Making good decisions based upon ignorance, confusion, delusion, and deception.

Like an iceberg, the reality supporting our decisions is hidden below the surface. How can we make good strategic decisions in an instant with limited information? Sun Tzu's Rules teach a number of sophisticated and yet practical models for decision making.

Knowing What is Relevant

Everything in Sun Tzu's strategy revolves around the idea of positioning. The only relevant question is: how do we advance our position? Our positions in all competitive arenas are determined by our decisions about conditions. Since information about conditions is critical to decisions, the first formulas of strategy are those designed to gather and organize as much relevant information as possible. By its nature, the environment frustrates information gathers. On one hand, it provides more information than we can handle. On the other, it seeks to hide the most critical information in a flood of data. Therefore, the tools of strategy limit our data collection to what is key and use methods that give us at least some insight into what we do not know. The concept of positioning is designed to limit the gathering of information to certain key areas where useful information can be found.

Focusing on Opportunities

The direction of positions is determined by motivation. What is an opportunity? It depends on our goal. Opportunities are determined by the opening that take us most easily toward our goals. The next formulas in Sun Tzu's strategy filter information to identify those openings so that decisions about actions can be made. This step requires its own specialized set of tools used for identifying opportunities and evaluating them. The process of advancing a position identifies the most likely areas where an advance can be made.

Testing the Environment

As Will Rogers once said, "It isn't what we don't know that gives us trouble. It's what we know that ain't so." Because each move is an experiment, Sun Tzu's first priority is experimenting safely. For example, the Minimizing Mistakes Formula teaches that initial moves should be small, limited, and local because they are the least risky.

Each move is a probe designed to test information in real time and determine its value. In making these moves, however, we must adapt to the situation as we find it. This systematic testing requires its own toolkit for adapting our experiments to the conditions we discover in the environment and that we can only discover by attempting something. Each strategic move seeks to make progress in a certain direction, but the immediate path to progress is discovered in the process of making the move.

Every Failure Is a Success

If our goal is gaining a better understanding of our position, every exploration is successful. This requires recognizing both our successes and failures. As Thomas Edison recognized, most experiments fail. However, if conducted correctly, even failed experiments are helpful because they give you good information. Every move is successful in the sense of improving your quality of information about the competitive environment.

Though we must be prepared for failure, we live for success. We can often find success, however small, in every move. The final step is claiming our new position. Even when we have just gained knowledge, we have advanced our position in that aspect. These are the tools necessary to get every drop of value from a new position.


Given the proper methods, the chaotic nature of the environment becomes our ally. Sun Tzu's strategy doesn't change environmental conditions, but it changes our decisions in response to them. Small increases in the quality of our decisions can, over time, make huge differences in our position.

Many of the techniques first developed by Sun Tzu and developed over time allow us to use the shortage of information to our advantage. It is always easier and less expensive to control a situation by controlling the flow of information than by using physical force. For example, you create strategic momentum by introducing new information into the environment when you are prepared for it and your opponents are not.

9 Formulas for Business Success: The Science of Strategy.