If you are the CEO of a multinational company, how do you consolidate the operations of a rival you have just acquired in a hostile takeover? If you are a CIO, how do you convince the senior management team to invest in a costly IT installation? And if you are a CFO, how do you persuade shareholders
that the best way to finance a major expansion is with an IPO?
These are the kinds of questions that keep business leaders up at night. They are also the challenges that make and break careers.
What does it take to navigate the stormy oceans of today’s business world, and not only survive, but emerge victorious?
The fact is that a smart CEO is not just someone with a deep understanding of his industry. And an effective CIO is not just someone with a thorough knowledge of the latest technologies. Often it is the ability to think outside the box, combined with soft people skills that make the difference between being a boardroom superstar and a back-room wannabe.
In business, a senior executive is of little value to his company unless he can influence allies and outwit competitors. But what is the secret to success in the political thrust-and-parry that underpins business affairs?
Every business leader wants his company to overcome challenges; become bigger, smarter and more profitable. But what is the best way to achieve these objectives? There are nearly as many answers as there are management consultants and books about business leadership. The trouble is, with hundreds of perspectives to choose from, how do you decide which one is right for you, and your particular business problem?
“”That’s the management dilemma,”” says Gareth Morgan, a professor at York University’s Schulich School of Business in Toronto.
“”The biggest breakthrough in strategic thinking in recent years is the realization that we are trapped by subconscious frames.””
For Morgan, who has authored three books on the subject of leadership and developed a related e-learning tool called NewMindsets, strategic thinking begins with recognition of our biases, and their influence on our decisions. For example a business leader who micro-manages his projects, and keeps a tight rein on his subordinates may believe if you want a job done right, you have to do it yourself. On the one hand, he ensures work is done to his specifications. But on the other he is probably expending too much energy, and not allowing his team to unleash its creativity. This could result in a morale problem, or outright revolt.
The second step, selection of the appropriate frame, is a little more difficult. “”Choosing the right frame for a given problem is a core leadership skill,”” says Morgan. “”You can have all the core technical competencies in the world, but if you don’t have the ability to interpret and reinterpret situations creatively, you can’t cut it in a turbulent business world.””
Still, Morgan’s NewMindsets does not try to match frames to business situations like socks to shoes because that would be too simplistic in a world where there are no right or wrong answers. “”To select the right frame, you have to see patterns,”” says Morgan.
“”It starts as an intellectual process, but over time it becomes intuitive.””
The recognition of patterns is the basis of The 36 Stratagems, an ancient Chinese text about military strategy that Miami-based author and consultant Kaihan Krippendorff thinks has a lot to teach Western business leaders.
“”The Eastern school of strategic thinking involves some level of manipulation and deceit,”” says Krippendorff. “”What we call tricks the Chinese have refined into stratagems.”” In his book The Art of the Advantage, published earlier this year, Krippendorff explains how these military tactics are as relevant to business thinking today, as they were to warfare 2,500 years ago.
The basic message of Krippendorff’s book is that Western strategic thinking tends to be direct, which means there is a propensity to challenge an adversary head on, and fight for all the marbles
on a level playing field. By contrast Eastern strategic thinking is indirect. It is rooted in traditions that give the adversary a chance to save face or escape if he wishes.
“”You can be effective fighting with your right hand,”” says Krippendorff in explaining the advantage of adopting Eastern strategic thinking. “”But what about also fighting with your left hand, and being able to switch back and forth?””
To illustrate how Chinese military stratagems can be applied to modern business, consider the case of a CIO who wants to persuade his company to invest in a major IT initiative by pointing out the competition is sure to make the same investment. This stratagem is known as killing with a borrowed knife, or using a third party (in this case the competition) to indirectly attack an adversary (in this case the senior management committee led by the CEO).
The CEO’s best response to this scenario is to reject the proposal, but carefully monitor the competition to see if it makes the predicted investment. This is called beating the grass to startle the snake, and it is generally applied in situations where you want to test the enemy with a series of small attacks before committing all your forces.
The CIO may counter by digging for the real reason for his lack of success, and discover the CEO believes a higher ROI can be achieved by investing in robotic technology. The CIO may then look for an example of where robotic technology has failed a company. If he finds it, say in a trade journal, he could casually leave the journal in his CEO’s office the next time they have a meeting.
This stratagem is called removing the firewood from under the pot, which eliminates an adversary’s reason for being hostile toward you. Again, it is best applied when confronting a powerful enemy you do not wish to fight directly.
“”The philosophy behind The 36 Stratagems is using creativity to outwit opponents,”” says Krippendorff. “”The assets and capabilities of an organization are a source of competitive advantage. The same is true for the strategic thinking of its people.””
Not everyone however agrees with Krippendorff. “”The metaphors of Chinese military strategy are incredibly dangerous,”” says Morgan of the Schulich School of Business. “”Trickery is not sustainable because it breeds enemies.””
Morgan makes an interesting point, but other masters of strategic thinking, including Niccolo Machiavelli, a
16th century version of Henry Kissinger, and Dale Carnegie, author of the landmark book How to Win Friends and Influence People, also advocate various degrees of duplicity in business dealings.
Salman Musti, program director of the Queen’s MBA for science and technology in Kingston, Ont., agrees that Chinese military strategy can provide valuable insights into business problems. His favourite book on the subject is Sun Tzu’s The Art of War, but Musti most often reads Commonwealth literature to open his mind to new ideas.
“”If you want to gain insights into your industry, you should not just read business articles,”” says Musti. “”You should also read fiction. A Renaissance manager is a scientist and artist, like Leonardo da Vinci.””
Whether you model yourself on da Vinci, an ancient Chinese general or Machiavelli, it all adds up to the same thing: If you want to unleash your strategic thinking, you need to stop relying on knee-jerk responses to business problems, and start looking at the world from different perspectives.
That’s easier said than done, but no one ever said winning in business was going to be easy.