“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.”
-Sun Tzu
This week marks a remarkable milestone point in the narrative of the US presidential election. Donald Trump, once written off as a serious candidate, is considered more likely than any other to win the Republican Nomination and attracting, for the first time, a unified competitive front. How this plays out could redirect the future of the Republican party, United States, and beyond in unexpected ways.
Many are scratching their heads. How could this scenario, considered six months ago an impossible scenario, now be the most likely?
We believe the answer to that question is not only interesting, but critical to understand if you want to drive an innovation, grow a company, or advance your mission. Regardless on where you stand on him as a candidate, he offers some critical lesson in what it takes to successfully drive innovation and grow.
The Competition Matters as Much as the Customer
We tend to focus on things like customer needs, the customer journey, and “latent demand” when we talk about how innovations propagate, businesses grow, or campaigns succeed. But customer need is only one factor. Your growth will depend on the interaction of three players in the system (the “3Cs”): your company/ organization, customers, and the competition.
But our research shows that winning customers (or voters) contributes only to the first steps in your journey. What matters more than your ability to attract demand is your skill at managing the competition once your success attracts their attention. Indeed, we studied the 30 most transformative innovations over the past 30 years (email, internet, DNA sequencing, etc.) and found only 7% of them were brought to market by the original innovator. More than 50% of the time, the innovator loses control of the innovation. Competitors take over.
Marketing can trigger demand. But your ability to win depends on your ability to hold off competition.
Now, most pundits provide marketing reasons for his success. We looked through the reasons press, pundits, and bloggers are giving for Trumps success and the most repeated reasons are:
- He speaks the language of the voters
- He says what he thinks so it sounds authentic
- His controversial statements that steal air time
- He sells to pain/discontent which is more effective than selling possibility and hope
At Outthinker, we work with a set of 36 strategic moves to help companies more skillfully manage the competition and create space for innovations. We applied this technique to understand Trump’s strategy and three key strategic principles at play.
We are not advocating for or against Trump here. We are simply seeking to dissect his strategy from the sidelines. The truth is we believe that many of the strategies he is deploying come from an outdated competitive era. But, as Trump proves, they can still be effective. We should understand them if we want our own initiatives to succeed.
Strategy 1: Appear Crazy
In my first two books, I outlined 36 strategic principles and showed that the one called “appear crazy” is remarkably effective at postponing competitive response. British Airways, for example, scoffed at Richard Branson’s idea to launch Virgin Airways. Branson appreciates the benefit of letting the competition underestimate you. Mahatma Gandhi advises to let the competition “ignore you and laugh at you” so that by the time they decide to fight you, you win.
Follow Trump’s campaign timeline (for example: http://www.usatoday.com/story/news/politics/onpolitics/2015/12/14/donald-trump-campaign-timeline-six-months/76936436/) and you will note that for the first eight weeks of his campaign, he builds a sense of disbelief among would-be competitors by making outrageous statements like “When Mexico sends its people, they’re not sending their best” (week 1) and says we should build a wall (week 5).
He then pinpoints his attacks at the Republican establishment and media, carefully avoiding directly attacking his competitors. In week 6 he says about Senator John McCain: “He’s not a war hero — he’s a war hero because he was captured. I like people that weren’t captured.” He continues to attack media reporters and executives through weeks 7-11, saying, for example of reporter Megyn Kelly, “She starts asking me all sorts of ridiculous questions, and you could see there was blood coming out of her eyes. Blood coming out of her wherever.”
Because of such outlandish apparent mistakes of judgment, his opponents discount him.
Strategy 2: Send a Secret Message
Another strategic pattern we see Trump employing I called in my prior books, “sending a secret message.” It comes from an ancient Chinese phrase that you should “point at the mulberry, but curse the locust.” The idea is that you attack one customer/competitor in order to send a secret message to another. You show your strength against one competitor in order to signal to other would-be competitors to stay away.
We see retailers responding with overly aggressive pricing strategies, for example, to communicate to competitors “don’t try to price lower than me.” Indeed, these behaviors have been ruled in the past as a form of price collusion.
In week 12 of Trump’s campaign we see the first serious attempt by a competing candidate to attack Trump, when Jeb Bush begins his offensive. Carly Fiorina attacks around the same time during a debate in week 13. Trump responds swiftly and aggressively calling Bush “low energy” and saying of Fiorina “Look at that face! … Would anyone vote for that?”
His “secret” message he sums up nicely himself, saying that “it certainly seems to be unlucky to attack me.”
Strategy 3: Sow Discord
The third strategic concept you see him deploying comes from the ancient Chinese phrase “The stratagem of sowing discord.” The idea is that when your enemies fight amongst themselves, they have less time and resources to fight you. In business, this may look like Intel which introduces a new, more powerful chip which fuels activity among device manufacturers who now compete to build faster devices.
A competitive risk to Trump is that competition will unify against him too early before he can build momentum. He divides his competition by giving them topics to things disagree on. He makes extreme statements on immigration, refugees, Muslims, etc. This attracts media attention to which his competition has to respond. When he questioned whether George W. Bush managed 9/11 well, saying “I’m not blaming anybody. But the World Trade Center came down” he forced his competition to respond. Instead of attacking Trump in unison, they began attacking each other, replaying old debates about terrorism, religious freedom, and national defense.
Give them something else to fight about.
Summary
Now, to be honest, we don’t love this form of competition. We believe a far superior form of competitiveness comes from doing things that your competitors will choose not to resist. The best way to do that is to create a strategy that benefits everyone.
But not everyone you compete with will play that way. Trump holds on to a more traditional competitive environment, one that is unfortunately still affective in politics. It won’t help you build the next great company, but it may help you win an election.
Knowing how to manage the competition in this way will help your innovation succeed. Ask yourself:
- How can I make would-be competitors laugh at and ignore me?
- What “secret message” do I want them to hear?
- How can I give would-be competitors something else to fight about so that they won’t attack me?
