Chapter 7: Guile
How to counsel others when the truth is the last thing they want, but the only thing they need.
“I'm not a person who thinks they can have it all, but I certainly feel that with a bit of effort and guile I should be able to have more than my fair share.”
— George Carlin
What will I learn in this chapter?
We’ll prove why guile — often referred to as duplicity — is necessary to achieve superior results. You’ll discover that guile can be a powerful force for good that protects you and your stakeholders whenever hostile forces might threaten your interests. We’ll reveal the benefits guile offers within the competitive landscape and show how some of the world’s most successful leaders have deliberately used it to their advantage.
Here are your key takeaways:
Guile is usually necessary with enemies, but often with partners and allies, as well. To influence allies in a positive direction, you must be allusory, even seductive. With competitors, on the other hand, you must be illusory and baffling, especially about your motives. If they knew what you were planning, they would try to stop you.
Guile is not deception. It’s not about being dishonest or misleading to others, but about protecting the full truth of reality to safeguard your plans.
Most scholarship around guile is focused on whether an actor is working in their own interests or in the interests of others. Working in your own interests tends to be associated with selfishness and even deceit; but working in the interests of others is usually regarded as generosity.
Guile is a fiduciary responsibility. It protects people from truths they can’t handle while keeping them on the straight and narrow path. Protecting another’s interests is a way to defend their future from enemies who might oppose them.
Guile is critical to the simulation of a successful IGC so your Missionary can attract helpful friends while your Mercenary baffles your hostile foes.
You’ll learn how motion pictures like Duplicity and The Equalizer dramatize how Missionaries and Mercenaries balance guile the same way disruptive innovators do, including Apple, Amazon, and NVIDIA.
The moral implications of using guile must include the deliberate choice to serve others while serving yourself. Guile is essential to building strong relationships, as it reveals how to counsel others when the truth is the last thing they want, but the only thing they need.
Doctrine and Tradecraft
Have you ever been frustrated dressing a child for school in the morning? The fact you’re under a time deadline to get them aboard their school bus before you leave for work just adds to the stress. Debating wardrobe choices with a kindergartner isn’t on your to-do list for the day. So, rather than ask what color socks your child wants to wear, you present a restricted set of options: “Do you want blue or black socks today, sweetheart?”
“Blue, please!”
You might be tempted to defer to your child’s opinion in choosing today’s outfit — after all, helping kids develop autonomy and independence is supposed to be a good thing. But you’ll struggle to achieve an outcome you both benefit from if you ask outright what they want.
Human will is a powerful force, but the paralysis of choice is worse for the inexperienced.
Parents know that love is often defined by making choices on behalf of a child who would struggle making choices on their own. Lingering too long over a choice might lead them to fail at selecting from the next range of options in their day. If you’re still arguing over which color socks to wear as the school bus passes your house, you’ll be even later arriving at work since you now have to drop your child off at kindergarten yourself.
If you’ve never dressed a child for school, you likely can still relate in other areas of your life. Remember the last time a teammate at work struggled to make decisions ahead of a deadline. How did their delay impact your plans? Could you have done anything differently to accelerate their choice-making process and not miss your window of opportunity?
This is what guile looks like when working with colleagues or partners. Openness is always preferred. But when the journey ahead is fraught with difficulty, it’s sometimes necessary to reveal your plans more selectively. Being too transparent might paralyze stakeholders with anxiety over circumstances beyond their control. This gradual revelation of plans is particularly tough when changes to a comfortable status quo are needed. As our close friend, Pastor Jeff Meyer, once put it, “People don’t like change when it’s their own idea. What will they think when it’s yours?”
Revealing the full truth to stakeholders before they are ready can terrify them. It’s often more compassionate — and more professional — to protect people from the elements of the truth they can’t handle.
Our goal is never to lead people astray, but to ensure we can stay on a path to success in spite of ourselves. Sometimes, reality might be too terrible to confront in its entirety and the truth needs to be revealed more gradually. Our collective ability to absorb ambiguous circumstances or difficult consequences will delay the choice-making process. Often these delays are disastrous if tolerated, so guile must be used to protect our plans.
Safeguards are never achieved by telling lies, but by revealing measures of the truth gradually enough for people to handle.
The Mercenary is able to use guile more effectively than the Missionary can. This is because the Mercenary must routinely conceal their motivations to be successful, particularly from a potentially hostile opponent or obstacle. They must present a more neutral face to those stakeholders who stand to lose if they succeed. This two-facedness can be described with one word: duplicity.
Likewise, an experienced Missionary will also realize they must compassionately use duplicity from time to time. This is especially true when Missionaries are trying to help someone sacrifice attractive options, which are suboptimal in the near term, while pursuing a long-term result.
Wisdom is helping the ones you care for defeat the abstract and difficult truths they’re wrestling with. You do this by breaking apart the complexities to reveal reality in a way they find empowering and actionable. Your duplicity is understandable to them only in hindsight after the potential or hoped-for results you’ve helped them achieve are made real.
Do not play with others’ trust carelessly; if you’re wrong about the path, they might never trust you again.
What about competitors or others who do not trust you or see you as a friend? This is where the Mercenary employs guile as a weapon. While Missionaries use empathy as an allusory instrument for attracting business partners, Mercenaries use guile as an illusory tool to confuse their competitors.
Testing strategy against a competitor is one of the most fundamental skills of Competitive Intelligence (CI). Isolating a competitive response can be done many ways, but we’ve discovered one of the most profound is wargaming.
Also known as a competitive simulation, a wargame exercise can be little more than a couple of hours with a few colleagues imagining what a competitor might do when your plans are revealed. Wargames can also scale up to periodic workshops between a facilitation team, business units, and senior corporate management testing the strategic risk of various responses by friends and foes alike. Not all such stakeholders are necessarily hostile today, but there are a few who might be when your plans get noticed.
Customer segments representing new or existing buyers who might be disenfranchised or repelled by your actions
Business partners who might find your plans puzzling or even threatening to the future of your relationship
Regulatory officials or government entities with authority to stop you from executing your strategy
Media or special interest groups who might reflect poorly on your plans
Unknown or misunderstood forces and actors who might have a response you can’t foresee or imagine
Wargames put strategy to the test the same way any predictive instrument does: by imagining how potentially helpful or hostile stakeholders will respond should you succeed. If you know and understand a stakeholder well enough, the hope is to formulate a way to mitigate or blunt their hostile response. You might even convert them to allies who could assist in your success.
For example, you might have invented an exciting new disruptive technology that could redefine performance for a market adjacent to yours. As a concept, this disruption is largely imaginary and is defined as a Delta, as you learned when we introduced you to the Angles of Attack. But once you make a first sale and have customer feedback to direct the progress of your operational efficiency in Stages 1 and 2 of your new S-curve, you’ve become a Gamma in P2. P2 is the new definition of performance which challenges the relevance of incumbent offers from Alphas and Betas in P1.
Let’s get specific and imagine you’ve developed an electric automobile technology that offers unparalleled performance, reflected in the acceleration power of your engine. Alongside your powerful engine is the fast-recharging infrastructure to defeat the chief obstacle for most buyers: The range of the car is limited compared to a gas-powered vehicle. Prospective buyers are hesitant because the time to recharge can be hours-long, assuming they can locate a charging station at all. But your recharging technology makes the charging stations cheap enough to saturate metropolitan areas and speedy enough to get people back on the road quickly.
There are a few obvious hostiles who will not appreciate your plans.
Car makers who rely on internal combustion for power
Oil companies refining gasoline to fuel the engines of those cars
Auxiliary service providers like mechanics who keep gas-powered cars running
But that’s not all. Think of the communities and families you’ll disrupt where these stakeholders contribute income to the local economy. The lawmakers and congressional representatives of these constituents will be susceptible to political lobbying. They will be motivated to stop you unless you can convince them there’s a “greater good” to be served. In the case of electric cars, that means decarbonization to preserve the environment by reducing the rate of carbon dioxide emissions and its effect on climate change.
Your new innovation will also affect direct competitors with similar technologies attempting to disrupt the same stakeholders. How will you avoid conflict with the other Gammas in your market segment?
The Mercenary response might be to form a cartel that would allow you and your competitors to control the pace of advancement and standardize on technology that preserves capital and creates scale-up opportunities through future mergers and acquisitions. Cooperation between competitors would also prevent wasted effort developing features the market might not appreciate. Cartels are a form of monopoly that create pricing power by transforming competition into cooperation.
Because cartels and monopolies command higher prices from consumers, they are often attacked by regulators. In fact, this is why regulatory agencies were created in the first place. Competition might be great for consumer economies wishing to make innovations affordable for everyone. But competition is bad for business because it limits the profits that can be enjoyed by innovators.
If profits are too great, political forces will eventually intervene with price controls to convince consumers they’re doing something about the cost of living with your innovation. Price controls seldom work to lower costs, however. Squeezing profit margins primarily serves to create artificial scarcity, resulting in black markets. Since desirable innovations eventually become unprofitable to produce, makers stop making them. If you’re able to acquire it at all, it’ll be from a source in the informal economy that flies beneath the government radar.
As you’ve learned in prior chapters, innovations like your electric automobile system change the definition of performance for buyers. Your offer’s principle benefit is avoiding the use of fossil fuels that emit carbon into the atmosphere and warm the climate through the Greenhouse Effect.1,2 While this greater good might be attractive to many buyers, it’d better be a no-brainer for everyone: Such a shift is not only urgent, but inevitable. Considering the wholesale overhaul of nearly every aspect of transportation and energy production infrastructure on an international scale, the cost of converting to your innovation will be nearly incalculable.
Replacing fossil fuels to generate electricity is only one of the problems with electric cars. Conquering the range issue for consumers, quelling the anger of displaced stakeholders from the incumbent system, and dealing with the repercussions of all those myriad changes will take decades.
How can we accelerate the pace of these changes when so many headwinds stand in our way?
Competitive simulations test the responses of your strategy and tactics by assigning the identity and interests of each stakeholder group to a team of subject matter experts (SMEs) who can inhabit that identity longer-term. When you’re sure you’ll be dealing with a stakeholder for a while, you’re better off forming a long-range team to consider their response. These more permanent Shadow Teams are charged with understanding a competitor, customer segment, regulatory body, supplier or channel partner better than they might know themselves. They “shadow” the behavior of the peer to understand their actions and the motivations driving them.
We’ll learn more about wargaming methodology in the chapters to come. But first, we must understand the industrial psychology of the Gamma, who uses guile to hide their motivations long enough to develop the necessary skills to redefine performance for the market.
As you’ve learned in studying the Angles of Attack, Alpha providers control the S-curve in Stage 3. Alphas enjoy a commanding position with the most desirable buyers by integrating the value chain into their business model so that it is operationally difficult for competitors to imitate. This is why Beta competitors must specialize in a narrower, simpler range of the value chain. Betas offer most of the value that a less desirable buyer down-market will be satisfied with, but at a much cheaper asking price, which forces Alphas to correct down into Stage 4.
Remember Figure 9 from Chapter 4: Disruption?
Betas take the market share an Alpha willingly surrenders because they’re focused on less profitable segments than those controlled by the Alpha up-market. This scarcer profit potential inevitably leads Betas to concentrate on efficiency in their cost structure to remain profitable. As their offer improves and Betas take more desirable buyers away from the Alpha, the Alpha notices too late to stop the erosion of share down-market. They struggle to simplify their offers to stem the tide — while maintaining profitability — of down-market buyers fleeing to the much cheaper but “good enough” offer of the Betas.
The use of guile does not usually occur to Alphas and Betas because the evolution of their S-curve is seldom planned out in advance. Incumbents in P1 aren’t concerned with confusing competitors. They’re focused on growth and profit maximization. While we’ve taught you that S-curve evolution is largely predictable, most innovators and incumbents alike notice disruption’s observable dimensions on their industry only after it’s too late for them to act. It’s unthinkable to sacrifice short-term results for shareholders in pursuit of long-term sustainability for stakeholders. The corporate “immune system” present in P1 is a largely Missionary mindset doing its best to empathize with partners instead of beguiling potential rivals.
Gammas, on the other hand, must employ guile judiciously in P2. To shift the definition of performance down the Z-axis for buyers, Gammas must perform a job-for-hire buyers didn’t know they needed until they could directly experience it. As soon as Alphas and Betas notice a Gamma taking share from them, they should be able to hear the clock ticking. Most underestimate the potential impact a Gamma will have on their business because they don’t expect to see the innovation any more than buyers do.
But a new Gamma will have a hard time going head-to-head with a rich, savvy Alpha or a lean, mean Beta. Guile is their only hope. Gammas appeal to a new definition of performance in P2 that will be confusing to incumbent competitors in P1. Gammas hope incumbents will remain confused about their intentions — and its risk to their business — long enough that the Gamma can reach Stage 3 of their new S-curve. If the Gamma’s path becomes clear to Alphas and Betas too early, they’re vulnerable to attack by higher-performing offers sustained by shares of the market which will be difficult to overpower.
How does all this strategic innovation theory show up in some of the oldest stories in human history?
In the Biblical account of David and Goliath found in 1 Samuel 17:32-51, David initially tries to suit up for a melee battle against a gigantic Philistine opponent. He puts on a coat of mail and a bronze helmet and girds himself with a sword. But he soon abandons the new gear, saying, “I cannot walk in these, for I am unused to it.” That’s when David bends down to pick up the five smooth stones he will later use to strike the giant with his humble sling.
Employing a ranged weapon against a melee opponent enabled David to strike a lethal blow from a safe distance. Proficient as David was protecting his flocks from predators with his sling, he knew Goliath — the Alpha — would find his weapon laughable. David relied on his expertise and a surprising approach to single combat to beguile the opposing Alpha. As a Gamma, David changed the definition of performance from full-contact, close-quarters strength and endurance into felling his opponent from a distance without laying a hand on him.
When developing a new product, revealing your plans to those who might profit from your failure — or even steal your idea — would be foolish. Competent rivals might have time to stop you if they recognize your new Gamma improving into Stage 2. If you can protect your innovation until it’s too late for them to stop you, you’ll produce the results that benefit those who have entrusted you with their success. If you can’t, you’ll deny the new market from being created in P2.
If you’re like us, your ethics dictate you must not lie to others about your plans, but you also have a moral obligation to avoid deception. Instead, you must reveal a version of yourself that will encourage competitors to ask all the wrong questions. The questions they do ask will draw inferior conclusions about your plans until you’ve had time to improve your offer into Stage 2 of your new slope of performance (P2). Guile is the key to bringing innovative, new solutions to market to challenge the relevance of incumbents, but not until its too late for them to stop you.
Going head-to-head with two or more incumbent Alphas makes guile an even more essential strategy. For example, inciting a price war between evenly-matched incumbent competitors will cause them to fight each other to protect their existing market share from erosion. As the Gamma, it doesn’t matter much to you who wins — the point is to take on a weakened victor. Taking share is significantly easier when pricing power of incumbents has been diminished, operating margins hurt, and a Stage 4 decline of P1’s best customers has been initiated. Forcing down the slope of incumbent competitors’ Angle of Attack will recalibrate expectations for all customer segments, enabling the innovator to more easily capture share.
How Alphas price their products and services is obviously a Dominion Control Factor which you, as the Gamma, have little influence over. However, in the duopoly example we’ve just described, each competing Alpha has much greater influence over the other’s pricing policy than you do. Gammas must remember the familiar saying that “the enemy of my enemy is my friend.” And especially when your power is lacking, you must use guile to your advantage.
Ain’t She Tweet is a 1952 Looney Toons cartoon which tells the story of Granny and her bird, Tweety. Sylvester the cat can’t resist the delectable Tweety and follows them all the way home from the pet store to Granny’s house. Tweety’s new home is guarded by a pack of dogs. Sylvester tries everything to get past the dogs, even walking through the pack on stilts. Tweety notices the threat and equips the dogs with the tools they need to chop the stilts from under Sylvester.
Next, Tweety chops off the tree branch Sylvester’s using to climb through the window, sending Sylvester plummeting down into the yard with all the dogs once again. Like David knew Goliath, Tweety knows Sylvester will always win in direct conflict. But the dogs are as interested in Sylvester as he is in Tweety. Beguiling the dogs into attacking Sylvester keeps Tweety safe.3
When a competitive rivalry is already well underway, choosing the time and place of your entry into the battle is a scenario you must simulate. How might the Alpha incumbents respond to a Gamma new entrant redefining performance for customers? How will Alphas repel an attack on their value proposition from a lean, mean Beta who produces most of the performance for a fraction of the price?
As you’ve learned, in Beta, that redefinition is through the simplicity of an offer that is radically less expensive than the Alpha, making price the principle driver. Beta delivers most of the expected performance at a fraction of the cost due to its specialization around a subsystem in the value chain itself. Walmart did this by placing its retail stores on cheap real estate Sears would never have considered. Sears might have found this puzzling, but certainly no threat to them. However, this strategy defeated the advantage of mall anchor store tenancy with an insurmountable cost structure edge with every square foot of floor space.
In Gamma, performance redefinition comes by demonstrating value buyers didn’t know they needed, such as a widescreen iPod with a desktop Internet browser. This is how Apple first positioned the iPhone against its incumbent smartphone rivals, such as BlackBerry. The incumbents all scoffed at the absence of a keyboard. But Apple knew the screen size advantage would be impossible to overcome once users demanded it. Losing the physical keys was the only way to achieve that edge.
Both strategies — Walmart’s Beta and Apple’s Gamma — changed how buyers expected to benefit from their offers. Although the offers at first were beguiling to competitors, eventually incumbents suffered if they couldn’t adapt to these new expectations. BlackBerry is no longer in the smartphone business and Sears is a ghost of its former self.
We don’t know whether Walmart or Apple used a technique like wargaming to explore the potential responses of incumbent competitors to their action plans. But we’re sure leaders from both companies thought deeply about how to serve customer segments in innovative new ways rivals would struggle to understand. In Chapter 8: Empathy, we’ll show you how to structure a wargame exercise that equips your teammates to understand friends and foes alike. We’ll also reveal how to influence their control factors to your advantage.
Applied Case Examples
Discerning friend from foe can be deceptively difficult. Even lovers can find themselves on opposing sides.
In the 2009 movie Duplicity, former CIA officer Claire Stenwick (Julia Roberts) and ex-MI6 agent Ray Koval (Clive Owen) conspire together to use the skills they acquired in international espionage for personal gain. The agents find work at rival healthcare companies and seek to gain an advantage for their respective clients. But they remain suspicious of one another despite their romantic involvement and collaboration on their elaborate con.
The CEO of Claire’s company, Howard Tully (Tom Wilkinson), uses her to trick his rival CEO, Dick Garsick (Paul Giamatti), into announcing that Garsick’s company is nearly finished testing a breakthrough baldness product. This is false. The formula for the product, which Claire stole for Garsick, is nothing but an inert formula for skin lotion.4
Obviously in the real world, stealing trade secrets is illegal, and lying and deception are unethical at best. But beguiling an amoral competitor into believing they have an advantage, only to let it embarrass them later — and watching their dirty tricks backfire on them — can be just and honorable. Tully acted the only way he really could in protecting his company, its stakeholders, and their interests by letting his thieving competitor fail.
As Oscar Wilde said, “Life imitates art far more than art imitates life.” How have you seen the plot of a movie, book, play or other performance unfold in real life?
Always the consummate performer, as exemplified by his “One More Thing” presentations, Apple co-founder Steve Jobs frequently used guile. But in January 2007, Jobs used guile to buy time to develop a breakthrough new business. During an interview at the All Things Digital Conference, Walt Mossberg asked Jobs about potential plans to build an applications store now that iOS had been introduced with the iPhone. This would enable porting applications from other independent software vendors (ISVs) to run as native apps on the new mobile operating system.
Jobs quipped that developers could simply build web applications because the iPhone featured a desktop-quality web browser in mobile Safari.
On a technical level, what Jobs said was true. But he always had a third-party app store on the iOS roadmap. In 2003, years before the iPhone or App Store went live, he advised Salesforce CEO Marc Benioff how to build a cloud software ecosystem of ISVs. This would extend CRM’s enterprise value for Salesforce customers into complementary business applications. By redirecting stakeholder focus on the capabilities of mobile Safari, Jobs was able to buy time to complete his work, which launched 18 months later on July 8, 2008.5,6,7,8,9
Guile is also a part of the Amazon.com story. Founded in 1994 and officially opened for business on July 16, 1995, Amazon’s original tagline was “Earth’s biggest bookstore,” which implied that Amazon had no intention of doing anything other than selling books.
But co-founder Jeff Bezos’ motto was “get big fast.” When the original name of the company, Cadabra, was misheard as “cadaver,” Bezos took advantage of the opportunity to rename the company after the Amazon River. This branding move helped to ensure that he wasn’t boxed into selling a single product category.
By 1999, Amazon was venturing into home-improvement products, software, video games, and gift items. A year later, it opened its marketplace to enable third-party orders. More recently, Amazon commercialized its spare infrastructure as Amazon Web Services (AWS) and is now one of the largest enterprise technology companies in the world. They even bought MGM, the movie studio, and Whole Foods, the upscale grocery chain.
Today, many people have realized that the arrow in the Amazon logo declares that the company intentionally sells everything “from A to Z.” If Bezos had been upfront about his A-to-Z ambitions for the business, he would have been attacked by anyone who would have been hurt by the success of his e-commerce innovations.10,11 Way back when Amazon was challenging a modest Alpha incumbent like Barnes & Noble, Bezos knew it would require guile if it stood any chance at all of taking on Walmart, Hollywood, or Microsoft head-to-head.
As far back as 1999, NVIDIA was making the Gamma argument for the superiority of GPUs over CPUs from Alpha competitors like Intel and AMD. A CPU (Central Processing Unit) is architected for serial instruction processing (one calculation at a time), such as a desktop PC calling up data into memory from a hard disk drive.
A GPU (Graphics Processing Unit) overwhelms the Alpha measure of performance P1. P1 has historically been known as “clock speed,” which describes the number of calculations per second — or hertz (Hz) — of a CPU. One megahertz (1 MHz) represents one million calculations per second.
NVIDIA, however, noticed an opening for a Z-axis shift to redefine performance in P2. By shifting the measure of performance in P2 from MHz to CUDA cores (Compute Unified Device Architecture), NVIDIA described parallel processing capability in comparison with serial processing. Doing so challenged Moore’s Law itself.
Named after Gordon Moore, co-founder of Intel Corporation, Moore’s Law had governed assumptions about computing architecture for half a century since his original paper theorized about this esoteric economic principle in 1965. Intel would later become famous as one of Clayton Christensen’s examples of an incumbent successfully navigating the waves of disruptive innovation. Another Intel CEO, Andy Grove, launched its own Beta — the Celeron business — in Israel, lest the mothership in Silicon Valley kill it off, to drive innovation against Intel’s incumbent Alpha (Pentium).
Everyone in the integrated circuits (IC) industry had come to assume Moore’s Law would continue to govern assumptions about computing architecture. Originally, Moore predicted that the number of transistors would double every year for the next decade. In 1975, he revised the prediction to every two years. His forecast has proved true, although some would argue it’s been a self-fulfilling prophecy. In 2015, the semiconductor industry celebrated 50 years of Moore’s Law, with microchips of the day containing tens of billions of transistors.
After co-founding NVIDIA with two partners in 1993 at the age of 30, President and CEO Jensen Huang embraced the humility of their situation in 1997 when Sega tossed them a lifeline. They’d originally focused on rendering quadrilateral primitives as opposed to the triangular primitives preferred by graphics competitors. But they were finally able to pivot to triangles thanks to Sega’s $5 million cash infusion.
Ever since, their unofficial motto has been “our company is thirty days from going out of business.” Due to the success of their Gamma — especially powering generative AI applications, such as OpenAI’s ChatGPT — NVDA was valued at a market cap of US$3 trillion by June 2024. Huang’s 3.6% stake values his net worth at a cool US$100 billion.
Originally designed to break graphics processing tasks down into parallel instructions, NVIDIA invented the GPU along with the next era of integrated circuits. Here’s a bit of backstory on how GPUs seemingly came out of nowhere:
That application — computer graphics — was just the first of several killer apps. And it’s driven the huge R&D engine behind GPUs forward. All this enables GPUs to race ahead of more specialized, fixed-function chips serving niche markets.
Another factor making all that power accessible: CUDA. First released in 2007, the parallel computing platform lets coders take advantage of the computing power of GPUs for general purpose processing by inserting a few simple commands into their code.
That’s let GPUs proliferate in surprising new fields. And with support for a fast-growing number of standards — such as Kubernetes and Dockers — applications can be tested on a low-cost desktop GPU and scaled out to faster, more sophisticated server GPUs as well as every major cloud service provider.
With Moore’s law winding down, GPUs, invented by NVIDIA in 1999, came just in time.
Moore’s law posits that the number of transistors that can be crammed into an integrated circuit will double about every two years. For decades, that’s driven a rapid increase of computing power. That law, however, has run up against hard physical limits.
GPUs offer a way to continue accelerating applications — such as graphics, supercomputing and AI — by dividing tasks among many processors.12
CPU makers were struggling with the sheer physical limits, such as the size of electrons in their transistor circuitry, which defined the practical end of Moore’s Law. In 2022, IBM Research finally reached 2-nanometers (nm), which puts 50 billion transistors, each the size of about five atoms, into a space the size of a fingernail. Obviously, a Z-axis shift would be necessary to demonstrate how application acceleration could continue to grow at a rate approaching Moore’s two-year doubling into the future.
How does the Z-axis shift from serial instruction processing on CPUs to parallel instruction processing on GPUs remind you of other Gammas you’ve heard stories about? NVIDIA created $3T of market value based on beguiling incumbents by weaponizing this insight!
Huang and his partners’ Missionary zeal to start a renaissance around computing performance with their innovation was complemented by a Mercenary mindset to disrupt proud and complacent incumbents.
Now that you’ve had some factual examples, let’s end our applied cases with a fictional one, the same way we started.
The 2014 film The Equalizer, starring Denzel Washington as the eponymous protagonist, is equal parts Missionary champion and Mercenary anti-hero. Denzel plays former special operations commando Robert McCall, who faked his death in the hope of leaving his past behind him. He keeps most of his abilities and identity a secret, knowing that the majority of the civilian world he’s trying to hide within wouldn’t be able to handle the reality of who he is.
But when a Russian gang threatens the life of a desperate young woman he’s befriended, McCall swings into action as her “avenging angel, ready to take down anyone who brutalizes the helpless.”13 McCall begins his defense by offering to simply buy the girl’s freedom, but he gradually reveals more of what he’s capable of. After successfully taking the gang out, McCall commits to helping others who might need the kind of help he can offer.14
One key criterion, however, is McCall’s ability to fly beneath the radar and keep his dark gifts secret. Only when confronting the malevolent bad guys do we see both sides of Denzel’s beguiling duplicity.
Stories like these, factual as well as fictional, demonstrate the importance of surrounding yourself with trusted collaborators able to use guile when you cannot. These people are put in your path to help you discern your best options, no matter what situations you find yourself in. They might be far more practiced at baffling rivals while seducing partners than you will ever be.
Collaborators like these also create the diverse perspectives you’ll require to close your stochasm. Everything you didn’t realize was unknown to you is more clearly visible through beguiling eyes. This is especially true for leaders lacking lessons learned at the Jobs & Bezos School of Hard Knocks.
Which mindset is strongest in you?
The supreme art of war is to subdue the enemy without fighting. If you know the enemy and know yourself, you need not fear the result of a hundred battles. — Sun Tzu15
Here’s a scenario that might sound familiar: A couple is debating what to have for supper that evening, so they decide to ask the kids.
One of the spouses has already planted the seed of an idea with a couple of the kids: “We should have tacos tonight. It’s delicious, everybody loves it, it’s more nutritious than some other choices, and best of all, it’s cheap and easy to make. If we don’t finish eating it all in one sitting, we can make spaghetti sauce or chili from the left over taco meat later in the week.”
By the time the other spouse surveys the kids about what the family should have for dinner, the kids are all defaulting to “Let’s have TACOS!” Even though the unanimous response might draw suspicion, the taco-loving spouse has prevailed with guile.
In our intelligence work, one of our favorite HUMINT (human intelligence) techniques is to try a similar tactic at industry conferences. We call these events a target-rich environment because they’re packed with primary sources. We’ll describe growing up in such a place in the next section with memoirs about our mom’s beauty salon.
It can be hard to get people to open up to someone from a company like ours. Ethically, we can’t misrepresent ourselves as anyone other than who we really are when we’re out in public. But with a little Googling, you’ll grow suspicious about any questions we might want to know the answers to.
Instead, we attend sessions by people likely to have the answers we’re looking for. And rather than asking questions directly, we’ll make friends with a less threatening actor — choosing to sit next to a student or journalist, for example. It’s much easier to get an answer when we plant the seed of a question and let a more innocent observer be the provocateur.
It works just like tacos for supper!
As Sun Tzu reminds us about matters of warfare, inducing a surrender in an enemy will involve understanding the motives, logic, ego, and control factors confronting your rival. Only when you know your enemy better than they know themselves are you equipped to make peace and convert them to an ally.
How do you use guile — at home with your family or in your career relationships — to produce beneficial outcomes with other stakeholders or teammates who might resist your idea?
Mercenaries make peace differently than Missionaries do. Mercenaries end the fight by any means necessary. Missionaries, on the other hand, extend the olive branch, like Denzel’s Equalizer attempted to do at first, usually sacrificing something to negotiate an end to hostilities.
This is why practicing humility — the ability to put others’ interests ahead of your own — is such an advantage. Making surrender an enemy’s best option often means subduing your own short-term interests first. If you completely reveal the extent of your guile and longer-range goals, their suspicion will foil your plans to make them an ally. Using humility to practice guile is almost impossible for proud Alphas to do. But it comes naturally to Betas, Gammas, and Deltas.
The purpose of Simulation is to understand how to influence other stakeholders who might help or hinder your plans. You do this by first identifying their dominion and contingency factors. Next, you figure out the degree to which you can reprogram those controls to align with your own. Finally, you decide whether you can induce a surrender that the competitor will prefer over continued rivalry.
Sound strategy handles friends and foes at the same time through this process. Being attractive to those who will help you and, simultaneously, puzzling to those who will hinder you, makes guile critical as you test your strategy in Simulation. You must imagine which stakeholders will help you succeed with your investment grade conjecture and understand how to seduce them. While you convince allies to fall in love with your plans, you are simultaneously confusing potential foes. If you fail to beguile your rivals, they’ll try to stop you before your plans can succeed.
Economics is based on information asymmetry: “I know something you don’t know!” Strategy, however, is based on analytical asymmetry: seeing the same reality and making sense of its meaning to plans only you and your allies will be able to exploit. Simulation puts your strategy to the test, revealing how your partners and others who might join you will succeed, usually at the expense of the rivals who will fight you. An untested strategy will tend to misjudge the potential actions of other helpful and hostile stakeholders.
As you make guile your competitive advantage, understand that people will view its use in different, contrasting ways. If you serve only your own interests, most people will see your actions as deceitful and narcissistic and never trust you again. If you use guile in service to others, however, your actions will, more likely, be associated with simple opportunism or even generosity. As long as you include partners and allies in the benefits you’ve created, people will be more forgiving. Helping someone else creates a halo effect around your actions and prevents damage to your reputation and bottom line. Just as you beguile your family at suppertime only if you’re sure your partner loves tacos as much as you do, you beguile business partners and allies only if you’re sure they want the outcome you’re after.
Does the following description of how Mercenaries beguile differently than Missionaries describe your attitude about guile?
The Missionary must only beguile to discipline someone into staying on the straight and narrow path. By contrast, the Mercenary expects a return on the guile they’ve invested in. They feel free to mislead hostiles if it produces a better outcome. Guile is permissible to Mercenaries whether or not it helps to restore justice or fairness, as long as they personally gain. Like the Missionary, the Mercenary seeks to know friends and foes better than they know themselves. In the process, the Mercenary equips their client to optimize choices they might not even know exist with tools and techniques to become unstoppable.
You must balance your Missionary and Mercenary mindsets to seduce or baffle those you seek to serve and at whose expense that service is rendered. Although your Missionary will be content to surrender results to the will of their higher power, your impatient Mercenary will demand a strategy tested to reveal its frailties or risk it leading to failure.
Memoirs
Our folks weren’t afraid to use guile to teach us a lesson when they thought we needed one. One of the best examples is Mom advertising Derek’s yard work to ladies in the beauty salon who might not have a husband around anymore to do it for them. It didn’t matter whether the task at hand was plowing snow, mowing a lawn, or other odd jobs. She’d ask every person who crossed her styling station if they needed a helping hand.
In fact, our mom was a master networker, honing her elicitation skills decade after decade. We learned the value of HUMINT from how she knew about almost everything happening in our small town. After all, she had most of the town’s best primary sources of scuttlebutt passing through her target-rich environment every day.
Mom’s penchant for salesmanship was founded completely in love. Yet, there was a fair share of Mercenary to it. When Derek was out making a few bucks helping one of her hairstyling clients deal with a laborious manual task, she didn’t have to worry about him getting into trouble. She knew the jobs would teach him valuable life lessons about the benefits of hard work and serving others.
But to her clients, the offer of her son’s hard work was evidence that our mother cared for them on a deeper level in the most Missionary way. She was mindful that her teenage boy needed to develop a strong work ethic. Beguiling Derek into an episodic job where he set his own schedule, she taught him the power of working on his own terms rather than reporting to a boss. This allowed Derek the flexibility to play golf and basketball all summer — at least until two-a-days started in football — while not feeling so overwhelmed that he’d want to quit. This planted an early seed of entrepreneurship in him.
Derek learned to work hard at an early age, but during high school, he learned to play hard, too. His senior year, when he came home after drinking one-too-many beers celebrating his last football game with his buddies, Mom found him passed out on the living room floor. Finding her baby in that condition is something she took to her grave — our dad never found out about it.
Arik was no angel either. A few years before, he fooled the bartender at the VFW into selling him beer one night, even though he wouldn’t be old enough to carry-out until he turned 21. The next day, the bartender ended up in our mom’s styling chair. She saw Arik’s senior picture tucked into a corner of Mom’s mirror and asked who the young man in the picture was. Mom raved about how Arik was in the National Honor Society and would start earning his degree from the University of Wisconsin-Madison the next year.
“I sold that young man beer last night.”
Mom protested. “That’s not possible. Arik’s only 18.”
But the bartender was certain. “I never forget a face. That was him alright.”
Mom didn’t tell Dad about Arik’s little escapade, either.
As a high school student herself, Mom was a bit of a rebel and could drink beer with the best of them. She knew from first-hand experience that too much of a good time would get you into trouble in the long run. Protecting her boys and her husband, while conveying this lesson, was more important than being completely transparent and pretending her sons were flawless. But rest assured, Mom let us know we’d done wrong.
At the time, we were all trying to be mindful of Dad’s heart condition. Mom knew these youthful acts of defiance would only cause him more stress. She was surely thinking that she didn’t need to bother Dad with our indiscretions — it would be counterproductive to get him so upset about something she could handle herself.
Each time Mom chose discretion over escalation, it was to take care of the people around her. She could see the bigger picture of where we were headed, rather than getting distracted by where we went astray. She focused on helping us get back on track and moving forward. Mom didn’t make mountains out of molehills just to teach us a lesson.
When did you have a guardian who protected you from the full consequences of your actions, especially when those consequences affected other stakeholders?
In October 2019, alongside our Chief Analytics and Learning Officer, Dr. Craig S. Fleisher, Arik led a pro bono superiority analysis workshop for a not-for-profit membership association. Based on the analysis, they delivered a new level of understanding about where the association needed to invest, as well as insights about where to slash expenses to preserve their future viability.
Ninety days later, Arik and others from the Aurora team reconverged with that client to follow up on the actions that were taken by the client’s stakeholders. Their follow-up visit happened during a regular quarterly board meeting, which was open to members, and accusations started flying.
Change doesn’t always sit well with people. The changes being made — including abolition of the 100-year-old division, caucus, and chapter system — caused a massive controversy with members accustomed to enjoying the money-losing services of their association. We call this an “immune system response” when stakeholders, such as these members, resist accepting what needs to be done to ensure survival.
As Arik and Craig ran through updates to the list of vulnerabilities and actions to address them in the organization’s business model, the Board Treasurer — who had not been present for the first part of the work — grew more and more agitated. He finally lost his cool.
“Who the hell do you think you are?”
He accused us of creating conflict between the membership, board, and the staff, and he insisted that they were doing just fine with the less-radical changes they’d been making.
Arik suggested a five-minute break.
The Treasurer, of course, was livid that Arik had deescalated the meeting in the middle of his tantrum. But Arik went out of the room with the Board President, the CEO of the staff, and a few others. Arik wasn’t afraid to tell them that there was clearly a conversation that needed to happen which hadn’t. He invited them to fire the Aurora team right then and there. He further suggested they might return to the boardroom with the news the Treasurer’s concerns had been heard and would be acted upon, assuming that’s what management believed was necessary.
But the Board President assured Arik they’d never seen the Treasurer behave that way and insisted they continue. Confronting the profound and demoralizing array of everything going wrong with the organization’s operations had brought the Treasurer to the brink. The President knew that now might be the only time the board and staff would see everything that had gone unaddressed for so long. Especially troubling to the Treasurer, this included not acting with a sense of urgency on their financial situation. We had touched a nerve by finding a way to confront it all at last.
Looking back, it’s obvious what was happening with the dynamics in the room. For years, the client’s team had been all Missionary and no Mercenary. Nobody dared confront the necessary and overdue changes that might risk their relationships with each other to defeat the problems they faced. When our team walked in, though, we delivered the proper dose of Mercenary we knew they needed. However, it was so countercultural that something finally broke.
Arik had no risk of losing established relationships, which meant he had no reservations about being direct. He was unafraid to warn them about what could happen if they remained too timid to act boldly. He was willing to sacrifice the client’s relationship with Aurora in exchange for the client’s future. You might say Arik knew he didn’t have much to lose since the work was pro bono in the first place, but that was irrelevant to producing the best outcome. This turned out to be painful for some of the client’s stakeholders.
In hindsight, a little more guile might have made the meeting progress more smoothly. Although some of the people on the client’s team were ready for change and prepared for some confrontation, most were not. If Arik had possessed a better sense of how little truth the Treasurer could handle after missing the first encounter, he might have adjusted for less conflict while still bringing the Mercenary mindset to the table. The experience helped Arik understand just how important it is to find the right balance when beguiling someone over to your side or letting someone bring you over to theirs.
One of the first wargames we were involved in together happened in 2004. We were invited to design and facilitate an exercise during the annual geology summit of one of the world’s largest mining companies. Emotions were running high between very intelligent high achievers.
The number two executive in the room decided to get in the face of his boss, who was leading a competing team. Before sharing some even more colorful language to get into character, he declared, “I’m going to kick your ass!” These two execs, wanting to harness the maximum competitive spirit possible for the exercise, were role-playing the intensity they wanted their teams to embrace that day.
Wargames are all about imagining, in a believable way, what might happen when you start spending capital to deploy your plans in the real world. But in a simulation like this one, those plans can be explored safely before all the risks are understood, let alone mitigated for. These senior geologists were forced to think about all the potential scenarios so they could be certain they weren’t risking real capital while they were still testing a new idea. Our client had a productive, entertaining day — they scouted out the industry they knew so well, but also got to see reality through the eyes of a rival.
The greatest value of Simulation is how it makes competitor teams feel, revealing that the decisions you make are largely emotional.
Decisions are not as rational as you’d like to tell yourself, but are based most of the time on appetites and tolerances, rather than logic. Because of the irrationality of human decision making, there’s a high potential that you could deploy capital foolishly — an unnecessary risk. Or, you might fail to deploy capital against a fleeting opportunity simply because you’ve grown too complacent with your past success.
Guile can help inoculate you to these kinds of knee-jerk, emotional reactions. It’s not unlike exposure therapy in psychology.
Imagine visiting a therapist to get over your fear of snakes. The first step might be to see a cartoon of a snake. Next, you look at a photograph of a real snake. Then, you watch a video about a snake and see it moving. After that, you visit the herpetology exhibit at the local zoo to watch snakes slither behind the glass. Over time, you draw closer to a real snake with no negative reinforcement of your fears. You eventually touch the snake, pick it up, and maybe even let it wrap around your neck.
Your therapist would be accused of misconduct if she wrapped a snake around your neck during your first visit to get over your fear of snakes. But by gradually exposing you to your fear, reality becomes tolerable.
Stress and anxiety are neurochemical responses, and the most powerful neurotransmitter is cortisol, also known as the stress hormone. Much of human life is spent trying to alleviate the effects of cortisol through behaviors such as overeating, abusing mood-altering substances, compulsive shopping or exercising, or pursuing intimate encounters.
All of these toxic behaviors are vain attempts to overwhelm our anxiety with dopamine, serotonin, endorphins, and oxytocin. Happiness, however, is a more complex emotional cocktail than empty pleasure-seeking. As the Stoics of antiquity would say, joy comes from tranquility, and a tranquil mind is a place where emotions are self-controlled. Beguiling friends and foes alike is one of the principal ways you can help them control their own emotions.
Using guile begins with sharing information conservatively because you don’t yet know how to influence a stakeholder. You don’t want to trigger their anxiety and accidentally influence them to behave irrationally. As people get more comfortable with the reality you’re revealing, you can give them more complete information. Although you might conceal much at first from your stakeholders, like Mom did with Dad in our rebellious youth, be watchful for how much more they could be ready to tolerate.
Questions to Activate Guile
In competitive intelligence, we’re always on the lookout for a wolf that lurks to prey upon the weakest members of the herd. A big part of our job is to equip our clients with the questions they need to ask to improve their future.
Where is the wolf lurking in your macro-environment? Are you the weakest member of the herd about to be culled?
Our mission is to ensure those we serve are equipped for the path ahead with all the right questions. To champion their cause also requires us to stop asking meaningless questions that only help us feel better about our circumstances. Finding answers to the questions that matter empowers us to work together to produce a better future.
Which questions are your stakeholders demanding answers to today that are merely palliative, designed to make you more comfortable while you’re dying?
The saying by Peter Drucker that “culture eats strategy for breakfast” means intelligence programs must be designed to support analytical asymmetry that drives action by removing under-certainty. Most questions attempt to create asymmetries of information where we know something others do not. But corporate culture seldom acts on knowledge alone; they are driven to action by emotions — especially greed and fear.
How will your organization take action on the insights you produce if you reveal the reality of your situation too early or with too much resolution? Is there a level of transparency that goes too far and blocks decisive and confident action by stakeholders? How can guile activate your stakeholders’ fight or flight instincts to act with urgency?
To be the champion stakeholders need you to be will require working through humility, guile, and empathy in the proper order. Without humility, it’s impossible to wage war on your weaknesses in ways that allow others to help you. You will struggle to set aside your short-term interests and serve others. Guile ethically conceals the truth wherever high-resolution reality — revealed too soon — paralyzes our ability to act.
Empathy, which we’ll cover next in Chapter 8, involves measuring and interpreting the responses that we’re likely to produce from helpful and hostile stakeholders. Empathy enables us to imagine what life is like in another actor’s situation.
Empathy is also deeply connected to confidence. When we understand how others view their situation, we are empowered to confront the paradoxes that hold us back from acting. This humility-guile-empathy sequence establishes a mindset critical for you to practice the skills necessary for success.
Consensus requires all stakeholders to agree on how to act for their mutual advantage. More often, however, you only need the consent of other stakeholders by overcoming their under-certainties. Empathy allows us to imagine what it’s like to be at a disadvantage. And without empathy, we lose the compassion necessary to avoid guile becoming harmful.
When have you struggled in the past to get consensus to act? How could guile have made your choices more actionable by seeking consent instead of consensus? How can you use empathy to understand what’s holding your friendly stakeholders back from acting? And how will guile stop hostile stakeholders from taking advantage of you?
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