#8 Happy New Year 2025: Embracing Sun Tzu’s Doctrine for Resolutions and Success

It is about principles and rules, thus apt because New Year resolutions are like doctrines.

How it works

Sun Tzu’s words show he was 2,500 years ahead of Henri Fayol’s principles of management. Let us review his words.

His “sub-divisions” is the forebear of specialization and division of work taught in management schools today. Individual or groups are assigned and held responsible for different work. When starting a business, employees are hired for production, sales and marketing, warehousing, and administration encompassing finance, accounting, and various personnel-related activities. As the company grows bigger, different divisions are created and their efforts are coordinated. “Gradations of ranks” is about creating tiers or levels so that certain persons are given positions with corresponding authority.

Today, we find organization charts showing one person at the top with a few reporting to him, and each of them has a few others reporting in turn, resulting in a perfect symmetry of a pyramid-shaped hierarchical structure. This classical way of organizing is popular with most organizations. As a tall structure can be quite cumbersome and often enmeshed in bureaucratic red tapes, communications are not too effective. Flat structure however stifles growth.

Many people somehow overlook that as an organization grows, the additional levels and jobs will inflate costs. This often leads organizations to financial losses. In the 1990s, as a turnaround consultant, I would scrutinize each job in my client’s organization to decide which unnecessary one to cut. I also advise them to compromise with a neither too tall nor too flat structure.

Logistics control and operations

As for “maintenance of supply routes and the control of provisioning for the army”, these may range from procurement, supply, and maintenance of equipment and food, to the movement, evacuation and provisioning of facilities and services. Without arms and food for the army, no war can be fought. Today, as running a business is like fighting a war, I interpret Sun Tzu’s words as logistics’ control and operations.

In 2012, I went to the Kuala Lumpur Performing Arts Centre for the first time to watch a musical. The performance was good but the Centre’s lack of facilities was disappointing. I had to walk a distance from the car park to the award-winning heritage building in total darkness because there was no lamp post. As this may be unsafe for female visitors, I hope the facilities has improved since my last and only visit. To promote a more cultured society, performing arts should also be run and managed like a business.

In business, creative minds had recently brought about improvements in procurement and logistics. Global sourcing, especially via internet has resulted in delivery of low-cost components from offshore. As mentioned previously, US athletic shoe companies like Nike and Reebok have made considerable cost-savings through outsourcing production to Asian manufacturers. Relationships with suppliers also may offer considerable cost-savings. Many firms today enjoy ‘just-in-time’ (JIT) deliveries from their suppliers, saving them costs of warehousing, inventory, etc.

Inventory management offers potential cost-savings even if JIT is not in practice. Inventory is idle money. Keeping too high inventory will tie up money and stocks, incur warehousing costs and may also risk spoilage or obsolescence of stocks. When Paul Chan was Vice-President and Managing Director of Compaq Computer in Asia, he declared, “Excess inventory is the root of all evils.” If more people can take the same view, a lot of money can be saved for their corporations. Next to labor costs, inventory is a favorite target of turnaround consultants.

Having had covered the five fundamental factors, we shall next look at Sun Tzu’s summation and then the Seven Elements from next month.