The success of any business depends on three pieces of information?
I remember reading Sun Tzuâ€™s treatise on the â€œArt of Warâ€ over 30 years ago and how it impacted my thinking about life in general. I also remember when I first became involved in â€œJust in Timeâ€ manufacturing principles, which are nowadays referred to as Lean principles. The â€œArt of Warâ€ taught a simple lesson about what I needed to know to understand the situation before me. I developed a personal interpretation of these ideas, and I have used them throughout my career.
In the â€œArt of Warâ€ Sun Tzu defines three conditions that will determine the outcome of a battle:
- If you know the enemy and know yourself, you need not fear a hundred battles.
- If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.
- If you know neither the enemy nor yourself, you will succumb in every battle.
I think these give a clear perspective on what is needed to win a battle. If we could take these three ideas and apply them to a business environment, what would it look like? A business is an entity that is competing for market share with other companies. In todayâ€™s world, many companies are not just competing in local or national levels, they are competing in the global economy.Â How does any company set itself apart from the competition?
Now letâ€™s apply Sun Tzuâ€™s three conditions to help determine the success of a business:
- If you understand the needs of your customers, are able to identify the strengths of your competitors and know the capabilities of your own business, you need not fear losing market share.
- If you know the capabilities of your own business but do not understand the needs of your customers or the strengths of your competitors, for every increase in sales revenue you will reduce profits and lose market share.
- If you do not know the needs of your customers, the strengths of your competitors nor the capabilities of your own business, you will succumb to market forces and eventually lose everything.
The process for creating a high performance organization must start with a business knowing the limits of its own capabilities. The company must define and understand its current state before it can develop a plan to determine where it must improve its processes to create a future state. However, defining the future state cannot happen until the business understands the needs of its customers and the strengths of its competitors. Once a business has clearly defined these three conditions it can develop a future state that serves its customer and is in a stronger position to compete in the market place. One way to do this effectively is to follow the â€œ10 Steps to become a Lean Enterpriseâ€ model. Check out our lean training at http://leancertificationonline.com/lean-enterprise-training-process