Engage with the Expected, Win with the Surprising

“In fact, the period of greatest Japanese success was the following decade. During the 1980s, for example, General Motors’ US market share went from 52% to around 30%, with most of this lost to the Japanese. What happened? Ask anyone who bought a Honda, Toyota, or Datsun (as Nissan products were known until 1984) back then. They came expecting to get great gas mileage, which they did, but, “Surprise!” The things ran like a Swiss watch, fit together like a Rolls Royce, and seemed to last forever. In the language of strategy, the Japanese engaged with the expected (cheng)—gas mileage—but won with the unexpected (ch’i): fit and finish, driveability, longevity. Contrast this with GM’s economy offerings of the period, the Vega and Chevette. Their gas mileage was as good as the Japanese, but in all other aspects, they were pretty ordinary. All cheng; no ch’i. Market share cut by 40%.”

“The key to understanding cheng and ch’i in business lies in looking carefully at the nature of the terms themselves rather at their specific applications in war. One of the main themes of this book has been that the essence of Boyd’s strategy in business competition is to shape ourselves and the marketplace to improve our capacity for independent action—to survive on our terms—generally at the expense of our competitors. The nature of war is to shape the enemy. Detect a connection? The nature of cheng / ch’i, in both cases as it will turn out, is not “frontal versus flank” but something more fundamental: “shaping,” using orthodox (expected) in conjunction with the unorthodox (surprising). Engage with the cheng and win with the ch’i, in business as in war.”