Business as war

(First part)

The Art of War” by military strategist Sun Tzu is studied not only in national defense but also in business.

His recommendations are often ruthless but effective, such as the following:

Deception: At the start of battle, be a shy maiden to entice the enemy to lower his guard. Afterward, be an agile hare to catch him unaware.

Temptation: Dangle a bait before the enemy to lure him. When he succumbs, strike him down.

Confusion: An army in confusion means certain victory for the enemy.

One-upmanship: Seek out enemy spies, then bribe and guide them to work for you. As double agents, they can now work on your behalf.

Resource conservation: Conserve energy while you wait for the enemy to tire himself out. Feed yourself while your enemy goes hungry.

Aside from Sun Tzu, Chinese history and lore contain other battlefield tactics that can be used by shrewd businesses.

In their book “The 36 Stra­tegies of the Chinese,” National University of Singapore professors Wee Chow Hou and Lan Luh Luh narrate war tactics and discuss them in the context of businesses today.

Readers have asked where to get copies of the book. A friend gave a copy to our family decades ago, but the book is still available on Amazon. Published by Pearson in 1999, the book is remarkably still prescient for businesses today.

In the past weeks, we stu­died some strategies. Now we look at three more, and end with several more next week.

Loot a house on fire

Strike while the iron is hot. Loot a house, not when guards are on patrol, but when it is on fire. Take advantage of the enemy, not while he is strong, but when he is weak.

For half a century, the family business Yeo Hiap Seng (YHS) used to be famous for food and drinks in Singapore. But it fell victim to vicious conflict; the third generation filed suits and countersuits against each other.

For a long time, YHS had seemed impregnable, but when conflict erupted, it was soon taken over by another family business. Far East Organization is now a respected conglome­rate in the country.

In the Philippines and elsewhere, all of us know of businesses that have fallen prey to family squabbles. These businesses were eventually taken over by others.

Steal a goat along the way

Seize the day. Enroute toward a bigger mission to topple a kingdom, wily spies manage to steal a goat along the way. Successful entrepreneurs grab at every opportunity, however small it may seem.

In the 1960s and 1970s, US car makers did not market their vehicles in Southeast Asia, and left the door open to Japanese and European companies, which soon dominated all segments of the market. Rolls Royce boomed in Hong Kong, Mercedes Benz in Singapore.

US car companies tried to catch up, but in countries like the Philippines, they already lost out especially to Japanese brands.

Federal Express and United Parcel Service, courier behemoths in the United States, also neglected Asia at first. DHL, which was much smaller then, decided to invest in Asia, to great success.

Soon DHL became more popular than the others in countries like Hong Kong.

Watch the fire from the other side of the river

Avoid the melee: Watch the fire from a safe spot. Avoid direct conflict: Watch on the sidelines and enter only when the time is right.

“While the US tried to ensure that China respects trade accords, copyright laws and human rights issues, its European and Japanese allies chose to ‘observe the fire from the other side of the river,’” Wee and Lan say.

“At times, they even cashed in on the vacuum left by the US. [In the 1990s] as a result of the conflicts between China and the US, Boeing lost a [huge] contract to supply aircraft to China. The contract was awarded to Airbus instead.”

Similarly, “the biggest beneficiaries of the US efforts to crack down [on] piracy of music and video recordings in China [in the 1990s] were not American companies but Japanese (Sony) and German (Bertelsman) ones.”

Queena N. Lee-Chua is with the board of directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” at www.lazada.com.ph or call National’s Jennie Garcia at 0915-421-2276. Contact the author at [email protected].