Disruptive Innovation

"Sun Tzu The Art of War Wisdom"

What Sun Tzu has to do with a modern Harvard University competitive theory such as the theory
of Disruptive Innovation
Sun Tzu Said:
"Those who strategise use the Tao of Paradox. They attack when the opponent is unprepared
and appear where they least expected"
Unfortunately, most interpretations of this famous statement from Sun Tzu, focuses on the direct
meaning related to war.
By delving a bit deeper into its meaning we find that it meant something more profound
especially when it comes to application in business today.
The key to this understanding lies in two words; "unprepared" and "least expected".
Sun Tzu's statement encapsulate in one line a very important modern competitive theory
developed by Harvard University in the last ten years.
The theory of "Disruptive Innovation" . What you will read in hundreds of modern books is
exactly what sun Tzu described in this one short sentence 2500 years ago.
What is disruptive innovation?
There are two distinct categories in innovations: sustaining and disruptive.
Sustaining innovation, is when the competitive race forces the dominant company to make
better products that can be sold for more money to more attractive customers. In such a
competition the incumbent supplier always wins.
Disruptive innovation on the other hand, is when a company new to a market; leaner and more
cost efficient, commercialise a simpler, more convenient product that sells for less money and
appeals to a new or "unattractive" customer. The new comer to this market is likely in this case
to beat the incumbents.
This is the phenomenon that so frequently defeats successful and large companies. It implies, of
course, that the best way for upstart to attack established company is to disrupt them by attacking
them when they are "unprepared" and where they least expected to be attacked.

What are they "unprepared" for?

They are unprepared from a cost structure and business model point of view, to take a smaller
margin or to develop a lower quality and cheaper version of their lucrative product.
On the other hand the new entrant is certainly more prepared to do just that.
For examples:
The personal computer and Sony's first battery-powered transistor pocket radio were new-market
disruptions. Their initial customers were new consumers that had not owned or used the prior
generation of this products and services.
Canon's desktop photocopiers were also a new-market disruption, in that they enabled people to
begin conveniently making their own photocopies around the corner from their offices, rather
than taking their originals to the corporate high-speed photocopy centre where a technician had
to run the job for them.
When Canon made photocopying so convenient, people ended up making a lot more copies and
letting go of the large centralised copier concept.
In the above examples, the established supplier focused mainly on improving the product at hand
to increasing their margin by moving up the scale to more lucrative customers. They were
"unprepared" to venture into lower margin, lower quality business and didn't "expect" that a
"smart" entrant will eventually topple them.
There is also the classic case of the Mini Computer manufacturers; Not one of them ventured
into the PC market, because their cost structure and resources allocation system didn't allow
them to compete.
They geared their business model toward sustainable innovation by improving the speed and the
power of the minicomputer while completely ignoring the emerging "lower quality, less
efficient" but cheaper and more convenient Personal Computers.
The rest of course is history, as none of these suppliers exist today i.e. Digital, Pyramid, Sequent
and many more..
Disruptive innovation like this, start at lower quality but with time and increase sales, quality
improves and market share increase till eventually they topple the incumbents all together.
Another type of disruptive innovation is the Low-End. This is what we call a disruption that
takes root at the low end of the original product.
Disruptions such as discount retailing (i.e. Wall Mart), and the Korean automakers entry into the
American market have been pure low-end disruptions in that they did not create new markets or

product, they were simply low-cost business models that grew by picking off the least attractive
of the established firms' customers.
Those customers really had enough improved quality and now needed simpler and cheaper
products to do the job.
Although they are different, new-market and low-end disruptive innovation both:
"Attack when the incumbents are unprepared and appear where the incumbents least expects
them..."
Sun Tzu would say in such circumstances;
"This must be studied"

The Nine Strategy Elements

Sun Tzu the Art of War

The Nine strategy elements highlighted here, are what we must consider and analyse before
plunging into costly fight or flight actions with people and organisations; Sun Tzu Explained in
the opening of his great treaty The Art of War.
The whole Sun Tzu Art of War strategy can be summed up in two sentences:

What is your strategic position?

How to Advance that position?

The first five strategy elements deals with one's strategic position and the four remaining strategy
elements are the actions and skills required to advance that position.
The five strategy elements that make up a Strategic Position are:

The Mission
Is what uniting us with all the people in the organisation and the customer that cause them to
share in your goals and objectives i.e "putting a man on the moon."

The Climate
Is the timing and the changes that happens around us and provide the opportunities to advance
our position. It is the trends that change your situation from moment to moment.

The Ground
The Ground is where the contest for such a position takes place. The ground provides the prize
you seek to win. It defines the game you are playing, and each game with its own unique rules.

The Leadership
The Leadership is the unique quality of character and leadership that you bring to your Situation.
Leadership is also the realm of decision-making and personality.

The Methods
The Method describes the skills that you master to work with other people. They are the realm of
methods and techniques. By definition, strategy is itself a system.
Until we equal or exceed our opponent's score in this five elements, we do not challenge or
begin our venture or even respond to our opponent.
Advancing our position comes from applying specific strategies with the aim of strengthening
the five strategy elements of our position to match or exceed that of the opponent. Thus securing
our success in the challenge before the challenge even begins.
Sun Tzu Strategic system starts with the idea of position, and goes onto make this idea easy to
advance in every aspect of life.
The framework of a strategic position is framework for a machine. You might say that this
machine manufactures luck. We complete this machine by adding its four moving parts. These

four parts (strategy elements) are designed to advance the position and to find and exploit
opportunities:

Information to uncover new opportunities

Focus to aim on the best possible opportunity

Action to take advantage of that opportunity

Position to get the rewarded and begin a new advance

In this section, we will analyse the five strategy elements and how to advance them to win over
life challenges.
We will also give examples so that strategy as a tool become clearer and ready for your use to
advance your position in life.
Before delving into the five strategy elements and the strategies to advance them in depth, I
would like you to consider a conscious thinking attitude to understanding and using strategy.

Easier said than done

Our instinct when facing challenges in life is almost always a reaction driven by our fight or
flight response.
We either attack or run away from challenges.
The ability to control ones emotions and instinct, while at the same time introspect on our
actions rationally and pragmatically, is the GOLDEN key to living the life you have always
dreamt of and reach abundance of success.
Reacting instinctively and spontaneously to challenges could be more pleasurable ... but the
pleasure is very short lived.
Not showing ones emotion while planning next move to success, leave the strategist with the
last laugh and success.
Strategy is counter intuitive.
When people learn it they say that it make sense. They are wrong, strategy only make sense once
we learn it and use it instead of following our instinct to saying what we think so to speak
without any "conscious" thinking or introspection.

The Five Elements of Strategic Planning

Sun Tzu the Art of War Strategy
Part One

Strategic Planning is the process you follow to form a Strategy.

Using Sun Tzu powerful strategic planning system, you will, determine your position and start
creating your own strategy in an enlightened and powerful way.

The process is so simple, so simple that people sometimes prefer to ignore it, and instead, spend
too much money to hire consultants to give them the same planning results; Cest la Vie , such is
life.
Sun Tzu overall strategic system consists of two major parts:

What is strategic position (strategic planning)

How to advance that position (strategy)

One word of caution:

Strategy in itself is not Planning

Planning is usually done in a controlled environment

Strategy comes later and it deals only with the changes in the field of operation.

In this article, we will only deal with strategic planning, or positioning, not the strategy itself.
This is quite another matter.
The five elements or steps must be considered and analysed in any strategic planning process.
The analysis is relative to your opponent situation. It is a fact that a position on its own is not
strong or weak, it is only so in relation to your opponent (competitor) position.
The five elements therefore must be considered for both, you and each opponent in the game you
are playing, in other words, the market you are in.
One major fault of the current strategic analysis prevailing in the market place, called, "SWOT";
(Strengths Weaknesses Opportunities Threats), is the fact that it deals with these four elements in
isolation of the competitor situation.
What may be perceived as weakness in an organisation may not be so in comparison to all the
competitors in this market.
Therefore, it is fruitless to do a "SWOT" analysis without taking your opponent situation or
position into account.
Lets look at the Sun Tzu five elements in details:
1. The Mission
2. The Climate
3. The Ground
4. The Leadership
5. The Methods
Getting these five strategic elements right before any execution or venturing into business, is the
best way to ensure success in any endeavour you choose to undertake in life.

Continue...
Strategic Planning - Part One You Are Here!
Strategic Planning is the process you follow to form a Strategy. Using this powerful strategic

planning system, you will, in five easy steps, create your own strategy in one day.

Strategic Planning - Part Two

The mission is what unifies or creates unity (clarity, understanding) between the leader of the
business, the people working in business, and the customers.

Strategic Planning - Part Three

The climate is about timing What is changing that is creating the opportunity for your
business.

Strategic Planning - Part Four

The Ground is where you chose to compete. There is both difficult and easy ground; there is also
intersected ground and a dangerous one too.

Strategic Planning- Part Five

Get your leadership right, in order for your people and the customers to follow you.

Strategic Planning - Part Six

The Methods are your artistry that you apply to your business

Strategic Planning - Part Seven

In Summary of Strategic Planning we conclude that...

The Five Elements of Strategic Planning

Sun Tzu the Art of War Strategy

Part One

Strategic Planning is the process you follow to form a Strategy.

Using Sun Tzu powerful strategic planning system, you will, determine your position and start
creating your own strategy in an enlightened and powerful way.

The process is so simple, so simple that people sometimes prefer to ignore it, and instead, spend
too much money to hire consultants to give them the same planning results; Cest la Vie , such is
life.
Sun Tzu overall strategic system consists of two major parts:

What is strategic position (strategic planning)

How to advance that position (strategy)

One word of caution:

Strategy in itself is not Planning

Planning is usually done in a controlled environment

Strategy comes later and it deals only with the changes in the field of operation.

In this article, we will only deal with strategic planning, or positioning, not the strategy itself.
This is quite another matter.
The five elements or steps must be considered and analysed in any strategic planning process.
The analysis is relative to your opponent situation. It is a fact that a position on its own is not
strong or weak, it is only so in relation to your opponent (competitor) position.
The five elements therefore must be considered for both, you and each opponent in the game you
are playing, in other words, the market you are in.
One major fault of the current strategic analysis prevailing in the market place, called, "SWOT";
(Strengths Weaknesses Opportunities Threats), is the fact that it deals with these four elements in
isolation of the competitor situation.
What may be perceived as weakness in an organisation may not be so in comparison to all the
competitors in this market.
Therefore, it is fruitless to do a "SWOT" analysis without taking your opponent situation or
position into account.
Lets look at the Sun Tzu five elements in details:
1. The Mission
2. The Climate
3. The Ground
4. The Leadership
5. The Methods
Getting these five strategic elements right before any execution or venturing into business, is the
best way to ensure success in any endeavour you choose to undertake in life.