Clausewitz - Timeless Insight from a Master Strategist

Clausewitz on Strategy

Inspiration and Timeless Insight from a Master Strategist

Summary - Carl von Clausewitz's classic book, “On War”, is not a book about business. It is a book about military strategy that can be readily applied to business.

Clausewitz's theories can train the modern executive's mind to cope with uncertainty. Just as conditions change rapidly in war, rendering even the most carefully plotted strategy obsolete, so it is in business: You can't know what will happen, so you have to remain mentally flexible to respond to any challenge.

In this way, whether you're battling entrenched competitors, fighting to seize or defend market territory, or forging alliances with former enemies, you can make the bold decisions that will ensure victory.

Clauswitz - Then and Now

To understand Clausewitz's theories, it's useful to consider how he arrived at them. He was born on June 1, 1780, near Magdeburg in the kingdom of Prussia, in a period of equal if not greater upheaval than even now. At birth, Clausewitz was a subject of Frederick the Great, one of the most brilliant leaders and managers in history.

Clausewitz was nine years old when the French Revolution began, and it lasted long enough that Clausewitz was able not only to participate in it but to recognize the important sweeping social, political, and military changes it ushered in and to write down for posterity his tremendous insights and ideas.

Clausewitz entered the Prussian Army at the age of 12, when the revolution was barely three years old, and saw combat at the age of 13. Despite coming from a poor family and having to educate himself, Clausewitz gained admission to the Institute for Young Officers in Berlin, which later became the Prussian General War College and graduated first in his class. He was then appointed military adjutant to a prince.

From that vantage point, and from his time as a French prisoner of war, Clausewitz was able to witness the crushing defeat of his country at the battles of Jena and Auerstadt and the humiliating peace settlement in which Prussia lost half its lands and people and became a French satellite.

He recognized that the French victory was not a matter of superior military might or even theory but came about because it tapped the energies of the French people. He saw, in short, that a popular uprising could trump even the best-organized and equipped army, which was an unthinkable idea at the time.

Unfortunately, his ideas were not shared by the Prussian king, whose interest in self-preservation went so far that he allied with France and provided an army to Napoleon for the 1812 invasion of Russia.

Clausewitz resigned from the Prussian military service and joined the Russian army at the risk of his life. His own analysis of strategy up to that point had convinced him that Napoleon's approach to war could not work against Russia, thereby convincing him that he was on the winning side.

As a soldier in the Russian Army, he participated in the long retreat from Napoleon's forces. But when they reached Moscow, the Russian Army turned the tables and put Napoleon into retreat.

Clausewitz slipped through the French lines to help negotiate the Convention of Tauroggen and the defection of General Yorck von Wartenburg's entire Prussian corps, after which Clausewitz was reinstated as a full colonel in the Prussian army.

From 1813 until 1818, when he was promoted to the rank of general, Clausewitz was often in the thick of combat, being wounded at Lutzen and acting as chief of staff for the 3rd Corps at Waterloo, where he was outnumbered two to one.

He subsequently became director of the General War College, where he analyzed military campaigns and wrote the manuscripts that later were published as “On War”.

After a decade at the college, he returned to service in 1830 in eastern Prussia. He died during a cholera epidemic on the Polish border in 1831, and his widow published his work in the following year.

Since that time, Clausewitz's thinking on strategy has become known throughout the world and runs through the works of top European and American commanders, political scientists, and military historians.

Clauswitz on Management & Strategy

Managers are always in search of a definitive strategy that will guide them in their decision making and in setting their short- and long-term plans. And yet even a casual glance at history will show that what institutions value most is the imaginative leader who defies convention and flouts theoru, logic and precedent.

Clausewitz puts theory in its place, granting it only modest utility in his overall philosophy.

In its original meaning, theory was the act of contemplating or inspecting — to look at something and examine it. Theory, then, is the companion and guide of practice — or action. While practitioners tend to deride theorists and vice versa, Clausewitz's only aim was to discover theory that was relevant to practice.

It is crucial to an understanding of Clausewitz to recognize that he does not strive to resolve contradictions.

Action without contemplation or contemplation that is not followed by action are both useless in the end.

Let's not forget that he was writing about war. And what is war? A continuous vying between conflicting sides? In that sense, so it is in business and even life itself.

The most fundamental idea in Clausewitz's work is that strategy involves the clash of antagonistic, purposeful, and intelligent wills, and the same applies in business. As we go about our daily activities, we do not ordinarily face an opponent who is bent on thwarting our plans. By definition, then, those activities are not strategic in nature. If there is no opponent, there is no strategy.

The clash of opposing wills is essential to the need for developing strategy. Also remember, if there's no conflict, there is no war.

Creating strategy means working in an environment of ever-present uncertainty.

Uncertainty is not merely an obstacle to be overcome, but an essential component of all strategic thinking.

The true strategist doesn't complain about uncertainty. He embraces it, even as a chess player embraces the notion that he can't fully anticipate his opponent's next move.

We are used to being handed prescriptions, relying on the fact of being able to repeat a cause and get a certain predictable effect. But those are not strategic situations.

In war, and in business, the right decision one day might lead to disaster on another day. If neither attack nor defense is always right in a given situation, if it’s not clear whether you should split your forces or try to win one territory at a time, then you can't rely on traditional theories to make decisions.

Even when a new business fad actually works, it's only a matter of time before both sides have the same weapons. No advantage lasts long, and building a long range strategy on it will lead to failure.

What, then, does Clausewitz recommend? The answer is thoughtful contemplation. He recommends that the leader's mind be engaged in continuous examination between conflicting view points.

Under the ever-changing conditions of the surroundings — such as terrain and weather in war, or the economy and customer attitudes in business — leaders must constantly evaluate the potential advantages to be gained by shifting their perceptions between numerous possibilities.

To appreciate why this approach works, consider what happens when you assume that a business theory is always correct. Your mind centers on that theory and fails to notice subtle and not so subtle changes in the environment. Thus, you will miss the emerging opportunities that no accepted conventional theory can fully anticipate.

If this approach seems difficult, it is. Clausewitz proposes that only geniuses can handle strategic thinking - and he calls for a genius to be at the head of each army or business.

Divine inspiration isn't necessary, but Clausewitz does makes it abundantly clear that you have to be exceptional at your job in order to fill the shoes of a true strategist.

So theory needs to be absorbed and contemplated, but then it also often needs to be set aside at the moment of truth by true leaders.

Consider using the metaphor of chess, in which two opponents seek to thwart each other's plans. One of the masterful approaches that chess master Bobby Fischer brought to the game was what's known as going "off book." He would start out with a well-known opening and the opponent would follow with the predictable and well-tested moves. He knew the rules his opponents would follow, yet he refused to follow them himself.

Coup D’Oeil

War, like business, is primarily an intellectual activity - and it is the inherent uncertainty of both that requires a leader to be intellectually superior to succeed.

Because of the uncertainty that is always present, Clausewitz places particular importance on what he calls instinctual intelligence to ferret out the truth of any given situation.

At every turn, we find that ‘normal’ business is what happens while leaders are crafting other plans. As a result, the leader must be continuously exploring the possibility of calling off ‘the plan’, or coming up with a new plan - especially at those times when the perfect information is generally lacking. It is at those moments that making the correct decision is most crucial.

For the mind to survive the constant assaults of uncertainty, it must, "even at these moments of intense darkness retain some trace of the inner light that will lead it to the truth, and the courage to go where that faint light leads."

He calls this intellectual vision, or seeing at a glance. The French term is Coup d'Oeil. Anyone who has been in a position of leadership in business is familiar with having to make a decision quickly and based on incomplete information. One is forced to cut instantly through the fog to some essential truth, and here is where genius comes in, for ordinary men won't be able to pull this off. The leader that can will win.

Danger and the great burden of responsibility produce in a genius who is a leader, a sense of liberation and a renewed intellectual vigor. He is not crushed by uncertainty and new challenges, but is enlivened by them - even with the threat of defeat always present.

Thinking Strategically

What is the strategy of doing business? In its simplest form, it is the creation of wealth by selling something of value. But that simple definition conceals a whole host of individual acts, each of which must be planned, conducted, and then joined together to achieve the overall objective.

These acts can be divided into two categories: those that involve tactics, and those that involve strategy. Tactics are concerned with the use of armed forces in battles, while strategy is concerned with the various battles needed to achieve the objectives of the war.

Consider the case of the British General Charles Cornwallis, who at one point had won every battle he fought during the American Revolution. The price of each victory, however, was that his army continued to shrink due to casualties. To hold the territory he won in each battle, he established a garrison at the site and left behind a small force of his men. By the time of his last victory, his army was too small to hold any conquered territory. Each of his small garrisons was overwhelmed by the American army, and Cornwallis' defeat led to the end of the war.

In business, leaders must realize that success is built on a chain of individual decisions, each leading to the next. Each action must be seen as a link within the whole series of events, in which winning a market or a client today can, unfortunately, spread the company's resources too thin to defend itself from competitors of tomorrow.

Therefore, strategy should always strive to give shape and meaning to tactical moves. And since events never go according to plan, the real winning strategy will develop under siege, in the heat of battle, on the spot.

Strategy is a never-ending process that attends the tactics, even as they are being carried out. That is one of the problems many companies develop when they formulate strategy in the board room and then announce it to the workers with a simple directive to carry it out. Those who make strategy must be down on the battlefield or else the strategy will always be at odds with reality.

Business leaders should read about the campaigns of Frederick the Great, who was badly outnumbered during the Seven Years' War, and yet prevailed through superior strategy. He had the foresight to attempt only what he knew he could achieve and never to engage in a decisive battle head-on with the enemy. He knew he couldn't beat them directly, so he sought instead to exhaust them, economically and psychologically, by prolonging the war and launching small attacks at their weakest points.

Strategy prepares the way for tactics to succeed. The great strategist, however, will take those small victories, build on them, and adapt as needed.

There are only three things that lead to victory in battle: Surprise, the advantage of terrain, and the attack from several sides at once.

Interestingly, the defender usually holds the advantage over the attacker. Once the attack is made, one can use any offensive strategy you like. When we have chosen the battlefield, have the advantage of terrain, then when we have gained the superior position, we can turn from merely defending to attacking and conquering.

It is rarely the first mover who becomes the industry powerhouse. In other words, long-term success comes in the counterattack. The successful defender waits and then attacks. The transition from defense to attack must be rapid and overwhelming. It must be incorporated into the strategy from the outset.

As Napoleon once declared, "The whole art of war consists of a well reasoned and extremely circumspect defensive, followed by a rapid and audacious attack."

In launching an attack, consider the wisdom of Chinese general Sun Tzu, who spelled out the best ways to confront the enemy in the fourth century B.C.:

"The highest form of generalship is to balk the enemy's plans; the next best is to prevent the junction of the enemy's forces; the next in order is to attack the enemy's army in the field; and the worst policy of all is to besiege walled cities."

The Elements of Strategy

The most common element of victorious campaigns, whether in military history or in business today, is the advantage of numerical superiority. There are exceptions, of course.

At Leuthen, Frederick the Great defeated an army of 80,000 Austrians by attacking its flank with only 30,000 men. At Rossbach, he defeated the combined Austrian and French armies by pretending to retreat and then setting up an ambush. Frederick's strategy for fighting larger armies was to keep his own force closely together. In this way, he could meet a scattered enemy on at least equal terms at any point.

The lesson for business executives is this: If you don't have numerical superiority over the competition, you must create a relative superiority of numbers at decisive points by using your forces skillfully.

A company that has only $2 million to spend in advertising can't compete nationally against a competitor with a $100 million budget. However, by concentrating all of its marketing efforts in a single market, it might gain an advantage over the dominant brand that must divide its budget among 100 markets.

A determined enemy will not allow time for long-range, complex strategies to unfold before they respond.

Two basic principles cover the whole plan of war and serve as a guide to everything else:

• First, act in as concentrated a manner as possible. Reduce the enemy's power to the fewest possible centers of gravity. Attack against those centers of gravity should be reduced to the fewest possible major operations if possible.
• Second, act as quickly as possible. Do not stop or take detours without a good reason. Once the attack has succeeded, it is important to stop after the objective has been achieved. Otherwise, he gives up the advantage rather quickly, leaving himself exhausted and vulnerable to a counterattack.

It is significant to note that Napoleon was defeated by Spain, which wasn't a first rate power and didn't have a first-rate army. He was worn down, bit by bit, by guerrilla action. As we have seen in modern times, guerrilla action can threaten the largest, most well-trained, and best-equipped army in the world.

A technological edge is usually transient. The various sides usually catch up fairly quickly in terms of technology or hardware.

When every opponent has the same weapons, the superiority is gained by the side with the greatest will and determination.

The ability to channel and mold the wrath, energy, and motivation of a people into what Clausewitz calls "smoldering embers" creates a devastating force that is often impossible to defeat. Consider the Vietnam War.

In business, when a company engages the passions of its employees and the customer in their business system and processes, it creates an unstoppable force that is difficult to defeat. Think Apple, Google, Facebook, Amazon, Tesla...

One of the topics that Clausewitz treats as mostly overlooked in theories of war is moral force, which he equates with ‘will’. He writes that this force is even more important than the military might of an army.

Anyone who has studied corporate culture and its importance in the overall success of the enterprise will recognize that Clausewitz is describing the enthusiasm, zeal, faith, and loyalty of a company's workers — or the lack of those qualities — that can make or break even the best business model.

The Will and Moral Force of Leaders and their Organization

Just as moral force, ‘will’, and genius are the qualities necessary to make a great leader, Clausewitz identifies what makes a great soldier or worker: valor, skillfulness, a willingness to endure hardship, and zeal. He collectively calls those qualities ‘spirit’.

From continuous exertion and victories, the soldier or worker learns his own strength. The more a leader demands of his soldiers and observes the outcomes, the more confident he can be that they'll be capable of carrying out orders and achieving ‘stretch goals’.

Only those at the top need to display the skills and expertise of a genius. From there on down, average intelligence is sufficient to the job. It is not easy to rise from the second tier to a top position of leadership. It is the exception rather than the rule.

In a strategic operation, everyone must give his greatest effort so that where one group falls short, another may take up the slack. It is the leader's job to lift those under him to that level of action.

In the end, a great leader is a true creative force in the world. They are possessed of a deep sense of honor and a boldness of action that is at all times guided by a superior intellect.

A corollary to that is the quality of perseverance, ‘holding firm’ to the strategy and goals when confronted with adverse appearances of a particular moment along the way. Once a leader has thought out his strategy and charted a course, it is almost certain that in the heat of battle, things will look far different from what he expected. It is at that crucial moment that he has to have the strength of his convictions to stay the course.

The greatest lesson that business leaders can learn from Clausewitz is that there is no strategy that always succeeds when you are on the attack.

To win, you must constantly stay alert to every change in the terrain, and every shift in your enemy's forces, and respond in ways that give you an advantage. Then you must recognize that your advantage is only momentary, and you must be prepared to keep fighting the war - forever.

The Boston Consulting Group's Strategy Institute, have taken Clausewitz's original work, edited and trimmed it, and provided valuable commentary written by Tiha von Ghyczy, Bolko von Oetinger, and Christopher Bassford. Their rather detailed commentary is further summarized here.