August 22, 2016
In recent years, classic war books became highly popular among entrepreneurs. Although technology is changing the world at a very fast pace, basic leadership, entrepreneurship and military strategies haven’t changed since the ancient times. In this article, I pulled out quotes from two of my favorite classics that deal with military and political leadership, and tried to determine how thoughts of Machiavelli and Sun Tzu can enhance business development.
Machiavellianism is a negative term that describes unscrupulous rule. In spite of this, Machiavelli’s political philosophy is widely appreciated in both political in business circles. Although we think that his thoughts are much more suitable for 19th and 20th century’s Robber barons like John D. Rockefeller, J.P. Morgan and JB Duke, Machiavelli’s ruling strategies are also used by millennial entrepreneurs, but they usually come in a shiny PR wrapping.
Men should be either treated generously or destroyed, because they take revenge for slight injuries – for heavy ones they cannot.
This is one of the harshest Machiavelli’s thoughts from The Prince, which can be easily applied in entrepreneurship. Coca-Cola and Pepsi have been plotting vengeance and causing slight injuries to each other’s reputation for decades during Cola Wars, and now both companies are affected by a soda sales decrease.
Apple and Samsung, on the other hand, managed to completely crush Nokia, which in 2007 held more than 50% of the worldwide mobile phone market. They did it by launching the first iPhone and Samsung Galaxy series. This proves that a hard blow which you competition won’t be able to withstand is much more effective than frequent small-scale attacks.
All courses of action are risky, so prudence is not in avoiding danger (it’s impossible), but calculating risk and acting decisively. Make mistakes of ambition and not mistakes of sloth. Develop the strength to do bold things, not the strength to suffer.
This Machiavelli’s quote is widely acclaimed in the corporate world. Today, everybody understands that entrepreneurship requires advanced risk management skills and that sometimes we need to do bold things in order to turn our business idea into a successful startup.
Every successful entrepreneur took a huge risk, at least once during their career. King Camp Gillette’s story is one of the brightest examples of how doing bold things can benefit your growing startup. In the beginning of his career, he’d given out thousands of free razors, to create a future customer base that will buy Gillette disposable blades.
And here comes in the question whether it is better to be loved rather than feared, or feared rather than loved. It might perhaps be answered that we should wish to be both; but since love and fear can hardly exist together, if we must choose between them, it is far safer to be feared than loved.
This quote has been widely disputed in political and entrepreneurial circles. Today’s entrepreneurs are using a completely different approach in running their business. They get overly friendly with their employees, which often causes a business performance decrease.
Machiavelli’s thoughts shouldn’t be taken literarily. Always remember that The Prince was written 5 centuries ago, and that 16th century’s tyrant will be similar to today’s leader, who rules ‘with an iron fist, while wearing velvet gloves’. The best example for this type of leadership are entrepreneurs who managed to benefit their company’s performance with big layoffs. William Clay Ford Jr. was one of them. From 2002 to 2008, Ford Motors laid off more than 50,000 employees and they were able to get through 2008 Economic crisis without declaring bankruptcy and taking government loans.
The Art of War
Sun Tzu was a Chinese military strategist and his Art of War treatise is one of the greatest military strategy books. Art of War inspired some of the greatest generals and revolutionaries, including: Mao Zedong, Vo Nguyen Giap, and Douglas MacArthur and in recent years it became very popular book among entrepreneurs, who are successfully applying Sun Tzu’s teachings on their business projects.
Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.
Today’s market wars are not much different from feudal wars that ravaged China during the Spring and Autumn period. As an experienced military strategist, Sun Tzu realized the importance of preparations and planning. Wars in ancient China were preceded by intelligence work and vassal arrangements. Startup incorporation and new product launches are not much different. They require an elaborate market research and negotiations with potential investors and partners.
Pokémon Go had a brilliant launch a few months ago. Niantic and Nintendo planned this game’s social network campaign to the smallest detail and won the market war by creating the biggest viral craze in the history of mobile gaming. In only a few weeks, Pokémon Go has become the most popular mobile game in the whole world.
A leader leads by example, not by force.
This Sun Tzu’s thought was turned into one of the most popular leadership quotes. Since entrepreneurs need to show advanced leadership capabilities in initial phases of their startup’s development, they should set an example to their employees and work hard in order to get their business running.
Influential entrepreneurs like Richard Branson or Steve Jobs have had the history of hard work and innovativeness and they represent the perfect example, not only to their employees, but also to millions of other people from around the world who want to build their own business success.
The art of war teaches us to rely not on the likelihood of the enemy’s not coming, but on our own readiness to receive him; not on the chance of his not attacking, but rather on the fact that we have made our position unassailable.
In war, as well as in entrepreneurship, nothing should be taken for granted. When you’re starting your business or launching a new product, you should conduct an advance scenario analysis and consider all possible outcomes.
Economic crisis that struck the world in 2008, took many entrepreneurs and brokers by surprise. The absence of scenario analysis led some of the most prosperous companies and investment funds into bankruptcy. On the other hand, Warren B1uffet consolidated his lines during this time and used Economic crisis to make over 10 billion dollars by buying shares of Goldman Sachs, General Electric, Swiss Re and Dow Chemical.
Millennial entrepreneurs often get carried away by current market possibilities. They should understand that business strategies they use today, are not much different from the ones that were used by warlords in ancient China or by traders in 16th century Florence. This realization helps us to understand business processes and apply strategies proven thousands of times throughout human history.
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