Sun-tzu's The Art of War , was the first comprehensive treatise on developing and implementing strategy. It was privately published in 514 BC. Asian business leaders soon began relying it for guidance while western executives only discovered it in the late 1790s. Mr. Aizawa, president of the American subsidiary of Asahi Kasei Corporation of Japan, felt that a reinterpretation and update of Sun-tzu's classic from a modern commercial perspective was needed and challenged the author to do so. The Art of War 3: The Canons of Commerce met his challenge.

The Art of War 3: The Canons of Commerce adopts Sun-tzu's ideas to current conditions by introducing new insights and appendices explaining how to do the two highest priority activities Sun-tzu recommended but did not discuss in any depth while maintaining Sun-tzu's terse, action-oriented style and structure. Modern business examples illustrate its points.

Experienced executives read the manuscript critically and offered enthusiastic comments about it such as:

"... a veritable tour de force. ..and seamless in its weaving together of Sun-tsu's ancient writings and Goldenberg's running commentary. The latter includes generous servings of modern examples that serve to enrich the fare.

"Together, Sun-tsu and David Goldenberg provide ample guidance not just to avoid catastrophe but to ensure success." T. Horton, Ph.D., Chairman, The Commercial Bank; past Vice President, Marketing, IBM Corporation; past Chairman, the National Association of Corporate Directors

"The Art of War 3: The Canons of Commerce' is written in the style of Sun-tzu Wu himself: terse, declarative language that simplifies today's world, a world burdened with 2500 years of compounded commercial complexity since the general's simple, declarative instructions to his warriors. I feel like I am reading Hemingway.

"The three Appendices alone are worth the price of a trip to the book store. ..."

Dr. David W. Crain, Vice President, Marketing, Radiant Technology Corporation

Director’s Monthly August 2002 [National Association of Corporate Directors]

"...

"For two and a half millennia, business and military leaders alike have relied on the timeless wisdom of Sun-tzu’s “The Art of War.”  What would Sun-tzu advise directors if he were alive today?  This is the opening question posed in The Art of War 3: The Canons of Commerce [Bloomington, IN; First Books, 2002), by longtime NACD member and strategy consultant David Goldenberg.  While ... not the first to ask this question, he may well be the first to answer it usefully.

     "Corporate directors can certainly use this book in overseeing corporate strategy—a hot topic today.  Indeed, some shareholders are demanding this from boards (see p. 17 in this issue).  Art 3 explains the importance of the board’s involvement in strategy, citing the Delaware Chancery case, Paramount Communications v. Time, Inc. (1989).  The Time case outlines the  traits essential for a bona fide strategic planning process, including connection to long-term corporate mission, assessment of threats and opportunities, and ongoing monitoring of progress against plan—all points Sun-tzu covers in the Goldenberg “translation.”

"...  Extras include appendices (including a great one on preventing catastrophic failure)  and a bibliography on strategic planning.   Directors serious about their oversight of corporate strategy will not want to face the future without this inspired guide.  For more information, contact Sun-tzu@goldenberg.org.

Business Economics January 2003

The Art of War 3: The Canons of Commerce

By Sun-Tzu Wu and David I. Goldenberg. 2002. Bloomington, IN: 1stBooks Library. Pp. 119. $10.50 paperback.

"The genesis of this little book is the writings of Chinese General Sun-Tzu in 514 B.C. on the subject of strategic management as applied to war. David Goldenberg wrote the book in response to a challenge of Mr. Takashi Aizawa, president of the American subsidiary of Asahi Kasei Corporation of Japan, to reinterpret and update Sun-Tzu's classic from a modern commercial perspective. ... The book presents what ... Sun-Tzu most likely would have written today to guide modern business leaders if he both updated and generalized to all of commerce his seminal systematic treatment of strategic military issues from a cost/benefit perspective.

"This book is relatively brief: seventy-five pages of tersely written text plus thirty-six pages of appendices. Goldenberg points out that Sun-Tzu stressed the importance of some unusual key steps but did not explain how to accomplish them. He therefore added appendices that apply the principles in the book to a critical analysis of three current topics: creating shareholder value, investing in real assets, and basic steps to make firms invulnerable.

"The book is not an easy or quick read. It was altered to conform to a commercial metaphor instead of a military one. But almost every sentence either presents a new idea or briefly explains one, so that the short chapters must be read slowly and carefully. The author points out that commerce is the ultimate life-or-death issue for every country. War's drama and urgency may attract greater public attention, but business matters far more to the well-being of a country and its people.

...

"This book, if read carefully, can be a gold mine of ideas and suggestions ... It takes constant reminding that the book was written more than 2,500 years ago and is not a recent textbook in corporate management."

On Amazon [all 5 star]

Dr. Goldenberg's Cannons of Commerce, September 18, 2002

"Business like war requires strategy, intelligence, etc., as exemplified brilliantly by David Goldenberg in The Art of War 3: The Cannons of Commerce. ... Besides its timeliness, this well-written book offers great depth and experience-based knowledge. Different people will find a specific chapter(s) particularly appealing as their circumstances change. Dr. Goldenberg has provided a concise background about Sun-tzu. ... a pioneering interpretation of one of the rare books to have survived over 2,500 years. It is one of the leading books on strategic thinking and is widely embraced book by leaders and others. The author has brought to public attention many simple but usually missed vital points such as "consumers dominate the world of commerce. Those ignorant of this harsh fact mistakenly rely on a series of fallacies." Anyone who has called the customer service for help of major organization would appreciate the quote above. The author clarifies other crucial nuances, such as "invention is not innovation. Innovation commercializes a discovery or invention." The book brings well thought out and insightful attention to bear on many important topics; among them are leadership, weaknesses and strengths, and contingencies. Decision-makers at all levels of business and government would benefit greatly by reading this book carefully, rereading it regularly and seeing that their subordinates do so as well."

Martial laws for business, September 1, 2002

"For two and a half millennia, business and military leaders alike have relied on the timeless wisdom of "The Art of War," by Sun-tzu, a Chinese military strategist. 

"What would Sun-tzu advise corporate directors and executives if he were alive today? While Dr. Goldenberg is not the first to ask this question, he may be the first to answer it usefully  His modern-day "translation" of Sun-tzu's sage advice brings to life timeless wisdom for an everchanging world.

"Art 3 offers sound guidance on strategy, citing important legal precedent: Paramount Communications v. Time Inc. (1989)--a case outlining the traits essential for "bona fide" strategic planning, including connection to long-term mission, assessment of threats and opportunities, and ongoing monitoring of progress against plan.

"But topics covered here don't all hover at the 30,000+ strategy realm. Some zoom down to earth--to shed light on operational topics such as resource allocation and markets. Innovation and competitive intelligence also receive insightful attention. Extras include appendices, including a superb one on avoiding catastrophic failure

"Corporate directors serious about their oversight duties, as well as executives desiring to steer clear of trouble, will not want to face the future without this inspired guide."

Domination is the goal in war. However, consumers dominate the world of commerce. Those ignorant of this harsh fact mistakenly rely on a series of fallacies.

• They incorrectly see profits as the ultimate goal of business.
• They incorrectly assume that at least some part of any and every market is profitable.
• They incorrectly assume that high market share or "monopoly" is the primary, if not only, key to profits.
• They incorrectly assume that profits rise proportionately with market share, which rarely happens.
• They erroneously regard markets as real estate ... that is, property to be acquired or sold ... rather than as terrain or theaters of operation.

They concentrate on the market(s) served as a seller at the expense of those from which they buy.

They fail to consider market disruption strategies as well as nonmarket situations.

Falling for any of these well-known fallacies always costs dearly and invariably generates embarrassing publicity. Yet the simplistic appeal of market share continues to lure executives like moths to a candle.

Investment is a leader's greatest challenge. Swapping financial assets is not investment but speculation. Swapping financial assets never creates economic wealth, although it can personally enrich the lucky and daring few who are smart enough to quit while they're ahead. Investment in real assets enlarges productive capacity, creates capacity to make a new product, increases productivity, or preserves the firm. A skilled investor transforms irrevocable commitments to indirect operations into sustained gains after the gestation period of creating, buying, integrating or adapting, installing, and then debugging productive assets. One may manage securities with Nobel laureate Harry M. Markowitz's portfolio theory. But, according to Dr. Markowitz, one cannot successfully manage a portfolio of real assets solely with his technique. (See Appendix 2.) Fortunately, one can make and manage such true investments with other techniques; the simplest appropriate method to that end integrates logical incrementalism with a combination of project-set theory and an extension of Keynes's marginal efficiency of capital schedule, as explained in Appendix 2.

So deter rivals by accepting a lower return, as Lester Thurow of M.I.T. recommends, and lure them to invest foolishly. Westinghouse blundered repeatedly in this fashion. Its misunderstanding of the labor policy of GE’s Lemuel Bouleware led to a major strike. Misjudging the price trend of uranium nearly bankrupted Westinghouse. Recently it misapplied the shareholder-value doctrine. Thus, you may follow them and yet come out ahead. Only those able to keep short-term net gains in a long-term context really understand strategic management.

Management usually recognizes only four types of real investments, but few know their odds for success or how to improve those odds.