The Principles of Effective Strategy
You may wonder why I spent so much time telling you about Alexander the Great and the Battle of Gaugamela in the previous chapter. It is because the story is about an excellent strategy that led to an incredible victory that made Alexander the most powerful man in the world of his time. The military principles of strategy illustrated in the story of this battle are equally as applicable to every business, large or small.
In fact, the reason that 20 percent of businesses earn 80 percent or more of the profits in every industry is because they have a well-thought-out strategy that encompasses each of the key principles demonstrated in this battle. The absence of, or the failure to apply, a single essential strategic principle can lead to downfall and defeat of an army or a corporation, and it has—thousands of times.
The Principle of the Objective
This is the first principle of strategy. To achieve great victories, you must be clear about your goals and objectives at every level of the business. This requires that you know exactly what it is that you want to accomplish and how you are going to go about accomplishing it.
In a study reported on in The Economist magazine, 150 researchers spent twenty years studying 22,000 companies in a variety of countries. What they concluded was that the most efficient, effective, and profitable companies were those that took the time to set clear objectives for the company and for each person in the company. Employees knew exactly what they were expected to accomplish and when it was expected to be done. They had clear measures or benchmarks against which they could grade their progress toward the agreed-on goals.
Alexander knew exactly what he wanted to accomplish. He wanted to be the master of the entire known world. He also knew that in order to be the master of the world, he had to first of all conquer the Persian army. And the key to conquering the Persian army was to kill Darius. Both he and his entire army were absolutely clear about their objective for the battle on the plains of Gaugamela in 323 BC.
The Principle of the Offensive
Napoleon said, “No great battles are ever won on the defense.”
For you to succeed in business, you must be proactive. You must go on the attack. You must practice the “continuous offensive” of the successful general. You must be continually moving forward with new products, new services, new processes, and new ways of doing business.
At Gaugamela, Alexander saw clearly that the only way he could defeat such a large enemy, with as much as 20-to-1 odds against him and his soldiers, was to go on the attack and never let up. This strategy enabled him to win every battle he ever fought throughout his short and glorious career.
The Principle of the Mass
All great battles are won by the general in command massing his forces at a critical point at a critical time to take a strategic objective.
Instead of lining up his forces across a broad front to counter the Persian army, Alexander instead kept his army together in a compact, oblique shape, at an angle to the armies of Darius. This position enabled Alexander to move his troops quickly to exploit an opportunity, which occurred when Darius allowed an opening in his front.
Even though he was outnumbered, Alexander saw that by hurling his 6,000-man companion cavalry into the heart of the army, like throwing a javelin into a target, he could completely disconcert Darius and either kill him or drive him from the field, which he did.
In business, the principle of the mass requires that you become absolutely excellent in one product niche, and dominate that niche in terms of quality and service, before you think of expanding into other products, services, or markets.
In warfare, this principle refers to the importance of remaining flexible and ready to move in one direction or another no matter what the enemy does. All great battles are battles of maneuver. They are battles where the general in command uses his army skillfully, moving men and resources to those areas where they can achieve “competitive advantage.”
By organizing his armies in the never-before-seen “oblique formation,” Alexander was able to maintain maximum flexibility in the face of a massive enemy force. Aside from his companion cavalry at the head and center of his army, he had large cavalry units on the flanks of his forces. When Darius’s forces began to break up because of the frontal attack, the rest of Alexander’s army was ready to swing out in an arc and attack the entire front of the Persian army, driving it back and eventually into confusion and retreat.
The principle of maneuver applied to business refers to innovation and creativity in finding better, faster, cheaper ways to serve customers, make sales, and achieve higher levels of profitability. To maintain this kind of flexibility in business, you must always be willing to stand back and question the status quo.
The Principle of Concerted Action
This principle of military strategy requires that individuals work together like a well-oiled machine, as a team, to achieve the agreed-on goals and objectives. This is often called “cohesive unit action.” It means that everyone works together cooperatively, supporting each other and bringing their resources to bear whenever and wherever they are needed to ensure that the army achieves victory.
Throughout military history, small and well-organized units have been able to defeat and destroy much larger units that were not as well coordinated. Alexander’s Macedonians were perhaps the most disciplined fighting force in the world at that time. They trained exhaustively, like a top sports team. They fought as a single unit, shoulder to shoulder, reacting and responding quickly to the needs of each other in the course of fighting and winning battles.
In business, the best companies have the people with the best morale. They see themselves as part of a corporate team. They use words such as “my,” “us,” “we,” and “our.” They see the company as a natural and logical extension of themselves. They never even think “that’s not my job.”
The Principle of Surprise
Alexander used this device continually throughout his career to keep his opponents off balance. He never did what he was expected to do. He never attacked where he was expected to attack. He never lined up his troops or organized his forces in the face of the enemy in a way that his opponents had anticipated. He always kept them off guard.
In business, the principle of surprise means that you are always looking for ways to develop competitive advantage with products, services, processes, marketing strategies and techniques, sales methodology, and new technology to offer products and services that are new and different from anything that your competitors are offering.
The Principle of Exploitation
Once you have won the battle, gained the market, cut through the competition, and achieved a position of market dominance, you must be prepared to move rapidly to exploit it. Entrepreneur and motivational speaker Jim Rohn used to ask, “How high does a tree grow?” Answer: “As high as it can.”
How much do you sell? As much as you can. Move fast. Your competitors are watching and preparing to get into your space as fast as they can. You must seize the high ground in your market and then hold on to it. Never relax.
When you get a market advantage with a superior product, service, or marketing technique, you exploit it to the fullest. You know that your competitors can copy you faster today than ever before or will do something to undermine your advantage. You cannot hesitate. You must press forward and take as much of the market as you can, while you can.