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CEO Notes
- News and Articles on Generating Competitive Advantage
- June 27
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Sales | Revenue | Compete | Partner | Thrive
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======CONTENTS
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1. Sun Tzu, John R. Boyd and Fast Cycle Times
2. Boyd Cycles (also known as "Blitzkrieg")
3. Using Boyd to Outmaneuver Bigger Competitors
======================
"Those who
establish adaptable formations will survive - even if
they are small. While those who establish unadaptable
formations shall perish - even if they are large. So
it has been since the beginning of time." From The Ancient
Book of the Huainan Masters (a 2000 year old Chinese
war text)
______________
1.
Sun Tzu, John R. Boyd and Fast Cycle Times
This is a
special issue on the business application of maneuver
warfare to generating competitive business advantage.
John R.
Boyd
Colonel John
R. Boyd, USAF was the first modern military strategist
to conduct a systematic study of recorded military history
to identify strategies that were associated with either
success or failure. He has been referred to as "the
most influential military thinker since Sun Tzu wrote
'The Art of War' 2400 years ago". His most significant
work involved the application of fast cycle times to
deliver massive competitive advantage to small forces
facing larger adversaries.
What his
research uncovered contradicted modern conventional
wisdom, which assumed that the larger and stronger force
should generally prevail against the smaller and weaker
force. A careful analysis of military history showed
that this just wasn't quite what was happening. Instead
he found that it was the quick and the agile who generally
prevailed over the slow and unfocused. It turned out
that focus, aggressive agility and speed were far more
important than size!
Boyd found
that Maneuver Warfare, and the resulting competitive
advantage of fast cycle times, was the one consistent
theme running from Sun Tzu's ancient war text "The Art
of War", through Alexander the Great, Ghenghis Khan,
Japanese samurai philosophers, Heinz Guderian (the inventor
of the German Blitzkrieg), Israeli desert warfare strategy
and Vietnamese military strategy. Maneuver warfare continues
to prove its mettle in the generate success evidenced
in the success of the Mujahadin battle tactics employed
to rout the Russians from Afghanistan and in turn the
success of the US battle tactics used to rout the Taliban
from Afghanistan.
Boyd pioneered
the adoption and application of Maneuver Warfare by
the modern US armed forces... and is generally considered
to be the father of modern Maneuver Warfare by most
respected military institutions in the world.
Boyd is the
founder and leader of the Military Reform Movement.
His pioneering work has recently born fruit in the results
from the US Military's campaign in Afghanistan. Don
Rumsfeld is now using the field proven success of Boyd's
strategies to impose their adoption throughout the US
military.
Non-Military
Applications
The applications
of Boyd's techniques are not limited to military conflict.
As a lawyer I discovered how effective they were in litigation
against stronger adversaries with greater resources. By
rapidly accelerating the pace and tempo of recalibrating
strategy and tactics while escalating the level of uncertainty
in (and between) opposing counsel and their clients, I
have been able to outmanuever and defeat stronger and
larger opponents. These tactics have permitted me to do
this even in situations where the opponents have had both
the law and the facts on their side.
I
was discussing this issue of CEO Notes last week with
one of the pioneers of quality assurance at Motorola
(which is now considered one of America's preeminent
practitioners of six sigma quality assurance). He said
if he had it to do all over again, he would have focused
on reducing cycle times... that improving cycle times
invariably improves quality but the vice versa is not
true.
More
and more, the application of Boyd's military thinking
is being applied to non-military situations. The April
issue of the Harvard Business Review had a controversial
article about it titled, "Maneuver Warfare: Can Modern
Military Strategy Lead You to Victory?" And Fast Company,
in their June issue did a feature article on Boyd and
his theories.
The
Two Articles in This Issue
The
first article is from retired Air Force Colonel Chet
Richards, an associate of John Boyd's from 1973 who
helped review and edit most of his major works until
his death in 1997 and a leading advocate of Boyd's research,
strategies and techniques. Back when Chet and John first
met, John was known as "40 Second Boyd".
Back
then Boyd was no academic. He started his military career
as a hard driving fighter pilot's "fighter pilot". He
was one of the best in the world. He had a standing
challenge to any fighter pilot that he could start with
them on his tail and place himself on their tail...
all in 40 seconds or less. If he failed, he would pay
them $40. He humbled the top guns throughout the US
and from many foreign militaries with this challenge.
It
was in the cockpit where Boyd first started developing
his strategies and techniques. His "The Aerial Attack
Study" articulated how he obtained such advantage in
aerial dogfights. It was quickly adopted by the Air
Force as the bible of air combat, and after declassification,
by other air forces around the world. Even as a junior
officer he was already changing how air forces around
the world conduct air combat.
Later,
taking inspiration from the Second Law of Thermodynamics,
he developed his famous Energy-Maneuverability Theory...
but I'll let Chet tell you the rest of the story from
his first hand perspective.
The
second article is about the practical application of
Boyd's military strategies and techniques to real life
business to business competition. It's written by Michael
Smock. Mike is the founder of Vsente, a boutique San
Francisco Marketing Consultancy. He has been applying
Boyd's techniques to marketing campaigns for over 20
years... and is the person who taught them to me. Theory
is great, but there is no substitute for practical experience.
This article is derived from real practical experience.
If
you want to go beyond the content in these articles,
here are some good links you can use to learn more about
Boyd's work:
1.
http://www.vsente.com (OODA Revenue Engines based on
Boyd Strategy and an on-line briefing on "FIRSTmaneuver"
vSente's proprietary implementation of Boyd techniques
to customer acquisition and the capture of market share
against larger and entrenched competitors.
2. http://www.d-n-i.net (rated as one of the top 5 defense
sites by the National Journal)
3. http://www.fastcompany.com/online/59/pilot.html (Fast
Company Article on Boyd and OODA loops)
4. http://www.belisarius.com (a Harvard Business School
Working Knowledge Selection in December 2001).
Curt
Sahakian
cpart@partneringagreements.com
1-847-676-9792
______________
2.
Boyd Cycles (also known as "Blitzkrieg") by Chet Richards
A
Better Strategy "Dislocate and Exploit"
Beginning
at about the time of the American Civil War, the range
and destructiveness of weapons began a dramatic increase.
Commanders, using traditional tactics, incurred frightful
losses. What was worse, the smaller and less technologically
advanced sides often won... a situation continuing to
the United States experience in Vietnam.
After
Vietnam, a small group of US strategists led by John
R. Boyd examined why this should be so. They started
by examining air combat, where rigorously maintained
statistics showed that the fastest and most maneuverable
airplanes failed to win far fewer engagements than theory
predicted they should.
Colonel
Boyd and his team then expanded the study to data from
a wide range of recorded conflicts from 500 B.C. to
the mid 1970s. The study included in depth interviews
with surviving participants of the more recent conflicts.
The
team found that the side that could operate in a more
ambiguous manner, that could better generate surprise
and deception, and that could more quickly exploit opportunities
on the battlefield - the more "agile" side - most often
won.
"Dislocate
and Exploit" Predates 500 B.C.
The
first recorded instance of the use of the "Dislocate
and Exploit" strategy was found in an ancient War Treatise,
"The Art of War" authored around 500 B.C. by the famous
Chinese military strategist Sun Tzu.
Boyd's
analysis confirmed that throughout military history,
even into today's high tech era, armies operating according
to these principles were continuing to triumph over
otherwise more superior adversaries.
The
basic formula for success has been, and remains "dislocate
and exploit." Not "confront and overpower" or even "outsmart."
This
strategy was most recently employed by the US to flush
out and destroy the Taliban forces in Afghanistan in
the first round of the war on terrorism. An unexpected
military triumph that has shaken up military thinking
throughout established Eastern and Western military
institutions.
The
OODA Loop (observation, orientation, decision, and action)
Colonel
Boyd synthesized, from the study, a concept he called
the "OODA loop." It was, he said, as if the opponents
were cycling through stages of observation, orientation,
decision, and action, although not necessarily in such
a clean, sequential order.
The
side that could consistently work the loop faster would
begin to appear ambiguous to its opponent. The faster
side could set up surprises and deception more effectively
and expose those of the enemy sooner.
After
a while, the morale, cohesion and spirit - the bonds
that distinguish an army from a mob - would begin to
shatter, presenting opportunities the other could exploit.
Boyd called this: "Operating inside the opponent's OODA
Loop." It was an analogy from his fighter pilot days.
Principles
of the Blitzkrieg
Boyd
had 2,500 years of evidence on his side, but his new
theory left open one crucial question: How do you do
it? Does it take a commander of genius? An iron discipline?
An all-knowing command and control system?
Again,
Sun Tzu provided a clue to the answer: It starts with
harmony and mutual trust: forces so fundamental that
Master Sun simply called them "The Way" of armed conflict.
Sun Tzu had written that armies that tap these elements
develop a "momentum" that sweeps up even the least motivated
of its soldiers.
Boyd
took this as a starting point, and from his studies
of later campaigns and his interviews, derived three
other attributes of organizations that successfully
apply his theory. He called them: intuitive competence,
the mission concept, and focus-and-direction.
1.
Intuitive Competence - the "Zen" element in strategy:
a "feel" for how the operation is going. This comes
only from extensive experience and training applying
maneuver warfare to increasingly fluid and ambiguous
situations.
2.
Mission Concept - the delegation of all decision making
out to the most decentralized points as possible,
kept focused and coherent by a shared understanding
of the end results to be obtained: "The Mission".
3.
Focus-and-Direction - this is the mechanism through
which the front line troops are guided in their exercise
of the decision making that has been delegated to
them. When the situation changes, commanders can shift
the focus and direction of all the front line decision
makers. In turn, they all shift their individual decisions
in unison.. The decisions remain decentralized, but
their focus and theme remaines coordinated and centralized.
The German term for this is "Schwerpunkt".
Boyd
identified these principles as the "Principles of the
Blitzkrieg." They apply to any type of operation by
any organization in any form of competition, in particular
to business.
Chet
Richards, 1-404-842-0179 For more information contact
cwrichards@mindspring.com
Please
send any comments you may have to ces2@gate8.com
(Curt
Sahakian here: If want a simple tool to help you use
"Schwerpunkt" and apply the "Principles of the Blitzkrieg"
to your business competition, send me an email to ces2@gate8.com
asking about "The One Page Strategy Sheet").
______________
3.
Using Boyd to Outmaneuver Bigger Competitors by Michael
K. Smock
We've
used Boyd cycles for almost 20 years to generate competitive
advantage as measured by revenue increases of 50% and
the reduction of sales and marketing budgets by 20%,
typically in less than 18 months.
Boyd
Cycles are the foundation on which we implement a decision
model that allows competitors to both identify answers,
and then measure the speed and effectiveness of their
responses. They are composed of competitive cycles or
activities that are used as the basis of a competitive
decision model.
A
business initiative based on Boyd Cycles differs from
traditional initiatives based on planned chains of causation.
A traditional business or marketing plan assumes predictable
chains of causation. It assumes that it is possible
to some degree to see through the "fog of war". And,
it incorporates an implicit or even express codification
of actions "if this happens, then do that".
The
Boyd Model takes an entirely different approach. Rather
than attempt to provide the answers, it provides a decision
framework. It is a decision-making process as opposed
to a static compilation of answers.
This
approach permits a fundamental improvement in measurability.
We don't measure success at the end of a campaign...
after it's too late to alter our course in response
to real time feedback.
The
Boyd Cycle is a looped decision system in that it accepts
and processes feedback from prior actions. It allows
competitors to better understand cause and effect relationships,
and provides the coordinates necessary to enhance performance
and recalibrate activities in future cycles.
The
four components of the Boyd Cycle are - Observe, Orient,
Decide and Act.
1.
The first step of a Boyd Cycle - Observation - can
be compared to a competitor's need to acquire tactically
actionable intelligence. Intelligence is what organization1s
use to observe their competitive environment.
2.
The second Boyd Cycle stage - Orientation - requires
a technique for competitors to orient the implications
of intelligence to their specific situations.
3.
The next stage of a Boyd Cycle - Decision - necessitates
a process for organization's to make decisions based
on their orientation to the competitive environment.
4.
And the final stage - Action - implies the need for
methodologies to allocate resources and execute on
tactical plans.
The
Boyd Model permits competitors to accelerate competitive
activities and impact through systematic, repeatable
processes.
In
order to generate and control the periodic tempo that
drives competitive Boyd Cycles, a "timing" mechanism
is required. This mechanism must cause intelligence
to be acquired and oriented to the competitor1s situation,
and then stimulate decisions and actions based on that
heightened understanding.
The
faster this is done the better. This is the cycle time
that drives the competitive process. It turns on its
ear the traditional convention that it is "the big that
eat the small". And replaces it with "the swift that
eat the slow".
Here
is how the Boyd Model might be implemented in a FIRSTmaneuver
campaign to acquire market share.
It
is foolish to engage in a struggle unless (a) it's worth
it, and (b) you can win the fight. Before expending
the effort we make sure the object of the campaign meets
these two criteria. We would first assess and select
the terrain for the battle to make sure these criteria
are met.
There
are four classes of terrain (try to envision a map drawn
in four quarters):
1.
Expeditionary Terrain - High revenue, High profit
(companies like eBay where both revenue and profit
continue to grow)
2. Mercenary Terrain - Low Revenue, Low Profit (companies
such as start ups or near death business units that
need to be repositioned)
3. Provisionary Terrain - High Revenue, Low Profit
(traditional "Cash Cow" commodity types of businesses)
4. Exploratory Terrain - Low Revenue, High Profit
(niche boutique businesses)
It's
best to view these four classes of terrain as four points
on a map, with various blendings of these characteristics.
As you go North to South , you go from high profit to
low profit. As you go East to West, you go from high
revenue to low revenue.
There
is actually a fifth type of terrain "Intersecting Terrain".
- This is terrain that is right plum center in the middle
of the map, equidistant from the extremes at the edges.
Generally
the terrains with the highest value targets fall in
the following order: Expeditionary, Intersecting, Exploratory,
Provisionary, and Mercenary.
What
we do is plot all the targets on the map for each competitor
operating in the mapped area. For each potential target
we look for gaps between its intrinsic value, the resources
we have available to take the target, and the resources
dedicated and/or available to defend the target.
From
this we select our targets, allocate resources then
launch the campaign (the "Revenue Engine"). We use a
Revenue Engine to power the campaign across the terrain
map. The Revenue Engine is composed of four key functions,
each with its own cycle time: Command, Control, Communication,
and Intelligence. (each key function is itself composed
of 4 Boyd Cycle processes):
1.
Command - The Leadership Function, involving the allocation
of the resources to the fight (30 day cycles)
2. Control - Tactical Execution of programs and initiatives
(7 day cycles)
3. Communication - Communication of directions to
the troops as well as the shaping of the battlefield
through marketing communications (1 day cycles)
4. Intelligence - Collection of market place data
in order to drive the campaign (1 hour cycles)
Michael
K. Smock, 1-415-457-8449 For more info contact mike@vsente.com
Please
send any comments you may have to ces2@gate8.com
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