The Nine Situations
In war, and business, there are nine varieties of ground. They are 1- Dispersive 2-Facile 3- Contentious 4- Open 5- Intersecting Highways 6- Serious 7- Hemmed In 8- Desperate. These types of ground help the commander to know when to avoid a conflict, when to attack, when to retreat, and when to join forces.
1- Dispersive Ground
Dispersive ground is when you are fighting in your own territory. For example, you are fighting in your home city. This is not great ground to lay a battle. When troops are near their home city, they will more likely retreat to their homes or find secret places to hide. Many of the troops will lack a feeling of desperation and may not give the fight their full attention.
In business, it also makes sense. If you are giving battle in your own home town, you may feel comfortable. If things don't work so smoothly, it is much easier to close up shop. People that are working for a company that they have been at for a long time will often become complacent and retreat ,when things get hard, to their comfort zone. Likewise, those that have traveled a great distance to compete will feel vulnerable and,without having a comfortable retreat, are forced to put forth more effort. One example of this is Ford Motor Company. They brought in a CEO outside of the auto industry so that they could gain this advantage. This helped the company to avoid retreating back into old comfortable habits that had poor long term advantage (like making all their money off gas guzzling SUVs).
The bottom line is to avoid dispersive ground for laying battles. Instead, move into hostile ground and remove all avenues of retreat.
2- Facile Ground
When the troops get to the hostile territory, but to no great distance, it is facile ground. This ground is great to lay battle. The key point is to make sure all signs of retreat are no longer there. This means burning bridges, boats, and whatever else that is necessary.
In business, you often hear people say that they didn't want to burn their bridges. In other words, if things didn't work out, they could go back to their old employer. According to Sun Tzu, this will only bring weakness. If there is no possibility of going back to your old employer, you are more likely to make the new job a success.
In business strategem, you can often see companies only partially commit to a project. They may give miniscule resources to something to see it it is going to work or not. And, while it is a good idea to test markets before entering them, this can cause great difficulty for companies.
Most of the great success stories of our day, came from companies that put everything into their idea. One of these great ideas was when IBM developed the pc. The CEO had a vision and spent almost three fourths of the company budget for this one project. In other words, failing could have ruined the company. You can only imagine the result of the project had they decided to comfortably put in 10% or earnings into the project and only continue after projected profits were realized. Once people and companies put in so much time and effort it is sink or swim, then people finally rise to the occasion and make it happen.
3- Contentious Ground
Ground that is of utmost value is contentious. In other words, both sides want the advantage of this ground. Should you gain control of this ground, you can defeat a much larger army with a smaller force. An example of this, is a narrow neck of land surrounded by water or high mountains. It might also be the higher ground that overlooks a large area. In business, the contentious ground will be intellectual property.
The first thing in business, it to figure out what the contentious ground is. You might do a market analysis and determine which companies will have the most advantage. To your surprise, it is often not the largest competitor. Instead, look for small to medium sized competitors that have intellectual property that can wipe out larger forces.
As an example, think of what would happen if someone invented an electric battery that could charge up in five minutes and run your car for 500 miles or more and do it for under twenty dollars. This would revolutionize the car industry and many other industries. Even if the company only had a few people in it, they could take out many larger competitors provided they were legally protected and had enough funding to fight lawsuits. So, you might say that in the auto industry, knowing how to get the best gas mileage or the best battery power is contentious ground. You must pay attention to it and own it to win.
4- Open Ground
In open ground, both sides can move around. There is ease of movement. This kind of ground is considered more neutral. If you want to lay battle here, it can be done, but it should mostly be avoided. This is a very important point. You only fight when you know you can win. If the situation seems neutral, both sides may incur many casualties. Instead, look for a better time when you have the advantage. An example of open ground, is a large flat tract of land.
In business, you always see companies fight in open ground. And, they often decimate each other. For example, how many times have you seen one gas station open up across the street from another. After a few years, you notice that they both are struggling more than they used to with just one. And, in a commodity business like this, there are many times that one or both go out of business. Still, it is more common for both to just struggle and below par profitability. This is not smart thinking. Instead, if gas stations are your thing, open up in a location where nobody else can come in and put one up across the street from you. And, above all, don't be the one to put in the new gas station next to the other one thinking your commodity will just happen to win out.
5- Intersecting Highways
Suppose you are at the top of a mountain and come across intersecting highways. This is an ideal position to gather allies. Where roads connect, there are good places to be. If you obtain the high ground of intersecting roads, you will have a dominant position. You can even force allies.
One example of this is Apple Computer. They have the high ground when it comes to hardware design. They are often considered the best in the world at hardware design. With this design, they also control the components that go into their product. They determine who manufactures what part of the computer and how exactly it will be done. What happens is that these specific hardware manufacturers become allies with Apple. Over time, everyone realizes that Apple must succeed for everyone else to succeed. The power of having many allies in the hardware field also give Apple much more affinity to creating better and more powerful designs. It's all based on their proprietary relationships or allies that are created on the high road of intellectual design.
Now, consider the alternative personal computer. Millions of hardware suppliers all create products that can be bought and sold like commodities all over the world. Now, suppose you want to do some innovative design. How much help are one of these hardware suppliers going to give you? They are not true allies, because they will go and sell to anyone else that they can. You now are taking up more time than the other vendors and will get sidetracked in an already low profit margin business. And, these hardware vendors have no real stake in your company because they can always sell to someone else. In the end, innovative design doesn't take place. And, you can see this in the market. The regular pc market is pretty much dead when it comes to innovation and has been like that for years. Instead, they pretty much sale on price, alone, and copy Apple whenever they get a chance.
As far as profitability is concerned, Apple makes obscene profits and sells relatively small amounts of product. Evidently, people are willing to pay more for performance and design.
6- Serious Ground
When you are far into hostile territory with fortified cities behind you, you are in serious ground. This type of ground shows that you are probably going to win the war. However, with the hope of winning comes overconfidence and often plunder. Winning forces may burn buildings, steal a cities wealth, or rape and murder at will. This type of plunder may happen because the soldiers feel overconfident. This type of depravity can come back to haunt the troops. The people that are plundered will remember well and revenge will come.
Instead of plunder, treat the hostile area and the people with respect. The army should have the goal of winning over the hearts of the people. This means to not take more than you need. And, of course, to treat people well. When you gain the hearts of the people, you have truly won the battle.
In business, this is a serious issue and perhaps that is why it is serious ground. Have you ever lost a battle to a competitor and had them laugh back at you? Many people have been burned at one time or another. And, while forgiveness may be in order, often times people vow to come back and win. When you defeat someone and do it in a prideful or haughty way, it will only fuel the fire of your competitors.
Suppose a Walmart came into town and put out a lot of the small local retailers (happens all the time, right). Most of the time, there are a few complaints, but the small business owners just sadly shut down their doors and move on knowing they can not compete. Now, imagine what would happen if Walmart started boasting on their ability to compete and to take out competitors. If they were not careful, they could soon suffer from an image problem. In addition, people may make some real effort to keep Walmart out of their cities. Other people may boycott the store and some people will actually resort to criminal behavior. Now, in real life all these scenarios do exist. Walmart has a bad reputation with small business, people boycott their stores, and some cities refuse to let them come in. If small business owners take it as just business they will often do nothing. However, if they take it as personal, they will do much more to stop Walmart whether it is in their best interest or not. So, while Walmart is plundering the hillside, so to speak, they are wise not to brag about it and to limit their obvious plunderings by not taking too much. It is evident, they aren't doing so well on this point because many people vow to take out Walmart and are proud of having never shopped there. Now think of Target. It's a similar big box store, but has a much sharper image than Walmart and more goodwill associated with the brand.
Hemmed In Ground
If you are hemmed in, you are at a great disadvantage. You may not be able to maneuver well at all. In this type of situation, first and foremost, avoid it, and second, resort to strategem. Hemmed in ground is like having mountains on both sides or a river on one or two sides and a mountain on the other. A way to avoid hemmed in ground is to plan out where you will go on a map and always try and keep to high ground that allows for maneuverability. When it is impossible to avoid hemmed in ground, first send out long range scouts to study the area before advancing.
In business, hemmed in ground is when you are fighting from a disadvantageous point. For example, you may have no intellectual property or have inferior intellectual property compared with competitors. In this ground, you must resort to creative strategies. You must get the opponent to lose track of their goal and to get distracted long enough for you to change ground.
One example of a company fighting from hemmed in ground is 3m. The company was struggling to make it, in the beginning, because their original mineral deposits proved to be of little value. Through hard work and time, they learned to manage quality and supply chain. However, their first real success came by creating the first waterproof sandpaper used in the automotive industry. This innovation helped lead the company to create a culture of innovation. Today, the company has developed many unique innovative products and is one of the most successful in the world. The key point is to treat employees in such a way that innovation happens. Most companies are horrible at supporting innovation and yet, the few that do, are wildly successful. Google is another strong example. They give employees one day a week to work on pet projects with knowing that most will fail, but that the successes will more than pay for all the failures. So, if your business is hemmed in and your intellectual property weak, try to create a culture of innovation.
Desperate Ground
Would you rather die or win? On desperate ground these are your choices. It is a great time to fight. Your forces will be magnified by 10 because the stakes are so great. This is why Sun Tzu many times says to give the opponent a way out. If you opponent feels they are on desperate ground, they will be very difficult to defeat. Instead, let the opponent feel a bit of confidence and always give them a way to retreat. This will weaken their spirit and help you to defeat them.
In literal terms, the desperate ground is when it is impossible to retreat. For example, having a steep mountain to your back, a large river to one side, and a thick impenetrable forest on the other side. Your only option is to fight and advance forward against the enemy.
In a lot of ways, Sun Tzu favors fighting on desperate ground. The reason is that your force will be much greater. Your soldiers will be more effective. That is why you should burn your bridges, burn your boats, and fight with the steep mountain to your back. When you feel that you must win, you will.
You see the same thing in entrepreneurs. How many times have you heard of an entrepreneur that kept failing and then, when they absolutely had to, they figured out a way to make it all work. You can see the nine situations at work for many entrepreneurs.
One of the best examples is that of immigrants to the United States. First generation immigrants are much more likely to be successful starting their own business than more established Americans. The reason is that they are on the best ground. They are in a "hostile" environment and most have no means to return home. With many, their limited skills make seeking a job difficult. They may face many hardships and feel desperation at finding success. Through all this difficulty many become strong and start successful businesses. The reason for their success is often a result of being on desperate ground.
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