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Business can feel like a war sometimes, so it's no surprise that the ancient classic "Art of War" by Sun Tzu has relevance to the corporate world.

The Warfare Metaphor of Business

"Let’s look at what the business environment is about. It’s about competition," says Richard Platt, Intel's former corporate innovation program manager and senior instructor for innovation methods. "Warfare is really the ultimate competition."

Warfare, like business, has guidelines and rules and principles though -- and business can be Darwinian with survival of the fittest and most adaptable companies.

It's important in using this metaphor, however, to understand that business warfare is not against customers but about winning hearts and minds and gaining competitive advantage. It's about market share and influence in the mind of the customer.

Survival of the Fittest in Business

A researcher named Langdon Morris performed analysis of Fortune 500 and Forbes 100 companies over the past several decades and discovered some interesting trends. Morris found that between 1979 and 1983 that one third of the Fortune 500 went out of business or fell off the list and that the list had a 6% annual turnover. The Fortune 100 was almost as bad.

If you extrapolate the data, says Platt, and Project it forward, you find an interesting trend. Authors Richard Foster and Sarah Kaplan have predicted that only a third of today's major corporations will survive as businesses for the next 25 years; most will die or be bought out and absorbed.

"The reality is that we’re looking at drastically compressed planning horizons for every company and the need for fast response," he concludes. The root cause of the dropoff is the adaptability issue, just as the best fighters tend to survive a war.

Using Warfare Strategies in Business

So what does this all have to do with the Art of War? Sun Tzu said that the highest form of competing is to win without fighting. In business, that means winning customers' hearts and minds and to compete where competitors are not. One tool for accomplishing the latter is called the Blue Ocean Strategy of seeking calm waters, which contrasts with the Red Ocean strategy of sailing into bloody water.

Another tool, to resort to a military analogy, which be the OODA Loop, which was developed by an Air Force colonel. OODA stands for Observe, Orient, Decide, and Act.

"If we look at this from an agility standpoint, we’re really looking at culture, organizational culture, and a climate of trust that actually encourages people to actually use their initiative and further the goals of the organization," Platt says.

For more on the metaphor and for specific examples of techniques like the OODA Loop in action, be sure to listen to the entire podcast.

Executive Summary by Krissi Danielsson

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