Sun Tzu, Statistics and The Art of War

Warfare is one of the more common events in the history of man. Because of its importance to survival, warfare has been studied carefully. The factors that contribute to success in war are fairly well understood.

Fundamentally, success in war, as well as in business is based on leadership. Other factors such as information, preparation, organisation, communication, motivation and execution also contribute to success, but the effectiveness of these factors is entirely determined by the quality of leadership provided.

According to Sun Tzu, the Chinese military general, strategist and philosopher. To achieve success, you must manage information. Sun Tzu says that information, or the lack of it, determines the probability of success. According to him, if sufficient reliable information is available, victory is certain. Likewise, in business, you gather information to make good decisions. Information is the lifeblood of business. The best information comes from firsthand experience. Sun Tzu strongly champions the use of agents and informants (stakeholders) to gather and transmit firsthand information.

Sun Tzu warns us about relying on “folk wisdom”. Folk wisdom is the body of unproven assumptions and unwarranted speculation. Great danger lies in not challenging folk wisdom. Reliable facts always precede successful actions.

Most decisions made have an element of uncertainty. We simply cannot know everything. Even so, decisions must be made. Sun Tzu tells us to consider everything and make our decisions by weighing the potential for success. That is, Sun Tzu is telling us to assess the probability of success before acting. Modern managers have access to a number of simple, but powerful statistical techniques to assist them in quantifying uncertainty related to information. Lean Six Sigma is one such approach that can improve the quality of decisions.

Success on the information battlefield depends on knowing how to use statistics to make the right decisions.