The Pyrrhic Fallacy
The unbearable cost of winning
Excerpted from Transcompetition, by Harvey Robbins & Michael Finley, McGraw-Hill/Business Week Books, 1998
(c) by Harvey Robbins & Michael Finley
The dreary aspect of pure collaboration is that when it occurs, it tends to last along time, like the Dark Ages. The redeeming aspect of its opposite, pure competition, is that it is often over almost as soon as it begins. Supercompetitive people and organizations, those who revel in the brute delight of winning, can count the hours their victories will last.
Pyrrhus, a king of 4th century BC Albania, was widely acknowledged to be a brilliant military strategist, but he was unable to capitalize on his victories, because they always came at too high a cost. His campaigns in Italy and Greece were triumphs in terms of crushing the enemy, but he lost so many men and resources in them that the vanquished enemies simply ignored his demand for terms. He could never maintain what he won. Thus his name comes down to us as the father of the ruinous, or "phyrric," victory.
And so it is with the unthinking competitive drive. Left to itself, it seeks to win at whatever cost. A company like AT&T in the 1960s will knock all other companies aside in its rush to success, until it is brought down to earth, in this case by Judge Harold Greene. IBM in the 1980s, the consummate marketing company of the era, was done in by the little people it thought nothing of -- the chipmakers and operating system companies that supplied parts for its neglected microcomputer lines.
More often than not, brutal victory comes back and bites you, preventing winners from enjoying their winnings. Tyrants do not endure, because there is no collaborative weight counterbalancing their regimes, and because mere "strongmen" are seldom able to ensure peaceful succession.
Bullies in the marketplace tend to cause their enemies to unite and defeat them. This comeuppance, which we call The Brute Cycle, always seems to take supercompeters by surprise. They expect, reasonably enough, that if you beat a challenger, they learn they are your inferior and should not come around except with head bowed. This generally works in the short term, so the order of competition ("I win, you lose and you like it") is logical and acceptable to all.
But in the longer term, and especially in a democratic culture with free flow of information, bully rules don't play well. The social ethic of equal opportunity holds that one can be whatever one sets one's mind to. The business ethic of continuous improvement holds that nothing is better forever -- thus there is no ordained ruling class. If a Brute kicks sand on your face, why, you bulk up, learn tae kwan do, and go alter the hierarchy Chuck Norris-style.
Because of this cycle, traditional winning is often a prelude to losing. Winning in a way that humiliates and angers your competitor almost guarantees that your turn to lose will come next.
The Brute Cycle explains why the bigger and meaner you are, the harder and earlier you fall, why species at the top of the food chain appear most often on the endangered list. Mussolini wound up hanging upside down in a square in Milan. Hotelier Leona Helmsley wound up making beds at a women's penitentiary in upstate New York. In the same way, companies that deliberately throw inside tend to get knocked down when it is their turn at bat.
The compleat Brute organization is a criminal entity, taking every shortcut and walking over everyone, exhibiting zero social conscience and maximum cruelty. The irony is that its very brutish nature, and its confidence of its superiority, is what hastens its demise.
The Brute Cycle is not something that "happens" to bullies. It is what people whom the bully had bullied do back to the bully. It is the only defense people have had against aggression and exploitation. It involves three steps that organizations and individuals have followed unconsciously since the days of Phyrrus:
The 3Es are not a game, and they are seldom pleasant. They are never assured of success. But they are the primary transcompetitive tool for dealing with supercompetitors.
"Chainsaw" Al
The best contemporary example of a supercompetitive manager is "Chainsaw Al" Dunlap, CEO at Scott Paper, and author of an aptly titled book (Mean Business) promoting his own brutal and deliberately shortsighted view of business. Dunlap is a gleeful celebrater of stratospheric CEO salaries and draconian downsizing, and a harsh dismisser of corporate philanthropy and good neighborism. He's been called everything from "Corporate Killer" (Newsweek) to "Rambo in Pinstripes" (New York Times).
When Dunlap moved Scott's corporate campus from Philadelphia to Florida, he was met with severe criticism from the Philadelphia newspapers, which deemed the move self-serving.
Like Mel Masters at Lasermaster, Dunlap is into imagery:
"I like symbolism," he explains, motioning to the paintings of lions in his office. "Predators don't order out for room service. I respect that. I'm a classic Leo: gregarious, outgoing, very self-confident, someone who likes center stage and is probably a little egotistical." There are more lions at his home - and a few sharks in case the theme gets a little too predictable.
The move to Boca Raton cost 11,000 employees their jobs. But Dunlap made no secret that the only constituency he cared about was Scott's shareholders. His pay before the cuts was $618,000; his pay in the year following the cuts rose to $3,575,500.
To his credit, he makes no claim whatsoever to being a patient manager with a Japanese 100-year plan.
Albert J. Dunlap admits there is "some truth" to the charge that he is no long-term manager. "Once a business becomes business-as-usual, it loses its appeal for me."
Dunlap is still out there, doing that voodoo that he does so well. Will the Brute Cycle come round for him?
It doesn't come around for everyone. Bullies are hard to topple, and fighting them is costly. As we type these words, Cambodian leader Pol Pot has been taken prisoner in the umpteenth insurgency since the 1972 United States intervention in that country. Pol Pot, dubbed "the Hannibal Lecter of Asia," was the worst of the lot, having stacked 2 million of his countrymen's skulls during his bloody tenure as head of the Khmer Rouge. Pol Pot survived the Brute Cycle for many years in part because information flowed so poorly in his country. The cycle is no guarantee that injustice will be avenged. It is simply the shape retribution takes when it occurs, as victims and allies exchange information, encircle the malefactor, and exacta settlement.
Chainsaw Al Dunlap may escape it if he keeps moving, and keeps cashing people in for another short-term fling. Like Billy Martin in baseball, there is always a call out for a manager who can rattle the cage of a company that needs change, and whose previous managers were unable to effect it.
Part of Dunlap's charm is that he knows he is so politically incorrect, and that he can hide for a long time behind the kind of short-term results (176% stock price rise in one quarter alone) his slash-and-burn tactics achieve.
Another part is that he is himself contributing, with his penchant for publicity, to the encircling that is already well underway.
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