Business is war—fight to win! H Hide a Today’s global economy is a battleground. To survive and i thrive, you’ll need every weapon you can get. Microsoft, d Sony, and Starbucks use business practices based on the e dagger ancient Chinese military text The Thirty-Six Stratagems— a now you can, too. Author Kaihan Krippendorff explains d how to apply each stratagem to make your business profits soar, such as: a g stratagem #1—Kill with a Borrowed Knife g Indirect attacks on your adversaries can catch them off-guard. e BeHind a r stratagem #19—Watch the Fire on b the other shore sm le e Companies that temper power with patience will be h more competitive in the long run. i n stratagem #33—Hide a dagger d Behind a smile Threatened adversaries resist—trusting ones do not. a s With Hide a Dagger behind a Smile, you can take m on your competitors and win—one battle at a time. i l Kaihan Krippendorff is a former consultant with McKinsey & Company and author of e the forthcoming The Way of Innovation. He is president of the Strategy Learning Center, Use THe 36 a firm that helps companies worldwide—including Microsoft, Ryder, Pfizer, and DHL— outthink their competition. He holds an MBA from Columbia Business School. He has ancienT cHinese been mentioned in or written for publications such as Inc. magazine, Harvard Business K Review, and Harvard Management Update and has appeared on many radio programs, r including NPR’s Marketplace. ip p sTr aTegies To seize e n d Images © istockphoto/choicegraphx, Tony Link Design o THe compeTiTive edge r $14.95 (CAN $17.95) Business ff ISBN-13: 978-1-59869-380-5 www.adamsmedia.com ISBN-10: 1-59869-380-8 Kaihan Krippendorff Hide a dagger BeHind a sm le USe THe 36 ancienT cHineSe STraTegieS To Seize THe compeTiTive edge Kaihan Krippendorff avon, massachusetts Copyright 2008 © by Kaihan Krippendorff All rights reserved. This book, or parts thereof, may not be reproduced in any form without permission from the publisher; exceptions are made for brief excerpts used in published reviews. Published by Adams Media, an F+W Publications Company 57 Littlefield Street, Avon, MA 02322. U.S.A. www.adamsmedia.com ISBN-10: 1-59869-380-8 ISBN-13: 978-1-59869-380-5 Printed in the United States of America. J I H G F E D C B A Library of Congress Cataloging-in-Publication Data Krippendorff, Kaihan. Hide a dagger behind a smile / Kaihan Krippendorff. p. cm. Based on concepts from the ancient Chinese text, The Secret art of war : the 36 stratagems. Includes bibliographical references and index. ISBN-13: 978-1-59869-380-5 (pbk.) ISBN-10: 1-59869-380-8 (pbk.) 1. Competition—Management—Case studies. 2. San shi liu ji. 3. Strategy—Case studies. 4. Problem solving—Case studies. 5. Industrial management—Case studies. I. Title. HD41.K69 2007 658.4’012—dc22 2007039126 This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice. 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For information, please call 1-800-289-0963. contents Acknowledgments .....................................vii Preface .............................................. ix Introduction .......................................... xi part i Yin Yang polarity 1 STrATAGEM ONE To Catch Something, First Let It Go .......................5 STrATAGEM TWO Exchange a Brick for a Jade ..............................14 STrATAGEM THrEE Invite Your Enemy onto the roof, Then remove the Ladder ....20 STrATAGEM FOUr Lure the Tiger Down from the Mountain ..................26 STrATAGEM FIvE Befriend the Distant Enemy to Attack One Nearby ...........33 STrATAGEM SIx Kill with a Borrowed Knife ..............................38 STrATAGEM SEvEN Besiege Wei to rescue Zhao .............................42 STrATAGEM EIGHT The Stratagem of Sowing Discord .........................48 STrATAGEM NINE Trouble the Water to Catch the Fish .......................53 iii iv Contents part ii Wu Wei: go with the Flow 59 STrATAGEM TEN remove the Firewood from under the Pot .................. 61 STrATAGEM ELEvEN Shut the Door to Capture the Thief .......................65 STrATAGEM TWELvE replace the Beams with rotten Timbers ...................70 STrATAGEM THIrTEEN The Stratagem of the Beautiful Woman ....................75 STrATAGEM FOUrTEEN Beat the Grass to Startle the Snake ........................79 STrATAGEM FIFTEEN Loot a Burning House. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 STrATAGEM SIxTEEN Sometimes running Away Is the Best Strategy ..............89 STrATAGEM SEvENTEEN Seize the Opportunity to Lead the Sheep Away ..............93 STrATAGEM EIGHTEEN Feign Madness but Keep Your Balance .................... 101 part iii Wu chang: continuous change 107 STrATAGEM NINETEEN Watch the Fire on the Other Shore .......................112 STrATAGEM TWENTY Let the Plum Tree Wither in Place of the Peach ............118 Contents v STrATAGEM TWENTY-ONE The Stratagem of the Open City Gates ....................124 STrATAGEM TWENTY-TWO Await the Exhausted Enemy at Your Ease .................128 STrATAGEM TWENTY-THrEE Exchange the role of Guest for That of Host ...............135 STrATAGEM TWENTY-FOUr Borrow the road to Conquer Gao .......................142 STrATAGEM TWENTY-FIvE Shed Your Skin Like the Golden Cicada ..................148 STrATAGEM TWENTY-SIx The Stratagem of Injuring Yourself .......................152 STrATAGEM TWENTY-SEvEN Borrow a Corpse for the Soul’s return .................... 157 part iv Shang Bing Wu Bing: indirect action 163 STrATAGEM TWENTY-EIGHT Point at the Mulberry but Curse the Locust ................166 STrATAGEM TWENTY-NINE Clamor in the East; Attack to the West ...................172 STrATAGEM THIrTY Openly repair the Walkway, Secretly March to Chen Cang ... 177 STrATAGEM THIrTY-ONE Fool the Emperor and Cross the Sea ......................184 STrATAGEM THIrTY-TWO Create Something out of Nothing ........................188 vi Contents STrATAGEM THIrTY-THrEE Hide a Dagger Behind a Smile ..........................193 STrATAGEM THIrTY-FOUr Deck the Tree with Bogus Blossoms ......................200 STrATAGEM THIrTY-FIvE To Catch the Bandits, Capture Their Leader ...............205 STrATAGEM THIrTY-SIx The Stratagem of Linking Stratagems .....................210 APPENDIx A The Thirty-Six Stratagems as Problem-Solving Tools .........219 APPENDIx B rapid-Cycle Strategy Innovation ........................249 APPENDIx C research ...........................................253 Notes .............................................. 267 Bibliography ........................................273 Index .............................................. 277 acknowledgments The book is like a snapshot of a ruedi Müller, verne Harnish, conversation I have been holding Zaki Mustafa, Stephannie Was- with many like-minded people serstein, Ned Bowman, Tereza over the past ten years. I unfor- Sommerfeld, Enrique riquelme, tunately only have space here to Evan Shelan, and Maritza thank a portion of this commu- Morales. My former colleagues at nity. Above all I thank my wife, McKinsey & Company continue Pilar ramos, and my son, Lucas to serve as mentors and friends, Somar Krippendorff, for being including David Wenner, Jacques the purpose of me completing Antebi, Juan-Jose Gonzalez, Brad this book. Hoover, Tim Lukes, and Joanna Dr. Kathryn Harrigan, my Popper. professor at Columbia Business In my attempt to capture School, first encouraged me with the subtleties of the Thirty-Six the idea that I could write a book. Stratagems as accurately as I can, Others who provided academic I depended heavily on a small support include Dr. Ming-Jer network of generous friends. Qin Chen, Dr. Costas Markides Chen spent countless hours with (London Business School), Dr. me explaining and critiquing my Sumantra Ghoshal (now deceased, interpretation of each stratagem. London Business School), Dr. I first asked Christina Zhu about Steve Heine (Florida Interna- the stratagems in 1999. She has tional University), Dr. Alan continued to answer my questions Carsud (Florida International energetically. Teresa Chu, Harry University). I thank my father, Dr. Wang, and Alex Tsui helped keep Klaus Krippendorff (University of my interpretation of the Chinese Pennsylvania), for expanding my philosophy behind each stratagem thinking over countless engaging on target. conversations. I also thank my mother, Sul- My colleagues at The Strat- tana Alam, for inspiring me and egy Learning Center, especially my agent, Laurie Harper, for AnaMaria rivera, contributed guiding me. ideas and support the research. This work is far more power- Kaihan Krippendorff ful thanks to the case ideas and Miami, Florida insights shared by Doug Muir, February 2007 vii preface n March 1220 AD, the defenders of Bukhara made a fatal mis- I take. This ancient Muslim city in what is now Uzbekistan was about to fall prey to one of history’s most daring military maneu- vers. Genghis Khan had appeared as if from thin air. When he first set his sights on Bukhara, he appeared to pursue a conventional approach, sending his army to attack cities standing between his homeland, Mongolia, and his target. But while the defenders of Bukhara monitored their adversary’s progress, Geng- his Khan secretly prepared a detachment for a march most thought impossible. He drove his men farther than any army had ever cov- ered—across 2,000 miles of mountains, deserts, and plains—and appeared unexpectedly at Bukhara’s doorstep. Surprised, Bukhara swiftly joined a long list of cities outwitted by Genghis Khan. How did Genghis Khan conceive of an option none expected? History’s greatest military strategists—Alexander the Great, Napoleon Bonaparte, Sun Tzu—won with creativity rather than strength. They shared an unnatural ability to see and choose stra- tegic options others ignored. I believe we all have the capacity for unlocking such strate- gic creativity. We can, with the right tools, approximate with a method that others exercise naturally. This book offers a toolkit, fashioned by an ancient Chinese text called The Thirty-Six Stratagems, that is surprisingly effective at ix