Stratagem 12:Replace the Beams with Rotten Timbers.
“Make the allied forces change their battle formation frequently so that their main strength will be taken away. When they collapse by themselves, go and swallow them up. This is like pulling back the wheels of a chariot to control its direction.”
—From The Thirty-Six Stratagems
Selling beer in Britain is a lucrative proposition. About 80 percent of British adults regularly visit pubs, with an average of three visits per month, and they spend about £20 billion each year.
For decades, a few national British chains exerted protected dominion over pub-goers, maintaining their control by locking up pub locations. When entrepreneurs tried to expand their pub chains beyond a few locations, they would hit a growth ceiling because there were no pubs available for sale.
Like countless aspiring pub owners before him, English-born, New Zealand–raised Timothy Martin hit this ceiling in 1981. Perhaps because of his relative inexperience in pub operations—the twenty-six-year-old had only two years previously opened a small pub and was now looking to expand—Martin saw a strategic option that his predecessors did not, one that disrupted the structural hold
major British pub chains had enjoyed over pub locations for decades. His decision laid the foundation for the fastest-growing public company in Britain (and the ninth-fastest growing one in Europe).
Martin was an uninspired law student in London who sought consolation at the end of his day by visiting a pub. Because he couldn’t find a pub in his neighborhood, he regularly took a taxi to a certain one across town. This pub was unique for two reasons: It was small (a 500-square-foot former betting shop), and it offered a wide selection of regional beers at a time when most pubs served only a small set of national beers.
Martin enjoyed spending time at the pub far more than he did with his law books. When he learned the pub owner earned £500 per week, he decided to switch careers. He sold his apartment,
which had appreciated by £10,000, took out a £70,000 mortgage, and bought the tiny betting-shop-turned-pub.
Martin immersed himself in the pub business. His zeal and the pub’s unique location helped build a loyal following. Two years later he needed more room, but when he looked to purchase a new location, he ran into the national chains. He could not find a pub for sale.
Rather than struggle against the national chains, Martin went around them. Inspired by the betting-shop history of his current pub, Martin purchased a car showroom. This would be his new pub.
The strategy worked. Not only did it differentiate Martin’s pubs from others by providing unique experiences, it eliminated a competitive “beam” the national British chains relied on to pre-empt
Over the next two decades, Martin expanded by purchasing unusual locations and converting them into unique pub experiences: banks, grocery stores, theaters, auto dealerships. The uniqueness of
each location became a trademark of Wetherspoon, Martin’s new pub chain. More important, it eroded the structural underpinnings of an advantage his larger competitors had enjoyed for years.
Today, Martin’s pub company generates £850 billion in revenue. Over the past decade, it has grown 35 percent per year, faster than its industry and peers, which post between 1 percent and 10 percent
growth. Indeed, his company has grown faster than any other company in the United Kingdom.27
Jin Topples Qin
In AD 383, during the Six Dynasties Period in China, two empires of unequal power—Qin and Jin—faced off in a stalemate. The smaller empire saved itself by manipulating its adversary’s beams.
The stronger empire, Qin, was attempting to destroy a much weaker one, Jin. The Qin army was encamped just across a river that bordered Jin territory. Despite Qin’s relative strength (Jin was
smaller and undergoing internal conflict), there were two reasons the Qin general did not want to cross the river to attack the enemy. First, some clever maneuvering by Jin had given him the false
impression that the Jin army was less vulnerable than it actually was. Second, the army that crosses the river is always at a disadvantage to the one waiting on the shore. For this second reason, the Jin army also refused to cross the river—hence the stalemate.
To break the stalemate and free his empire from threat, the Jin general devised a plan to disrupt the Qin army’s axles, destroy the integrity of its formations, and force it to retreat.
His first step was to send an envoy to the Qin general with a deceptive proposition that he pull back his troops to allow the Jin army to cross the river. The two could then fight on solid ground and settle the conflict.
The Qin general conferred with his advisors and decided on the following plan: He would accept Jin’s proposal and order his troops to retreat. But once the Jin army was halfway across the river, he would reverse his orders and attack. The Jin army, caught in the river, would fall quickly.
The Jin general expected, even counted on, Qin’s deceit. He ordered a few of his men to dress as Qin soldiers and infiltrate the Qin camps to spread a rumor that their general had discovered the
Jin army was actually much stronger that he originally believed them to be and that he feared they would lose the battle if the Jin crossed the river.
The next day the Qin general ordered his troops to retreat as promised. The troops did not know that this retreat was prearranged, and they took it as a sign that the rumors were true—that
the Jin army really was much stronger and they were at risk of losing their lives. So instead of retreating in an orderly manner, panic broke out. The Qin soldiers abandoned their formations, dropped their weapons, and ran.
The Qin general lost control in the chaos. He ordered his troops to return to battle, but their formation and command-control structure had fallen apart, and the orders disappeared in the wind. His men kept running. His house crumbled because his beams and pillars had been destroyed. Jin was saved.