Chapter 10. Strategy for an Uncertain World
Uncertainty is central to both the Eastern and Western approaches to strategy. The Chinese philosophical tradition – from which Sun Tzu emerged – recognised that, as minor fluctuations in conditions can amplify into dramatic changes, no two situations are ever identical and therefore no universal recipes can exist. While Clausewitz – the father of modern Western strategy – recognised that, as ‘friction’ (unexpected events) makes ‘even the simplest things more difficult’, analysis is often insufficient and predictions rarely accurate. Yet, despite both recognising its importance, the Eastern and Western traditions diverged in how they dealt with uncertainty. These differences are now cultural and are even reflected in the different games of strategy played today in the East and the West.
Chess is the dominant game of strategy in the West. “The purpose of the game is checkmate, to put the opposing king into a position where he cannot move without being destroyed. The vast majority of games end in total victory achieved by attrition or, more rarely, a dramatic, skilful manoeuvre. The only other possible outcome is a draw, meaning the abandonment of the hope for victory by both parties”. Chess reflects Western, Clausewitzian thinking where the aim is absolute domination; achieved by bringing down the full weight of one’s forces against the enemy’s ‘decisive point’. The dominant game of strategy in the East is weiqi (or Go). Where chess is a “struggle for the centre of the board” with both players seeking to eliminate their “opponent’s pieces in a series of head-on clashes” weiqi “teaches the art of strategic encirclement”. A “talented weiqi player moves into ‘empty’ spaces on the board, gradually mitigating the strategic potential of his opponent’s pieces”. Weiqi reflects Eastern thinking, and that of Sun Tzu, where the aim is relative advantage; achieved by cultivating superior potential that, eventually, becomes impossible to counter.
The differences revealed by these different games of strategy played in the East and the West are: Focusing on the internal vs external; focusing on singular vs multiple wheres; and treating ‘strategic genius’ as a natural gift vs something one nurtures — the last of which is reflected in how strategy has been practiced in these two parts of the world. Therefore, in this final chapter we’ll contrast these approaches through the lenses of chess/weiqi, warfare and business in an attempt to articulate an approach to strategy that is more suitable for our current, uncertain world.
Difference #1: Focusing On The Internal vs. The External
“A chess mindset … focuses on what one can achieve given limited resources at the moment, whereas a Go player thinks about what he can bring to bear with additional resources”.
Clausewitz argued that ‘power determines everything in war’ and chess reflects this with its pieces having a clear hierarchy of power: The queen outranks the rook, which outranks the bishop and so on down to the least powerful pieces, pawns. Players start the game with this power fully deployed (i.e. all pieces on the board), which is slowly eroded through a battle of attrition as less powerful pieces are sacrificed for positional gain. Competitive advantage tips towards the player who retains power best, which can be quickly calculated by counting the remaining pieces on the board or, if both players are evenly matched, by how those pieces are deployed.
Fig. 19: The opening situation in chess
The Clausewitzian focus on power became Western military orthodoxy in the 19th century as Prussia (adopting best the military theories of its now-famous countryman) enjoyed success in the German wars of unification. But the rise of Germany led to competition with Europe’s established power, (Britain) and an arms race as these new rivals sought to build a mightier military machine with which to dominate the other. The ‘Great War’ that eventually broke out in 1914 descended into a bloody series of attritional battles in the mud of the Western Front as these two mighty machines — cursed with technological parity — were launched at the other’s ‘centre of gravity’ (the opposing military) again and again. Leaders, confusing their indifference to lives of soldiers for the determination they believed a Clausewitzian genius was meant to possess, sacrificed their men — like pawns on a chessboard — in an industrial scale of killing never seen before. This senseless, multi-year destruction, that brought an entire continent to its knees, led some Western military strategists to start finding “fundamental faults [with this] costly and wasteful attrition style of warfare … and the strategic mindset ever since in the West”.
An early critic of the Clausewitzian military orthodoxy was T.E. Lawrence, a British liaison officer to the Arab forces revolting against the Ottoman empire (an ally of Germany during the ‘Great War’). The man who would become known as Lawrence of Arabia understood that the small Arab irregular force he was advising could not hope to defeat the larger Ottoman army in battle. But, while military orthodoxy offered little guidance, military history provided an abundance of good examples. The battles of Julu (207BCE), Badr (624), Morgarten (1315), Agincourt (1415), Panipat (1526) and Lacolle Mills (1814) all showed how less powerful ‘Davids’ can defeat more powerful ‘Goliaths’ and this is a common-recurring pattern. Since 1900 military engagements have only been won by the larger force 60% of the time — only slightly better odds than if they’d been tossing a coin. It appears therefore that Clausewitzian orthodoxy was wrong — power does not determine everything in war.
Many other Western military strategists have also sought to ‘go beyond Clausewitz’. However, the Prussian’s ideas have spread widely and deeply into the Western culture of strategy. Many business leaders today subscribe to the idea that success comes from having an organisation that runs like a ‘well-oiled machine’. The belief is that, if they can bring their full capabilities online, (‘having all their pieces on the board’) success become inevitable. However, an overly-internal focus — building a more powerful ‘machine’ with the latest technology and the best of “best practices” — can not bring competitive advantage if such moves are easily imitated by rivals. The result is stalemate. If one side then seeks to leverage their investments by attacking the other a form of trench warfare breaks out which, in business, is often a damaging race to the bottom on price as neither side can differentiate themselves. The risk is destruction for both parties. Yet, despite these dangers, the Clausewitzian hyper-focus on developing internal power remains popular in the West today as the widespread variety and popularity of change management and transformation programs testifies to.
Fig. 20: The opening situation in Go
In contrast to the maximum power displayed at the start of a game of chess weiqi begins with an empty board. Each player has the same number of ‘stones’ — all of equal value — and plays them in a near-infinite number of ways in an attempt to make their whole (position) more than the sum of its individual parts. Where victory in chess comes from deploying one’s power better (dominating the centre of the board and exchanging weaker for stronger pieces) victory in weiqi comes from cultivating superior potential (creating connections between one’s stones that limit the opponent’s options for making moves). Due to the ebb and flow of the multiple, simultaneous engagements across the entire weiqi board it can be difficult for the untrained eye to see who’s winning, but eventually one player’s accumulated potential becomes irresistible and victory is conceded.
Weiqi reflects the Eastern focus on potential (shi) as the determining factor in competitive situations and this is cultivated through making both orthodox and unorthodox moves. Orthodox moves include much of what Clausewitz and Sun Tzu wrote about (ex, adopting the latest weapons technology, developing sound tactics, managing impeccable logistics). However, while Clausewitz focused excessively on these internal matters — attempting to reduce the friction (uncertain events) that undermine the smooth running of one’s machine — Sun Tzu also focused on the external. It’s not enough to try and keep oneself “from being driven bananas” by uncertainty — one should also use unorthodox moves to try and increase the uncertainty external players must deal with. In other words, one must try to drive rivals “bananas” for keeping rivals off-balance diminishes their ability to cultivate their own potential, thereby improving your potential for relative advantage over them. Lao Tzu, a contemporary of Sun Tzu, described this strategic approach as:
“Governing the state by being straight-forward, Waging war by being crafty”.
Orthodox moves boost one’s invincibility by reducing uncertainty (governing by being straight-forward) while unorthodox moves exacerbate the uncertainty rivals must contend with (waging war by being crafty). Unorthodox moves must surprise and confuse rivals — forcing them to spend valuable resources (time, money, attention) trying to make sense of what’s happening. This is why misdirection is rife in both weiqi and the Eastern approach to strategy: Subtle feints are made to obscure one’s true intentions (to remain unpredictable), whilst distorting signals attempt to lure rivals into making false moves that one can capitalise on (ex, appearing weak where one is strong). This constant interplay between orthodox (cheng) and unorthodox (ch’i) moves — represented in Chinese philosophy by the yin/yang symbol — is about remaining ‘formless’ (so one is impossible to attack) while cultivating favourable conditions that ones exploits at the right moment (‘becoming like a torrent crashing down a gorge’). By incrementally decreasing one’s own uncertainty, whilst continually increasing the uncertainty rivals must deal with, one creates a mismatch. This is what enables even a weaker force to vanquish a stronger one — without ever needing a battlefield.
Fig. 21: Yin and Yang
However, unorthodox moves that are successful quickly become orthodoxy, which is why repeating past successes (copying the tactics of the last war, or imitating “best practices”) is sub-optimal — for it makes one predictable and easier for skilful opponents to manipulate. General Bonaparte — the archetypal Clausewitzian strategic genius — used a combination of orthodox moves (internal military reforms) and unorthodox moves (flexible operational formations) to surprise his European rivals. But, by the time he became Emperor, Napoleon’s unorthodox moves had become military orthodoxy and this made him predicable. Following victory over Napoleon at the battle of Waterloo the Duke of Wellington observed that the French merely “came on in the same old way, and we sent them back in the same old way”. All advantages have limited shelf-lives and the more frequently they’re used (by yourself or others) the less advantageous they become. Therefore, one should continually make orthodox moves to improve one’s internal resilience, but one should also continually use one’s imagination to create unorthodox moves that others can’t anticipate or easily make sense of. It’s this constant interplay of cheng and ch’i that creates relative advantage over rivals.
Difference #2: Focusing On Singular Wheres vs. Multiple Wheres
“In Go, it is a war with multiple campaigns and battlefields. There is no one single focus on the board. A Go player must always keep the whole situation in mind”.
The Arab Irregulars, with Lawrence advising its leaders, launched a series of lightening-fast attacks against their enemy across the vast expanse of the Arabian desert. By utilising conditions in their favour (experienced riders with a deep knowledge of the desert, able to cover huge distances at speed) the Arab forces ‘drove their opponents nuts’ with unorthodox moves: They manipulated perceptions by attacking quickly across such huge distances that the Ottomans believed they were fighting multiple forces; they exhausted their rivals by forcing them to continually re-build their partially-destroyed supply lines; and they undermined Ottoman troop morale by creating unbearable uncertainty as to when and where they’d be attacked next. The success of the Arab Revolt — eventually taking Damascus in November 1918 — was a clear, yet successful, rejection of the Clausewitzian principle to identify and strike at a singular ‘decisive point’.
In chess there is a singular focus to checkmate the king. Players seek to eliminate “powerful pieces such as the queen, knight, castle, and bishop [and] typically focus on these powerful military units as the “centre of gravity” and “decisive point” … Naturally, chess players are single-minded”. This singular focus is replicated in the annual strategic plans of many businesses today. Yet the defining weakness of plans is that they’re conceived in a world that’s often unlike the one that eventually unfolds; as unexpected events and unanticipated moves by rivals change the landscape, often dramatically. The many ‘strategic plans’ businesses made in winter 2019 and 2022 were quickly made redundant by the time the following spring came round in the North. And the complicated processes for creating ‘strategic plans’ and budgets meant that many organisations were unable to revise their thinking in time. This left them with a choice: abandon their plan (and the comforting illusions of certainty and control they brought) or ‘double down’ on it. Some organisations made a virtue of ‘sticking to the plan’ — no matter how irrelevant conditions had rendered it — playing like amateur chess players, wedded to their pre-determined game plan and ignoring the moves on the board that had taken the game in a different and more dangerous direction. In a rapidly-changing world such single-mindedness is stubbornness and can be very costly.
Weiqi eschews the single-mindedness of chess. As situations continually wax and wane in importance with each stone placed expert players know that focusing on one area of the board, to the exclusion of others, is detrimental to the strategic flexibility needed to develop real potential. Weiqi players therefore focus on multiple wheres — exploring opportunities and threats across the entire board. This echoes Pal’chinskii’s principles (our little known engineer, who was far ahead of his time) who argued that, as some failure is inevitable, we must experiment with a variety of ideas in order to increase our overall chance of success. The approach to strategy that took root in the East — one that ‘distrusts a single strategy that focuses attention on one situation at the expense of others’ — explains Honda’s seemingly cavalier approach to entering the US market with ‘no strategy other than seeing if they could sell something’. It was their aversion to focusing on a singular where that gave them the strategic flexibility to adapt when their situation changed in unexpected ways. This rejection of singular wheres also explains why Fujifilm — responding to the rapid decline of their core market — sought out multiple markets to attack. Unlike their US rival, Kodak — whose singular focus on digital cameras failed to save them from bankruptcy — Fujifilm’s focus on multiple wheres enabled them to cultivate the potential needed to not only survive the crisis but thrive.
Fig.21: Multiple wheres in play on the weiqi board
Focusing on a singular where — a single course of action — is a risk no strategist can afford to take. Focused plans provide a sense of certainty and control but, both Clausewitz and Sun Tzu, thought this illusory in a world of uncertainty. But it was Sun Tzu who argued that one does not need absolute certainty in order to act effectively — one simply needs to be less uncertain than rivals and exploit the mismatch. Orthodox moves enable us to adapt to “shifting conditions and circumstances in a world where chance, uncertainty and ambiguity dominate” but it’s the simultaneous unorthodox moves that decrease the ability of one’s rivals to adapt and creates a relative advantage over them. This is why a “prescribed plan and action are the last things a general should seek in warfare” or an executive should seek in business. Plans tempt one to treat the world the way they wished it was (conforming to their plan) rather than how it really is (complex and uncertain). When situations shift weak strategists ‘double-down’ on their plans and divorce themselves from a reality they are unprepared for — making themselves vulnerable to attacks from skilful rivals. This is why “nothing is more dangerous than becoming immobilised” by a rigid plan — a singular where — that can “make conduct inflexible and prevent an actor from the variation from which all potential stems”.
Difference #3: Natural Genius vs. Genius Nurtured
“As a prolonged and complex game, Go players focus on building or creating rather than chess players’ emphases on removal and destruction”.
Making moves — adopting new technologies, developing new products, entering new markets — is fraught with uncertainty. To hedge against uncertainty many leaders seek out ‘strategic geniuses’: Those thought able to peer through the ‘fog’ and identify the ‘decisive point’ the organisation needs to focus on in order to succeed. It was Clausewitz who helped make strategy “an activity in its own right, separate from politics”, which led to strategy in the West becoming an ‘art-form’ practiced in isolation from any concerns about implementation. The subsequent division of many Western organisations into ‘thinkers’ (who make plans) and ‘doers’ (who implement plans) feels natural — after all, we “have heads with which to think and bodies with which to act” — it’s an orthodoxy that has become “so deeply rooted in the very philosophical basis of Western society that it seems indisputable”. The separateness of strategy creation from execution has also given rise to the “industry [of] management consultants, strategic planning staffs, and business school academics” that have grown up around businesses in the West and to whom many outsource their thinking.
When the plans of the ‘thinkers’ fail the blame is often directed, quite quickly, at the ‘doers’ for poor execution, (as shown in the case of Hewlett-Packard earlier). Yet this blame game flies in the face of common sense. Any plan that can be derailed by poor execution was not have been much of a plan to begin with — as “every failure of implementation is, by definition, also a failure of formulation”. However, the elevation of the ‘strategic genius’ — despite the concept remaining a ‘black box’ in Western thinking — often renders them immune to criticism: The more their plans fail the more organisations look internally at what ‘doers’ did wrong. What follows is the launch of yet another single-action remedy (ex, a cultural, agile transformation) aiming to address the perceived ‘execution gap’. The chief beneficiary of these efforts to close the chasm between supposedly great plans and poor implementation is, of course, the management consulting industry again, who market and lead these complicated, expensive, multi-year transformations that promise to (finally) make the ‘doers’ capable of implementing the great plans the ‘thinkers’ (such as themselves) have devised for them.
Unlike in the West though strategy in the East was never seen as a separate activity, but as part of the entire affairs of state incorporating the political, diplomatic and logistical fields. Strategy in war was not limited to achieving victory on (or before) the battlefield; it was also concerned with the aftermath of war. “In this broad framework, the art of war is, in essence, the process of diplomacy”. Strategy in the East became an integral part of what everyone should be doing as it requires many people to focus on the ‘whole board’ at the same time. People explore moves they should make (seizing opportunities, guarding against threats) and moves they’re capable of making. This is why Fujifilm’s CEO warned his people ‘not to rely on outside consultants’ because they ‘couldn’t possibly know the company as well as Fujifilm’s own people could’. Strategy is not outsourced to others — it is expected to come from within. But this requires an organisation with people on the frontline who can both ‘think’ and ‘do’ — who can respond in a timely and effective manner to changing conditions — like the Honda’s executives who beat the British in the US motorcycle market by learning and exploiting emerging opportunities quickly and effectively.
This is where the “ancient Chinese notion of genius [is] at odds with Clausewitzian genius”. In the Eastern tradition ‘genius’ is meant to be ‘teachable’. Sun Tzu’s ‘Five Factors’ — considering purpose, climate, the terrain, commands and regulations — is a framework for teasing victory from conditions — even (or especially) if one is the weaker power. Victory comes from developing better awareness about what’s really going on, (which requires opening oneself up to more inflows of information, as described by Ashby’s Law ), challenging assumptions (about things you think you know) and using one’s imagination to create unorthodox moves that shape the landscape to your advantage (rather than merely ‘sticking to a plan’). Victory also requires cultivating the adaptiveness to work with the flow of these conditions — that one now has better awareness of — rather than against them: Like falling into a river’s rapids and accommodating oneself to the water, rather than expecting the water to accommodate itself to you. Awareness-adaptiveness are the mutually reinforcing capabilities that help one cultivate superior potential. And, when the timing is right, one unleashes this potential in an unstoppable torrent — impossible for anyone to resist. Effective strategy is not a singular plan conceived of in advance by a ‘strategic genius’ possessing other-worldly insight and determination. Effective strategy is not dependent on making people better ‘doers’ by trying to change or transform them into something they are not. Instead, effective strategy emerges in hindsight from the multiple, small, next-best moves people on the frontline make in response to the many challenges and opportunities they face in ever-evolving conditions.
A “new” approach strategy for an uncertain world
The Russian-British theorist and historian Isiah Berlin famously made a distinction between hedgehogs and foxes: Hedgehogs, he argued, are those who know and do one big thing; while foxes are those who know and do many small things. Western strategists, culturally shaped by the work of Clausewitz, may be said to be hedgehogs: They seek to identify a single ‘decisive point’ to attack and create a plan of action to bring all their acquired power into play, while displaying rugged determination needed to carry the day. Eastern strategists on the other hand, shaped by the influence of Sun Tzu, can be said to be foxes: Rather than relying on incomplete plans conceived in advance they seek to actively learn how situations are evolving. They know that business, like war, is a democratic game where other players have a large say in how conditions unfold, so they focus on active problem-solving (and active problem-making for rivals) and adapt as they go.
Understanding the Eastern approach to strategy — developing better awareness and adaptiveness by making orthodox/unorthodox moves that cultivates superior potential and limits the ability of others to move against you — doesn’t come naturally to those versed only in the Western approach to strategy. Yet, the Art of War provides an elegant framework for making ‘strategic masters’ of us all — contradicting the Western idea that ‘strategic genius’ is something you are either born with or not. Sun Tzu’s message is one of democratising strategy — providing a path to strategic brilliance that each of us can develop by learning how to harness the potential in the conditions around us. Knowing these ‘Five Factors’ can help you make moves that can be as powerful as a river racing down a mountain, “capable of arriving [at the sea] at multiple and thus interchangeable outcomes” — impossible to resist. The next book will start exploring these factors in the context of the modern business world. It’s a path to strategic mastery for any who wish to take it.
1 On China. Kissinger (2011) p45
2 On China. Kissinger (2011) p47
3 Learning from the Stones: A Go Approach to Mastering China’s Strategic Concept, Shi. David Lai (2004) p.28
4 Science, Strategy and War: The Strategic Theory of John Boyd. Frans P.B. Osinga (2007) p.311
5 Military Power. Biddle, S. (2004) p63
6 We will explore the idea of one of these, John Boyd, in depth in the final book.
7 A Treatise on Efficacy. Jullien. (2004) p177
8 DaoDe Ching (chapter 57)
10 Learning from the Stones: A Go Approach to Mastering China’s Strategic Concept, Shi. David Lai (2004) p.28
11 Learning from the Stones: A Go Approach to Mastering China’s Strategic Concept, Shi. David Lai (2004) p.28
12 See chapter 1 for a fuller discussion of the weaknesses with ‘strategic plans’.
13 See chapter 3.
14 See chapter 6.
15 See chapter 5.
16 Science, Strategy and War: The Strategic Theory of John Boyd (Strategy and History). Frans P.B. Osinga (2007) p45
17 Deciphering Sun Tzu. Derek M. C. Yuen (2014) p. 162
18 A oft-repeated criticism of non-complexity aware thinkers by Dave Snowden.
19 The Mind of War. Hammond p198 quoted in Deciphering Sun Tzu. Derek M. C. Yuen (2014) p. 89
20 Learning from the Stones: A Go Approach to Mastering China’s Strategic Concept, Shi. David Lai (2004) pp.28–9
21 On China. Kissinger (2011) p.48
22 Rise and Fall of Strategic Planning. Henry Mintzberg (1994) p406
23 The Honda Effect. R.Pascale. (1996) California Management Review, Vol 38, №4 p80
24 See chapter 1.
25 Rise and Fall of Strategic Planning. Henry Mintzberg (1994) p59
26 Learning from the Stones: A Go Approach to Mastering China’s Strategic Concept, Shi. David Lai (2004) p.3
27 The idea of genius in Clausewitz and Sun Tzu. Lukas Milevski (2019)
28 See chapter 8
29 See chapter 4.
30 See chapter 8.
32 Deciphering Sun Tzu. Derek M. C. Yuen. (2014) p. 82
Introduction to Part One — Why Best Practices Hold You Back
Chapter 1 — Forget Strategic Plans!
Chapter 3 — Pal’chinskii’s Principles
Chapter 4 — Ashby’s Law of Requisite Variety
Chapter 5 — FujiFilm: Innovating Out of a Crisis
Chapter 6 — Honda B: Miscalculations and Mistakes
Chapter 7 — Honda-Yamaha War of Natural Selection
Chapter 8 — The Eastern Approach to Strategy
Chapter 9 — The Western Approach to Strategy