Business Is War

Business As War
By: Mark B. FullerOctober 31, 1993
Business in the New Economy is a civilized version of war. Companies, not

countries, are battlefield rivals.
In Clausewitz's terms, the era of "set-piece" competition is over. We have entered the era of total
competition. No matter your industry, company, or nationality, there is a battle-ready competitor
somewhere who is busy thinking how to beat you. There are no safe havens.
Yet the hard truth, for all the talk of new paradigms, reengineering, and organizational learning, is that
most executives in most companies are still equipped to fight the last war. Their strategic assumptions,
management structures, information systems, and training programs are geared to a competitive
battlefield that no longer exists. The rules of engagement have changed. Strategic mind-sets have not.
In the life-or-death quest for strategic change, business has much to learn from war. Both are about
the same thing: succeeding in competition. Even more basic, both can be distilled to four words:
informed choice/timely action. The key objective in competition - whether business or war - is to
improve your organization's performance along these dimensions:
• To generate better information than your rivals do

• To analyze that information and make sound choices
• To make those choices quickly
• To convert strategic choices into decisive action
Together they represent informed choice/timely action.
Why Companies Fail
It's no secret why companies fail. The failure starts at the top. CEOs and their senior executives know
the problems; in fact, in the privacy of their offices, they'll volunteer them to you.
"We have the information in the company. But we don't seem to get it to the right place."
"We get the information to the right place. But then we can't seem to make the choices we should."
"We're okay at choosing what to do, but we're too damned slow. By the time we pull the trigger, the
target's moved."
"We know what needs to happen. But we never seem to execute. I never see action."
For some companies, the list of symptoms includes bad habits that slowly erode performance: rivalries
in the executive suite, endless turf consciousness, resource struggles between business units. In
short, functional boundaries drive a wedge between managers who should be on the same side but
who act like the Army, Navy, and Marines competing to see who leads the invasion. In these cases
you hear sentiments like, "We can't pull together, we're always pulling separately. There's too much
internal friction around here."
In every struggling large company I've seen, the symptoms are the same. It's all just a matter of where
it hurts worse.
Why Companies Fail, Part 2

It's no secret why companies fail. They fail because over the last 20 years they have been taught to
fail. Think of it as Joe Stalin Visits Corporate America: "We have a five-year plan. The five-year plan is
in a three-ring binder. The three-ring binder is on a shelf in the CEO's office. The five-year plan sets
goals. We will meet or exceed those goals."
In this all-too-familiar model, the pieces of the company and the pieces of the strategy are broken
down into separate elements. Line is separate from staff. Market research has nothing to do with
product positioning. There's no connection between strategy and operations.
Companies then decompose pieces of their strategy into separate projects and assign them out to
different people in different places - people who have never worked together, never even met each
other. In fact, these people were hired, promoted, motivated, and rewarded in ways that trained them
not to like each other, not to trust each other, not to help each other, not to speak to each other. They
were trained not to work together.
In this respect, right through the Vietnam War, big companies and the military shared much the same
approach to strategy. Both labored under institutional dynamics that virtually guaranteed competitive
defeat. The terrible irony of Vietnam was that the United States won every battle but lost the war. Most
military histories of the Vietnam War agree on the reason for defeat: the military had no unified
strategic doctrine, no clear definition of victory.
American business had its Vietnam 10 years after the Pentagon did. In the 1980s, one company after
another confronted agile domestic competitors and new global rivals. These "guerrillas" exposed the
flaws of business-as-usual. Like the Pentagon, business learned its lesson the hard way. Now it must
learn to change.
Carl von Clausewitz: Business is War

"Rather than comparing [war] to art we could more accurately compare it to commerce,
which is also a conflict of human interests and activities; and it is still closer to politics,
which in turn may be considered as a kind of commerce on a larger scale." On War, Book
I, Ch. 3
"Business is war. Arm yourself." Motoman 2-page ad in Manufacturing Engineering,

August 1994.
Mission Statement
Clausewitz.org is about putting the principles of history's greatest leaders and
organizational developers to work in the modern workplace. Levinson Productivity
Systems, P.C. offers management consulting services that can make these principles work
for your organization.
Overview
War is the oldest form of competition between human organizations; business is a
relative newcomer. There were no large business organizations (with a few exceptions,
like Britain's East India Company) until a couple of centuries ago. Humans have been
fighting wars for millennia and war has driven the evolution of techniques for organizing,
supplying, leading, and motivating large numbers of people.
The idea of quality management systems, or mutually supporting and synergistic

activities that make sure "things go right," is but a few decades old. The ISO 9000
standard for quality systems is, as of 2000, less than a decade old. The harshest possible
environment, one in which not only natural forces but the opponent is trying to cause an
organizational system to fail, drove the evolution of military organizational systems.
Many aspects of these systems are adaptable to civilian activities.
History's greatest generals may or may not have been outstanding strategists and
tacticians but they were always outstanding organizational developers. Two of the
greatest commanders who ever lived, Alexander the Great and the Russian field marshal
Alexander V. Suvorov (1729-1800), created or improved outstanding organizations.
 Alexander's father Philip II developed the Macedonian Army into a highly professional
fighting organization. Philip's innovations included drills, logistics for rapid movement,
and equal discipline for officers and enlisted troops. Alexander maintained this system,
and his personal behavior earned the commitment of his troops.
• Frederick William I left his son, Frederick the Great, a superbly-trained army. As
these soldiers suffered attrition through battle or retirement, Frederick's ability to
win declined. Although Frederick was a skilled tactician and strategist, he was not
a great organization-builder.
 Suvorov encouraged self-direction and innovation by enlisted soldiers in an era when

commanders relied on tight control: Taylorism before Frederick Winslow Taylor.
Suvorov's leadership, like Alexander the Great's, promoted outstanding commitment,
morale, and enthusiasm.
Intellectual Heritage of Clausewitz.org

Every thoughtful man has an idea of what ought to be; but what the world is waiting for
is a social and economic blueprint. …We want artists in industrial relationships. We want
masters in industrial method, both from the standpoint of the producer and the product.
We want those who can mold the political, social, industrial, and moral mass into a sound
and shapely whole.
--Henry Ford, Ford Ideals (1922)
Quoted in the Preface to Levinson, 2002, Henry Ford's Lean Vision: Enduring Principles
from the First Ford Motor Plant (Productivity Press).
Through the travail of the ages,

Midst the pomp and toil of war
Have I fought and strove and perished
Countless times upon this star.
In the forms of many peoples

In all panoplies of time
Have I seen the luring vision
Of the victory Maid, sublime.
I have known the call to battle

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Business As War

By: Mark B. FullerOctober 31, 1993

Business in the New Economy is a civilized version of war. Companies, not

• To generate better information than your rivals do

Together they represent informed choice/timely action.

Why Companies Fail

Why Companies Fail, Part 2

Carl von Clausewitz: Business is War

"Business is war. Arm yourself." Motoman 2-page ad in Manufacturing Engineering,

The idea of quality management systems, or mutually supporting and synergistic

 Suvorov encouraged self-direction and innovation by enlisted soldiers in an era when

Intellectual Heritage of Clausewitz.org

Through the travail of the ages,

In the forms of many peoples

I have known the call to battle

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