How do you win at business? One can go into the philosophical questions of what does “winning” mean anyway or is that even the point?
But, let us take the question at face value: how does one company outcompete others to succeed in the marketplace?
I think the somewhat abstract nature of this framing is important. Most business books tend to start off much more tactically, at a lower level of abstraction: how to build an audience, how to build a million-dollar sales funnel, or how to hire someone.
These are useful and important skills to winning at business but without a proper strategic framework within which to function, they are, at best, less effective than they could be. At worst, they are counterproductive.
Chet Richard’s Certain to Win is a book that seeks to look at the broader strategic question. Instead of offering cliches or various tactics that sound great but lack a coherent framework for making them effective, it appropriately sees business as a complex system and helps to build a framework for operating effectively in it.
Chet Richards worked with John Boyd, most well known for his creation of the OODA Loop. In Certain to Win, Richards takes the lessons Boyd applied to modern warfare and seeks to apply them to business. It is a frame of reference which is still broadly underappreciated.
There are three core principles that I believe every business would benefit from understanding and implementing.
- Effective Orientation via “Fast Transients” and “Snowmobiling”.
- The pre-eminence of Vision and Culture.
- The Farthest Down the Chain Principle.
Effective Orientation via “Fast Transients”
The essence of agility and of applying Boyd’s ideas to any form of competition is to keep one’s orientation well matched to the real world during times of ambiguity, confusion, and rapid change when the natural tendency is to become disoriented.
The ability to rapidly shift the focus of one’s efforts is a key element in how a smaller force defeats a larger: see the emergence of guerilla warfare and the ability of trivially small startups to outcompete vastly more powerful competitors. It enables the smaller force to create and exploit opportunities before the larger force can.
While this point is often bandied about, it is still broadly underappreciated. To appreciate how important speed is, go find the best chess player you can and offer to play for $1,000 under the following conditions:
- Your opponent moves first.
- You move twice for every move of his or hers.
Unless you are playing somebody at the grandmaster level, you can play pretty horribly and still win.
When we talk about “getting inside your opponent’s OODA loop”, this is a helpful analogy for thinking about it. One of the key reasons for the success of Japanese Carmakers over Detroit in the 1970s and 1980s was that Honda and Toyota could bring out a new model in roughly 2 years, with superb quality, while it took Detroit at least a year longer.
There are a couple of key elements here that people often get wrong. One is that effective orientation, getting inside the competition’s OODA loop, is not about blindly moving fast, but about “the ability to rapidly shift the focus of one’s efforts”.
Boyd referred to this as a fast transient. A fast transient is not a traditional maneuver done more quickly. “Move fast” is usually interpreted as “let’s do more of what we are already doing just work harder and do it faster”. This is the precisely wrong interpretation.
The “transient” is the change between maneuvers. The ideal fast transient is an abrupt, unexpected, jerky, disorienting change that causes at least a hesitation and preferably plants the seeds of panic in the other side.
It’s a “What-the f___k!” change in circumstances, and in the interval when the opponent is trying to comprehend what the f___k is, Boyd would strike. In the context of aircraft dogfighting where Boyd first developed his theories, this focused on the American fighter setting up novel and unexpected conditions and exploiting them before the Russian could react.
In a business context, it is perhaps best embodied in the story of Intel. In the 1970s and 1980s. Intel developed the first-ever low-cost memory chip in the 1970s and for the decade that followed Intel dominated the memory business. However, Japanese firms quickly started catching up making memory chips cheaper and better every year
Under the leadership of Andy Grove, Intel decided that the only way to survive was to rapidly grow their microprocessor business. If they tried to grow it slowly, they knew the memory business would drag them down.
Under the new plan, Intel used their assets from the memory business to successfully expand their microprocessor business and came to dominate the microprocessor market. Andy Grove was named Time magazine’s Man of the Year in 1997 for the turn around.
Without going into a full history of the microprocessor business, it’s almost impossible to state how big a shift this was. The first step in transition was that Grove laid off more than 7,000 employees, nearly a third of the entire company.
Intel survived and thrived not because everyone was working extra hard or long hours (though I’m sure they were), but because Grove and the Intel team successfully re-oriented to the new environment.
Since what you’re looking for is mismatches between your current understanding and the environment, a general rule is that bad news is the only kind that will do you any good.
To thrive in any form of maneuver conflict, you must seek out and find data that don’t fit with your current worldview and you must do this while there is still time as Grove did. Otherwise, the world will change—or more likely your adversaries or competitors will change it for you—and you will find yourself disoriented and in the position of playing catch-up. You will have lost the initiative, which is dangerous in any conflict.
This requires optimizing for interesting. Business consultant Tom Peters suggested that you can spot who is going to do great things by what they do on airplanes. They don’t pull out the laptop and grind spreadsheets. Instead, they read Zen and the Art of Motorcycle Maintenance or pick up insights on human behavior from the great novelists.
You never know what will prod your creativity, and the more widely your prospect, the more likely you are to find that something to set your offerings apart from all of your competitors.
Toyota claims that the idea for their amazing production system came from engineers who visited supermarkets in the United States after the war. Studies of innovation reveal that practically everything new consists of bits and pieces of other concepts, often from fields that appeared to be unrelated, that somebody had the genius to reassemble to form something new and exciting.
Boyd called this snowmobiling. Imagine three separate scenes: a motorboat towing a skier behind it, a tank rolling across the desert, and a bicycle cruising down the street.
If you break them down into the constituent parts, you have: a motorboat with a hull, outboard motor, and a set of skis being towed behind it; a tank with treads, a gun, and armor; and a bicycle with wheels, handlebars, and gears.
You can use these constituent parts to make many different incoherent wholes, but a coherent and useful whole would be a snowmobile: you take the treads from the tank, an outboard motor and skis from the boat, and handlebars from the bike and combine them to make a snowmobile.
Snowmobiling is an effective orientation. Intel succeeded because Andy Grove and the Intel team looked at the marketplace and Intel’s own internal competencies and capabilities and built a snowmobile in the form of a new microprocessor business.
Snowmobiling requires taking all the data you’ve gathered in the observation phase, breaking it down deductively into its constituent parts and then recombining those parts through creative synthesis to form a new model of reality that lets you make better decisions and actions. It is the essence of strategy.
Unexpected victories (or losses) are the best source of strategy. In Boydian terms: unexpected victories are the best source of fast transient opportunities that allow you to win.
Boyd believes that a winner is someone (individual or group) that can build snowmobiles, and employ them in an appropriate fashion when facing uncertainty and unpredictable change.
The Pre-eminence of Focus and Culture
Another key element of Boyd’s thinking (that was also prevalent with Sun Tzu) is a focus on the moral and emotional components of competitions over the merely military.
In Sun Tzu’s words: “Do not even consider risking a decision by cold steel until you have defeated the enemy’s will to fight”.
When discussing the notion of grand strategy, Boyd concluded that: “What is needed is a vision rooted in human nature so noble, so attractive that it not only attracts the uncommitted and magnifies the spirit and strength of its adherents, but also undermines the dedication and determination of any competitors or adversaries. Moreover, such a unifying notion should be so compelling that it acts as a catalyst or beacon around which to evolve those qualities that permit a collective entity or organic whole to improve its stature in the scheme of things.”
Herb Kelleher, former CEO of Southwest Airlines frequently said that competitors could copy the details of his system—the main differentiators being direct (as opposed to hub-and-spoke) routings, no reserved seats or meals, and using only a single type of aircraft to reduce maintenance costs —but they couldn’t copy the culture, the vibrant esprit de corps, because “they can’t buy that”.
By all accounts, he was right. There have been roughly 14 gazillion Southwest case study books and articles published yet very few companies have actually implemented it in an effective way.
That’s because establishing a vision, a culture which is “so noble, so attractive that it not only attracts the uncommitted and magnifies the spirit and strength of its adherents, but also undermines the dedication and determination of any competitors or adversaries” requires making very hard tradeoffs.
It’s a lot easier to emulate the trappings of successful companies than to actually emulate the company: see every office of a failing company with foosball and bean bag chairs.
Recall that Andy Grove’s first step after determining a new direction for Intel was laying off more than 7,000 employees. The courage to do that is hard to come by and it was ultimately necessary to save the jobs of everyone else.
It is ideal if a company’s highest-level focus serves the purposes of grand strategy: attract the uncommitted to our side while pumping up our morale and deflating that of the competition.
I personally quite like the payment processing company Stripe for this reason. What could be more boring than payment processing? Yet Stripe’s mission is to “increase the GDP of the internet”, which is grand and inspiring, akin to the Star Wars hero’s journey of “bringing balance to the Force”. Stripe is Yoda, helping your company (Luke) on the grand quest to sell products or services and increase the GDP of the internet. That’s a vision that inspires many to work for them and brings customers to them.
However, much more to the point focusing or vision statements are effective. Honda’s slogan during the Honda-Yamaha War was “Yamaha wo tsubusu!” which roughly translates to “We will crush, squash, butcher, and slaughter Yamaha!”
Boyd called this idea Schwerpunkt. It literally translates as the center of gravity or emphasis but is best understood as focus or the main priority.
In military terms, it is usually the geographic point of attack.
Having a clear focus, and emphasizing that over any particular tactic, empowers your subordinates to make decisions for themselves in an uncertain environment.
A good schwerpunkt helps you and your team make better decisions in an uncertain environment where rigid procedures close you off and isolate you.
Instead of giving others plans, you give them a schwerpunkt, what I like to call a focusing statement and let them figure out how to get there.
This both gives them a greater sense of ownership and empowers them to be flexible with trying different approaches.
One of the most common mistakes that people make as it relates to culture is that they pick “values” or a “vision statement” which is effectively meaningless.
It’s not necessary to explicitly state that you value things like integrity, honesty, respect, creativity, communication, or other very obviously positive values. You should hire people that are already ethical, intelligent, and hard-working. That is table stakes. (Not-so-fun fact: One of Enron’s core values was integrity so you know that one works really well.)
An effective vision or effective principles must necessarily be in some way exclusionary. A culture is determined precisely by what it will not tolerate. That reveals the tradeoffs it is trying to make.
Facebook’s focusing statement for a long time was to “move fast and break things” and they had various things in place (such as having every engineer push something live on their very first day at work) to reinforce that.
Move fast and break things is not an obviously good principle for every business like integrity or creativity. If you run a nuclear power plant, “move fast and break things” would be a completely idiotic focusing principle.
That’s what makes it effective! It necessarily excludes seemingly reasonable ideas.
Every day, your team members encounter situations that no one has ever encountered before. A good focusing statement helps them to make decisions there that reinforce the company culture.
The focusing statement of the Toyota Production System was “shorten the time it takes to convert customer orders into vehicle deliveries”. This is one of the best vision/focusing statements in the history of business.
This allows fast transients to be much more effective. It tells everybody who works for Toyota that whenever they are in doubt about what to do or something unexpected happens, make the fast transient that will most reduce customer-to-delivery span time.
When done well and actually used, a focusing statement gradually becomes company culture.
The Farthest Down the Chain Principle
The final key element is what I call the Farthest Down the Chain Principle. In order to maximize the effectiveness of fast transients and the focusing statement, you have to devolve maximum responsibility onto the subordinate, in return for his or her pledge to use his/her initiative and creativity to accomplish the task, consistent with your ground rules.
You want the people making the decisions to have an intuitive knowledge, what Boyd called fignerspitzengefuhl, of the customer and the competitive environment.
Fingerspitzengefühl is a German word that translates literally to “fingertips feeling”, but it’s probably easier to understand as “intuitive feel” or “having one’s finger on the pulse”.
In Medieval Japan, samurai practiced with their swords until the weapon became “an extension of their arm”. Once the fight began, if you stopped to think, you were dead. You had to be able to feel how the fight was going.
The Greeks called it mētis. Odysseus, the protagonist of Homer’s Odyssey, was praised for his mētis. Odysseus not only knew how to deceive Circe, the Cyclops, and Polyphemus but also knew when to drive his men harder and when to pull back. This is fingerspitzengefuhl.
You want to push the decision making as far down the chain of command as you can go because it’s the people on the “frontlines” that have the best intuitive feel.
In order to do this, you must create mutual trust among the members of your team. When you are working with people you trust, you can each move through your OODA loop cycles much more quickly. When I ask someone who I trust implicitly, because we have a shared focus and they have a multi-year track record of getting things done, to execute on something, I don’t have to micro-manage them. I know they will get things done.
I do not need to check in with them on their new orientation because I can trust them to do it on their own.
Creating mutual trust takes time; it’s not something that can be done in a weekend retreat, only over a period of years of working together but I believe it’s worth it.
For managers, the most important insight from Einheit is that you can’t micromanage. You have to let people take ownership even if they are going to make mistakes. In the long run, the mutual trust is more important than the small mistakes.
When you have these three ingredients, it is very easy to re-orient quickly and outcompete. The highest leverage task in the world of business is creating a company culture that accelerates effective fast transients through the establishment of a clear focusing principle (schwerpunkt), mutual trust (einheit), and intuitive knowledge (fingerspitzengefuhl).
This requires embracing constant change even as most people resist it. As Gen George S. Patton said “I don’t want to get any messages saying, ‘I am holding my position’. We are not holding a Goddamned thing. Let the Germans do that. We are advancing constantly and we are not interested in holding onto anything, except the enemy’s ass.”
My Full Highlights
- Our view of the world, our “orientation,” as Boyd called it, depends heavily on things happening close in time to when we expect them to happen. Mismatches in time—such as when things don’t appear to be happening in a continuous and predictable (even if very rapid) manner—can be disorienting. Under stress, disoriented people become demoralized, frustrated, and panicked.
- Note: this is basically about speed of implementation.
- Honda, however, chose to attack through speed and agility. Over the 18 month period of the “H-Y War,” Honda introduced 113 new models to replace the 60 it had in the beginning. In contrast, Yamaha was only able to bring out 37.
- Note: speed of implementation can be a durable competitive advantage.
- Boyd’s work represented the culmination of an outburst in strategic thinking that began in the mid-1970s, about the same time as the fall of Saigon. Among the many post-mortem analyses of that conflict, Boyd’s followed the logic that since we cannot predict exactly what a future war might look like, we need to find general patterns, the “common elements” as he termed them, that will apply to any battle, conflict, or war. So, rather than engage in a technical “Why did the North Vietnamese win?” inquiry, of which many began at that time, Boyd simply asked: “What does it take to win?”
- Note: is it antifragile? He recognizes inability to predict and narrative fallacy.
- The essence of agility and of applying Boyd’s ideas to any form of competition is to keep one’s orientation well matched to the real world during times of ambiguity, confusion, and rapid change when the natural tendency is to become disoriented.
- Perhaps the problem is, as I have suggested for strategy, that modeling by its very nature cannot address the underlying basis of economics. Nobel Laureate Friedrich Hayek eloquently makes this case in his book, The Fatal Conceit. Hayek inveighed against the notion of ever being able to plan a productive economy. He argues that formal planning methodologies—which are models of how an economy works—do not capture what really drives a competitive economy, in particular the information processed through decisions made daily by millions of buyers and sellers.
- Note: Nassim Taleb and the root of complexity economics
- Modern weapons are extremely lethal and opportunities to surprise and shock an intelligent enemy are fleeting. Soldiers at all levels must be free to—must be required to—use their creativity, intelligence, and initiatives to work around the enemy’s weapons and generate and exploit opportunities.
- Note: power must be distributed to the front lies in complexity based environments.
- Key Attributes of the Blitzkrieg • einheit: Mutual trust, unity, and cohesion • fingerspitzengefuhl: Intuitive feel, especially for complex and potentially chaotic situations • Auftragstaktik: Mission, generally considered as a contract between superior and subordinate • Schwerpunkt: Any concept that provides focus and direction to the operation
- If there is a universally accepted truth in military science, the fundamental role played by cohesion, unity, and trust may be it. Twenty-four hundred years before Fuller, Sun Tzu had concluded that “He whose ranks are united in purpose will be victorious.”50 The Arab historian ibn Khaldun, who is generally credited with writing the first modern analysis of history, echoed this theme in 1377 A.D., “What is in fact proven to make for superiority is the situation with regard to group feeling.” The rule is simple: The side with the stronger group feeling has a great advantage.
- All of the officers and sergeants shared a common background, knew each other’s strengths and weaknesses, and could communicate rapidly and accurately using very few words.
- Note: length of relationship in biz partnerships is maybe a good measure? You want to have an accurate map to be able to predict how they will respond to work well together. Also why you want to reduce employee turnover, takes a long time to make this work. #Hiring
- Zen and other oriental philosophies talk at great length about intuitive knowledge, but they also stress that it comes through years of experience and self-discipline. In medieval Japan, samurai warriors practiced with the long sword until it became as an extension of their arm. When the fight starts, you don’t have time to stop and think about the fundamentals. In fact, one of the goals of Japanese samurai strategy was to cause this very “stopping” of the mind in their opponents.
- A maneuver warfare military believes it is better to have high levels of initiative among subordinate officers, with a resultant rapid Boyd Cycle, even if the price is some mistakes.
- Note: Often it is better to have fast speed of implementation and mistakes than slow speed of implementation.
- Do not even consider risking a decision by cold steel until you have defeated the enemy’s will to fight.
- The ability to rapidly shift the focus of one’s efforts is a key element in how a smaller force defeats a larger since it enables the smaller force to create and exploit opportunities before the larger force can marshal reinforcements. Lind notes, and this is especially relevant to business, that the focus is often a concept rather than a unit, and so shifting it requires a mental as well as a physical change.
- **An “asymmetric fast transient,” though, is not a traditional maneuver done more quickly, even much more quickly. In business, it should not conjure up an image of doing what you’re doing now, just doing it faster. The “transient” is the change between maneuvers. In Boyd’s concept, the ideal asymmetric fast transient is an abrupt, unexpected, jerky, disorienting change that causes at least a hesitation and preferably plants the seeds of panic in the other side. It’s a “What-the f___k!” change in circumstances, and in the interval when the opponent is trying to comprehend what the f___k is, Boyd would strike. **What this described vis-à-vis the MiG and the F-86 is that the American fighter could set up novel and unexpected conditions and exploit them before the Russian could react with his sometimes superior EM capability.
- Note: changing focus faster is a sustainable competitive advantage. unexpected wins are the best source of strategy #Writing Ideas
- Since what you’re looking for is mismatches, a general rule is that bad news is the only kind that will do you any good. To thrive in any form of maneuver conflict, you must seek out and find data that don’t fit with your current worldview and you must do this while there is still time. Otherwise, the world will change—or more likely your adversaries or competitors will change it for you—and you will find yourself disoriented and in the position of playing catch-up. You will have lost the initiative, which is dangerous in any conflict.
- Note: he who solicits dissent is strongest. see Abraham Lincoln Team of Rivals.
- Those who know the situation in the marketplace serve the role of spies for the leaders of modern companies. They will sometimes be bearers of bad news, and, if you follow the Sun Tzu tradition, they will bear this news to you while there is time to act. They are saviors of the company and should be recognized and rewarded as such.
- You want to reward people for bringing you bad news. E.g. Having a “Today I Fucked Up” channel in your meetings.
- Decisions can transition us into the action stage. For an individual, though, if observe and orient were done well you just know what to do the vast majority of the time. Such “implicit decision making” is another way to look at the notion of “intuitive competence.”
- Note: figure out the limit in the theory of constraints and pursue an obvious solution quickly. The goal in OODA is creating optionality and then recognizing and quickly taking the obvious decision.
- most decision making can and should be implicit, and that quite often, orientation controls action directly without the need for explicit decisions at all.
- if you cannot or do not spot mismatches, and generally this means finding bad news, your orientation becomes detached from reality. Then, since decision and action flow from orientation, your decisions (implicit and explicit) will be flawed and your actions will not have the effects you intend.
- Note: shows the importance of always exposing your underbelly. discovering your own, internal weaknesses faster accelerates OODA
- When discussing the notion of grand strategy, Boyd concluded that: What is needed is a vision rooted in human nature so noble, so attractive that it not only attracts the uncommitted and magnifies the spirit and strength of its adherents, but also undermines the dedication and determination of any competitors or adversaries. Moreover, such a unifying notion should be so compelling that it acts as a catalyst or beacon around which to evolve those qualities that permit a collective entity or organic whole to improve its stature in the scheme of things.
- Note: It’s essential to paint such a promising vision that it undermines your competitors and rallies people to your side. Stripe and “increase the GDP of the internet” is a good example.
- Strategy is a mental tapestry of changing intentions for harmonizing and focusing our efforts as a basis for realizing some aim or purpose in an unfolding and often unforeseen world of many bewildering events and many contending interests.
- **What a Business Strategy Should Do **
- **Keep our focus on the customer, with an eye to the competition and the rest of the strategic environment **
- **Provide our team with a continuing stream of options **
- **Enable rapid switching between options **
- Encourage initiative at all levels—in particular, an execute-and-communicate (“shoot and scoot”) mindset rather than one of ask-and-wait
- Harmonize our efforts to achieve the future we have in mind.
- Quick OODA loops will allow you to better track your environment.
- Note: keep some part of business high friction always, you want decision-makers to have fingerspitzengefuhl with the frontline and customers
- a “rapid thinker” advantage that at each moment learns from and influences the marketplace, extracts profits, then moves on before the competition figures it out.
- **A Simple Example of Agility: Go find the best chess player you can and offer to play for $1,000 under the following conditions: • Your opponent moves first. • You move twice for every move of his or hers. In fact, you can even offer to give up some pieces, to make it more fair. You will find that, unless you are playing somebody at the grandmaster level, you can give up practically everything and still win. Keep the knights and maybe a rook. This is a graphic illustration of how the smaller side, using agility, can overcome a large disadvantage in numbers. Does it strike you as farfetched and removed from what happens in the real world? Consider that Honda and Toyota can bring out a new model in roughly 2 years, with superb quality, while it still takes Detroit at least a year longer.
- there is the Basic Rule of All Competition (BRAC): You are not smarter than either the customer or the competition. Mathematically, IQours ≤ IQtheirs This is why “roadmaps of the future” that masquerade as strategy will get you into trouble. You’ve seen them: first we’re going to do this, then that, then the other thing. As if neither the customer nor competition much mattered. As we have discussed, these are complex plans, that is, intentions, and not strategy at all.
- Note: assume competitors and customers are smarter than you and so focus on being more adaptive.
- In this case, competitive advantage comes not from better ways to handle inventory, but from fundamental changes that enable a goal of abolishing it altogether. This is an exact analogy to the military case, in which conventional strategy glossed over the factors that actually produce victory, like cohesion/trust, agility, initiative, and the ability to generate surprise and confusion, and instead considered only numbers and weapon effectiveness.
- If you really believe that the world needs a lightweight, portable, rapid cooking device (this is a vision of the future and a potential Schwerpunkt), then trust your instincts, learn what you can from your customers about the first experiment, and press on. If you are right, then maybe it will be you, and not the Japanese, who bring out the first commercially successful version. If not, then if you know your business, your intuition—your Fingerspitzengefühl—will tell you when it’s time to shift to something else. In any case, the experience will have added to your store of intuitive competence in your field. When Apple was trying to move upscale from the Apple II, it brought out not one, but two commercial flops (the Apple III and the Lisa) before hitting pay dirt with the Mac. It was Steve Jobs’ clear focus on an “insanely great” new personal computer that saved Apple from destruction.
- Note: trust your gut and move fast is a better long-term strategy than moving. It’s not optimizing for general speed, but speed of implementation, going from changing your mind to actually implementing something
- There is a principle of strategy that says that when your strategies start becoming aggradations, where each new feature is intended to correct problems found with earlier versions, then it’s time to throw the whole thing out and start over.
- Herb Kelleher, chairman and recently retired CEO of Southwest Airlines, brags that competitors could copy the details of his system—direct (as opposed to hub-and-spoke) routings, no reserved seats or meals, one type of aircraft, etc.—but they couldn’t copy the culture, the vibrant esprit de corps, because “they can’t buy that.”So far his words have been prophetic, at least as far as the other US major airlines are concerned.
- Note: culture is a sustainable competitive advantage
- Mutual trust comes from mutual experience. You have seen how a group of people who put in a month of 20-hour days to meet a deadline, especially one that first seemed impossible, develop a special relationship that lasts long after the project is over. During this process, the members of the team also form common orientations that encourage implicitly—and so extraordinarily rapid-communication. It is what the military tries to create during basic training.
- Note: eat salt
- The damage done to individuals by managers’ violation of “fair process” in a business is mitigated by the fact that unlike in the military, employees can leave at any time. The best ones, that is, the ones likely to have the most career options, generally are the first to do so.
- Note: You need to have clear standards for everyone to follow and feel like they are getting a fair shake or you end up pushing out the people who behave ethically and just get the worst people
- the whole notion that we can “control” other human beings is a fallacy. Psychologist Michael Popkin, the founder of the highly successful “Active Parenting” program, calls it the “Paradox of Control: The more you try to control a teen, the less you can influence that teen.” The reason? “Control eventually leads to resistance and resistance to rebellion.”This is true of all human beings, not only teenagers. One of Boyd’s favorite expressions was “The more you try to control people, the less control you get.” #quotes
- “It is a fireable offense for two employees to discuss salaries.” This was a defense contractor, and several of us in the room were former military, where you can look at people and tell within $1,000 per year how much they make. So the obvious question on our minds, as several of us discussed later, was, “What are they trying to hide? What game are they trying to play?” There was no reason trying to build trust in this company, or in helping it improve its performance since they didn’t value trust in the first place. Companies in industries more competitive than defense contracting do not have this luxury.
- It is said that someone who understands the system can walk into a factory, close his or her eyes, and tell by listening and feel if everything is working properly. This ability to sense the state of the system is critical in avoiding major breakdowns and while it may seem magical to an outsider, it develops naturally through increasingly complex interactions with the system.
- Note: trust your gut #fingerspitzengefuhl
- Now you are ready to begin acquiring a true intuitive competence. How? By using these skills in ever more complex circumstances so that you build an intuitive feel for situations where there is a lot of stress and the answers are not clear. We do this through incessant practice, incorporating exposure to an ever-widening variety of new and challenging types of situations, and with feedback from knowledgeable individuals (otherwise we’re practicing our mistakes.) We polish individual techniques and also train as a group, thereby building the type of cohesion—mutual trust—that facilitates implicit communication. As Miyamoto Musashi summarized it, in the translation by Hanshi Steve Kaufman, which was Boyd’s favorite: Practice is the only way that you will ever come to understand what the Way of the warrior is about … Words can only bring you to the foot of the path …”
- Note: why apprenticeships work
- Specialist or Strategist? Isn’t it true that the more you practice, the better you get? Yes, but, and this bears repeating, the intuitive mastery we are striving for is not brilliant skill at predictable tasks. As the late science fiction author, Robert Heinlein, pointed out, specialization is for insects. Humans need the mystifying ability to cope with the unpredictable and ambiguous challenges posed by thinking adversaries in the real world. Since kendo masters practice hard, don’t we need to put in long hours to develop super competence? The answer is absolutely yes. However, sixteen hours at the office doing the same things day after day simply make you a workaholic (and very likely a micromanager); they do not per se confer an intuitive skill useful in competitive situations. Tom Peters suggests that you can spot who is going to do great things by what they do on airplanes. They don’t pull out the laptop and grind spreadsheets. Instead, they “read Zen and the Art of Motorcycle Maintenance for the umpteenth time,” or pick up insights on human behavior from the great novelists. Note: The point is not to work a lot, but work on how to better go through the orientation phase.
- **Concentrate instead on the essence of the concept, which is to devolve maximum responsibility onto the subordinate, in return for his or her pledge to use his/her initiative and creativity to accomplish the task, consistent with your ground rules. #management
- **Here’s what I think we face • Here’s what I think we should do, and why • Here’s what we should keep our eye on • Now, talk to me
- When in doubt, move in the direction that facilitates computing on demand.
- Note: create guiding principles to guide organizational culture, heuristics so people don’t have to make decisions on demand
- It would be nice if a company’s highest-level focus also served the purposes of grand strategy (attract the uncommitted to our side, while pumping up our morale and deflating that of the competition) noted in chapter IV. The best way, though, for a commercial enterprise to do this is to provide products and services that people want to buy, and leave saving humanity to the non-profits. Honda’s headband slogan during the H-Y War (described in chapter I) was the decidedly uncouth “Yamaha wo tsubusu!” a “rather impolite” expression roughly meaning “We will crush, squash, butcher, slaughter, etc. Yamaha!” One may assume the phrase made no appeal to the good of all mankind, but it did its job. Most of us are more like Honda than like the Little Sisters of Charity, and taking pride in the quality of our work, enjoying the company of our compatriots, and driving our competition into Chapter 11 will have to suffice. #culture #company vision
- An Alternative to Goals: A reporter once asked an official from Toyota whether the company achieved “six sigma quality—a defect rate of around 3 in a million and also the name of a quality improvement methodology that is currently fashionable. His answer typifies the Boyd approach to goals: Basically, I would say that because of our evolutionary concept, whatever we were doing becomes the benchmark for what we do next. We hold onto what we were doing so that it becomes maintainable and it is the new steady state. This may seem like a masterwork of obfuscation, but it is entirely consistent with Toyota’s overall guiding concept: The Toyota Production System, quite simply, is about shortening the time it takes to convert customer orders into vehicle deliveries. This is one of the best vision/focusing statements in the world of business. Instead of setting arbitrary goals, it tells everybody who works for Toyota that whenever they are in doubt about what to do, take the action that will reduce customer-to-delivery span time. It sets a direction, not a goal, since
- Note: instead of goals. use default to scenarios #company vision. I like the phrase “focusing statement” over vision statement, less woo woo
- Schwerpunkt: Summary However you define the Schwerpunkt for your organization, here are some ideas for you to consider: • It has to actually provide focus and direction. It has to give real and actionable guidance in situations where there is no formal direction. This is what distinguishes a Schwerpunkt from a “vision statement”. • It must contribute to an outward focus, towards the customer and the marketplace. The last thing you need is another device that drives your attention inward, which is the problem with so many “goals.” Always keep in mind: “We will crush, squash, butcher, slaughter, etc. Yamaha!” and “The length of time between when a customer orders a Toyota and when s/he receives it.” • Your focus should reinforce mutual trust einheit. You must make sure that it flows down to every member of your organization. This makes it a powerful tool of “control” in the best sense of helping people make the right decisions, in turbulent times, without destroying their initiatives. • Finally, people in every organization at every level within the company must understand the concept and use it to run their affairs. As I’ve said so many times, the key is: study it, believe it, and then promote those who use it and remove those who do not, and this starts at the top.
- #company vision
- Perhaps Boyd’s climate is easiest to visualize if we start with the individual and work up (Boyd always did prefer the bottom-up approach.)
- Note: making smaller circles
- The basic idea is to start a number of things going and reinforce the ones that succeed.
- Note: launch a lot and kill what doesn’t work, always be making fast transients
- The same implicit, organic quickness and initiative also powers successful businesses. Note that I am not saying that the specific tactics of maneuver warfare—or any other form of warfare—apply to business. However, I am claiming that Boyd’s underlying strategy—the use of time as a shaping and exploiting mechanism, and the emphasis on a culture / organizational climate that makes this possible—apply equally well to both.
- Note: The highest leverage task is creating a company culture to accelerate OODA and speed of implementation.
- Don’t Cheng Unless You Ch’i Sun Tzu’s goal was to shape the enemy’s mind so that if armed conflict finally proved necessary, it would be relatively quick and bloodless. One of the primary tools for achieving this was the interplay between things he called cheng and ch’i. Cheng maneuvers are those that the enemy can comprehend: the formations lined up for battle, the chariots on the wings, the maneuvering and charging in full view of the enemy. Thus cheng is usually translated as something like “orthodox” or “expected.” We might even add, “measurable.” Experience suggests that if you try to force victory only through what can be observed and measured, that is, primarily through cheng, you will find yourself in attrition warfare. You might expect that the complementary concept, ch’i maneuvers, are the unorthodox, unanticipated, irregular, surprising elements. You would be right: the charge that seems to come out of nowhere to strike at the rear; the sudden turning of ‘defeated’ troops to fire on their now disorganized pursuers—known as a “baited retreat,” a favorite tactic of the Mongols and used with great effect by Daniel Morgan at the Cowpens during the American Revolution. As we saw above, Lawrence of Arabia carried on entire campaigns seemingly on ch’i alone.
- Note: legible and illegible. You can gain advantages by leveraging illegibility.
- Engage with the cheng, win with the ch’i.
- Note: outbound sales cheng drive people to unorthodox chii
- One of the main themes of this book has been that the essence of Boyd’s strategy in business competition is to shape ourselves and the marketplace to improve our capacity for independent action—to survive on our terms—generally at the expense of our competitors.
- Note: roughly correlates with The Star Principle (highlights)?
- Ask anyone who bought a Honda, Toyota, or Datsun (as Nissan products were known until 1984) back then. They came expecting to get great gas mileage, which they did, but, “Surprise!” The things ran like a Swiss watch, fit together like a Rolls Royce, and seemed to last forever. In the language of strategy, the Japanese engaged with the expected (cheng)—gas mileage—but won with the unexpected (ch’i): fit and finish, driveability, longevity.
- Note: sell them what they want. give them what they need
- Ch’i, on the other hand, requires that mystical feel that we have called intuitive knowledge (Fingerspitzengefühl), which in business includes an ability to sense what will cause customers to become fascinated by our products and services. In other words, what will delight potential customers enough to keep them coming back to us and paying a premium for the privilege? For a company in a competitive marketplace, searching for answers to this question must be what gives you focus and direction.
- What makes the fast transient possible is fingerspitzengefuhl
- If you achieved a 97% chance of winning a fight, which would be spectacular against people who train just as hard as you do, your odds of surviving 25 fights is less than 50%. Musashi won 60 duels, so clearly he was not thinking of taking that kind of risk. He wanted no risk at all.
- you want to develop a sense for what might be ch’i in your business, you first need to recognize the need for ch’i, set up by the cheng, as the (not “an”) instrument of decision in all forms of competition.
- Boyd insisted that “ch’i” and “Schwerpunkt” are essentially the same, that is, finding and exploiting the magical element should be what gives your enterprise focus and direction.
- Note: Unexpected victories are the best source of startegy.
- In warfare, one purpose of using cheng/ch’i is to generate the jerky, abrupt, unexpected and disorienting changes that Boyd called “asymmetric fast transients.” We could generate such an effect, for example, when we spring the ch’i on an opponent whose attention has been captured by the cheng and so believes that he understands the situation. There is a similar-sounding term in business strategy called “market dislocation,” an innovation so profound that it changes the rules of the game in that market segment. The Internet is often cited as such a dislocation, and the theory is that we should be the ones striving to unleash such dislocations.
- Note: redefine the category a la koch. When you start a new category, you are redefining the map in a way that lets you win. This is the essence of positioning.
- a better way to regard ch’i in business is the look of amazement and delight on the faces of customers when they discover magic in our products. Like the “What the f__k!” reaction of less agile fighter pilots, it’s “Incredible! Hey honey, look at this!” It’s the emotional force that pulls customers to do more business with us, and to tell their friends. Using “Ok, everything works.”/cheng in combination with “This is so cool!”/ch’i is as fundamental to success in business as employing Nebenpunkte/cheng to set up Schwerpunkt/ch’i is to maneuver warfare. No probabilities here; you’ve made yourself certain to win.
- Note: purple cow
- One way, as mentioned earlier, is to take active measures to seek out and reward bearers of bad news, the corporate versions of Sun Tzu’s spies. Here’s another, even simpler idea: **Be the customer. I don’t mean “identify with the customer,” or “respond to customer desires,” or some other inane canard. All business is people buying from people. You’re on the selling side, so to understand what happens on the buying side, walk around the table and sit in the buyer’s seat. If you’re in retail of some type, buy your own product or service just the way the paying public does and use it just the way they do. **
- Note: in defense of scratch your own itch
- For example, if you can’t be the customer, at the very least, you can spend a lot of time one-on-one with them. Another idea: Who in your own company makes buying decisions? Can you rotate into one of those shops? If you sell internationally, you can invite energetic personalities from target countries to serve on your board. There are no rules in strategy, so be creative.
- Note: maximize transparency. spend time talking to customers.
- The subject of creativity and innovation—for ch’i, as the unexpected, requires a timely creative act—has fascinated strategists for years. I can’t tell you from where you will get great inspirations. One thing for sure, the spark of ch’i is unlikely to arise from talking with the same old people about the same old things day in and day out. Recall the advice from the ultimate samurai, Musashi: “Pursue the arts,” and “Practice the crafts.” Or Peters’ advice to put down the same management text everyone else is reading (including his!) and study human nature through novels and biography. Why? Because
- You need to be dilettante in your inputs and focused on the Schwerpunkt in your outputs. #optimize for interesting
- you never know what will prod your creativity, and the more widely your prospect, the more likely you are to find that something to set your offerings apart from all of your competitors. Toyota claims that the idea for their amazing production system came from engineers who visited supermarkets in the United States after the war. Studies of innovation reveal that practically everything new consists of bits and pieces of other concepts, often from fields that appeared to be unrelated, that somebody had the genius to reassemble to form something new and exciting. Boyd called this, “building snowmobiles,” from an observation that a snowmobile is made up from pieces of other things (treads from a tractor, engine from an outboard motor, etc.) that someone in a spark of creativity visualized could be ripped apart and put back together to serve this new purpose. His final “Metaphorical Message” was that A winner is someone (individual or group) that can build snowmobiles, and employ them in an appropriate fashion, when facing uncertainty and unpredictable change. #Snowmobiling
- I don’t want to get any messages saying, “I am holding my position.” We are not holding a Goddamned thing. Let the Germans do that. We are advancing constantly and we are not interested in holding onto anything, except the enemy’s ***. Gen George S. Patton, Jr. #quotes
- Note: “Advance constantly” is a good guiding principle #Writing Ideas
- In particular, markets, like so many systems involving humans, are “complex,” a technical term which means, inter alia, that they are not predictable using the methods of formal mathematics and simulation.
- Complex systems do exhibit patterns, however, and places like the Santa Fe Institute have accumulated a considerable body of knowledge about how these systems behave. If you are in business, the marketplace is your playing field, so it stands to reason that you need to build an intuitive sense for how complex systems work.
- Since business is a competition, you don’t have to be perfect, only better than everyone else.
- Southwest has advantages the others cannot match, but these are, as co-founder Herb Kelleher notes, echoing Boyd and Sun Tzu (perhaps unintentionally), more cultural than physical. (Location 3274)
- Note: company culture is always the primary leverage point.
In individuals, it is just called mindset. This is why every company should send their people to therapy.
- Note: company culture is always the primary leverage point.
- If you want your system to run faster, what you have to do is change it in ways that decrease the time it takes to do the most important things you do, those that affect the customer. Toyota, for example, is interested in reducing the time from order to delivery, and that is essentially the only time span they worry about. There would be no point or payoff in accelerating an individual activity if this would throw the whole system out of balance.
- Note: focus on proving speed of implementation
- It also means that the CEO must become the pope of the new religion, and note that “pope” is a full-time job.
- Note: The goal of the CEO is to start a social movement
Last Updated on February 4, 2021 by Taylor Pearson