In every course taught in major business schools, the book, The Art of War by Sun Tzu, is a requisite when discussing business strategy. In Chapter 13 of The Art of War, Sun Tzu discusses the purposes of due diligence before a general goes into battle. He states:
"Raising a host of a hundred thousand men and marching them great distances entails heavy loss on the people and a drain on the resources of the State. The daily expenditure will amount to a thousand ounces of silver. There will be commotion at home and abroad, and men will drop down exhausted on the highways. As many as seven hundred thousand families will be impeded in their labor.”
In other words, going into battle is a major concern to the campaign, and a good general needs to know the opportunity costs of taking on this challenge. How does one come to that conclusion that the usage of labor and resources are worth the battles fought? What will be the outcomes, whether won or lost?
Sun Tzu’s response:
”What enables the wise sovereign and the good general to strike and conquer, and achieve things beyond the reach of ordinary men, is FOREKNOWLEDGE. Now this foreknowledge cannot be elicited from spirits; it cannot be obtained inductively from experience, nor by any deductive calculation. Knowledge of the enemy’s dispositions can only be obtained from other men. Hence the use of SPIES.” [Emphasis added]
Sun Tzu outlines a number of different types of spies, ranging from local inhabitants of the district to converted spies of the enemy, but all these different types have a common purpose: to supply the general with the intelligence he needs to make a calculated decision and decide on whether to engage an enemy or avoid that engagement to avoid the usage of valuable resources. The benefit of this FOREKNOWLEDGE is a deciding factor for the general to march with his troops.
How can the Art of War, Spies, and Win Loss Analysis Questions provide leaders the foreknowledge before choosing their battles?
In business every day, we are met with challenges and obstacles that we need to overcome. Some of these are more significant than others and need to be prioritized. A competitor is moving into a market—do we challenge them or consolidate for another opportunity? A major client is leaving us—why are they leaving? Government regulations are changing—do we continue on our path or pivot into another product offering or market?
Executives, like generals, are faced with complex choices every day of their lives and are entrusted with the livelihoods of their subordinates. Making an executive decision can be a strenuous and challenging process because it will use up a company’s resources and could potentially demoralize the workforce if there is a loss. As Sun Tzu says, the best way an executive/general can make this decision is by having FOREKNOWLEDGE. The best way is from human contact or other people. Risk mitigation, cost/benefit analysis, or even predictive analytics platforms cannot replace primary human contact. And while an ethical executive would never use an actual spy, employing an agent to gather intelligence has always been the greatest usage of a company’s resources before going into a competitive opportunity.
Using ethical and transparent methodologies, will allow you to gather trustworthy intelligence from the buyer that your company needs before you make any executive decisions about engaging with a market or account. In other words, you hire a spy, without being a spy. Utilizing a 3rd party firm to gather the sales and competitive intelligence needed is the best and honest way to do so. They gather the true intents of the buyer and competitive intelligence that is not otherwise attainable.
As Sun Tzu concludes:
“Be subtle! Be subtle! And use your spies for every kind of business. Hence it is only the enlightened ruler and the wise general who will use the highest intelligence of the army for purposes of spying and thereby they achieve great results. Spies are a most important element in water, because on them depends an army’s ability to move.” [Emphasis added]