Who Creates Opportunities for Defeat

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Who Creates Opportunities for Defeat

In the section "Ensure Undefeated-ness" in Chapter Four of Sun Zi Art of War, lies great wisdom. From the section, you can see that we, ourselves should be held accountable for our defeat in business. That does not mean you should become very self-critical. What it means is that we should learn from our mistakes and practice kaizen, which means in Japanese Language "continuous improvement", to build a good defense.

Let’s have a look at how we can apply this to business.

Business Application

Have you set the conditions that ensure you would not be defeated by your rivals in business or have you created opportunities for 'defeat'? There are so many areas in business that a weakness can occur. Overlooking these weaknesses could be fatal. With so many fronts to take care of, how do we prevent such fatal weakness from being created or worsened? I have no fool- proof way, but I can suggest one way to reduce such risk.

Have adequate knowledge of how your corporation is run, the work processes and systems, or hire the right person. The person running a department must be competent to help you cover that particular front. By having adequate knowledge of how each department is run and the skill sets available, you are able to notice any trends or potential problem areas and thus work on them before it gets too big.

For example, account receivables. If you notice that the share of account receivables is increasing with respect to sales, you know that there is a potential problem that may surface if not rectified. It could mean that there is something wrong with your credit policy. Your clients might be running into cashflow problems thus your company is having difficulty in retrieving the account receivables to book as revenues. Something like this seems alright at the moment, but note that these are aspects of cash flow management that needs great attention. The reason is because cashflow to business is like blood to body. Without cashflow, the business is as good as gone. So given such a discovery, one would need to look at his credit policy and try to tighten it.

Another example is customer service level. Have you use a mystery shopper? Did your business provide a high level of customer service? If customer service is not high enough, relative to close competitors, customer satisfaction will be low. This in turn leads to lower sales. And now with the advent of the Internet, bad Word of Mouth marketing proliferates easily, magnifying the detrimental effect of bad customer experience on your business.