War & Business Strategies

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Lecture 2 of the Business Project course. The origins of business strategy from military strategy.

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War & Business Strategies

  1. 1. War  &  Business  Strategy   Understanding  Founda4ons  and  Drawing  Parallels  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  2. 2. By  a  show  of  hands,  how  many  of  you   believe  that  military  and  business   strategy  are  the  same?  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  3. 3. Understanding  the  Similari0es  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  4. 4. In  the  world  of  business,  we  regularly   hear  phrases  like  “we  have  won  the   baDle  for  industry  leadership,”  “we  have   successfully  defended  our  market   posi4on,”  or  “we  have  made  a  killing  in   the  stock  market”  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  5. 5. These  phrases  use  military  terminology   to  express  business  successes,  but  is   that  where  the  rela4onship  ends?  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  6. 6. Both  the  military  and  business  are   concerned  with  compe44on  and  how  to   succeed  in  the  face  of  determined   adversaries.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  7. 7. In  one  case,  there  is  physical  survival;  in   the  other,  there  is  commercial  survival.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  8. 8. Both  use  a  mental  ac4vity  which  seeks   to  iden4fy  a  way  of  winning,  and  each   defines  this  process  as  “strategy.”  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  9. 9. In  each  case,  resources  –  physical,   human  and  moral  –  are  applied  at   cri4cal  points  in  an  aDempt  to  achieve   the  aim.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  10. 10. Between  500  –  600  BC,  Sun  Tzu,  a  great   Chinese  General,  began  wri4ng  his   volume  on  military  strategy  called  the   Art  of  War.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  11. 11. Sun  Tzu  proposed  that  the  most   successful  general  was  one  that  could   win  before  the  figh4ng  has  to  start   (deterrence);  that  superior  manpower,   posi4on,  technology  and  so  on  would   prevail  (competitive advantage);  and  to   avoid  what  is  strong  (indirect approach).  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  12. 12. Heads  of  State  also  used  military   strategy  to  ensure  that  their  na4ons   survived  or  to  minimize  the  affects  of   aggressive  moves  by  compe4tors.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  13. 13. This  strategy  is  conducted  on  a  world   stage  and  can  result  in  the  loss  of  lives,   will  involve  vast  sums  of  money,  and  will   influence  the  progress  of  human  history.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  14. 14. This  type  of  strategy  is  known  as  a   Grand  Strategy.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  15. 15. An  example  of  grand  strategy  is  the   conquest  of  India,  but  the  way  this  is   achieved  also  requires  a  means,  method   and  a  plan.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  16. 16. This  is  where  strategy  changes  to  tac4cs.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  17. 17. BaDalion  commanders  will  develop  a   “strategy”  to  conquer  the  enemy,  but   the  Corps  Commanders  will  look  at   these  at  “tac4cs.”  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  18. 18. Strategy  is  the  theory  of  the  use  of   combats  for  the  object  of  war.     Tac*cs  is  the  theory  of  the  use  of   military  forces  in  combat.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  19. 19. Differences  Between  Military  and   Business  Strategy  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  20. 20. Many  people  who  study  strategy  have   tried  to  disprove  the  link  between   military  and  business  strategy…  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  21. 21. This  is  not  possible  to  do  for  a  number   of  reasons…  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  22. 22. First,  there  was  no  such  thing  as   business  strategy  prior  to  the  1960s.   Before  that,  all  strategy  was  considered   military  strategy.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  23. 23. In  the  military,  ge;ng  results  is  as  easy   as  giving  orders.  It’s  not  that  simple  in   civilian  life.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  24. 24. We  believe  that  ge_ng  results  is  as  easy   (or  as  difficult)  as  giving  the  right  orders,   whether  in  the  military  or  in  business.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  25. 25. Making  the  right  decision  and  building  a   team  to  execute  the  decision  is  a   challenge  for  a  leader.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  26. 26. In  both  spheres,  the  leader  must  act   through  people.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  27. 27. As  a  business  person,  I  have  to  make  a   profit.  In  the  military,  you  don’t  have  to   face  that  pressure.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  28. 28. While  we  agree,  the  military  does  not   face  the  same  kind  of  boDom  line   pressures  that  business  face.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  29. 29. The  pressure  that  all  of  our   organiza4ons  face  is  pressure  to   perform,  to  succeed  and  to  win.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  30. 30. In  today’s  world,  with  poli4cal  demands   for  accountability  and  efficiency,  the   military  has  been  forced  to  reduce  its   costs  and  improve  its  produc4vity  as   surely  as  any  private  enterprise.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  31. 31. In  business,  I  have  to  struggle,  get  and   keep  customers,  but  the  military  is  a   public  ins0tu0on  –  you  don’t  have  to  go   out  and  find  customers.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  32. 32. In  a  sense,  Pakistan’s  ci4zens  are  the   military’s  customers  and  they  are  in  no   danger  of  losing  them.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  33. 33. The  danger  is  in  failing  them  on  the   baDlefield.  In  that  sense,  compe44on  is   at  the  core  of  the  military’s  existence.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  34. 34. Strategy  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  35. 35. We  were  taught  in  business  school  that   –  good  strategy  does  not  recognize  the   concept  of  victory.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  36. 36. Strategy  is  the  way  to  gain  advantage  in   the  current  circumstances  and  as  far   ahead  as  it  is  possible  to  look,  but  retain   the  understanding  that  adjustment  may   have  to  be  made.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  37. 37. As  I  men4oned  previously,  business   strategy  did  not  emerge  un4l  the  1960s,   so  the  concept  of  strategy  was  started   by  the  military  and  later  adopted  by  the   business  world.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  38. 38. Understanding  the  Origins  of  Strategy  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  39. 39. The  word  strategy  comes  from  two   Greek  words  –  stratos  (army)  and  agein   (to  lead)  –  which  means  “art  of  the   general.”  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  40. 40. The  reason  for  telling  you  this  is  not  just   to  show  you  where  the  word  comes   from,  but  that  it  has  been  around  since   500  BC.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  41. 41. In  508  BC,  in  the  great  city  of  Athens,   ten  tribal  divisions  were  formed,  each   headed  by  an  elected  strategos.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  42. 42. The  crea4on  of  a  strategos  showed  the   increase  in  the  military  decision-­‐making   process  and  the  complexity  that  came   with  it.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  43. 43. Warfare  had  evolved  to  the  point  where   winning  sides  no  longer  relied  on  the   deeds  of  heroic  individuals  but  on  the   co-­‐ordina4on  of  many  different  units  of   men  figh4ng  in  close  forma4on.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  44. 44. Strategoi  were  not  only  selected  for   their  wisdom,  but  were  also  required  to   have  first-­‐hand  experience  in  baDle.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  45. 45. They  also  required  vision,  ar4cula4on   and  communicate  it  to  the  people.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  46. 46. In  338  BC,  Philip  of  Macedon  and  his  son   Alexander  the  Great  gained  victory  in   the  baDle  of  Chaeronea…  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  47. 47. Many  of  us  use  this  baDle  to  draw   parallels  with  current  management   concepts…  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  48. 48. The  Parallels  Ø  Philip  and  Alexander  had  very  clear  goals  in  the  baDle  Ø  They  used  an  indirect  approach  Ø  They  used  decep4on  Ø  They  had  a  well-­‐developed  con4ngency  plan  Ø  They  exploited  their  top-­‐down  command  structure  against  a   Greek  military  that  relied  on  the  more  difficult  democra4c   system  Ø  They  analyzed  their  strengths  and  weaknesses,  and  used  their   strengths  to  offset  their  weaknesses  Ø  They  aDacked  their  opponent’s  weaknesses  Ø  They  concentrated  their  forces  at  the  cri4cal  points  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  49. 49. This  evidence  shows  that  strategic   thinking  by  the  Macedonians  to  achieve   superiority  over  the  larger  Greek  forces.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  50. 50. Sun  Tzu’s  Art  of  War  was  the  first   wriDen  document  on  the  principles  of   strategy,  and  his  declara4ons  have  been   quoted  in  recent  years  in  the  business   context…  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  51. 51. The  Art  of  War  Taught  Ø  Stressed  the  value  of  planning  Ø  Recognized  the  value  of  4ming  Ø  Explained  that  war  was  a  contest  of  wills  of  opposing  generals  Ø  An4cipated  the  strategy  of  the  indirect  approach  Ø  Stressed  the  importance  of  mobility  Ø  Iden4fied  leadership  and  morale  as  important  aDributes  of   successful  forces  Ø  Along  with  a  number  of  other  observa4ons  s4ll  relevant  today   to  business  people  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  52. 52. In  Rome,  the  Romans  were  ruthless  and   warlike,  habits  that  had  become  part  of   their  culture  over  decades  of  war.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  53. 53. The  Senate  was  responsible  for  strategic   decision  making  at  the  direc4on  of  the   state,  but  Senators  were  not  only   poli4cians…  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  54. 54. No  Roman  could  stand  for  poli4cal  office   un4l  he  had  served  on  ten  annual   military  campaigns.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  55. 55. Like  the  strategoi  of  Greece,  the  Roman   strategies  knew  from  first  hand   experience  about  military  opera4ons.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  56. 56. The  Romans  did  not  face  a  single  enemy   whose  ul4mate  defeat  would  ensure   permanent  security.  Their  only  goal  was   the  maintenance  of  a  minimally   adequate  level  of  security  at  the  lowest   feasible  cost  to  society.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  57. 57. These  condi4ons  are  similar  to  the   problems  that  modern  corpora4ons  face   –  no  single  baDle  wins  security,  but  they   face  an  endless  aDack  of  compe4tors  in   which  only  the  most  efficient  will  survive  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  58. 58. Origins  of  Strategy  in  Business  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  59. 59. Strategy  can  be  seen  as  “the  way  to   win.”  So  winners  must  have  a  strategy   whether  they  acknowledge  it  or  not.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  60. 60. Henry  Mintzberg  developed  the   founda4onal  principle  of  the  different   components  of  strategy:  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  61. 61. Plan  –  recognized  that  a  common  view  is   that  strategy  is  a  consciously  intended   course  of  ac4on  which  is  made  in   advance  of  the  ac4on  and  is  purposeful.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  62. 62. Ploy  –  suggests  that  strategy  can  be  a   manoeuver  intended  to  outwit  or   confuse  the  opposi4on.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  63. 63. PaDern  –  iden4fies  a  consistency  in   strategic  behavior,  whether  or  not   intended,  that  over  4me  becomes   recognizable  or  even  predictable.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  64. 64. Posi4on  –  means  that  strategy  locates   an  organiza4on  in  an  environment  and  is   a  media4ng  or  matching  force  between   an  organiza4on  and  the  outside  world.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  65. 65. Perspec4ve  –  proposes  that  strategy  is   the  way  an  organiza4on  perceives  the   world,  an  abstract  concept  that  shapes   the  behavior  of  the  par4es  involved.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  66. 66. Michael  Porter  broke  strategy  into  further   components  to  be  used  as  compe44on:     New  Entrants,  Subs4tute  Products,  Power  of   Suppliers,  Power  of  Buyers,  and  Industry   Compe44on.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  67. 67. Campbell  and  Young  defined  the  Ashridge   Model  for  how  strategy  could  be  used  for   se_ng  the  mission/vision  of  an  organiza4on:     Purpose,  Values,  Behavior  Standards  and   Strategy  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  68. 68. We  also  know  that  strategy  must  be  able   to  drive  decision  making.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  69. 69. Strategy  is  the  choice  from  many   available  op4ons  as  a  way  to   succeeding.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  70. 70. So  what  we  learn  is  that  strategy  is  all  of   its  forms,  originated  from  the  military   and  was  tailored  to  business  to  achieve   compe44ve  advantage,  a  mission  or   vision,  target  objec4ves  and  drive  the   decision  making  process.  HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED
  71. 71. HTTP://EMAGINE-GROUP.COM BRAND FOCUSED, SOCIALLY ACTIVE, DIGITALLY ENABLED

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