The relevance of Sun Tzu's "Art of War" applied to modern business strategy

Asian Business Strategy Compared to the West  - lessons from the classic text on Asian strategy the “Art of War” by Sun Tzu 
authored in 2004
by Jason Armstrong, PhD who has worked as a CEO in Japan and has over 25 years martial arts experience

Sun Tzu’s “Art of War” is considered to provide the most profound lessons for leadership, and victory in East or the West. Today its principles are applied to business all over the world. This classic body of work came from life and death scenarios, which evolved from empire, trade and political struggles. Obviously today’s corporate world does not induce anywhere near as strong a mechanism for change, or success, as the consequences of failure in business are far less than warfare. Nonetheless, the trickle down lessons from the “Art of War” are definatley applicable to any organized effort, project or business. Although Chinese in origin, the “Art of War” and lessons from Zen were adopted by Japanese groups such as the Samurai and Corporate Japan for clarity of mind, decision making and strategy.
Past and Present: Modern Asia is now very different from its past. The question is: how much do today’s managers in an environment like Japan apply these principles? In short, the answer is that some components of the “Art of War” are easily spotted broadly across Japanese business culture and other attributes of the text are rare. Looking at specific companies, or managers, one will sometimes see avid followers of the principles of the “Art of War”, and sometimes very little application at all. The roots of almost any good strategic plan can be found in the text the “Art of War” so it’s implementation is also present in Western business (even if it not derived by someone who directly studied the text).
Alliances: Using alliances is a key strategic component of the “Art of War”. This translates to partnering in the business world. Business partnering models and strategies based on the “Art of War” are outlined in detail in a downloadable video series by Applied Zen. This article will not go into the details of such strategies but rather relate to their presence in Japanese business today and make comparisons to Western business. The importance of partnering and relationships is apparent to anyone who has done business in Japan. While these may not always portrait the efficiency of Sun Tzu’s “Art of War” strategies, partnering in Japan has permeated almost every aspect of Japanese business to an extreme. Over the years it has evolved to a degree of “middle men” involvement not seen in the West. The benefits, and hindrances, of such a system are often discussed by those doing business in Japan. Strategic partnering if carried out correctly should optimize sales, marketing, reduce operational requirements and create synergies that a company who approaches end point sales cannot. From Sun Tzu’s teachings such partnering strategies should also be put into product development (both the item itself and the marketing of it) as a process – not an after thought once the product is finished. Again, broadly speaking, Japan is rich with examples of this type of implementation.
Leadership and Decisions: The “Art of War” offers many lessons on leadership and people management. After all, if you can create a situation where people are willing to follow you into battle and die, there must be valuable motivation and leadership practices in place. Nowadays in Japan, one can see good examples of team co-operation and communication, and yet also some very bad examples. For example, Japan is a group-oriented society and usually makes decisions on that basis. Therefore, typically more staff are consulted and informed about decisions and ideas while they are in the making. However, this draws out the decision process. In comparison, Western companies often have decisions made only by upper management and then the ruling is put into the company as policy. In this Western approach, it is common for staff to learn about the policy only after it is announced. (the net result is often a long time before staff “buy-in” and policy becomes practice). The interesting thing about these two different approaches is that the time spent from contemplating a new idea to company implementation is very similar in both cultures, despite the generally faster decision making that occurs in the West. When one considers staff compliance and conflict avoidance, the Japanese way is better in that more staff are involved in the communication before policy is induced.
Communication: On the other side of staff communication, the Japanese environment does not encourage pro-activity like Western organizations. In fact, to suggest radical alternatives is often considered “rocking the boat” and is not a good career move inside Japanese businesses. In comparison the “Art of War” clearly identifies the need for taking calculated risks to gain intelligence as well as potentially gain ground. In the 1990’s Stephen Covey’s name became famous through the publication of the “The 7 Habits of Highly Effective People”.  As many know the “7 habits” are not a group of new concepts but age old approaches to success. They are simply represented in a way that can be clearly applied to modern day personal and corporate development. The same precepts are taught in a number of ancient development and achievement, arts such as: Zen (which is not a religion, but a path for self discovery and growth), the “Art of War” by Sun Tzu, and the Tao de Ching (the “book of change”). Covey’s first “habit” is pro-activity. This is based on recognizing, just as Sun Tzu did, that not taking some calculated short-term risks due to fear of action, is the sure way to long-term failure. In contrast Japanese business behavior is generally very risk adverse. On the flip side, Sun Tsu’s “Art of War” stresses the importance of defense and conservative advancement. It is the balancing of risk and conservative defense that must be strategically planned to ensure victory.
Synergize: The “Art of War” by Sun Tzu, is often superficially viewed as an aggressive approach to victory. However, it is essentially a master text on “Conflict Management” and “Win-Win” scenarios. Again the modern day programs such as Covey’s “7 habits” possess such precepts (“Win-Win”, habit 4 of Stephen Covey and “Synergize”, habit 6). Japanese models of partnering and distribution encompass these ideas.
S.W.O.T:  Zen, the “Art of War”, and the book of change (Tao de Ching) are all about self-analysis and understanding. They allow one to understand yourself and your organization’s: strengths and weaknesses, and therefore how to synergize with others to achieve positive outcomes. These things have a direct correlation to Western company S.W.O.T review (strengths, weaknesses, opportunities and threats). A better understanding of how one can approach self and competitior analysis from an “Art of War” business perspective can be found in the accompanying video series. Generally, in comparing the authors dealings with Japanese workers and companies, to many Western organizations, it seems that Japan places more attention on understanding one’s own, and competitor’s, position before acting. Again this relates to setting out a strategic path before embarking on a journey rather than exploring options as you go. Again reflecting on Japanese actions with regard to modern Western corporate trainers, Stephen Covey has said, “begin with the end in mind”(Habit 2 of “The 7 Habits of Highly Effective People).
Training: Continuing to train employee skills and undergo development both in-house and outside a company is essential. As the ancient samurai saying says: “Continually sharpen the sword or it will go blunt!” Generally the Japanese are quite good about providing thorough in-house training for tasks and sales. However, compared to many Western companies, outside training to create new ideas is rare. On the flip side, many Western companies (particularly smaller ones) are often a bit light with regards to in-house development.
Embracing Change: All the above methods (old and new) are about changing base behavior, beliefs and approaches. These are core values, and are far more important than putting band-aids on problems, or approaching things with simply a behavior change. In regard to the ancient philosophies, they of course must be interpreted, and applied, using case studies in a context that matches the modern corporate world. Japan today is a very different place than preached by its ancient philosophical ideals.  Japanese businesses and employees are generally not as good as the West at embracing, or coping with change – one of the few things in life which is inevitable. All people and cultures struggle with change and it is openness to it is the subject of the classic Chinese text “Tao de Ching”.
Etiquette: Many people at first glance take the strategic approaches of the “Art of War” to be aggressive. As outlined above Sun Tzu’s work is quite the opposite - avoiding conflict and aggression is in fact the thesis. Etiquette and humanity is absolutely built into all issues, and one obvious connection is the value of partners, networking and not creating enemies.  In Japan, the depth of etiquette is very extreme which again provides a similar link to the “Art of War” which has evolved over time.
This article only touches the surface of a few of Sun Tzu’s strategies and lessons. It also only eludes to some Japanese behavior in a generalized fashion (in any culture there are always exceptions). The study of Japanese corporate behavior relative to such Asian arts such as Zen and the “Art of War” is a fascinating area of study with lessons that can be applied to doing better business in the Asian environment, or in the West.

About the author:

Jason Armstrong, Ph.D., has worked at CEO levels in Japan, the USA, & Australia. He has also consulted for large multi-national companies in Japan and has specialized in the "Art of War" through martial arts for more than 25 years. His merging of Asian strategy and the business world was further developed by living with a Japanese budo master. In the last 6 years he has consulted with Japanese companies such as Mitsubishi Pharmaceutical and been General Manager of a US company in Tokyo. 

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