Wisdom Agency - Strategies for Mid-Sized Business

This is solely the reflective writing upon two books that I have read recently. Personally I have two great for life; the first is about how people think and behave, the second is about how they plan for the future which I think is mostly about strategy. Strategy in my own opinion is simply the art of arrangement separate elements in order to achieve goals. Therefore, strategies regardless of their forms to serve war, governance or simple personal lives have unchangeable principles those I extracted from the reading of “The Art of War” – the 2500-years-old treatise written by a Chinese general and strategist Sun Tzu and the book “Why Nations Fail” written by two professors Daron Acemoglu and James A. Robinson.

In “The Art of War”, Sun Tzu states 5 principles of a great war to be (1) Morality, (2) Sky, (3) Earth, (4) General, and (5) Laws as foundation for 13 chapters of the book. Even though written 2500 years ago, the value of these principles remains intact, even greatly applied to business management of Japanese companies by their first conquer on Chinese market after the WWII.

Taking from another perspective in “Why Nations Fail” Acemoglu and Robinson emphasizes the importance of a good institution as key factor for a national wealth. Further explanation of this finding by 600 pages of the book is how to implement a good institution. Comparing the theories of two boos, there are there elementary principles of these two arts of war and governance I propose:

  1. Structure of command: clear and transparent, the structure of management must be simple and focusing. Decentralization and self-management of each unit are keys to effective structure. In many cases, complex and cross management should be avoided. A classic example is failure of Hitler to the Allies by Hitler’s obsession with power centralization of his own
  2. Rewarding & punishment policies: should be equally regarding how much one earn for the entity versus how much he loses. Maintaining the balance between rewarding and punishment policies is also an art of balancing between finance and workforce. Too much rewarding, the entity runs out of treasure; too little rewarding, the entity runs out of good talent and later on loses to the war.
  3. Process: should be fast, in the essence. Applied by The Socialist Republic of Vietnam to be “One-door mechanism” or Sun Tzu to be Fast and Flexible as elementary for every war. For example, if a similar request that takes 5 days to be processed in a 1,000+ people companies also takes the same amount of time in a 40+ people companies, the former company does have a huge problem to fix with the process.

Finally, one that can be considered as the fourth common principle or in my opinion the objective of all wars and governance is people welfare agreed by all authors. Wars are not about devastation but the final method to resolve disparate conflict. Governance to the essence is not about exploitation but creating and distributing welfare fairly among people of all classes.

Applied to business context, the questions that I shall ask is “Am I working for company that has all the three common principles?” If not, “Am I willing to stay to fix them or just leave?” I personally believe the final decision of these choices rests among persons’ will. Before 30, I was willing to stay and fix things. After 30, I think it could be easy to just leave after my fourth tries. Hence, it is totally personal, isn’t it?

 

Nguyen Hai Minh

Managing Director

Wisdom Agency