The Rules of Successful Competition

Generic Principles: The strategic principles in the Sun Tzu's Play Book (S-RULE) describe how competition works. The underlying forces shaping competition exists independent of the specific contest or competitive arena. The meta-rules documented in The Play Book define what all competitive situations have in common. These rules are very different than those covering the non-competitive areas of life, what we call, the arena of production (explained in detail in this series of articles).

The generic principles work consistently because all forms of competition have certain key elements in common. Those elements include goals, changing conditions, source of rewards, contestants, and a set of methods.

Definition: We defined competition simply as:

Competition: The comparison of individuals, groups, or forces within a specific area of skill or judgment, where results yielding rewards are ranked based by physical outcomes and/or by other people’s judgment.

The key elements here are 1) parties being compared, 2) ranked results, and 3) results generating rewards. Take away any of those elements, and it ceases to be a competition, but competition by this definition is unavoidable. We are always going to be compared in terms of our skills, judgment, and results. Those who claim to hate the idea of competition are just as quick as anyone else in making judgments about the relative value of others. Rewards are always going to be distributed based on that ranking.

Practicality: Seeing competition as a comparison is much more useful that seeing competition as conflict, fighting, and battle. Competition is not the opposite of cooperation. Conflict is the opposite of cooperation. Both cooperation and conflict are methods which, properly understood, can be used in competition. We are be compared and rewarded for being cooperative much more frequently that we are rewarded for being belligerent.

People confuse competition with conflict because our only instinctual responses to competitive situations are “flight” or “fight.” The problem is that this view of competition is not very useful. This means that it doesn't allow us to be very successful over time in the ways that we are compared to others. Since conflict is inherently costly, the Institute teaches strategy specifically as "winning without conflict." We learn the skills of strategy to give ourselves a broader repertoire of responses to competitive conditions.

Positioning: Strategic positioning is fundamental to competition because it is what really happens during all forms of competition. "Positioning" it is just another way of describing what happens in making comparisons. When people are compared, they are ranked or "positioned" in an order. That "ranking" can be performed by two armies moving against to see which win controls a battlefield or by customers choosing one product over another in the marketplace. When commanders choose to avoid an opponent in battle or customers choose not to purchase a product, they are also performing a ranking and making decisions based upon it.

Advancing a position means simply improving our ranking. Saying that "competition works" is the same as saying that we are all capable of ranking people and organizations according to our preferences. Because every individual has different preferences at different times, there is no perfect or final ranking in any competitive arena. The competitive environment is inherently dynamic. Positions are constantly changing.

Freedom: The more free people are to make decisions for themselves, the more competition must take place. The more choices we have or what to have, the more we must embrace competition. Deny competition in any arena is basically denying people that ability to make comparisons in that arena. These may sometimes make sense, such as rules against dueling, but where competition is denied in one form, it often channels itself into another form.

In a free society, every individual is must be free to make choices based on their own preferences, that is, their own comparisons. Individuals and organizations whose positions win support win more rewards and their positions grow more powerful. In less free societies, only the preferences of the elites matter in determining rewards and power. Free societies are more successful than controlled societies because judgments regarding who gets rewarded come from a broader perspective and can more easily change as conditions change.

Specific Methods: Every competitive arena has its own methods, but the meta-rules of strategy apply to them all because the mental processes of making comparisons are always the same. Throughout history, the weapons used in all competition--military, business, sports, etc.--constantly improve, but these difference in weapons equalize over time. In the end, the only weapon the matters is the human mind, that is, the choices we make given the specific conditions of our situation.

Science is the realm of reproducible results. To make more accurate predictions, we must offer a precise description about how a system works. Mathematics is the language of science because it is more precise than spoken languages, but people do not think in mathematics. Sun Tzu's strategy could be defined in mathematical terms but instead we use simple, direct language to describe strategic principles in The Play Book, however we use our terms precisely and consistently. This is why we tend to define our terms so precisely.

Competitive Arenas: