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On Being Unfathomable
"An expert General [CEO] approaches his objective indirectly. He moves in an obscure manner, like a ghost in the starlight. He conceals his true condition and ultimate intent." Chinese military saying.
This has its roots in General Sun Tzu’s notion of being “unfathomable” where the enemy (a.k.a. your competition) doesn’t really understand what you’re doing so it’s inefficient or even impossible to effectively plan against you , (e.g. the classic “when close, appear far away”). It helps you move your competition around, wasting their resources. This helps you keep things short. The Chinese knew that no war is best but, failing that, keep it short. A short war is cheaper in all the ways war costs. This helps keep the people (shareholders, employees) on your side. 

So, being obscure about your process and goals can be a useful thing. The Chinese liked the notion of being like fog. It’s hard to see what’s going on inside fog. Inside you can move with intensity and precision but from the outside you’re invisible.  

Perhaps a modern illustration will help. The following was forwarded to us by an energy client that insists we at Parcon Research have no discernable sense of humor (“What? In THIS economy!?”). It is an anonymous letter sent to the Financial Times this week regarding Enron’s competitive style. Clearly Lay and his Crew knew a lot about Fog. Unfortunately they forgot it's most important characteristic.

Financial Times 4/14/03
Texan bull

“Normal capitalism: you have two cows and buy a bull. Your herd multiplies and the economy grows. You sell the bull and retire.

Enron capitalism: you have two cows. You sell three of them to your publicly listed corporation, using letters of credit opened by your brother-in-law at the bank. You then execute a debt-equity swap with an associated general offer so that you get all four cows back, with tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Islands company, secretly owned by your chief financial officer, who then sells the rights for all seven cows back to your listed corporation. Your annual report states that your corporation owns eight cows, with an option on six more.”

Thank you, anon.
 

Of course, a great General plans for the inevitable: fog always clears.

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