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Is Your Business Ready for War?
by Christine Crandell
Software companies operate in an intensely competitive global industry characterized by glorious victories and at times disappointing defeats. Imperialistic and samurai acquirers, predatory pricing, enigmatic deployment of resources, coupled with the ever increasing battles for mind share, and you have a very real warlike theater. The software battlefield winners have proven that successful strategy is rooted in proven warfare strategy. It is not unusual to find software companies that achieve sustainable success are often those that utilize the principles of war in their strategic planning.
The principles of war have evolved over time and they have been successfully applied throughout history by all the great warriors - from Sun Tzu to those of current day. The software industry battlefield principles that follow have been prepared based on the principles used by military planners throughout the world. The relatively short history of the software industry is full of examples that show us, to disregard even one of these principles can often result in disappointing results or even disaster.
Objective
Every organization - whether it's an army or a company - must have a credible purpose or mission. Supporting that mission there must be goals that are achievable and meaningful, and objectives that are measurable and time specific. The key is to have strategic goals and objectives that are prioritized and focused only on what's most important. In implementing strategy, the odds of succeeding are enhanced if all employees know their role in relation to the company's objectives and how their contribution relates to the overall purpose of the organization.
Offensive or Initiative
This principle is based upon being prudently proactive - in order to achieve secure positions in the marketplace, to maintain freedom of action and to impose the company's will on the competition. Being prudently proactive refers to a consistent sense of urgency, to operating fast and being able to capitalize on opportunities and trends before the competition. Reactive or defensive measures should only be used as a temporary strategy until an opportunity is available to be proactive. Have a look at your situation and make an honest assessment of your company's adherence to this important principle. Are you setting the pace or always reacting to competitors' initiatives?
Scale or Mass
The rule here is that generally, the army with the right concentration of resources at a particular point and time will win. The interesting thing here is that a company with relatively less resources can actually win with the proper application of "what they have" at the right time and place. During economic fluctuations, this principle is especially significant for the "little guys", since this is when many large companies spread their resources too thin - thereby making easy opportunities for others. Take some time to see where your competitors may be vulnerable and then review your resource allocation (people and capital) to make sure your "mix" is where it should be.
Economy of Effort
This principle gets to the heart of an important aspect of strategic management - your team's degree of tolerance to risk. Economy of effort really means minimal use of resources for non-critical objectives after deploying appropriate resources for primary objectives. Are you willing to take risks in secondary markets to ensure appropriate focus on your primary ones? Done properly, those resources that are deployed for secondary purposes can provide leverage and act as force multipliers, causing competitors to misallocate their resources and attention.
Maneuver
From a military perspective, positioning of various troops to the disadvantage of the enemy is the essence here, thereby achieving results that would otherwise be too costly. For software companies, this principle touches upon two critical bases of competing - speed and flexibility. Flexibility allows you to modify your strategies to change. When things are going well, maintaining flexibility is usually very difficult -- but essential for future success and must be part of the company's culture, value system, and beliefs. Speed allows you to make changes more quickly than the competition. This principle is even more important for software executives who must make decisions, especially critical ones, faster than almost any other industry. The best strategy is irrelevant if it takes too long to formulate or implement.
Unity of Leadership
In order to have cohesive, consistent winning strategy, there can be only one leader of an army, a business or a project. Unity of command fosters unity of efforts. Time and time again we see the violation of this principle by many otherwise talented executives. How many times have we seen disappointing results from committees or task forces? This does not mean that a team approach is not vital in implementing strategy - just that authority and responsibility should not be diluted. The key then is having one person responsible with the right authority for strategic initiatives and critical programs.
Security
This principle involves the prudent management of resources. It does not equate to being overly cautious or to the avoidance of measured risk. Stated in terms of war principles, security strategies prevent unnecessary surprises, maintain freedom of action and preserve the privacy of plans. From a business viewpoint, security is obviously important in order to protect corporate resources from competitors whether they are markets, people or technology.
Surprise
Throughout history, the successful application of surprise has allowed otherwise weaker armies and businesses to achieve significant advantage and success out of proportion to the efforts deployed. For example, in the early '90s, SAP AG entered the USA market for real and used this principle to challenge some of the leaders such as McCormick & Dodge, The ASK Group, and MSA in the ERP market. In this case, as in most successful applications of this principle, such factors as deception, speed, proper timing, good intelligence information and so on were crucial.
Simplicity
Simplicity should be a guiding principle in any approach to strategic management. If your strategic plan cannot be reasonably well defined on a single page, then it is probably too complicated. Moreover, thick, "noisy" plans are difficult to implement and can often result in a misapplication of resources. The difficulty for many executives is that for a plan to be simple and implementable, requires difficult and consequential prioritizing and then letting go of certain non-priority goals, objectives and programs. Focusing your efforts and resources on relatively few, but critical objectives is actually easier to manage and proffers a higher likelihood of success than many conventional planning exercises.
Conclusion
Application of the principles of war to software market strategic management has always been valid. Now, however, in the fast, global, competitive world we know as the software industry, adherence to these principles is a necessity for survival. The software battlefield winners have proven that successful strategy is rooted in proven warfare strategy. Now the question becomes, Is your company ready for war?
Christine Crandell is president and co-founder of NBS/New Business Strategies, a market strategy firm.
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