Comparisons 14: Risks

As we discussed in the previous article, we have three strategic options: building up our current position, moving to a new one, or doing neither and instead saving up our resources. All three have their costs and risks. However, these are not the only risks in competition.

Winning Existing Positions

Too many of us see the positions of others and think that a good strategy is to go after what they have. We see the advantages of those around us and want them for ourselves. This is position envy. We think we can manage better than our bosses. We think we can improve on the successful products of market leaders. We move against others instead of into openings. Why this a poor strategy?

This is the next topic that Sun Tzu tackles in The Art of War. A transliteration of the Chinese in the first section of chapter two tells us the problem.

<This> <use> <battle> <also> <expensive> <victory>

“Battle” means meeting competitors to fight over their position. This path to advancing ourselves is expensive. Our moves can create opponents and supporters, but the opposition is strongest when we try to take from others. They oppose us. Their supporters oppose us. This leads to mutual conflict. In strategy, “conflict” is trying to tear down the positions of others rather than building up our own. Conflict is expensive. Worse, it usually doesn’t work.

<Long time> <then> <blunt> <war> <defeat> <sharp>,

This line has a kind of poetry in it, a blunt strategy suffers sharp defeats. The initial problem is time. It takes a long time to dislodge others from their established positions. This competition is “blunt” in the sense of not intellectually sharp, ineffective, and too direct. A blunt confrontation is pointless: without subtlety and cleverness. It damages our positions in the minds of others. Others do not want to award aggression. They fear that such aggression will eventually be turned against them. We are misled by our entertainment industry that romanticizes conflict and aggression. These are seldom a fast, painless, and affordable path to success.

Fortified Positions

We all must invest time and resources in building up our positions in the minds of others. The very fact that we want to win the position of another is a testimony to their success at winning the mind battle. They have built up their positions in our own minds. Sun Tzu call these fortified positions “cities” because they have a crowd of people who support them.

<Attack> <city> <then> <power> <humiliate>

The historic military standard is that it requires five times more troops to attack a fortified position than it does to defend it. The power of an established position is easy to underestimate. Even in Sun Tzu’s time, the main advantage is in people’s thinking. Those defending think they are safe so they can act more aggressively. Those attacking think they are at risk so they are more careful. Confidence is often the difference in these battles.

<Long> <time> <violent> <troops> <then> <nation> <use> <not> <sufficient>

The more generalized rule is that all conflict takes longer than we expect. This has been true for every military engagement in modern history. Tearing down positions is faster than building them, but it still takes time, and losing time is always costly. What is the purpose of competition? To help us reach our goals, improve our lives. Our lives cannot sustain long periods of conflict, financially or emotionally.

Risks

There are a series of risks that flow from managing a direct challenge, a “blunt war.”

<Husband> <blunt> <war>,

We must remember that strategic positions are held in the minds of others. Our actions must change people’s thinking. People and organizations hold positions because of what others think about them. Changing people’s minds is not easy, and it seldom happens because of a challenger’s attacks.

When we attempt this, the most likely outcome is that we lose.

<Defeat> <sharp>,

This defeat hurts us. Changing minds is difficult. The natural tendency is for everyone to support who they have supported in the past. But our sharp defeat get attentions. It can discourage our past supporters.

<Humiliate> <power>

The next risk is that our capabilities are proven to be less than we thought. This changes what people think of us. Failed challenges are not a only a waste. They are embarrassing. They demonstrate our inability to make good choices. Others stop supporting us because they don’t want to support our bad choices.

<Use up> <money>,

The underlying risk is the cost of mounting a direct attack. It is the costliest type of competitive move as well as the most likely not to be rewarded. However, because these defeats are painful and public, a natural tendency it to throw more money, time, and effort into them, to prove we are right. It is one thing to try to joust with windmills. It takes a special kind of stupid to keep doing it.

<Then> <various> <noblemen> <multiply by> <this> <corruption> <and yet> <begin>;

This is the hidden risk. Our move not only fails, but it corrupts our positions in the minds of others. Competitors are encouraged to move against us to take advantage of our weakened situation. They will eat use this event as a tool to winn away our supporters.

Final Thoughts

<Although> <have> <intelligence> <is>,

The sad part is that people that choose to attack established positions are usually smart in many ways, otherwise they wouldn’t have the capabilities or the resources to go after these desirable targets. The lack is not of intelligence or knowledge but of training. It is natural to want the positions we see around us. We need training or experience to understand why it is a folly. It is position envy.

<No> <can> <good> <this> <fall behind> <will be>

There is no putting lipstick on this pig. If we fail to advance our position in a move and damage how people see us, we have fallen behind where we were.