Mark McNeilly is the Executive Director for Corporate Branding at Lenovo, an Adjunct Professor at the Kenan-Flagler MBA program at UNC, and the author of three books: Sun Tzu and the Art of Business, Sun Tzu and the Art of Modern Warfare, and most recently, George Washington and the Art of Business. He and his insights have been featured by the New York Times, the Los Angeles Times, the BBC, the radio series “Secrets of Success,” and other business programs. He is an honors graduate from the University of Minnesota’s MBA program and served as an infantry captain in the U.S. Army reserves.
Morris: When did your interest in Sun Tzu and his classic work, The Art of War, begin?
McNeilly: Ever since I was a young I was interested in military history and strategy. So I first read Sun Tzu’s Art of War when I was in my teens. Sun Tzu’s novel and unique approach to military strategy intriqued me and provided a framework to analyze conflicts such as the two world wars. I furthered my interest in this area by joining the military. Then, when I got into business strategy I saw how Sun Tzu’s approach to military strategy could be applied to business. I also noticed that, although many of my business colleagues had heard of The Art of War or had a copy, they had never completely read it, perhaps because it can be a little difficult. So I resolved to write Sun Tzu and the Art of Business to make his strategic philosophy easy to understand, clearly applicable to business, and enjoyable to read.
Morris: Although written more than 2,500 years ago, The Art of War continues to be required reading at military academies and war colleges throughout the world, including those in the United States. Why?
McNeilly: Because it has a different way of approaching strategy. In the West a very direct approach to attacking the enemy is often favored. Think of two knights jousting or the shoot-out at high noon in the Old West. This philosophy can lead to a war of attrition with high casualties, as we saw in World War I. Sun Tzu emphasizes the indirect approach to defeating the enemy and the need to win with as little conflict and loss as possible, saying, “For to win one hundred victories in one hundred battles is not the acme of skill. To subdue an enemy without fighting is the acme of skill.”
General Norman Schwartzkopf studied and used Sun Tzu’s approach to win victory in the Perisan Gulf War and General Tommy Franks used it as well to quickly defeat Saddam Hussein’s troops in the initial phase of the war in Iraq. Of course, many Asian countries pass on the learnings from The Art of War to their military officers as well.
Sun Tzu also said that all battles are won or lost before they are fought. Hence the importance of preparation. In business as in war, the extent to which you prepare carefully determines the extent to which you can minimize waste of resources.
Morris: How do you explain the fact that, until recently, the major graduate schools of business paid little (if any) attention to Sun Tzu and his ideas?
McNeilly: My guess would be that many B-schools approach business in a numeric and highly analytical way and the concepts in The Art of War are perceived as a little too “soft” for them or out of the mainstream. Also, because it comes from the realm of warfare and outside of business, they may see it as too distant to be applicable. Of course, I believe this view is incorrect. For thousands of years military organizations have been solving many of the same problems businesses face. Ever since the first Chinese warlord deployed cavalry and infantry he was dealing with cross-functional teams. When Xenephon had to lead his men back from Persia he had to balance empowerment and delegation with discipline and control. Dr. Philip Kotler, the marketing guru from Northwestern said, “Given the constant battles for market share in almost every industry–computers, soft drinks, airlines, giant retailers–it still surprises me that people resist the notion of business warfare.”
However, I think that situation is beginning to change in many graduate schools of business as faculty members realize that “business warfare” offers more than a nomenclature. Consider the example of Lieutenant General William Gus Pagonis who was the director of logistics during the Gulf War of 1991 and is widely recognized for his logistical achievements particularly during Desert Storm. Two years later, Pagonis retired to assume the position of executive vice president of logistics for Sears Roebuck & Co.
Morris: Of all that you have learned from Sun Tzu, what has proven to be the single most important principle or insight? How so?
McNeilly: One of Sun Tzu’s most illuminating quotes is “Now an army may be likened to water, for just as flowing water avoids heights and hastens to the lowlands, so an army avoids strengths and attacks weakness.” He is saying that, just as water takes the path of least resistance to get where it is going, you should take the path of least resistance to achieve your objectives. So, instead of attacking directly where a competitor’s strengths are greatest, identify the areas in which they are weak and focus on those.
Many years ago K-Mart developed a $3B strategy to attack Wal-Mart at its strongest point: low prices. Because K-Mart couldn’t get below Wal-Mart’s 5 point cost advantage the strategy failed miserably. K-Mart’s sales and profits dropped, market share fell from 35% to 23%, the stock price flattened, and their CEO resigned. Meanwhile, Wal-Mart’s market share increased to 40%, the profits soared, and its stock price doubled.
Contrast K-mart’s strategy with what Target has done. Understanding that Wal-Mart’s focus on being the low-price leader left a gap for higher-end, higher-quality products in a more upscale environment, Target has successfully built its brand on that promise of value. As a result its stock price rose from under $30 in 2004 to, at one point in 2007, a high of $70.
Morris: One final question on Sun Tzu. Do you expect his influence to increase, decline, or remain about the same during the next 10-15 years? Please explain why you think so.
McNeilly: Given the growing influence of China and Asia in the business world, I have to believe it will become increasingly influential. That, and the fact that it’s an exceptional and unique way of thinking about strategy, will increase its appeal. To support that I’d point to the increasing popularity of The Art of War, not only in the U.S. but around the world. For example, my book as well as Sun Tzu’s have been translated into Spanish, Russian, Portuguese, and even Lithuanian. It seems certain that senior-level executives in a number of foreign countries are studying Sun Tzu’s ideas and then applying them to their own specific needs and objectives.
Morris: Why did you select George Washington as the subject of your most recently published book?
McNeilly: I picked Washington as the subject for my newest book, George Washington and the Art of Business: Leadership Principles of America’s First Commander-in-Chief, for a number of reasons. A lot of people don’t understand the real Washington and his accomplishments. In fact, one friend of mine said, “I think of George Washington sort of like Paul Bunyan, a mythical American character from our past.”
Washington was a real, live person with strengths and weaknesses. Yet Washington’s accomplishments put him in a class that few other leaders in history can match. He created an army from scratch and used it to defeat the leading power of Europe, winning independence for our country. He then went on to become the first President of the United States by unanimous vote of the Electoral College. As Jefferson said of him, “For his was the singular destiny and merit, of leading the armies of his country successfully through an arduous war, for the establishment of its independence; of conducting its councils through the birth of a government, new in its forms and principles, until it had settled down into a quiet and orderly train; and of scrupulously obeying the laws through the whole of his career, civil and military, of which the history of the world furnishes no other example…” Obviously, a person who has accomplished those feats is one from whom we can learn a great deal about leadership. To do so requires a better understanding of how George Washington developed the leadership traits and skills that were the source of his success. My book provides that understanding and then goes beyond it to suggest how those same capabilities can be applied in business to achieve success.
Morris: Of all of Washington’s leadership qualties, which do you think are most important for business leaders?
McNeilly: That’s a tough one. Washington was a great organizer, which helped him build and sustain the army. He motivated his troops by leading from the front and sharing their trials and tribulations, as he did during the dreadful winter at Valley Forge in 1777. He worked well with other stakeholders like Congress and the state governors to get their support for the war effort. Washington developed a strategy to beat the British and was not afraid to seize opportunities when they presented themselves, such as his attacks on Trenton and Princeton that saved the Revolution. Also, his persistence in the face of so many obstacles and defeats is amazing, allowing him to persevere through several setbacks to lead the colonies to victory.
That said, probably the trait that is most important for business leaders is Washington’s integrity. Despite his qualifications he did not push to become commander-in-chief of the army. Once selected by unanimous vote Washington did not take a salary, asking only that his expenses be paid. He always deferred to Congress and consulted with its members regularly. This was critically important because many in Congress feared a military dictatorship and were worried that Washington might use the army to take power. At the end of the war he surrendered his sword to Congress and returned to Mount Vernon to become a gentleman farmer. King George III, Washington’s adversary in the war, found this act amazing and called Washington “the greatest character of the age.”
Morris: In your opinion, which was Washington’s “finest hour” and why do you think so?
McNeilly: Before responding to that question, I should point out that all of the opinions I have expressed in this interview, including those that follow, are mine alone and do not reflect that of any organization with which I am affiliated.
That said, Washington’s finest hour probably occurred during what was known as “The Newburgh Conspiracy.” A number of army officers, upset that Congress had reneged on its promises of pensions and back pay for their service, wanted to take action against the legislature. Some even advocated a military dictatorship or setting up a constitutional monarchy with Washington at it’s head.
Washington told the officers at a gathering in Newburgh, NY, he totally disapproved of such thinking and that it was contrary to all they had fought for. However, his prepared speech did not work and there was still much grumbling against Congress. Washington, seeing this, pulled out a letter from his coat. After a fumbling attempt to read it Washington took from his pocket a pair of reading glasses, stating “Gentlemen, you will permit me to put on my spectacles, for I have not only grown gray but almost blind in the service of my country.” This act and its accompanying words from the heart achieved what Washington’s prepared speech had not. His emotional appeal reminded his officers of Washington’s sacrifices and won them back to his side and that of the Republic. Eventually a more conciliatory approach would be taken by the officers, and Congress, seeing the need to be responsive to the army, would meet most of the officers’ demands. Washington’s leadership and selflessness were amazing.
Morris: To what extent (if any) did his leadership style as a military commander later change during his two terms as president? Why?
McNeilly: Washington always had an inclusive style of leadership, frequently calling “councils of war” with his top commanders to get their input before any major battle or movement. He would ask them for their opinions, hear their arguments, and only then make his decision. After the war and his retirement Washington saw that the Articles of Confederation were an insufficient framework for the country. He was instrumental in convening and then managing the Constitutional Convention, serving as its president. Rather than make all the decisions himself, he facilitated the conversation to a successful conclusion, resulting in the publication and eventual ratification of the Constitution.
As President, Washington continued his consultative style, both with his cabinet and Congress. Probably one of his biggest disappointments was the formation of political parties (or “factions” as they were then known) under Hamilton and Jefferson. Washington had hoped that, rather than having people coalesce into factions with all the emotion and bitterness that can entail, public servants could look at different options as rationally and dispassionately as possible, then come to the right conclusion. Unfortunately, his vision for a faction-free future was not to be.
Morris: To what extent does Washington’s deportment provide a model for today’s business leaders?
McNeilly: Washington understood the importance of making a favorable impression on others. He always dressed in an immaculate uniform and surrounded himself with a bodyguard and aides that were of fine physical stature and dress. Washington himself was very tall and strong, and he would stand very straight to emphasize his military bearing. He was also one of the best horsemen of his time. There is the story that, during the advance to Trenton Washington’s horse started to slip and fall on the icy road. Washington pulled up hard on the bridle and, solely through his physical strength, stabilized his mount. So Washington used these assets to portray himself as a strong leader. More importantly, his character and behavior supported the image he was projecting.
While each of us needs to develop an appropriate personal style, there is much to be learned from how Washington dressed, spoke, and behaved. His deportment communicated important “signals” about who he was and what he stood for. He had a presence that attracted favorable attention and commanded respect. Why? Because his charisma was wholly authentic.
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