The Art of War in Business: What Finance Experts Should Know

Businesses fight for their bottom-line. They should learn how to win. So businesses seek wisdom from proven philosophies of war. “Obviously, much can be learned from business history, but military strategies imply more strategic thinking and strategic adaptation…,” Adrian Slywotzky, one of the world’s top 25 business consultants, said.

We can use most of the insights from Sun Tzu or Napoleon Bonaparte in business, according to Slywotzky. In this kind of war, we should not just be soldiers carrying shoulder-type anti-tank weapons, looking for tanks to shatter. This is usually how financial experts think. They have the financial wizardry, but they need more to win. They must think like great generals who win.

To become better at hitting the bottom line, businesses should learn how to apply the art of war.

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Business is a fight of interests. Carl von Clausewitz, a Prussian general and military theorist, put it this way: War is a clash between major interests. Rather than comparing it to art, we could more accurately compare it to commerce, which is also a conflict of human interests and activities.

In this article, I expound on the overview of the art of war and apply it on business strategy, particularly in dealing with the crucial advantage of knowledge, managing tangles, and leading despite of finite resources.

The art of war: an overview

Why is the “Art of War” by Sun Tzu, ancient as it is, continues to become a useful strategy in the 21st century? This is worth pondering. Among those who use the philosophy: former U.S. Chairman of the Joint Chiefs of Staff Colin Powell and New England Patriots coach Bill Belichick, among others.

Born in 544 BC, Sun Tzu established a remarkable philosophy of military strategy. It is one of the first-known war strategy book focusing on tactics beyond the bloodshed of physical battle. The philosophy anchors on the avoidance of war by diplomacy. It also gives battle advice. Foremost of these are preparation, planning around the enemy’s location and terrain, good training of combatants, and knowing the intents and weaknesses of the opponent.

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In this article, I extrapolate the applications of the art of war in business. These help you succeed as an information-age entrepreneur or freelancer.

On the value of knowledge

“Know the enemy and know yourself; in a hundred battles you will never be in peril.”—Sun Tzu

The philosophy underscores the importance of knowledge in oneself and that of the enemy. The logic is simple: you cannot expect to win if you do not conquer your inner demons and what faces you. We won’t be surprised why 68 percent of the world’s richest are self-made. They do not inherit their wealth; they made it.

How do they do it? When I read “Think and Grow Rich”—a classic book by Napoleon Hill — I discovered rich people think differently compared to ordinary people before they increased wealth. They learned from mentors.

They also read many books. Warren Buffett, for example, finishes 500 pages of books every day. No wonder he is one of the most accomplished investors in the world. Knowledge gives handsome returns. Businesses do not reflect knowledge in their financial statements, but what managers and employees know is invaluable.

Do you know why any wannabe in the industry, no matter how rich in monetary resources, cannot outperform Elon Musk’s Space X? The answer cannot overemphasize knowledge.

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On managing chaos

“Amid chaos, there is also opportunity”–Sun Tzu. The 21st century landscape makes chaos inevitable. This is amid a 24/7 “forever on” culture, building up complexity, super heated competition, and hyper speed pace of change.

Businesses need the art of war because it is all about how to handle chaos. Battles are not predictable. Soldiers in ancient times train to handle swords and spears so they don’t panic and fail, causing a slash. In modern days, crawling below barbed wires with volleys of shots above their heads is part of their preparation. This makes them maintain poise in a chaos.

This is similar in business. Entrepreneurs and managers need to handle a lot of things at the same time under pressure. The moment they make a mistake, it can be the end of the business. Some technology companies failed because they failed to handle chaos. One example is Blackberry. It used to be the Smartphone byword, an undisputed industry leader. But now, it has already lost its mass consumer base.

The reason? It fell behind in the must-haves for modern entrepreneurs and did not adopt the chaos principle for innovation, globalization, and technology. Business leaders who know the art of war always update themselves with the latest about their industry. They make their organizations flexible and adaptable to marketplace changes. They respond fast, use time management and prioritization tools, skillfully deal with changes and interruptions and communicate effectively, among others.

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On limited resources

“He will win who knows how to handle both superior and inferior forces.” –Sun Tzu

In war, soldiers can get outgunned or outnumbered. They can face a more superior army. This, however, should not lower their morale. To deal with such a situation, Sun Tzu teaches learning when to fight and not to fight. If the enemy is stronger and more numerous, the best way is to avoid the fight through diplomacy. Companies apply this philosophy by changing their business model. For instance, Amazon disrupts the industry by providing to clients around the world ebooks and printed materials faster and more efficiently compared to any company before. It avoids playing the game of traditional book sellers – and win.

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The art of war philosophy inspires modern strategies to become an industry leader. Here are ways to win a resource-strapped business by Rhett Power, et al. in Inc. magazine:

1) Use social media marketing. Maintaining an emotional connection with customers through Facebook, Linkedin, Twitter, Snapchats and other platforms is inexpensive but effective.

2) Be money smart. Justify each expense. Many start-up businesses fail because they spend too much on attracting potential investors rather than building their main business.

3) Bootstrap. Using this method, you only rely on internal finance to grow your business. Your income only supports the growth of the business. This requires discipline and creativity.

4) Be resilient. Entrepreneurs fail, but they should also learn fast. When a decision flunks, they should again with another course until they succeed.

5) Build allies. Companies like call centers and real estate businessmen can team up with special arrangements with each other.

Strategic management in the creative age continues to employ the wits of ancient times, which includes the art of war. We need these to win our battles.

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Special thanks to Lucell Larawan