/Images/Allianced%20Enterprise.pdf.

Hartung, Adam. “Netflix—The Turnaround Story of 2012!” Forbes, January 29, 2013.www.forbes.com/sites/adamhartung/2013/01/29/netflix-the-turnaround-story-of-2012/.

Heffernan,Margaret.“JamesDysononCreatingaVacuumThatActually,Well,Sucks.”Reader’sDigest,February 2009. www.rd.com/advice/work-career/james-dyson-on-creating-a-vacuum-that-actually-well-sucks/#ixzz2eKNGOMFq.

Heubeck,Elizabeth.“Wegmans’GroceryListforSuccess.”BaltimoreBusinessJournal,March20,2013.

www.bizjournals.com/baltimore/print-edition/2012/05/25/wegmans-grocery-list-for-success.html?page=all.

Hsieh,Tony.DeliveringHappiness.NewYork:HachetteBookGroup,2010.Hsieh, Tony. “Your Culture Is Your Brand.” Zappos Blogs: CEO and COO Blog, January 3, 2009.

blogs.zappos.com/blogs/ceo-and-coo-blog/2009/01/03/your-culture-is-your-brand.Huang,J.H.Sun-Tzu:TheArtofWar—TheNewTranslation.NewYork:WilliamMorrow,1993.Huynh, Thomas. The Art of War—Spirituality for Conflict: Annotated and Explained. Woodstock, VT:

SkyLightPathsPublishing,2012.IBIS World. Business Coaching in the U.S.: Market Research Report. November 2013.

www.ibisworld.com/industry/default.aspx?indid=1533.“Interview Transcript: Meg Whitman, Ebay.” Financial Times, June 18, 2006.

www.ft.com/cms/s/2/f3ae81f8-fef8-11da-84f3-0000779e2340.html#axzz2dlJqgInb.Keen, Andrew. “Keen On . . . Clay Christensen: How to Escape the Innovator’s Dilemma [TCTV].”

TechCrunch video interview, April 2, 2012. techcrunch.com/2012/04/02/keen-on-clay-christensen-how-to-escape-the-innovators-dilemma-tctv/.

Krippendorff,Kaihan.“HowGreatEntrepreneursLureTheirCompetitors’SheepAway.”FastCompany,May 16, 2012. www.fastcompany.com/1837389/how-great-entrepreneurs-lure-their-competitors-sheep-away.

Leotin, Sylvie. “Atari: The Original Lean Startup.” VentureBeat, October 13, 2010.venturebeat.com/2010/10/13/atari-the-original-lean-startup/.

MarketWatchCommentary.“SalesforceCEOPullsOffExcellentStunt.”MarketWatch,October5,2011.www.marketwatch.com/story/salesforce-ceo-pulls-off-excellent-stunt-2011-10-05.

Maxwell,Scott,“SmallBusinessInnovationLessonsfromSalesforce.com.”OpenViewLabsBlog,January31,2013.labs.openviewpartners.com/smallbusiness-innovation-lessons-from-salesforce-com/.

McMahan,Dana.“CraftDistillersBreakingintoKentucky’sBillion-DollarBourbonIndustry.”NBCNews,August30,2013.www.nbcnews.com/travel/craft-distillers-breaking-kentuckys-billion-dollar-bourbon-industry-8C11035874.

McNeilly,MarkR.SunTzuandtheArtofModernWarfare.NewYork:OxfordUniversityPress,2001.Michaelson,GeraldA., andStevenMichaelson.TheArtofWar forManagers:5StrategicRules.Avon,

MA:AdamsMedia,2010.Nisen, Max, and Alexandra Mondalek. “Invaluable Advice from 18 of America’s Top Small Business

Owners.” Business Insider, June 21, 2013. www.businessinsider.com/invaluable-advice-from-18-of-americas-top-small-business-owners-2013-6?op=1#ixzz2cXyGkSmJ.

O’Connor,Clare. “TheMysteryMonkMakingBillionswith5-HourEnergy.”Forbes,February8,2012.www.forbes.com/sites/clareoconnor/2012/02/08/manoj-bhargava-the-mystery-monk-making-billions-with-5-hour-energy/.

O’Hagan, Sean. “The Nine Lives of Felix Dennis.” The Guardian, June 1, 2013.www.theguardian.com/media/2013/jun/02/nine-lives-of-felix-dennis.

Parr, Ben. “Here’s Why Amazon Bought Zappos.” Mashable, July 22, 2009.mashable.com/2009/07/22/amazon-bought-zappos/.

Pendleton,Devon.“HiddenChobaniBillionaireEmergesasGreekYogurtSoars.”Bloomberg,September14, 2012. www.bloomberg.com/news/2012-09-14/hidden-chobani-billionaire-emerges-as-greek-yogurt-soars.html.

Penenberg,AdamL.“ReidHoffmanonPayPal’sPivotedPathtoSuccess.”FastCompany,includingvideointerview of Hoffman, August 9, 2012. www.fastcompany.com/1837839/reid-hoffman-paypals-pivoted-path-success.

Pozin, Ilya, “9 Biggest Mistakes New Entrepreneurs Make.” Inc., July 20, 2013. www.inc.com/ilya-pozin/9-biggest-mistakes-you-will-make-as-a-new-entrepreneur.html.

Rohde, David. “TheAnti-Walmart: The Secret Sauce ofWegmans Is People.”The Atlantic,March 23,2012. www.theatlantic.com/business/archive/2012/03/the-anti-walmart-the-secret-sauce-of-wegmans-is-people/254994/.

Salter, Chuck. “Failure Doesn’t Suck.” Fast Company, April 10, 2007.www.fastcompany.com/76673/failure-doesnt-suck-part-2.

Sambidge,Andy.“Yahoo!’sMaktoobDealValuedat$175m—Report.”ArabianBusiness.com,September10, 2009. www.arabianbusiness.com/yahoo-s-maktoob-deal-valued-at-175m-report-12955.html#.UiSfYD_zjbw.

Sheetz-Runkle,Becky.SunTzuforWomen:TheArtofWarforWinninginBusiness.Avon,MA:AdamsMedia,2011.

Sonshi.“InterviewwithMarcBenioff.”Sonshi.com.www.sonshi.com/benioff.html.Taylor,Bill.“WhyZapposPaysNewEmployeestoQuit—andYouShouldToo.”HBRBlogNetwork,May

19,2008.blogs.hbr.org/taylor/2008/05/why_zappos_pays_new_employees.html.Thomas, Kathryn Quinn. “Golisano Built Paychex into a Success Story.” Rochester Business Journal,

October8,2004.www.rbj.net/article.asp?aID=149125.Tice, Carol. “12 Ways to (Legally) Spy on Your Competitors.” Entrepreneur, November 17, 2011.

www.entrepreneur.com/article/220761#ixzz2cfCfx1pP.Tobak, Steve. “David vs. Goliath: How Small Companies Make It Big.” Inc., March 27, 2013.

www.inc.com/steve-tobak/david-vs-goliath-how-small-companies-make-itbig.html.“Vacuum Makers Dyson, Hoover Settle Lawsuit.” Appliance Magazine. October 10, 2002.

www.appliancemagazine.com/news.php?article=3691.Vitello,Paul.“ElmerT.Lee,WhosePremiumBourbonRevivedanIndustry,Diesat93.”NewYorkTimes,

July 21, 2013. www.nytimes.com/2013/07/22/business/elmer-t-lee-whose-premium-bourbon-revived-an-industry-dies-at-93.html?_r=0.

Wegmanscorporatewebsite.“FrequentlyAskedQuestions.”www.wegmans.com.www.wegmans.com/webapp/wcs/stores/servlet/FAQDetailView?

storeId=10052&catalogId=10002&langId=-1&faqCategory=AboutWegmans#question_12.Welch, Liz. “How I Did It: Jerry Murrell, Five Guys Burgers and Fries.” Inc., April 1, 2010.

www.inc.com/magazine/20100401/jerry-murrell-five-guys-burgers-and-fries.html.ZapposInsights.www.zapposinsights.com/www.zappos.com.

INDEX

TheindexthatappearedintheprintversionofthistitlewasintentionallyremovedfromtheeBook.Pleaseuse the search functiononyoureReadingdevice for termsof interest.Foryour reference, the terms thatappearintheprintindexarelistedbelow.

Abraham,JayTheStickingPointSolution

adaptationinfinitevarietystealthintothreatswatermetaphorfor

ADPadvantages,readinesstoseizeadversaries,seecompetition;enemyadversityAirwalkalliances

withdefeatedenemyforsmallbusinessvalueofwithvendors

alliesofenemy,moraleofAmazon.com

anger,overcomingAnheuser-Buschapplication,vs.understandingTheArtofWar(SunTzu)keypassages

keythemestranslations

TheArtofWar:SpiritualityforConflict(Huynh)AskJeevesAsk.comassumptions

anddecisionmakingovercomingfalse

Astorino,DavidAtariattitude

barteringbattlefield

engagementinunderstanding

Beard,JamesbeermarketBenioff,MarcBhargava,Manojbigbusiness,disadvantagesBlockbusterBostonBeerCompanybourbonindustryBoyd,JefferyBraddock,RichardBurgerKingBushnell,Nolanbusiness

continuousimprovementsinwarasmetaphorbusinessbattle,readinessforbusinesscontextbusinessplan,vaguenessofCalloway,Joecapturedsoldiers,careforCarnivalCruiseLinescashflowchainofcommand,andorganizationchanges

bigbusinessdifficultyadjustingtoChobaniChoudynasty(China)Christensen,Clayton

TheInnovator’sDilemmaCiscoSystemsCohen,Jasoncollaborationcombinedenergycomicbookcompany

Commanderdangerousfaultspatienceof

Commander’svirtuesbenevolencecouragesinceritystrictnesswisdom

commitmenttocustomers

compactnesscompetition

creatingopportunitiestodefeatdetectingdisorderdividinghiringsalespeopleofidentifyingmailinglistofmeasuringnotfollowingpreparedopennesstopressonspiritandtakingadvantageoflowspirittimingattacksvulnerabilityof

competitiveadvantages,ofsmallbusinesscomplexityconcernforemployeesconsistencycontentiousgroundcontract,short-termperspectiveconvertedspiescoreproducts

bigbusinessnarrowfocusoncouragecowardiceCozmicComicscustomerservicecustomers

competitorinformationfromhelpfrominteractionwithloyaltypurchasingdecisionssocialmediatounderstandDannon

deceptionchaosandcontrollingandshapingappearancessecretsselectivenessin

winningwithdecisionmaking

andassumptionsdefeatedenemy,alliancewithDeliveringHappiness(Hsieh)Denning,SteveDennis,FelixDennisPublishingdesparategroundDienBienPhu,Battleofdifferentiationdifficultgrounddisadvantages,convertingtoadvantagediscipline

enforcementofdisorder,creatingappearanceofdispersiveground

disruptionsdistributors,relationshipswithdisunity,consequencesdivisiveness,reducingdoomedspiesDrucker,PeterDuMuDyson,JamesDysonInc.

EartheBay

andPayPaleconomiesofscaleEllison,LarryEmanuel,Rahmemployees

avoidingoverburdenedconcernfordefinitiveactionbyexcessiveconcernforexpectationsforinspiringkeepinginformationfromknowingandleveragingmoraleofatWegmans

encircledgroundenemy

alliancewithdefeatedcapturingitemsofconcerntodeceivingdividingencouragingmistakesbywithguarddownintelligenceonkeepingonmoveknowingopportunitiestodefeatunderstanding

energy,maximizingexceptionalperformersexperience

FacebookfacilegroundFagefailure

ofnewbusinessesfalseassumptions,overcomingfast-foodburgerindustryfaultsofCommanderFieldlinkfighting

knowingtimeforwinningwithoutwithoutfighting

FinancialTimesfire

fearandchaosfromandspirit

FiveGuys5-HourEnergyflexibilityfocus

andlong-rangeresultsmistakesreducedbypositiveonviableoptions

force-on-forcemodelFord,Henryforest,compactnessofformlessnessFortune500firms,lifeexpectancyoffrontiergroundFuddruckers

general(j-iang),seealsoCommanderGiles,LionelGobry,Pascal-EmmanuelGolisano,TomGoogleforcompetitor’shiddenpagesgrandstrategyground

typesGroupongrowthGuidewireSoftwaregutfeeling,andvalidationHargrove,RobertHartung,AdamHastings,ReedHeaven

hemmed-ingroundhierarchyhobblingthearmyHoffman,JeffHoffman,ReidhonestyHsieh,Tony

DeliveringHappinessHuang,J.H.HumbleSeedhumilityHutchins,RandyHuynh,Thomas

TheArtofWar:SpiritualityforConflict

iGATEimmovabilityIn-N-OutBurgerincentivesinformation

keepingfromemployeesfromsuppliersInfosysinnovation

disruptionsandTheInnovator’sDilemma(Christensen)inspiration

maintainingInstagramintellectualproperty,protectingInternetintersectinghighways,groundofinwardspiesISHPI

jobads,ofcompetitorsJohnson,Petejointventuresjujitsu

karate,vs.jujitsukataknowledge

ofcustomersextendingthroughoutorganizationKoch,Jim

Krippendorff,Kaihan

Lambesis(adagency)leadership

leadsfromtradeshowLeask,NoahThomasLee,ElmerT.LetsBuyIt.comLevchin,MaxLivingEssentialslocalguideslocalspieslong-rangeresults,focusandlong-termstrategy

proactivelost-caseanalysisloyalty

ofcustomersLynch,Jack

mailinglist,ofcompetitorsMaktoob.commaneuvering

fightingwithoutfightingtakingbestpositiontimingfor

MaoTse-tungmarginalgroundmarket

poorunderstandingofmarketsharemartialartsMcCourt,MartinMcDonald’sMcNeilly,MarkmethodanddisciplineMeyer,Dannymistakes,focusforreducingmodernbusinesswarfare,SunTzuforMoralLawmorale

ofemployeesofenemy’sallies

motivationmountain,immovabilityofMurrell,JerryMurthy,Phaneesh

negativity,overcomingNetFlixnewbusinesses,failureofnewsmedia,oncompetitionnichemarketnoncompetedocumentsnondisclosureagreements(NDAs)nonsolicitationagreementsobjectives,forpartnersopengroundopenings,exploitingopportunities,identifyingandseizingopposition,seecompetitionoptimismorganization

andchainofcommand

extendinginformationthroughoutunderstanding

PalmPilotParr,Benpartnerships

objectivesforpatience,ofCommanderPaychexPayPalperceptionsperseverancePete’sGreensplans

varyingPontain,Dickposition,securingpositivefocusPowell,Colinpress(newsmedia),oncompetitionPricelineproducts,comparisonprospectivecustomers,informationfrompunishment

Q2Marketing

Ralyea,Robertreadiness,toseizeadvantagesrecklessnessregroupingrelationships

withsuppliersanddistributors,seealsoalliancesreputationresources

consolidatingmaximizingprovidingspiesas

retailstoresretreat,blockingrevenueandprofitmdoelsrewardsrisk,bigbusinessaversiontoRyu,Marcus

salesprofessionalsSalesforce.com

spiritofSamuelAdamsscattering

Schwarzkopf,Normansearchenginessecrets

protectingshoppingforcompetitor’sselfdefense,martialartsforself,knowing

seriousgroundSerlin,MarshaShakeShackShatner,Williamshuai-janSiebelSystemssiloedorganizationsSimons,Berniesincerity,inleadershipSixDegrees.comsmallbusiness

alliancesforapplyingArtofWarcompetitiveadvantagesdisadvantagesneedforSunTzustrategyandserendipitysmallbusinessleadersSmashburger

socialmediasparringspeedSpence,Johnspies

treatmentoftypes

spiritandfireirresistibilityofofSalesforce.com

stagnation,riskofTheStickingPointSolution(Abraham)stratagemstrategicalliances,seealsoalliancesstrategy

long-termrepeatedemergenceandwithdrawstrengthavoidingavoidingattackontocompensateforweaknessconcentrating

strictnessSunTzu

TheArtofWarbasics

essentialsforvictoryfiveconstantfactorskeypassagesmilitaryprinciplesofsmallbusinessneedforSunTzuforWomen

SunWusuppliers

guardingrelationshipswithrelationshipswithasspies

surroundedgroundsurvivingspiessusceptibleground

tacticalmaneuveringtalent,identifyingandnurturingteamstemperThiel,Peterthreats,adaptabilitytotiming

attacksknowingforfightformaneuvering

tradeshowstraps,avoidingtrends,identifying

UcheAnusionwuUlukaya,Hamdiunderstanding

vs.applicationoforganization

unexpectedUnitedScrapMetal,Inc.unity

consequencesofdisunityconsequencesoflosingandwithdefeatedenemydividingenemyinspiring

validation,andgutfeelingvengeancevictimvictory

achievingvs.determiningactiononbeforebattlecreatingconditionsforforecastingSunTzu’sessentialsforsustaining

VietnamvigilanceVoNguyenGiap

vulnerabilityofenemy,learningWalker,Jaywar

asmetaphorwatermetaphor,foradaptationweakness

attackingcreatingappearanceofWeaver,John

WegmansWendy’sWhitman,Megwind,speedofwinning,withoutfightwisdomofleader

YahooYoplait

Zappos

ABOUTTHEAUTHOR

BECKY SHEETZ-RUNKLE is a strategic marketer, speaker, and martialartist,andtheauthorofSunTzuforWomen.ShelivesinWashington,DC.

FREESAMPLEEXCERPTFROM

DOIT!MARKETINGbyDavidNewman

For additional—and fun—insights on how to rev up your marketing impact, be sure to read DavidNewman’sDoIt!Marketing[ISBN97808144-32860;$19.95(retail);alsoavailableasane-book].Thisno-nonsenseguidegivesyoudozensofideas,tactics,andtools,suchas“avoidblah,blahmarketing”and“pull—don’tpush—decision-makersintoyourworld.”Newman’spremise:Onlyactioncreatesresults.Here’safreesamplefromthebook...

PARTONE

MARKETINGROCKS

INTRODUCTION

Forexpertsandsmartcompanieswhowantto stand out from thecrowd...

Asasmallbusinessowner,independentprofessional,orthought-leadingexecutivewho’slookingtopositionyourselfasanexpertandmaximizeyourvisibility,credibility,andmarketingmagnetism...

IsthisYOU?

You’veexperiencedthefactthatold-schoolbusinessdevelopment(randomcoldcalling,batch-and-blastdirectmail,buyingadsandworkinghardtointerruptstrangers)isbrokenandthattherehastobeabetterway.Youwant to winmore attention from prospects by positioning yourself as a thought-leadingexpert and by executing magnetic marketing strategies that pull (not push) qualified, targeteddecision-makersintoyourworld.Whenitcomestopositioningyourselfandyourcompanyastheexperts—andexecutingthedailymarketing tasks tomake it happen—you feel there’s toomuch to do, never enough time, andsometimesyou’renotevensurewheretobegin.You’dliketoeliminatetheupsanddownsofyourfeast-and-faminerevenuecyclewithprovenmarketingtacticsthatgenerateconsistentvisibilitysoyoubecometheobviousgo-tochoiceforyourtargetmarket. You want to outsmart, out-position, and out-execute your competition so that you stop“marketingbyaccident,”andyounolongerhavetojustsettleforwhateverbusinessfallsinyourlap.

Smallbusinessmarketingisnotamystery.It’sjustaseriesofsimpledecisions—andtheactionstepstocarryouttheimplementationofthosedecisions—tohelpyouregaintheclarity,confidence,andcontrolyouneedtoreachhigherlevelsofsuccess.

Putthisbookdownrightnow,andgrabyourFREEmarketingtools,templates,andgiftswaitingforyouatwww.doitmarketing.com/book.Youwillseereferencestothespecifictools,worksheets,andtemplatesyouneed throughout thebook,soyoumightaswell log in,bookmark theresourcespage,andhaveover100marketing toolsatyourfingertips.You’llalsoget the21-DayDoIt!MarketingPlaybook tocreateyourperpetualmarketingplanonceyoufinishreadingthebook.

Ifyouandyourbusinessarereadytokicksomeseriousass,you’reintherightplace.Strapin,hangon—andlet’sDOIT!

1STOP THROWING MONEY INTO AMARKETINGBLACKHOLE

Astern-lookingexecutivestaresoutatyoufrom thepage in themagazine.

Thebodyoftheadreads:

Idon’tknowwhoyouare.Idon’tknowyourcompany.Idon’tknowyourcompany’sproduct.Idon’tknowwhatyourcompanystandsfor.Idon’tknowyourcompany’scustomers.Idon’tknowyourcompany’srecord.Idon’tknowyourcompany’sreputation.Now,whatwasityouwantedtosellme?

ThisadfirstraninBusinessWeekin1958.Anditsmessageisevenmorerelevanttoday:Youmustbuildrelationshipsbeforeyousell.

Ifyou’reinvestingintrustedadvisormarketing(itgoesbyseveralothernameslikeinboundmarketing,thoughtleadershipmarketing,andcontentmarketing),thenyou’veprobablyaskedyourself,“How(andwhen)willthisgenerateasale?”

AndthatisthecompletelyWRONGquestiontoask.By the timeyou’re done reading this book, you’ll see exactlywhy—ANDyou’ll be able to ask (and

answer)muchbetterquestionstogrowyourbusinessrightaway.

WE INTERRUPT WITH A BRIEFMETAPHOR

Askingwhenyourmarketingwill lead toasale is like fillingupyourcar’sgas tankandasking,“Whyaren’twethereyet?”

Answer:Becausefillingyourcarwithgasisanecessarybutnotsufficientstepingettingyou to your destination (a newcustomer or client).Marketing is just the first step, but thatdoesn’tmakeitanylessvitaltoyoursuccess.Putitthisway:

Doyouhaveachanceofarrivingnowthatyourgastankisfull?Youbet.Didyouhaveachanceofgettingtherewithyourtankonempty?Noway.Let’sdriveon...

INSIGHT 1: YOU NEED TO SELL THE SAME WAYTHATYOUBUY.

Lookatyoure-mailspamorbulke-mailfolder.Yes,you.Yes,rightnow.I’llwait...Tap-tap-tap-tap.You’reback.Excellent.Didyouseethatspame-mailfromthetonercartridgecompany?DidyoucatchthepitchfromtheSEO

firm that filledoutyourwebsite’scontact form?Didyou respond to thatgreatdealonvacationcruises?No?

OK.Nowpopovertoyourpapermailpileonyourdesk.Didyoucheckoutthelatesttriple-playofferfromyourfriendlycablecompany?Howabout thatcompellingcellphoneoffer fromVerizon?TheWallStreetJournalsubscriptionoffer?Orhowaboutthatpostcard—youknow,theonefromthehomeheatingoilcompany?No?

When’sthelasttimeyougaveyourcreditcardnumbertoacoldcallerwhointerruptedyourfamilydinner?NEVER??

I’mshocked!Butyou seempretty excited aboutYOURcold calls—and sendingoutYOURspam,YOURoffers,

YOURpostcards,YOURsalesmessages.Theproblemwithdoingitthisway?Infourwords:Zero.Value.For.Prospects.Andhello?YOUdon’tBUYthisway.WhatintheworldmakesyouthinkyourprospectsDO?Lookoncemoreattheadatthestartofthechapterandanswerafewsimplequestions:

Question1:WhatVALUEhaveIADDEDtomyprospect’sworldinordertoEARNtheRIGHTtoINVITEthemtoaconversationandOFFERmysolutionstotheirproblems,headaches,heartaches,andchallenges?

INSIGHT2:REFERRALSROCK...BUTTHEY’RENOTDEAF,DUMB,ORBLIND.

Thenextthingyou’regoingtotellmeisthatyoudon’tNEEDtodoanymarketingbecause99percentofyourbusiness is repeat and referral business, and it’s always been thatway.You don’t see how anynewfangledmarketingisgoingtomovetheneedletowardclosingmoresales.

Do you seriously think that referrals don’t check you out online before picking up the phone?Whatmessagesareyousendingtoyourvaluedreferralswith:

Youroutdatedwebsite.Articlesfromthreeyearsagoareoutdated,friends.Andfrom2005,evenmoreso.Anddesignaestheticfrom1998mostofall.Yoursporadicallyupdatedblogthatyouleavedormantfortwo(orfourorsix!)monthsataclip?

YourabandonedTwitteraccountthatyousetupbecausesomeonesaidyouhadto?Nowithas87followerswhileyourcompetitorshave5,000(orawholelotmore). Your sketchy, bare bones LinkedIn profile that has 200 connections but only tworecommendations?(Andthey’refromtwoyearsago.Frompeoplewiththesamelastnameasyou.)Your“glorydays”articlesandTVclipsandPRplacements from20(yes,I’mserious),10,orevenfiveyearsago.Nothingscreams“has-been”likeoldmedia.

Makenomistake:Gettingrepeatandreferralbusinessisgreat.But don’t kid yourself that this absolves you from having a top-notch web presence, social media

platform,andbodyofknowledgethatisultracurrent,super-relevant,andobviouslyabundant.Infact,youareleavingyourselfopentoEMBARRASSMENTifyouradvocateshearbackfromtheir

referrals and find themselves in the awkward position of having to defend your out-of-date marketingplatform,whichnowcastsyourprofessionalexpertiseintodoubt.

Question 2: Does my overall online presence REASSURE and REINFORCE thereferrals I earn? Does it contain the most current, credible, and relevant marketingmessages,positioning,content,resources,andvaluethatwillmakemyadvocatesLOOKBETTER—notworse—forreferringme?

INSIGHT 3: TRUSTED ADVISOR MARKETING IS AFOUR-LAYERENCHILADA.

Andyoudon’tgettoeatthedeliciousgolden-browncheesewithoutfirstlayeringonthemeat!Here’swhat“four-layer”means:

1.Thefirstlayer—atthecoreofthematter—isyourReputation.Yourwork.Yourtrackrecord.Ifyoustopthere,you’llhaveaVERYhardtimeattractingNEWleadsandprospectstoyourdoorstep.“Myworkshouldspeakforitself”iswhatalotofverysmartpeoplesay—smartpeoplewhohaveahardtimemakingtheirmortgagepayments.

2.ThesecondlayerisAmplification.Waystomakeyoursignalstronger.Entersocialmediamarketing,nichePR,articlemarketing,blogging,keywordresearch,andsearchengineoptimization.Thisisthekeytospreadingyourideasandbroadcastingyourexpertise.

3.ThethirdlayerisLeverage.Thisiswhereyoubegintocapitalizeonyourtrustedadvisorassetssuchasarticles,blogs,videos,podcasts,interviews,whitepapers,specialreports,bookexcerpts,andothervalue-firstmarketingtools.Youcannowreachouttohigh-probabilityprospectsbothindividually(onLinkedIn,forexample)andcollectively(onyourblog,forexample).Thisiswhereyourjobbecomesputtingtherightbaitontherighthooksintherightlakestocatchtherightfish.

4.ThefourthlayerisGravity.ThisislikeJimCollins’sflywheelconceptinGoodtoGreat:Ittakesalongtimetogetitspinningbutthenisveryhardtostopbecauseofthepowerofmomentum.Thisiswhereyoustarttoseepayoffs:moreleads,betterprospects,biggeropportunities,moreconversations,higherprofilealliances,moreinvitationstospeak,publish,guestpost,contributeandteach,and[drumroll,please]moreinvitationstodogreatworkatpremiumfeesforgreatclientswhoNOWknowyou,like you, and trust you enough to hand over five-and six-figure checks because their level ofconfidenceinyourexpertiseisprettycloseto100percent.

Question3:Doyouwanttomakemoresalestostrangers?(Goodluckwiththat).Ordoyoureallywantmorepeopletorecognize,respect,andrequestYOUbynamewhentheyhaveaneed,project,orproblemthattheyinstantlyseehas“yournamewrittenallover

it”?Ifthat’syourgoal,thentrustedadvisormarketingisforyou.

Reread the ad at the beginning of the chapter, and let’s do a twenty-first-century spin on ittogether.

Idon’tknowwhoyouare.

Idon’treadyourblog.Idon’tsubscribetoyournewsletter.

Idon’tseeyournameinmyindustry’spublications.

Idon’thearmypeersspreadingyourideas.

Idon’tcomeacrossyourcontentinGooglesearches.

Idon’tconnectyoursolutionstomyproblems.

Idon’tfeelthegravityofyourcredibilityorcredentials.

Idon’thaveanytangiblewaytogaugeyourexpertiseorexperience.

Now—whatwasityouwantedtosellme?

Sohere’stheultimate(andmostimportant)questionforYOU:How can you realistically expect to SELL anything WITHOUT first setting the necessary

preconditionsforANYsalewithtrustedadvisormarketing?Theanswerisassimpleasitisobvious:Youcan’t.Justlikeyoucan’tdriveyourcarfromDenverto

Sheboyganifyouhaven’tfirstfilledupyourgastank.Onlythencanyougetbehindthewheel,planyourroute,useyourGPS,addmorefuelalongtheway

(andprobablysomebeefjerkyandSno-Ballsandrootbeer),ANDputinthehoursandthemilestogetyoutoyourdestination.

Nobody—and I mean N-O-B-O-D-Y—hires vendors, suppliers, or professional services firms sightunseen.Youwouldn’t.Iwouldn’teither.

Andthefactsprovethattoday’sbuyersarejustlikeYOUandME.Thekindofmarketingwe’llexploretogetherinthisbook—trustedadvisormarketing—isamarathon,notasprint.And,asanymarathonerwilltellyou,thebest(andonly)waytorunamarathonisonemileatatime.

Onyourmark...getset...GO!

2DETERMINE WHO, THEN WHY—ANDYOURWHATCOMESLAST

Whatshouldbemycompanyname?

What’sthebestheadlineforthiswebpage?

Whataretherightwordsforourtelemarketingscripts?

WhatdoIsaytopeoplewhentheyaskme,“Sowhatdoyoudo?”

Whattaglinewillattracttherightprospectsandcustomers?

WhatshouldIsayinthissalesletter?

“What—What—What?”needstobecome“Wait—Wait—Wait!”You’rewastingyourtime.Truly.“What?”isthewrongquestion.Morespecifically,it’sthewrongFIRSTquestionwhenitcomestoyourmarketing.Let’sboilthisdowntoaverysimpleexercise.ImagineforamomentthatIaskyoutotakeoutapieceof

papertowritealetter.Youdoso,and,withpeninhand,youfindyourselfstaringatablanksheetofpaper.Intheupperleft

corner,youwritetheword,“Dear,”andthenyou’restuck.Before you can get any further in your task, you need to ask me TOWHOM should the letter be

addressed.ThePresidentoftheUnitedStates?YourcousinMarvininNewOrleans?Youroldhighschoolsweetheart?

Itmakesadifference,doesn’tit?The assignment getsmore interestingwhen I tell you that the letter is intended for yourAunt Sally.

(Humorme,andpretendyoudoindeedhaveadearoldAuntSally!)Soyoufillinthetopofyourletterwith“DearAuntSally.”Sofar,sogood.

YournextquestionmightbeWHYareyouwritingtoyourAuntSally?Isittocheckonherhealth?Toask for her delicious apple pie recipe from last Thanksgiving?Or to thank her for those snappyArgylesocksshegotyouforChristmas?

Let’ssayit’stoaskforherfamilysecretapplepierecipe.Having answered the WHO and the WHY questions, you would most likely get busy and create a

compelling,fast,easyletterwithnofurtherquestions.NoticeallthethingsyouwouldNOTneedtoworryabout:

WhatdoIsay?

HowdoIsayit?

WhatwordsshouldIuse?

WhatwordsshouldIavoid?

Willsheliketheletter?

Willsheactontheletter?

Fret,fret,fret...

Worry,worry,worry...

You’rejustgoingtowritetheletter,gettherecipe,andhaveagreatrelationshipwithyourdearoldAuntSally. And the reason will be that you connected with her with enthusiasm and authenticity for aspecificpurposethatmadeherfeelvalued,special,andimportanttoyou.

Haveyouconnectedallthedotsyet?ThisishowMARKETINGissupposedtoworktoo.Figure outWHOM you’re talking to, TALK to them for a GOOD, SPECIFIC, RELEVANT reason,

understanding who they are and what’s important to THEM. Just do that, and you’ll have all theprofessionalcopywritersandadagenciesbeatinnotimeflat.

BESTSELLERSFROMAMACOM

Leadwith aStory:AGuide toCraftingBusinessNarrativesThatCaptivate,Convince,andInspire

ISBN:9780814420300(print)ISBN:9780814420317(ebook)

Forget facts, figures, and PowerPoint slides—well-crafted stories deliver business concepts simply andpowerfully.Thereasonforthisissimple:Storieshavetheabilitytoengageanaudiencethewaylogicandbulletpointsalonenevercould.Whetheryouare trying tocommunicateavision, sell an idea,or inspirecommitment,storytellingisapowerfulbusinesstoolthatcanmeanthedifferencebetweenmediocreresultsandphenomenalsuccess.

JustListen:DiscovertheSecrettoGettingThroughtoAbsolutelyAnyone

ISBN:9780814414033(print)ISBN:9780814414040(ebook)

Barricadesbetweenpeoplebecomebarriers tosuccess,progress,andhappiness;sogetting through isnotjust a fine art, but a crucial skill. Just Listen gives you the techniques and confidence to approach theunreachable people in your life, and turn frustrating situations into productive outcomes and rewardingrelationships.

Leading at the Edge: Leadership Lessons from the Extraordinary Saga ofShackleton’sAntarcticExpedition

ISBN:9780814431948(print-paperback)ISBN:9780814431610(ebook)

InDecemberof1914,theBritishImperialTrans-AntarcticExpedition,ledbySirErnestShackleton,sailedfromtheislandofSouthGeorgiaintheSouthernOcean.Itsgoal:thefirstoverlandcrossingofAntarctica.Soontrappedinaprisonofsolidpackice,thecrewbecameengagedinalegendaryfightagainstbrutalcold,impenetrable ice, dwindling food, and complete isolation. Despite these seemingly insurmountableobstacles,theteamremainedcohesive,congenial,andmercifullyalive—afactthatspeaksnotjusttoluckbuttoanunparalleledfeatofleadership.

IntotheStorm:LessonsinTeamworkfromtheTreacherousSydneytoHobartOceanRace

ISBN:9780814431986(Print)ISBN:9780814431603(ebook)

TheiconicSydneytoHobartRace,a723-miledeepwaterchallenge—oftencalledthe“Everest”ofoffshoreoceanracing—isconsideredoneof thetoughest in theworld.Unpredictableweatherandseasmakeeachracedemanding,butin1998,anunexpected“weatherbomb”hitthefleet,creating80-footwavesand100-mile-per-hourwinds.Manybigger,better-equippedboatstriedtomaneuveraroundthestorm,butthecrewoftheAFRMidnightRamblerchosetoheaddirectlyintoitspath.Afterbattlingmountainouswavesandhurricane-forcewindsintheBassStrait,thetiny35-footboatarrivedsafelyinHobart,3daysand16hourslater—winningthecovetedTattersall’sCup.Whatwerethefactorsunderlyingthisincredibleachievement?IntotheStormrecountsthestoryoftheRamblers’stunningvictory,andtheteamworkthatmadeitpossible—revealingpowerfullessonsforsuccessintoday’sdemandingbusinessenvironment.

ABOUTAMACOM

WHOWEARE

AMACOMisthebook-publishingdivisionoftheAmericanManagementAssociation(www.amanet.org).AMACOM’sbroadrangeofofferingsspansnotonlythecriticalbusinesstopicsandleadershipchallengesoftodayandtomorrow,butalsotheissuesthataffectourlives,ourwork,andourworld.

WHATWEPUBLISH

AMACOM publishes nonfiction books on business, management, leadership, HR, training,communications, career growth, personal development, marketing, sales, customer service, projectmanagement,andfinance.

ABOUTOURAUTHORS

AMACOM authors are experts in their fields—world-class educators, successful executives, businessowners,trainers,consultants,andjournalists—alleagertosharetheirinsightsandtechniqueswithabroadaudience.sultants,andjournalists—alleagertosharetheirinsightsandtechniqueswithabroadaudience.

YourGoalisSuccess.Oursishelpingyougetthere.American Management Association, a world leader in professional development, has helpedmillionsofpeoplelearnnewskills, improveperformanceandworkthroughchallenges.Ourflexibletrainingsolutionsfiteverystageofyourcareerandthedemandsofyourschedule.

Needtheskillstogetaheadfast?AMAoffers140+seminars inmore than40citiesnationwide.Tacklechallengesdirectly related toyourjobinthesedynamicclassroomcoursesledbyourexpertfaculty—withsuperiorcontent,hands-ontrainingandpeerinteraction.

Can’tgetawayfromworkfortraining?Trainrightatyourdesktop.AMA’sLiveOnline Seminars offer instructor-led, interactive courseswith the high-quality contentandexpertfacultyyouexpectfromAMA.Noneedfortravelortimeawayfromtheoffice.

Tightschedule?Choosewhereandwhenyoulearn.AMAOnDemand™ is online training powered by CrossKnowledge that gives you the freedom tobuildnewskills24/7aswellasfeedbackandsupportfromaprofessionalcoach.YouwillbeawardedanAMACertificateuponcompletion.

Facingatoughbusinesschallenge?AMAEnterpriseSM can helpwith both the diagnosis and solution. This specialized divisionworkswith corporations and government agencies to drive talent transformation and organizationalexcellence.

Increase your knowledge even more with AMA Webinars, AMACOM business books and anextensive range of FREE resources including webcasts, podcasts, eNewsletters, articles andWhitePapers.

Learnmoreatwww.amanet.org/goal