A Useful Business Weapon Called FUD

Alexis de Tocqueville observed that it is easier for the world to accept a simple lie than a complex truth. Hannibal knew the same thing 1,000 years earlier. Today, if your company is in a serious jam, this human weakness can be very useful.

Even at the best companies things occasionally go wrong. You've messed up. Taken your eyes off the ball. And of course the competition is right there to exploit your faltering. That's the other CEO/general's job. Exploit your weakness. If he or she's really good or has good spies (the legal kind—we'll cover them briefly below and in detail some other time) they may know you're in trouble even before you do! That's a tough opponent for sure. The clock's ticking even louder than normal.

So you're losing customers, maybe not many yet, but there's talk of a better way than yours out there. You don't have much time and you are behind the development curve. Things are grim. What do you do?

After kicking Development's rear you can do what IBM did when computer architect Gene Amdahl jumped ship in September of 1970 to start Amdahl. You generate "FUD". In fact FUD victim Gene came up with the term. It stands for the "Fear, Uncertainty and Doubt". IBM salespeople would skillfully plant FUD in the minds of prospective Amdahl customers. IBM knew Amdahl was brilliant and his starting another mainframe company could easily cause IBM serious problems. So they put the word out, via back and side-channels, that Amdahl's computers were somehow risky. It worked. Once again IBM made IBM the "safe" choice. "Why take a chance? Why change? Stick with us. We'll take care of you.” The fact was Gene's computers were cheaper and faster but IBM successfully created a dark, foreboding cloud over them. This slowed Amdahl down and provided protection to IBM.

Microsoft has made an art form out of FUD (the term is frequently used in the tech arena) in their battles to fight the very real threats of Linux and Open Source. In fact Microsoft even discusses its value in leaked internal memos as a tool in the Linux and Open Source wars.

Finally, in the beginning, many people believed, and some still do, that Larry Ellison's move to buy PeopleSoft was just elaborate FUD. The idea was that if PeopleSoft became a part of Oracle, PeopleSoft software would wither. The object, of course, was to inhibit the purchase of PeopleSoft products (another moral is to 'never mess with Larry, but that's another story). And it worked.

The point is it doesn't take much 'Fear, Uncertainty and Doubt' to freeze the use of a corporate checkbook, especially for a "risky" resource. And that's the object here.

FUD is particularly useful for the large company battling a smaller one, because to established customers the "new small guy" generally feels a bit risky anyway. The majority of the readers of this newsletter are in positions of importance in large companies, many of them multinationals (the balance largely entrepreneurs). As we all know big companies are seldom as nimble as small ones. This can give the small company a tactical advantage. They can occasionally get a technically superior product or service out quicker than you can. Plus, as we've detailed previously, a smart small company can show up where you don't expect them—where you are somehow weak—and have no, or insufficient, in-place defenses against them. This allows the small guy to gain a foothold in your territory (what Sun Tzu called "Ground"). It's David taking a swipe at Goliath. Again.

So, what do you do? Your product (software, drug, widget) is late. The “why” is secondary even though you can dial that into more FUD ("Our new drug is still 6 months out but it'll be a revolution. Why start your patients on something new only to have to change them later for something better?"). What you really need to do, RIGHT NOW, is slow down the competition before they get share because it's too expensive getting it back, and sometimes you can't. Especially if what they are selling really is better—hey, it happens. Never forget, a little bit better is often enough to induce customer flight.

Now is a time that FUD can be very useful. And yes, we could discuss the ethicalness of FUD till the next equity holder's meeting but if we ask them don't we know what the answer is likely to be? And they are the owners. They want the maximum return possible and it's our job to provide them with it to the maximum degree that is legal. Just don't go over the edge. Happily you don't really have to.

You don't even need to lie here to win, folks. All you have to do is create any or all of Fear, Uncertainty and Doubt. And there are lots of ways to do that. One of the simplest is by asking the right question. If you discern they are a credible new threat, find out what the David company fears most. To find out, cruise social media. It's u-n-b-e-l-i-e-v-a-b-l-e what you can turn up following a competitor’s loquacious employees chatting, sometimes anonymously, about what their company is up to. We frequently monitor social platforms for clients and it's scary what employees freely divulge. Read a couple of levels below the line in their press releases. Talk with their suppliers, new customers, old employees. And finally just put yourself in their shoes—what would you be afraid of? You're in the same business. You probably know what he or she sweats the target customers might find out. That’s what you toss into the spin machine, plant the seeds to slightly disorient and leave the rest to the imagination of the David's potential new customers (your existing and targeted ones). Never forget that refuting takes a lot more resources than asserting. Ask any Presidential campaigner.

Think about it...

How to Avoid Your Own Waterloo

“A conqueror is like a cannonball…he can only move forward. Once he rebounds his career is over.” -The victorious Duke of Wellington in the wake of Waterloo when asked why Napoleon chose to attack, rather than simply defend, France after escaping from his exile on Elba.

What happened to Napoleon Bonaparte at the Battle of Waterloo is a useful illustration of how a brilliant strategist can make disastrous, career terminating mistakes. But rather than focus on the minutia of the convoluted battle it’s more useful here to look at the broader mistakes he made as a manager. Why? Because, unfortunately, we see these mistakes all too frequently in business leaders. Do you see anything familiar in the summary below?

A brief history

In 1799, driven by his dream of making France a European empire, Napoleon Bonaparte, a highly talented and experienced military leader, carried out a coup against the Directory (First Republic of France) and eventually made himself Emperor. This strategy worked and in 1802 the Republic of France was recognized with the Peace of Amiens.

You would think this would be enough. But no, because Napoleon was a megalomaniac (like some CEOs we all know—Donald, are you still reading?), this was insufficient. He wanted France to be the most powerful country (business!) in Europe. So in 1803, he declared war on his neighboring countries plus Britain. This was the beginning of the Napoleonic Wars which went on between France and the Allies for 11 years. The Allies finally defeated France in 1814 forcing Napoleon to abdicate at the Treaty of Fontainebleau. He was exiled to the pleasant island of Elba off the coast of Italy. Elba is part of Tuscany, and Tuscany is wonderful. He was even given the title Emperor of Elba and rule over its 100,000 people. Not bad. But not enough either.

He stuck it out for 11 months then escaped on March 1st of 1815 with a contingent of 1,000 men. He reached Paris on March 20th and thus began the "100 Days Campaign". Horrified at his return from exile the Allies who, unfortunately for Napoleon, happened to be meeting in Vienna at the time discussing the territorial balance in Europe, immediately declared war on him. To understand the instant resolve to get rid of the fellow it’s useful to remember Napoleon was a Very Bad Man (an “Evil Doer!”) and was thought, by some, to be a sort of Hitler or Saddam of his day. He wanted to conquer Europe and everybody knew it. This is why a large coalition of forces could easily be formed to deal with him in a completely unambiguous manner. It would be like combining two very large computer manufacturers to give Dell and IBM a hard time...

So it was France/Napoleon against: the British, Dutch, Belgian, Russian, Prussian and Austrian armies. The Anglo-Dutch force was commanded by the cool, aristocratic Irishman Arthur Wellesley (a.k.a. the Duke of Wellington) with Field-Marshal Gebhard Leberecht von Blücher commanding the Prussians. Both Wellington and Blücher had experience against Napoleon and Blücher was the only person to beat Napoleon more than once. So Wellington and Blücher understood their opponent. Blücher, especially, hated Napoleon and since Blücher was entering old age he had little to fear from Bonaparte—and competing against an opponent that has no fear (and this includes business leaders) is always dangerous. Even so, Napoleon thought neither Wellington nor Blücher were “worthy” opponents.

Napoleon’s goal was to use the classic battle tactic of the Central Position which he was expert in. This is how a small force (a small business) can defeat a bigger one. While he was seriously outnumbered with his 125,000 men, this was only the case if the two opposing forces (Wellington with 110,000 men and Blücher with 120,000) were able to combine. It was extremely important that Napoleon prevent this from happening—he had to get between them (gain the “central position”) and fight them in series since he knew victory was almost impossible against the combined force. If he took them on separately he could succeed.

Since he moved so quickly toward Belgium, Napoleon knew a fleeting set of circumstances was in his favor—the Allies were still moving towards each other. To exploit this Napoleon ordered a young Marshal Ney to take 24,000 men and attack part of Wellington’s forces at Quatre Bras. Napoleon took the remaining force and attacked the approaching Prussian forces under Blücher at the town of Ligny.

Napoleon shattered the Prussians and almost killed Blücher. Unfortunately, ego driven Napoleon made a critical competitive mistake—as they started retreating he concluded Blücher was beaten and out of the fight, thus preventing him from aiding Wellington.

The young Lt. Ney was also making a critical mistake. Rather than taking the initiative, he waited for clarifying communications from Napoleon before attacking the Dutch force led by the disastrously inexperienced Prince of Orange (the son of the King of the Netherlands). When Ney finally attacked he sent much of the Dutch force fleeing but the critical pause allowed time for Wellington’s main battle force to arrive and attack which in turn seriously weakened Ney’s numbers. However, it wasn’t a draw—Wellington retreated only a few kilometers north. Had Ney been more aggressive he could have done far more damage, which would have been useful later. In fact, some military historians believe Ney's performance at Quatre Bras was elemental in Napoleon's defeat later.

However, so far, so good. Napoleon had managed to keep the two allied forces from combining and inflicted serious damage while doing so. On the surface it was an utterly brilliant victory for the pugnacious Frenchman.

Unfortunately it was short lived. The next day, June 18th, Napoleon was likely to regret leaving lovely Elba.

The decisive battle was at Waterloo, about 11 miles from Brussels. The day started with a torrential downpour. This made it extremely difficult for Napoleon to move his artillery even with a dozen horses and 15 men pulling on each cannon. This was a critical problem as it delayed the battle allowing Blücher’s reorganized army time to move closer. Realizing this Napoleon had dispatched almost a third of his force under Marshal Grouchy to march north and engage Blücher to prevent him from entering the main fight. Had Grouchy been successful things might have been different. But Grouchy had no real depth as a leader and blew the assignment badly. Napoleon was paying the price for his hasty staffing decisions (We’ve all been there, right?). At 11:30 that morning Bonaparte gave the order to start the general attack and with it 100 cannons let loose.

The battle lasted the rest of the day and into the night. Unfortunately for Napoleon, Grouchy never reached Blücher’s main force. This raised many questions. There’s a saying in war: “Follow the noise to find the battle.” It was obvious where the battle was being waged because of the massive sound of all the cannons (And, if you don’t already know, cannons are LOUD!). But Grouchy, under nominal orders to prevent Blücher from moving toward Napoleon, didn’t join the main battle but chose rather to engage Blücher’s tenacious rearguard around the town of Wavre; this provided Grouchy a minor, and basically meaningless, victory. Had Grouchy had more initiative and brought his 30,000 fresh men into the main fight Napoleon might well have won at Waterloo. As it was, Grouchy's actions allowed the Prussians to merge with Wellington’s now weakened forces. Napoleon’s central position had collapsed (the manpower math was all wrong). When this happened Napoleon was doomed.

But, he fought on. It was only with the arrival of Blücher’s force, suddenly combining with the British, that the French turned and fled "for their lives". It was 9:30 that night that Blücher and Wellington embraced each other in success. Four days later in Paris Napoleon abdicated a second time and was sent off to the windswept island of St. Helena in the middle of the South Atlantic where he died five and a half years later. Unlike the bucolic Elba, St. Helena was no picnic spot.

History puts the blame for the disaster of Waterloo on Napoleon because he was the leader. And that’s certainly as it should be. He was the CEO. That said, sure, he made a lot of mistakes (see the summary list below) but frankly I think he had some serious staffing issues in the form of Ney and Grouchy. Had they been up to the tasks Napoleon assigned to them, the outcome would likely have been different and the face of Europe changed for many years to come.

Little known fact: The “Battle of Waterloo” isn’t named for where the fighting took place. Although that's where most of the battle happened, it’s called that because that is where the Duke of Wellington spent the night before the battle and it was his own tradition to name the battle after where he slept prior to a victorious battle. So perhaps there was more than one big ego involved…

Here is a summary of Napoleon’s management traits and the mistakes resulting in The Battle of Waterloo (a.k.a. CEO traits and actions of questionable value…)

1.     Impossibly arrogant and egotistical leading to:

a.     Careless rush to action thinking he could do no wrong

b.     Ignored the opinions of others

c.     Disrespected the competition (thought Wellington and Blücher were not “worthy” even though they had previously beaten him)

d.     Relied on his previously successful tactics, closing his mind to new ideas (victim of his previous success)

e.     Underestimated the sheer conviction of the competition

2.     Rushed selection of incompetent senior management (Ney and Grouchy)

3.     Poor lines of communication with divisional management

4.     Made the fundamental mistake of choosing the wrong goal and bet the company on it…and lost

Very basic stuff, really.

Think about it...