25 May 2015

The Sun Zi's Art of War that even the experts may not know #3

The Art of War Winners' mindset helps us to understand the rise and fall of nations and also of corporations. It can be the guide for us to build successful businesses. Here is a series of stories of the Smart-phone wars that explained the successes of Apple and Androids and the failures of Nokia-Microsoft phones.
 The Sun Zi's Art of War that even the experts may not know  #3:

Last post The Sun Zi's Art of War that even the experts may not know #2, ends with "I still want to play the catch-up game, what can I do?"

We have to go back to the very basics of Sun Zi's Art of War - the Five Factors and Seven Measures.

The five factors are Philosophy, Seasonal Timing, Terrain Advantages, Leadership, Policies & Processes, and a sixth factor Customers Desires added by me for business use.

The philosophy of business is best captured in the Mission, Visions and Values of the business that when really practiced by the top and the bottom will become the culture the company.
See 
Who has the Best Mission statement?

The Right Way to Do SWOT - TOWS
We will use a well known method for the design of strategies called SWOT.

But we will follow Sun Zi's teaching and do it in the right order of TOWS.

The first principle from Sun Zi is outside-in analysis. Our perspective should start from the external environment, the external factors, the threats and opportunities, and then looking for the relevant internal factors of our comparative weaknesses and strengths.

The second principle is risk averse, risk first analysis.  Hence we must overcome the threats first before we can talk about the opportunities. If we are unable to address the threats, all the opportunities are false optimism.

This TOWS order guards against the typical optimism of project proposers and sponsors who tend to under-estimate the risks and over-rate the potential opportunities.

So our Sun Zi based Outside-In, Threats before Opportunities, TOWS analysis should look like this:

Objective:

Start with External Factors of Season Timing, Terrain Advantages and Customers Desires:
Threats
Opportunities
1.

1.

The Internal Factors of Philosophy, Leadership, Policies & Processes, Staff:
Weakness
Strengths
1.
1.  
The Strategic Initiatives:
1.
2.

Lim Liat copyrighted 25 May 2015


Every analysis of the TOWS must derive the strategic initiatives that need to take such that:

1. Our weaknesses exposed by the threats are handled and eliminated, or even better converted to strengths to overcome the threats to become opportunities to be exploited.
2. Our strengths exposed by the threats can be gainfully employed to overcome the threats.
3. In the same way, our weaknesses that may prevent us from exploiting the opportunities are eliminated or converted to become strengths to take advantage of the opportunities.
4. Our strengths relevant to the opportunities can be recognized and profitably employed.

We shall the Google Android experience rather than the earlier mentioned Microsoft successes which may be too old for many younger readers to know.

The Apple iPhone was announced by Steve Jobs in Jan 2007. The first Android phone was HTC dream announced in Sep 2008. So we can roughly say that Android is about 1.5 to almost 2 years behind the iPhone. They have much to catch up then.

So here is the TOWS analysis may be done by Google in 2005-6?....

The weaknesses revealed in analysis of threats caused Google to use its existing strengths to acquire the skills and to pull in many other leaders in hardware and telecoms to form the OHA to create new strengths to snatch the opportunities from Apple. Android soon became the market shares leader and many of its partners, namely Samsung and HTC earlier and China HuaWei, Lenovo, ZTE and lately XiaoMi to become major players in the smart-phone cloud-device market. While they may not be as profitable as Apple and are still successful.

The Sun Zi's Art of War that even the experts may not know #2

The Art of War Winners' mindset helps us to understand the rise and fall of nations and also of corporations. It can be the guide for us to build successful businesses. Here is a series of stories of the Smart-phone wars that explained the successes of Apple and Androids and the failures of Nokia-Microsoft phones.
In The Sun Zi's Art of War that even the Experts may not know #1, the winning Strategy is making sure others cannot compete with you. When you try to compete with others, you are starting from the loosing position.

The key question is then how can I achieve that?

In 20005 Chan Kim & Renee Mauborgne wrote the Blue Ocean Strategy to tell us how to get out of the red ocean of commoditied fierce competition into the blue ocean of non-competitors. The strategy canvas is a good tool to show you how to differentiate yourself from others. His ERRC and 6 paths are good guides to generate a different curve.

Sun Zi gives us the higher level guidance in
Art of War Chapter 4v7 He who is skilled in defense hides in below the earth; he who is skilled in attack moves in the sky above. Thus he can protect himself safely and gain all out win. 善守者藏于九地之下,善攻者动于九天之上,故能自保而全胜也。

The best defense is that you could be seen. There is no where to find you.

The best attack is to come from the next dimension, the sky, where you are not expected and yet you can still hurt them.

In the last post, I said that Apple created iPhone (cloud device), a new dimension, where the Nokia did not even understand. Only much later, when its sales were greatly impacted, that they tried to compete with iPhone by working with Microsoft - too late and no new value proposition.

Last post ends with, "If you miss the boat, how can you recover?".

In 1998, after Steve Jobs has saved Apple from going bankrupt, he was asked by Rumelt, "What are you trying to do? What’s the longer-term strategy?"

Jobs just smiled and said, “I am going to wait for the next big thing."

His strategy was precisely hiding underground and then attack from the sky (a blue ocean, next dimension market).

The Busy Wait
Most people think that waiting is doing nothing. That's laziness and losers talking. Jesus told his disciples to be busy still he comes again.

In this period of waiting, and hiding, Steve Jobs did incremental innovations for the Mac to keep the company profitable. In the meantime, he saw new opportunities in the music market - the deficiency of packing 20 songs in a CD. He went after a dollar a song anytime anywhere on the go. That's was the iPod and iTune. The new thing was marketed Oct 2001. Then, a major mp3 player, Creative Technology, just like Nokia later in the phone market, did not even know what was happening. They tried to go on a features war with iPod without the understanding of the real business issues. I hope you do remember Creative Technology, one of Singapore proud success stories that impacted the whole world in sound and games PCs.

The winning strategy is to hide while you develop and then create a new wave a new dimension ... i.e. a blue ocean. A blue ocean that sucks the profits out of the red ocean competitors, especially the market leaders of the red oceans. iPod greatly impacted the music and tech businesses and even later, through iTouch and iPhone, the phone market and the telecom market.

The Great Followers
But you may say, Steve Jobs types are rare. Creating a new wave is not easy. How can I really play catch-up successfully? Does Sun Zi have any good strategies?

For catching up strategies, we have to learn from Microsoft - the best followers that replaced the first movers. Microsoft DOS replaced CP-M, Excel replaced Lotus 123 that replaced Vasicalc earlier. Word replaced WordPerfect that replaced WordStar earlier. Even so, we can see how Sun Zi Art of War at play.

Lim Liat (c) 24 May 2015