Competition in Cooperation and Production: The World of Strategic Agility

Beware of misleading dichotomies. Competition is not the opposite of cooperation, nor is competition the opposite of production. As we explain in this article on decision science, competition exists wherever a choice must be made among external alternatives. Sometimes we are the subject of competition, the one making the choices. Other times we are the object, the one being chosen or rejected. Competition is required for successful cooperation. We must make good decisions in choosing partners. Competition is required for production. We must make good decision in choosing products, methods, and suppliers. Competition, cooperation, and production work together to produce value, but they demand very different skill sets and methods. 

At the point where these decisions are made, we must use the appropriate methods. Competitive decisions from among external alternatives cannot be "managed" in the same way that internal operations can be managed. Strategy as good internal management is not the same as strategy as good external agility. Sun Tzu teaches that the methods by which we make good decisions in competitive situations depend on a different a set of skills that are very often the opposite of management skills. Good managers and not necessarily good competitors. 

Good management depends on planning and the execution of plans. It depends on controlling the internal organization so that cooperation and production are predictable and dependable. 

Sun Tzu's strategy is not good management. It is a process of seeing opportunities in the external environment and exploring them. Since these situations exist in externally, we cannot plan or control the conditions that shape them. Good agility requires responding appropriately to changes in the larger environment that are not planned or controlled. Production requires strategy in the form of planning for the future, but competition requires strategic agility, adapting to unforeseen changes in the environment.

What's the difference?

Competition exists everywhere there are comparisons among alternative choices in the external evironment. Production exists wherever objects are transformed under internal control to create more valuable objects. 

Production works using a proven set of methods that transform raw materials into products or services, that is, changing objects into more valuable objects. Competitive methods work by winning support, discouraging opposition, and adapting to changes to win a competitive comparison. Production methods work on objects while competitive methods work on people. The more efficiently we produce objects, the more value we can offer in competition with others. The better our competitive skills, the more support our productive skills will gain amid the alternative choices.

Complementary But Opposite Skill Sets

2,500 years ago, Sun Tzu described the realms of the nation and the army as two opposite but complementary components of survival. The nation, run by the ruler and his administrators, was the world of productive: farming the land and making objects. The army, run by a general and his commanders, was its competitive counterpart, competition: defending the land and creating order. Survival depends on both components working together, understanding each other's role, and using very different rules. Managing production and internal operations is very different than decisions about competition and external maneuvers.

The secret is knowing when to use the methods of production (linear thinking, process planning, problems solving by division) and when to use the methods of competition (adaptive thinking, expert decision-making, and problems solving by innovation). We go into this in more detail in discussing our training, but the chart below offers a quick summary of the differences.

The Critical Differences

Competition Production
Advancing Positions Shaping objects
Exploring and experimenting Designing and organizing
Adaptive thinking Linear thinking.
Networked relationships Hierarchical structure
External, chaotic environments Internal, controlled environments
People competing People cooperating
Most people making decisions Most people following procedures
Anonymous, unattained resources Known, available resources
Event-based responses Predetermined steps
Factors details into larger picture Breaks processes into finer details
Unique, custom solutions Duplicate, standard products
Adjusts to environment as a whole Controls part of environment
General improvement in position Well-specified end result

Creating Resources for Each Other

Productive and competitive methods create the resources for each other in a constant cycle. The better our competitive skills, the more resources we capture to use productively. The better our production, the more resource we produce for use in external competition. Competition and production are closely tied to each other, but they require different skill sets. In the Sun Tzu's strategy, they are defined as "complementary opposites." Both are necessary. They work together. But you must understand how they are different.

The problem in recent decades is that our knowledge of production and training in linear thinking have greatly overshadowed our competitive skills and we receive. Fortunately, there is a growing interest in the types of strategic skills that people need on the front lines of competition. Fortunately, we have the Sun Tzu's strategy of Sun Tzu to guide us in building our competitive perspective and sharpening our decision-making reflexes.