Business

More Freedom Means More Uncertainty

Planning and control are good things, but their opposites, strategy and freedom, are also good things. The complementary opposites of Sun Tzu's strategy balance each other. It is wrong to think of them as good against evil. We need areas of control in order to design and build things. Large areas of control, such as corporations, a necessary to build large, complicated things. This planning and control only becomes oppressive when its opposite, freedom and strategy, are suppressed. That suppression leads to stagnation and increasing frustration.

Pushing and Pushing Back

Strategy teaches us to avoid conflict because when you push others, they naturally push back. This sets up a cycle of conflict that naturally escalates if both parties have excess resources. Once started, the process doesn't get anyone closer to their goals. For a good example, we can look at Google and Microsoft. One makes its money in selling advertising via on-line searches. The other makes it money in selling desktop software.

Difficult Choices

A member of the Strategy School writes:
I can not help thinking that whatever direction I choose to take, it has to lead to some larger long term reward. I feel absolutely surrounded and overwhelmed by opportunity. But I feel that I’m searching for “the” route to the land of megabucks...Maybe I should focus on making lots of small decisions and like you say the big ones will fall into place.

Hillary Wins in NH: Testing Dynamic Environments

Planning doesn't work in competitive, external environments, for a variety of reasons (discussed here), but one of the central reasons is the problem of limited information (discussed here). One of the tools planners use to try to predict these dynamic environments is "market" testing. However, the success of such testing is limited.

Networks and Hierarchies

Competitive environments that require strategy are open networks. In these networks, people, individually and in organizations, are relatively free to act, choosing their own partnerships. Within larger organization, we find controlled environments, in which hierarchies define who does what and works with whom. Within these hierarchies, planning is not only possible, but necessary.

The Economy Gap Between Perception and Reality

The New Year seems like a good time to look at the economy. Strategic positions have an objective dimension in physical world and subjective dimension in the minds of the public. These physical and mental aspects of a position are complementary opposites of a single system. One changes the other in a constant cycle. The larger the gap between any physical reality and our subjective impressions of it, the poorer job we do predicting the future and the more volatile the future becomes.

The Wealth Gap

Sun Tzu's strategy is the science of comparing relative positions. Sun Tzu's strategy offers a system for understanding the dynamics of positions. These dynamics create short-term random "jitters" in positions, but when you understand them, you can harness their power to create long-term progress in one direction or another.

The Unseen Opportunity

Sun Tzu's strategy teaches that opportunities are both 1) right in front of you and 2) hard to see. Why is something that is right in front of you is hard to see? Because your perspective, which is subjective and not objective, blocks your view. As human beings, we get locked into certain views of our situations, which filter out information that doesn't fit our mindset. Sun Tzu's entire system for strategic analysis was developed to overcome this problem.

Value, Risk, and Reward

Sun Tzu taught that advancing in small, certain steps were always preferable to using larger, riskier steps. What science considers "illogical" choices are very logical when we factor in the difference between controlled environment, where planning works, and competitive environments, where strategy works. Good strategy seeks to exploit the mistakes people naturally make in calculating risk and reward. Planning assumes that the future is controllable and predictable.

Wars of Words

A war of words is a special type of positioning duel. It focuses only on the subjective part of a position, that is, what a position means in terms of the future. A war of words is a psychological war in which one party is trying to get someone else to physcially change their position based upon the information communicated. Generally, all wars of words can be broken down into two types: threats and promises. These are future punishments and rewards for acting or stopping acting in a certain way.

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