Details: What this is.

Rule: “A great General [CEO] controls the movements of his competition.”

 “The Feint”: Genghis Khan and Henry Kravis.
Different time, same tactic.

The Mongols under the rule of the brilliant Genghis Khan, perfected the feint, or feigned retreat, which had been in use for over a thousand years. It’s deceptively simple but requires exacting execution (e.g. good management, a loyal team). If the enemy couldn’t be shattered on the initial attack the Mongols had a special unit called the mangudai. The mangudai would first make a fearsome charge against the enemy and then would appear to flee in retreat. This was the feint. Thinking an easy victory was available the enemy would often pursue at speed.

What they didn’t know was they were, in fact, being controlled by the Mongol leaders (called orloks). The rest is as grim as it is obvious. As the opportunistic enemy chased the light and fast mangudai, hidden Mongol archers would start picking off the pursuers. When the calculated chaos ensued the heavy Mongol cavalry would swoop in and finish the job.       

Henry Kravis did the same thing in one critical stage of his eventually successful bid for RJR Nabisco. His feint was when he went off skiing to Vail during the heat of the bidding. His competition in the deal, Peter Cohen et al., thought Kravis had given up and made decisions based on that. Because of this Henry essentially controlled the crucial next round of bids, as in keeping them low, via his presumed retirement from the action. He then sprang his trap: At a crucial moment he showed up with a bid much higher than anyone else’s. This threw the process into chaos which Kravis and Roberts skillfully exploited.

Never forget, a feint is a snare. But, like any snare, in order for it to work it requires somebody foolish enough to step in.

Think about it…

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