Bill Gates, Andy Groves, and Steve jobs’ 4th Strategy: “Exploit Leverage and Power—Play Judo and Sumo”
By Zulfiqar Ashraf Chaudhry
Roseville, CA
Life is constantly throwing challenges at us. Our response to these challenges determines our fate (both in this world and the next). Some of us fight these challenges with grace, like a Judo fighter; while others (mostly the rich and the powerful) bulldoze over these challenges, like a Sumo fighter. Of course, most of us (usually belonging to the middle class) use a combination of the two to overcome many of our challenges. What’s interesting about Bill Gates, Andy Groves, and Steve Jobs (GGJ) is that even when they became large, heavy, and powerful, like a Sumo fighter, they continued to employ Judo techniques. Is there a lesson in this for our rich and elite?
GGJ used speed, stealth, agility, deftness to neutralize their opponent. Overall, they used three Judo techniques and one Sumo technique to dominate the market. According to Yoffie and Cusumano’s book, Strategy Rules, these techniques included:
1. “Stay under the radar”—a Judo technique
2. “Keep your enemies close”—a Judo technique
3. “Embrace and extend competitors’ strength”—a Judo technique
4. “Don’t be afraid to throw your weight around”—a Sumo technique.
1. “Stay under the radar”—a Judo technique
One should not “toot” his/her own horn. It attracts unnecessary attention. One should play as harmless as a puppy. When Jobs was negotiating with the music industry, he presented himself as a harmless “puppy dog.” Music industry wanted to sell whole albums, not piece-meal one song for 99 cents at a time. Jobs asked them, “What harm could it possibly do …? Think of it as an experiment.” Thinking of Jobs as a harmless puppy, with a cute idea, Music industry agreed to his terms. At the time of this deal, everyone knew that Apple needed the Music industry more than the Music industry needed Apple. “But in the end, being underestimated helped Jobs get his way. Believing that there was little at stake made it easier for the labels to give in.” (p 135). Did we play a cute puppy to the USA during the Afghan war (to strengthen our Armed forces, while making the “A-bomb” on the side)?
Intense secrecy about your projects help. “In 2005, Jobs sued several websites that had revealed information about Apple and its products. When Jon Rubenstein headed up the team developing the iPod, no more than 100 other people at Apple even knew the product existed. As Rubenstein said in 2000, "We have cells, like a terrorist organization. In the weeks leading up to a product launch, Jobs had electronic monitoring devices placed in boxes of parts to track their movement through factories. Reportedly, the company once shipped products in Tomato boxes. (This) prevented new releases from potentially harming sales of existing products, since customers were less likely to wait for the next version of the product if they did not know when it would come out. Tight secrecy was a prerequisite for the dramatic product launches for which Apple became famous. Jobs used secrecy like a lever order to boost the drama and impact of Apple’s marketing efforts and increased sales.” (p 136)
Jobs had taken the Chinese sage’s advice to heart: “All warfare is based on deception. Therefore, when capable, feign incapacity; when active feign inactivity.” Most of us do exactly the opposite: when we are capable and active, even our mother-in-law knows all our moves well in advance. Jobs used misdirection habitually. Re iPod, he told reporters that he did not think “people want to watch movies on a tiny little display they carry around.” One year later, his iPod did exactly that. All this secrecy and misdirection translated into handsome dividends for Apple. Did Pakistan benefit from these tactics in developing her A-bomb?
2. “Keep your enemies close”—a Judo technique
In Judo, "clever players will find ways to engage in a cooperative relationship with key players while protecting their options. The goal of this maneuver is to get in close, control the relationship, and make it much harder for your opponent to know you down." Both Gates and Jobs utilized this technique: Gates with IBM and Jobs with Microsoft. "Gates found ways to work with IBM while competing with the computer giant to define the future of the PC platform. IBM did not endorse Microsoft roadmap, but Gates neutralized (the) threat) when IBM decided to merge CP–DOS project with Microsoft’s work on DOS. The two companies also signed a joint agreement to create a new operating system. In 1985, this project resulted in OS/2. Steve Ballmer had tried to convince Gates to abandon OS/2, but Gates refused. Gaits knew that the two companies had fundamental differences in culture and vision and the prospects of long-term cooperation were slim. In 1986, Gates said to his colleagues, "IBM is F-ed and we all know that they are F-ed. What we are going to do for the next couple of years is play rats in a maze,” trying one option after another as if they want to make the relationship work but knowing that they were all likely to be dead ends. In effect, Gates successfully collaborated with IBM as long as it was possible to avoid a devastating attack, while preparing for an inevitable confrontation.” (p141). Does this apply to India-Pakistan relationship?
“Gates also cooperated closely with Jobs to build applications for the Macintosh; this helped him learn nitty-gritty of developing GUIs (Graphical User Interface), which he then leveraged for Windows development.”
The best example of Judo comes from Jobs (again). He started from a position of weakness, nay, near-death. He used his opponent’s (Microsoft’s) impressive strength and position to his advantage and convinced Gates to invest $150 million in Apple, without getting voting rights. “In Jon Rubenstein's words: “Who would have bought a Mac, without having Office? We would have been dead, because you couldn’t do anything without Office." In fact, by signing the agreement, Gates may have made a colossal tactical error; if Gates had not bailed out Jobs, Apple might not have been around to harass Microsoft a decade later––and eventually replace it as the most valuable company of all the time.” (p 143). Was General Zia-ul -Haq’s uninvited and unannounced visit to India in 1987, on the pretext of watching a Cricket match between India and Pakistan, when India’s armies were ready to attack Pakistan, a Judo or a Sumo move?
3. “Embrace and extend competitors’ strength”—a Judo technique
Most people look down on imitators. They think copying others stunts growth and clogs up the “creative juices.” However, GGJ thought otherwise. They showed that there’s no shame in copying others, as long as you do not go to sleep after copying, but rather “leap-frog” after copying. (Jobs’s) “strategy for the iPhone operating system (iOS) was simple: "Catch up to Android behavior where we are behind (notifications, tethering, speech…) and leapfrog them (Siri…).” Similarly, Grove’s strategy in the early 1990s was to “incorporate” (translation: copy) its competitor’s chip (RISC) features “and deploy its manufacturing prowess to produce the new, higher performance microprocessors at high volume. (That’s how), Intel eventually grabbed between 80-90% of the workstation and server market, which RISC machines had previously dominated.” As for Gates, he kept incorporating features of smaller companies (that were making programs, like freeing up more space, storing lengthy commands, recovering files, etc., in order to run MS-DOS more efficiently) into Microsoft’s DOS 5.0 version; hence making these small companies obsolete. Gates used the same tactics to catch up in the internet race, even though he was late to the game. “By embracing new technologies, including HTML and Java, Microsoft could match Netscape’s Navigator feature-for-feature and win back the market by offering an equivalent browser for free,” while Netscape still charged $49 to its customers (p144-146.) Guess who won the internet war? And who’s winning the Quantum-computing race: China or the USA? So much for the “creative juices”!
4. “Don’t be afraid to throw your weight around”—a Sumo technique
Sumo players are heavy and awesome. They inspire fear in their opponent. Above all, Sumo requires toughness. As the Chinese sage, Sun Tzu, said, “Those who win every battle are not really skillful; those who render others’ armies helpless without fighting are the best of all.” To win a battle, without fighting, with sheer fear, is the ideal situation, like India did so skillfully in East Pakistan. Perhaps, that’s why Pakistan wanted the nuclear weapon so desperately, even if it meant “eat(ing) grass”. Now that Pakistan has accomplished her goal, but has her population stopped “eat(ing) grass”?
“We (Pakistan) will eat grass, even go hungry, but we will get one of our own (atom bomb).... We have no other choice!”― Zulfikar Ali Bhutto
Gates “was notorious for using the Microsoft market clout to spread “FUD” (Fear, Uncertainty, and Doubt) across the industry by preannouncing new products or upgrades that were at best a long way from release.” By throwing his weight around, like a Sumo fighter, Gates would convince the would-be buyers of a competitor’s product to simply wait to get the much better version of the same product from the all-powerful and innovative Microsoft.” (p. 149) And when Microsoft would eventually release its product, the buyers would feel like the poet, who after giving up everything for the beloved, realizes that the beloved is completely indifferent to him.
Ab jafa se bhi haen mehroom ham, Allah Allah
Is qadar dushmane arbabe wafa ho jana
“Now we are deprived even of oppression-- God, God!
To this extent, to become an enemy of the possessors of faithfulness!” - Ghalib.
In international politics, the USA is not afraid of throwing her weight around. GGJ were no different. But throwing one’s weight around, irresponsible, is not the way of the Sumo fighter. Indeed, it’s dangerous and can cause serious injuries. For example, Gates’s disregard for antitrust laws, nearly broke his company, when the Department of Justice (DOJ) went after it in 1998. Jobs was also notorious for throwing his weight around without any regard to rules and regulations. “In 2010, DOJ charged Apple and five other high-tech companies with conspiring to prevent employees from jumping ship (i.e., for working for other companies.)” This lawsuit was settled in 2012. “Apple lost an even more important case—a lawsuit brought by the DOJ charging that Apple had colluded with five other major publishers … to raise ebook prices.” (p 162). In contrast, Andy Grove was paranoid about antitrust laws. Nonetheless, he too lost no opportunity to punish anyone who annoyed him. For example, if his customers (Compaq, Dell, HP) annoyed him, they “had to queue up to get their chips…he (would) put them in his “penalty box”...(and they) would experience delays in receiving their allocations of scarce parts until they once again toed the line.” (p 159). So, in international politics, is it wise for the USA to throw her weight around, while disregarding international rules and regulations? Don’t “chickens come home to roost?”
Next, we will discuss GGJ’s final strategy: “Shape the Organization Around Your Personal Anchor.”
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