May 2018

Timeless Thinking—The Art of War, by Sun Tzu

By Nick Ortner

The Art of War by Sun Tzu—the ancient Chinese military exposition dating back to the 6th century B.C. (if not earlier)—continues to hold meaning today. Beyond the treatise’s ongoing influence on military strategy and tactics, much of its guidance and emphasis on outmaneuvering rather than fighting the opposition appears to have helped spread the piece’s influence, relevance and application across business, management, legal, athletic and other competitive domains.

Summarizing The Art of War

Multiple translations of The Art of War exist. Using Chow-Hou Wee’s 2003 translation, the 13 chapters of this timeless piece explore the following critical topics:

  1. Detail Assessment and Planning explores the factors and elements that determine the outcomes of engagements, while stressing the gravity of war and importance of sufficient consideration.
  2. Waging War explains the cost of warfare and emphasizes the success of campaigns may be measured by limiting the cost of competition and conflict.
  3. Strategic Attack defines strength in terms of cohesiveness and unity rather than size, and highlights and prioritizes the five factors needed for success.
  4. Disposition of the Army describes the importance of prioritizing and defending existing positions, while co-emphasizing the need to recognize strategic opportunities and not create such opportunities for the other side.
  5. Forces emphasizes the use of team and individual skill assessment, creativity and timing in building a successful campaign.
  6. Weaknesses and Strengths highlights how opportunities may emerge from the relative weakness of the enemy, and responding successfully to changes in the environment.
  7. Military Maneuvers expands upon the dangers of conflict, and how to win direct confrontations if/when they are forced upon leadership.
  8. Variations and Adaptability underscores the importance of flexibility in responding while explaining how to successfully respond to ever-changing conditions.
  9. Movement and Deployment of Troops delves into situations faced upon penetrating new territories, along with assessments of opponents’ intentions and possible reactions.
  10. Terrain considers competitive ground/field positioning when facing an opponent, the advantages and disadvantages of various positions, and reactions and counteractions to each position.
  11. The Nine Battlegrounds differentiates battlegrounds, defines their relative location and importance, and describes the leadership focus and tactics for navigating each battleground.
  12. Attacking with Fire details the use and timing of both attacks and restraint, along with responses to consider when under attack.
  13. Intelligence and Espionage builds out the importance of competitive intelligence while exploring the various types of intelligence sources and optimizing management of those sources.

Critical Takeaways from The Art of War

Sun Tzu’s work provides entrepreneurs and innovators many valuable takeaways for consideration, including the following selected quotes (immaterially adjusted to clarify meaning) from a variety of chapters, along with their accompanying relevance:

  1. Chapter 1 (Detail Assessment and Planning). “The general who loses a battle makes but few calculations beforehand. Thus do many calculations lead to victory, and few calculations to defeat: how much more no calculation at all! It is by attention to this point that I can foresee who is likely to win or lose.”

    Entrepreneurial and Innovation (E&I) takeaway: Critical thinking, planning and scenario testing may be critical for improving the chances for success once action begins. Without planning and supporting analyses, defeat may be more likely. However, planning alone is not sufficient; individuals and teams must take action (i.e., “battle”) for success.

  2. Chapter 5 (Forces). “The clever combatant looks to the effect of combined energy, and does not require too much from individuals. Hence the combatant’s ability to pick out the right team and utilize combined energy.”

    E&I takeaway: No individual can drive success alone, nor should leaders expect too much from any one person. Choose associates and partners wisely with complementary skills, and then use the combined energy and abilities of that team to maximize achievements.

  3. Chapter 6 (Weaknesses and Strengths). “You can be sure of succeeding in your attacks if you only attack places which are undefended. You can ensure the safety of your defense if you only hold positions that cannot be attacked.”

    E&I takeaway: Assess markets carefully to understand your competition’s strengths and vulnerabilities. Consider also looking in the mirror, to know how the market may similarly view you. Use that collective market intelligence to prioritize new initiatives and protect or prune your own business.

  4. Chapter 8 (Variations and Adaptability). “The art of war teaches us to rely not on the likelihood of the enemy's not coming, but on our own readiness to receive that enemy; not on the chance of the enemy not attacking, but rather on the fact that we have made our position unassailable.”

    E&I takeaway: Market competition and disruption, whether real or looming, may always exist. Accept their presence, and play to your strengths and competitors’ weaknesses to mitigate current and emerging competitive forces and optimize your chances for sustained success.

  5. Chapter 10 (Terrain). “Generals who advance without coveting fame and retreat without fearing disgrace, whose only thought is to protect their country and do good service for their sovereign (i.e., ruler), are the jewels of the kingdom.”

    E&I takeaway: Successful leaders create, develop and grow their business with a selfless collaborative mentality with their customers and company. Success may also include the occasional failure—innovating and not achieving an established target may not mean such an approach was a failure, if lessons are learned to improve the chances for success with the next targeted initiative.

  6. Chapter 13 (Intelligence and Espionage). “Thus, what enables the wise sovereign (i.e., ruler) and the good general to strike and conquer, and achieve things beyond the reach of ordinary people, is FOREKNOWLEDGE. Now this foreknowledge cannot be elicited from spirits; it cannot be obtained inductively from experience, nor by any deductive calculation. Knowledge of the enemy's dispositions can only be obtained from others.”

    E&I takeaway: Market intelligence and understanding of emerging issues may be critical for sustained success. Networking, connections and cooperative sharing of information may be particularly important for such intelligence and understanding, and may only occur with regular interactions across a variety of mediums, including phone calls and face-to-face meetings.


    The scope of The Art of War extends well beyond the constraints that may otherwise be implied by its title. With a meaningful focus on winning by outfoxing the opposition rather than battling them, the essay’s sphere of influence has expanded well beyond military policy and strategy—fields as diverse as business, management, legal and sports (among others) have applied its teachings. Entrepreneurs and innovators across those and other fields may find its lessons similarly valuable.

    Qualifications, Caveats, and Limitations

    The author meets the Academy’s qualification standards to write this article. The material in this article reflects the author’s interpretation of the publication summarized and the author’s emphases, and is not representative of the views of Milliman. Other interpretations and emphases related to the publication summarized may vary from the author’s opinion.

    Nick Ortner, FSA, MAAA, is a consulting actuary for Milliman. He can be contacted at