Saturday, April 5, 2014

The Definition of Competitive Darwinism in the Information Economy

Never enter into a conflict without
 a durable clipboard, with  the right set of notes!  . . . 
(updated at 12:00 noon)

No one really gets killed in a competitive business setting unless it gets personal and extreme.  That is usually a rarity.   The weaker businesses are usually closed and/or bankrupted while some lives could be interrupted and/or be ruined. Dreams are usually smashed. Partnerships are broken and some relationships become irreparable.   Reality hurts.  But life goes on.

The underdog company might win once in a blue moon.  It is rare but the reasons are numerous.  But people rarely care. 

The after-effects become obvious after "Competitive Darwinism" is properly implemented. 

If you still don't understand what we are talking is about, spend some time, reading The Wall Street Journal, The Financial Times, The Investor Business Daily, the business section of NYT, Business Week and some other news sources, find articles with similar content, compare the articles and try to read between the lines with some of the stories.  

Ask the following questions:

  • Did the losing chief decision makers really err on disinformation or on mis-information?
  • What are the odds that the losing chief decision makers committed the error of third kind?
  • What is the probability of the losing side (especially the underdog) returning to the marketplace as a formidable competitor?  (This is a subjective question that is based on the circumstance of the situation.)
A Recommendation 
We highly recommend Douglas Ramsey's Corporate Warriors (1987) for an unique view of competitiveness. 

At that level of business competition, there is no such thing as accidental loss.  Coincidence-based events could be re-assessed after the situation is over.  The tardy implementation of a viable contingency plan is irrelevant in some instances because of the limited time line and the availability of resources.

You cannot find this type of analysis in most translations of The Art of the War (except for Mark McNeilly's Sun Tzu book on business). Mr. Ramsey's did a superb job in analyzing each business case. 

A 1987 Book Review From The NY Times 
By ANDREW FEINBERG; Andrew Feinberg writes frequently about business.
Published: April 12, 1987

THE CORPORATE WARRIORS By Douglas K. Ramsey. 261 pp. Boston: Houghton Mifflin Company. $17.95.

WHILE this breezy and generally entertaining chronicle of six corporate battles of the 1970's and 80's is not subtitled ''In Search of Expedience,'' its amoral tinge can be disturbing. Perhaps this is inevitable when an author seeks, as Douglas K. Ramsey does, to apply the principles of warfare to modern business management. Still, it is jolting to realize that once a reader has mastered the finer points of ''Iacocca'' and become a gifted one-minute manager, the next item on the agenda is total war against the competition.

Mr. Ramsey, a business correspondent for NBC News, got the idea for this militaristic view of commerce while working in Japan for The Economist. Most Japanese managers he knew could quote from ''The Art of War'' by the ancient Chinese philosopher Sun Tzu, and Mr. Ramsey sought to understand the value that executives found in those teachings. What, he wondered, was strategy like before strategic planning?

From military experts such as Karl von Clausewitz, Machiavelli and Sun Tzu, Mr. Ramsey culls nine key points for corporate generals: ''maneuver'' (flexibility), ''objective'' (a clear goal), ''offense,'' ''surprise,'' ''economy of force,'' ''mass'' (concentration of strength), ''unity of command,'' ''simplicity'' and ''security'' (secrecy).

Strangely, most of the business leaders analyzed in ''The Corporate Warriors'' have recently suffered blows to their reputations. Among Mr. Ramsey's heroes are Donald Burr, the founder - and destroyer - of People Express; Roger Smith, the chairman of General Motors; Ted Turner, the media mogul; and William McGowan, the head of MCI, the telecommunications company. Only Bob Guccione of Penthouse magazine and Roberto Goizueta of Coca-Cola are still riding high. Unfortunately, Mr. Ramsey ignores the failings of his business paragons.

Nonetheless, the military perspective that he employs provides some enlightenment. After decades of watching Pepsi narrow Coke's lead in the soft-drink market, Coca-Cola finally realized that perpetual defense does not work. (For decades the company had ignored Clausewitz' contention that ''the defensive is a relative state, and consequently impregnated more or less with offensive principles.'') Bob Guccione did not take on Playboy in the United States until he had gained sufficient strength abroad to be confident of victory. During his initial success in England, in fact, he tried to prevent copies of Penthouse from reaching America, correctly reasoning that any premature sallies would only help the enemy. Ted Turner, on the other hand, is portrayed as a skilled guerrilla fighter, winning battles that opponents only belatedly discover are worth fighting. One of his greatest weapons may be his buffoonery, for he has been consistently underestimated by his competitors. AS for Donald Burr, Mr. Ramsey surprisingly overlooks the real militaristic messages of Mr. Burr's ultimate failure. People Express abandoned some of the strategies that had made it successful, and it never got to know its enemies. By deciding to attack American Airlines and United Airlines in the vital and hugely profitable Chicago market, Mr. Burr invited retaliation he could not withstand.

The final disconcerting element of ''The Corporate Warriors'' is that four of its leading players - Messrs. Turner, Burr, McGowan and Guccione - are autocrats, men who, Mr. Ramsey suggests, would not dispute the conclusion of the French World War I field marshal Ferdinand Foch: ''Battles are lost or won by generals, not by the rank and file.'' If that's the message some managers take away from this provocative book, we might soon have even more economic problems than we do now.

The Quality of Information Determines the Quality of Planning  
The quality of information that one possessed at the beginning, allows the chief decision makers to determine where to concentrate their efforts and where to position their resources.  

Defining the configuration of the situations and identifying the category of the specific situation in the beginning of a grand situation do matter.  The quality of the specificity usually enhances the quality of the decision.  This presumes that chief decision makers know how to decide strategically.

Having that hybrid skill to assess strategically, to decide strategically and to plan and execute strategically is a different matter. ... Most people are lucky to have that one skill that enables them to survive another day. 

Comments From The Compass Desk
Influencing the chief decision makers away from their intention is the idealistic approach to subjugate the predominant paradigm of the competition. 

We have always emphasized that one should anticipate competitive darwinism from the other side, not to implement it. 

To prevail on the long run, the "smart" underdog must immediately focus on pursuing the strategic gain that would immediately lead to the advantageous gain by focusing "the singularity point" while controlling the counterpart from executing "the exception point."  ... We will outline the definitions of "Strategic Gain" and "Advantageous Gain"  in a future post  

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