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Stratagem 28:Point at the Mulberry but Curse the Locust


“When the powerful wants to rule over the weak, he will sound a warning. One’s uncompromising stand will often win loyalty, and one’s resolute action, respect.”

—From The Thirty-Six Stratagems

In 2006 Microsoft surprised the software world by forming an alliance with a longtime nemesis. While the move was officially touted as a shift by Microsoft toward becoming more collaborative, many industry experts saw it as a tactic to deliver a secret threat to Microsoft’s adversaries.

Novell and Microsoft are natural competitors. In the late 1980s Novell launched a revolution that threatened Microsoft’s PC dominance. The company’s vision was that, instead using traditional PCs, employees would work through “dumb” terminals linked to a large central computer. Such an architecture would make Microsoft’s desktop operating system unnecessary, thereby threatening the central hub around which the company’s advantages turned.

As Novell grew, it aligned itself with nearly every major Microsoft competitor. In 1991 it formed an alliance with IBM in which IBM agreed to market Novell’s core software, NetWare. The next year it entered a product development agreement with Lotus, the company competing with Microsoft’s Outlook and other collaboration products, through which Novell would connect Lotus more closely with NetWare. It then aligned with Sun Microsystems, another Microsoft rival. In 1994 Novell went head-to-head with Microsoft by purchasing WordPerfect and Quatro Pro, the leading competitors with Microsoft’s Word and Excel programs, for $1.4 billion. Though Novell sold these businesses two years later, their purchase highlights Novell’s long, proactive offense against Microsoft.

Between 2003 and 2005 Novell struggled against IBM and other competitors, losing market share and profits. But Novell still stands at the center of a movement in direct opposition to Microsoft’s roots. Novell and its fellow open-source competitors believe a new open environment will emerge, which no company can own. They are part of a growing community of programmers who develop software anonymously, share it with others, and believe that this software should be part of the public domain, available for anyone to use at no cost.

The industry was therefore surprised in 2006 when Microsoft announced a $250 million deal with Novell. Through the agreement, Microsoft and Novell agreed to collaborate to jointly support customers who used both open source and Microsoft’s proprietary software. They also agreed to work more closely to ensure that their software integrated easily.

Was Microsoft finally giving up its struggle against “open source”? Was it shifting its competitive position from confrontation toward collaboration? Microsoft claims its decision was a good-faith effort to serve the many Novell business customers running both Windows and open-source applications, but Microsoft’s choice of partner seems to point to an entirely different motive.

Microsoft had many partners to choose from. By far the largest open-source vendor is a company called Red Hat. If Microsoft’s primary goal was to service business customers using both open and closed software, it could have reached far more such customers by aligning with Red Hat. Why did Microsoft instead choose to partner with a weaker player?

We cannot know for sure. But if we consider this deal an attack rather than a capitulation, Microsoft’s choice makes sense. As part of the Microsoft-Novell deal, Microsoft agreed not to sue Novell’s customers. A string of lawsuits had been filed between open-source and closed-source software firms, with the latter claiming that open-source programs were stealing and embedding proprietary program codes into the software that was released into the public domain. Companies that use Red Hat or Novell to customize opensource solutions run the risk that, in the future, a company such as Microsoft might claim that some of that software was actually proprietary intellectual property.

By sending the message to Novell’s customers that they will not be sued, Microsoft is implying that non-Novell customers may be sued. The secret message, then, is that if you are going to use open source software and you do not use Novell, you expose yourself to a potential lawsuit.

This message has the potential to lead customers away from Red Hat, the leading open-source vendor, toward its weaker competitor, Novell. This, in turn, could disrupt the power balance emerging in the open-source community and potentially slow the movement’s growth. This is not unlike, say, the U.S. government supporting a weaker opponent to remove an anti-Western leader from power.

The tactic of sending secret messages to scare potential clients away from the competition is so common in the high-technology space that it has earned a name: Fear, Uncertainty, and Doubt (or FUD). IBM was arguably the first to wield it successfully. Its famous marketing message that “nobody ever got fired for buying IBM” implied that not choosing IBM put your job at risk.

Though we cannot know Microsoft’s true intentions, the impact of Microsoft’s decision is clear. By aligning with a weaker player, it sent a message to any company looking at using open-source software: You may be sued.

What makes this tactic possible is the often-overlooked interdependency that links industries, companies, and actions. Actions propagate through these connections. This is similar to chaos theory: A butterfly flapping its wings in China may cause rain in Los Angeles; a decision to attack a small competitor has indirect effects, such as influencing the behavior of larger competitors.

By exploring these indirect effects, you may uncover levers of influence, means of achieving goals that you did not know you had.

Sending Secret Signals to Customers

You can apply the very same tactic to influence your customers. Movie marketers have found that young viewers dislike being marketed to, so they must appear to be targeting adults in order to sell films targeting youth. Movie posters, therefore, might display images of the adult leads but place a key teenage character not centrally but prominently. The ostensible message is, “This is a movie for adults,” and the hidden message is, “But there is also something for younger viewers.”

Take your children to Pixar’s Monsters Inc. or a similarly successful children’s movie, and you may catch yourself laughing out loud. You and the other chaperones will fill the theater with laughter but at different times than your children. This is because you and your children are laughing at entirely different things. The film is carefully designed to interweave plot lines that appeal to adults with those that appeal to children. Children miss most of the adult themes entirely. What is openly a children’s movie is also one targeted at adults. This dualmessage strategy is critical because adults are less likely to take their children to a movie they themselves will not enjoy.

Huan Unites Eight States

In 685 BC, a new duke, Huan, was installed as ruler of the Qi state. He claimed this position after years of military struggle, and he now wanted to secure peace and build prosperity.

An advisor suggested that the best way to achieve this goal would be to establish an alliance with the eight states in the region, with Duke Huan serving as the leader. The duke thought this would be an excellent plan for peacefully securing power. He invited representatives of the other states to jointly discuss his plan. He built a large platform for the conference; he assured his guests that they would enjoy lavish accommodations; and, as a sign of his peaceful intentions, he did not bring a single war chariot to the meeting.

To the duke’s surprise and disappointment, only four of the eight warlords attended his conference. An alliance among just five states would be useless, even counterproductive, because such an alliance could threaten the four states outside the alliance and trigger further conflict. Nevertheless, the five states held the ceremony and appointed Duke Huan leader of their alliance.

At the meeting, Duke Huan proposed that the five new allies attack the four states that did not join the alliance. He requested their support. Three of the four states obliged. However, the duke of Song, did not.

The duke of Song was dissatisfied with the results of this meeting. While Song was the largest state, Duke Huan led the alliance. Further, Song saw little value in an alliance that excluded four of the eight states. The duke of Song believed that if he dropped out,others would as well and the alliance would collapse. So during the night, the duke of Song secretly left the meeting.

Song’s exit from the alliance infuriated Duke Huan, who ordered a general to hunt down the duke of Song and kill him. But before his orders could be executed, one of his advisors made an interesting argument. He suggested that Duke Huan let Song alone for the moment. Instead, Duke Huan should focus his attention on a nearby state, one of the four that did not attend the meeting. Such an attack would be safer and cheaper and yet would be an effective warning to Song.

So instead of attacking his primary adversary, the state of Song, Duke Huan attacked a weaker, closer one. He led an army toward the capital city. When he reached the city walls, the head of this small state, fearing a painful defeat, sent an urgent message to Duke Huan explaining that he did not attend the alliance meeting only because he was sick and that he intended to join the alliance. In response, Duke Huan called off his attack, and this smaller state joined the alliance.

The veiled message in Duke Huan’s tactic was powerful. Fearing attack and encouraged by the duke’s willingness to forgive old enemies, each state that had missed the first meeting apologized and joined the alliance.

This left just Song outside the alliance. Duke Huan assembled a joint army and marched to Song’s capital. But before this army engaged Song, the duke of Song himself, realizing the futility of waging war again seven other states, joined the alliance as well.

Duke Huan unified the eight states, ensuring peace and gaining supreme power without bloodshed. He did this by attacking a weak enemy—pointing at the mulberry while cursing the locust.

“8Ps” of StrategyOpportunity
for Disruption
Recommended Leverage Points
Position- The farmers, individual and corporate, that you are targeting.

- The need of the agricultural industry that you seek to fill.
3- What technologies do you control that can help you tap into market
segments that you previously thought unreachable?

- What are the potential business alliances you could think about with key players in the segment to serve your customers with integrated solutions? (Serving customers with more integrated solutions example: serving farmers with fertilizers, crop protection and other).
Product- The products you offer, and the characteristics that affect their value to customers.

- The technology you develop for producing those products.
8- What moves are your organization taking to implement Big Data and analytics to your operations? What IoT and blockchain applications can you use?

- What tools and technology could you utilize or develop to improve food quality, traceability, and

- How can you develop a more sustainable production model to accommodate constraints on arable

- What is the future business model needed to serve new differentiated products to your customers?
Promotion- How you connect with farmers and consumers across a variety of locations and industries.
- How to make consumers, producers, and other stakeholders aware of your products and services.
8- How are you connecting your product with individual and corporate farms who could utilize it?
- How could you anticipate market and customer needs to make customers interested in accessing your differentiated products?
PriceHow consumers and other members of the agricultural supply chain pay for access to agricultural products.7- What elements of value comprise your pricing? How do each of those elements satisfy the varying needs of your customers?
Placement- How food products reach consumers. How the technologies, data, and services reach stakeholders in the supply chain.9- What new paths might exist for helping consumers access the food they desire?
- How are you adapting your operations and supply chain to accommodate consumers’ desire for proximity to the food they eat?
- How could you anticipate customer expectation to make products more
accessible to customers/agile supply chain?
- Have you considered urbanization as a part of your growth strategy?
- How your food satisfies the needs and desires of your customer.
- How the services you provide to agribusiness fulfill their needs.
9- Where does your food rate on a taste, appearance, and freshness
- Could the services you provide to companies and farms in the agriculture industry be expanded to meet more needs?
- What senses does your food affect besides hunger? How does your
customer extract value from your food in addition to consumption?
Processes- Guiding your food production operations in a manner cognizant of social pressure.8- How can you manage the supply chain differently to improve traceability and reduce waste?
- How can you innovate systems in production, processing, storing, shipping, retailing, etc.?
- What are new capabilities to increase sustainability (impact on the environment, or ESG) components?
People- The choices you make regarding hiring, organizing, and incentivizing your people and your culture.- How are you leveraging the agricultural experience of your staff bottom-up to achieve your vision?
- How do you anticipate new organizational capabilities needed to perform your future strategy (innovation, exponential technologies needed, agile customer relationship, innovative supply chain)?
- How do you manage your talents to assure suitable development with exposure in the agrifood main challenges/allowing a more sustainable view of the opportunities/cross-sectors?