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Interview with Kaihan Krippendorff
By Sonshi.com

With his new book The Art of the Advantage, Kaihan Krippendorff is poised to take the business strategy community by storm. Much of the advice dispensed in The Art of the Advantage is based on The 36 Stratagems, and resembles principles found in Sun Tzu's The Art of War. From hundreds of business cases, Mr. Krippendorff adroitly links shrewd decisions of present-day companies to the successful military campaigns of ancient China. A must-have book for any executive.

Kaihan Krippendorff has made all the right moves as a business professional. He spent three years as a consultant with McKinsey & Company, helping leading corporations craft winning strategies. Prior to McKinsey, Kaihan held various senior management positions in the banking, consulting, and retail sectors. He earned his MBA from Columbia Business School and London Business School, BSE in Finance from the University of Pennsylvania's Wharton School, and BSE in Engineering from the University of Pennsylvania's School of Engineering. He lives in Miami, Florida where he writes, consults, teaches, and leads a non-profit organization.

We believe you will hear more of Kaihan Krippendorff in the future. For more information on the author, please go The Strategy Learning Center, an executive education company. Below is our interview with Kaihan Krippendorff.

Sonshi.com: As author of The Art of the Advantage: 36 Strategies to Seize the Competitive Edge, you used as your basis the ancient Chinese classic The 36 Stratagems. What makes it different from the numerous business books using The Art of War as their basis?

Krippendorff: The 36 Stratagems can be considered a sister text to The Art of War. It was heavily influenced by the same period -- the Warring States period -- that gave birth the Sun Tzu. So on one level, the text complements the Art of War and other classic Chinese strategic texts quite well.
The text also offers some intriguing differences, sometimes fundamental, from its sister texts:

• Authorship: The 36 Stratagems has no single author. It was not influenced by one dominant individual. Rather, it distills the contributions of hundreds of political and military strategists. It is a collection of thirty-six flowery, dramatic phrases -- such as "Kill with a borrowed knife" and "Lure the tiger down from the mountain" -- that are the product of 1,000 years of oral tradition that began around 500 B.C. and completed around 500 A.D.

• Breadth of experience: While most strategic texts combine the experience of one person or one generation, The 36 Stratagems distills the experience of 20 generations. During its formation, stories of conflict were passed down from generation to generation, distilled with each telling, combined, and distilled again until just 36 phrases remained. The 36 Stratagems represents the combined experience of 20 generations of Chinese military and political strategists.

• Level of distillation: The 36 Stratagems packages an unusual amount of experience in few words. It distills 1,000 years of strategic history into just 36 phrases each supported by a few sentences of explanation. In total, the text is just 150 characters long.

• Options vs. principles: The most fundamental difference between The 36 Stratagems and other strategic texts is that, while most strategic texts advocate principles or rules we should follow, The 36 Stratagems does the opposite. It offers options from which we can choose. Sometimes these options are contradictory (e.g., "run away" and "surround the enemy"). The text expands our options rather than narrows them.

Sonshi.com: You were a consultant at McKinsey & Company and received your MBA from Columbia Business School. How were you able to meld the latest business concepts to principles that are over 2,000 years old?
Krippendorff: The principles that drive competition and power, that determine success and failure, have not changed in the past 2,000 years. They are fundamental because they grounded in natural patterns of nature and human behavior.

I tested this. When I first happened upon a translation of The 36 Stratagems, I asked myself whether this ancient Chinese text could play a role today's business world. I tested the stratagems against competitive strategy cases, asking "which stratagem explains this move?" and "which stratagem would have led me to that option?" After analyzing 300 cases through the lens of The 36 Stratagems, and finding no case that did not fit, no case that could not be explained by The 36 Stratagems, I concluded that the stratagems are fundamental patterns of competitive interaction. They are the building blocks of competition. And they are as relevant today as they were 2,000 years ago.

When you consider that we have been studying modern business strategy for only 50 years, it seems less surprising that Sun Tzu, The 36 Stratagems, and other historical strategic texts have so much of relevance to offer us in solving modern strategic problems.

Sonshi.com: Please describe for our readers one particular business case where the application of The 36 Stratagems would have been useful.
Krippendorff: In my book I detail 60 business cases and show how they are examples of one the 36 stratagems. One of my favorite examples is that of Coca-Cola's competitive move against Pepsi in Venezuela. Over night, Coca-Cola turned the tables on its rival and grew from a 10% market share to 50%, while Pepsi dropped to almost zero.

In 1996, Coca-Cola outsold Pepsi in almost every market in the world. In Latin America, Venezuela was the one country in which Pepsi enjoyed a lead. Venezuela was a particular source of pride for Pepsi. Pepsi had outsold Coca-Cola in the country for almost fifty years. Its sales were approaching four times that of Coca-Cola's. But in August of that year Coca-Cola applied The Stratagem of Sowing Discord. The stratagem suggests that you can more efficiently topple your adversary by removing a critical relationship from his support. This is like removing a leg from a chair -- the chair will topple under its own gravity. It has two key elements:
1. You induce your adversary's agent to work in your favor
2. You use this agent to topple a critical relationship on which your adversary depends

Coca-Cola identified a "critical relationship" on which Pepsi depended heavily: Pepsi's sole bottler and distributor in the Venezuela. Despite its long history, Pepsi's relationship with its bottler was tenuous. Contrary to industry practices, Pepsi held no equity in its bottler. Previous requests by the bottler for additional investment from Pepsi went nowhere. So Coca-Cola embarked on a campaign to attack this critical relationship.

Coca-Cola entered secret talks with the Pepsi bottler aimed at convincing that company to switch its allegiance. In late August 1996 Coca-Cola and the bottler reached an agreement under which Coca-Cola would buy 50 percent of the bottler and invest additional money into building its Venezuelan business. The talks were so well hidden that Pepsi was taken by surprise upon hearing that a fifty-year relationship had come to an abrupt end -- that Pepsi's only bottler, in the only Latin American country in which Pepsi held a lead, had suddenly switched sides.
Pepsi fought to hold on to its 45 percent market share. It said it would "exhaust all legal remedies in Venezuela and in the U.S." It scrambled to find a new partner. But almost overnight, eighteen bottling plants switched over to Coca-Cola and 4,000 blue Pepsi trucks were painted over with Coca-Cola's red logo. Pepsi's market share dropped to almost zero, and Coca-Cola's 10 percent share shot up to 50 percent.

That is one of many examples of The Stratagem of Sowing Discord delivering a quick an decisive advantage. You see this stratagem at work in military, political, business, even in sports arenas.

Sonshi.com: Consider the many companies you have worked with or have analyzed, which principle do they often lack, and how would you advise them to proceed?

Krippendorff: Most companies lack versatility. Plenty of studies have proven that Eastern and Western people think differently. Western managers are necessarily guided, invisibly, by the assumptions and preferences of a Western upbringing. This upbringing has a surprising important role in determining how Western managers perceive their options and what they believe to be possible. Eastern managers are similarly limited by their cultural influences. The strategist that can best free himself from his/her natural, cultural predispositions will achieve the greatest strategic freedom and will become more competitive.

In my book I touch of four key differences between Eastern (primarily Taoist) and Western thought.

Ying Yang/ Polarity
Westerners believe they can pursue good and banish bad, but this assumption runs counter to the Taoist understanding which doesn't judge anything. There is no "good" or "bad" -- they are simply two sides of the same coin.

Wu Wei/ Go with the grain
Westerners equate yielding with weakness and overcoming adversity with strength. Taoists view the contrary: They value "going with the grain," which often leads us to the opposite answer to the same question.

Wu Chang/ Continuous change
Westerners believe the past determines the present and that change connects static moments. If Westerners assumed instead that the present determines the present, and that change is continuous, as the Taoist perspective suggests, Westerners would choose different courses of action.

Shang Bing Wu Bing/ Indirect action
Westerners prefer to meet an adversary head-on; the Eastern preference for indirect action often seems impractical, deceitful, or indicative of weakness. Embracing indirect action puts powerful new tactics into Western hands.
We all naturally fall onto one side of each of these key differences. Neither side is right or wrong, but following just one is unnecessarily limiting.

Sonshi.com: Do you refer to Sun Tzu's The Art of War in your consulting work?

Krippendorff: Yes, quite often. The Art of War is perhaps the most influential strategic text in history. It is well known and respected by Western managers. When I can show that a concept in The 36 Stratagems is supported by, or is a permutation of, a concept advocated by Sun Tzu, Western managers accept it readily.

Sonshi.com: You started The Strategy Learning Center based in Miami, Florida. Tell us what the center offers and how it can help companies perform better.

Krippendorff: The Strategy Learning Center is an executive education company built on the assumptions that creativity can be a competitive advantage and that every problem has a solution (i.e., that if your problem seems unsolvable this means merely that you have not yet found its solution). Our mission is to help individuals and organizations achieve their aspiration by making and executing powerful choices. We use a unique problem solving approach, fundamentally different from the traditional scientific approaches, that we call a "pattern-based" approach to strategy development.

We conduct workshops and seminars that help our clients reveal exciting, creative competitive options they might not have otherwise considered. In the process of solving a problem, our clients learn a methodology for consistently developing out-of-the-box strategies. We have found that our methodology, which uses The 36 Stratagems as a toolkit, helps managers break through creative blocks that stand in the way of them being innovative strategic thinkers. The methodology increases a company's competitiveness by expanding its field of competitive options.
We have conducted our workshop for several corporations and are now starting to apply the methodology in the public sector to solve policy and political problems.

Sonshi.com: We will certainly hear more of your name as more people learn of your work. What are your current and future plans or projects?

Krippendorff: I hope you are right! I enjoyed studying The 36 Stratagems and believe that it, Sun Tzu's The Art of War, and their sister text have a lot to offer modern business strategists.

In the near future I will dedicate myself to sharing The 36 Stratagems as widely as I can through The Strategy Learning Center. I believe it to be an excellent, and fascinating, strategic problem solving tool. My vision is that one day professors at Harvard and Columbia and other top business schools will be using terms like "lure the tiger down from the mountain" in their strategy courses.

I am also starting to explore what ancient strategy texts teach us about implementation. In other words, how do we transform a strategy into a victory? Western books on this topic provide vast amounts of operational and performance management best practices. But The Art of War and the Tao Te Ching seem to point us in a very different direction…

We recommend business professionals who have read Sun Tzu The Art of War to also read Kaihan Krippendorff's The Art of the Advantage: 36 Strategies to Seize the Competitive Edge.