The 36 stratagems - 30 - Turning the guest into the host

The stratagem I’m going to present to you is from the book The 36 stratagems, a Chinese masterpiece that can be of interest to anyone involved in conflict situations: in business, politics and private life.

Literal translation

Take advantage of the gap to intervene, and find ways to control the enemy’s key points, which must be done gradually.

Interpretation of the stratagem

The stratagem suggests moving from a passive condition, which may consist of a position of disadvantage or simply of waiting, to take the initiative and prevail over the opponent; in essence, gradually transforming inertia into action.

From the perspective of the military culture in ancient China, the invader of enemy territory is the guest while the defender is the host; the mutation of the guest into the host is a metaphor that helps to understand how under disadvantageous conditions it is convenient to accept the position of the guest to gain time, regain strength and, step by step, mutate the situation to face the decisive confrontation at the appropriate time.

The host and the guest may have different strengths; while in many cases the guest is in a disadvantageous position and must wait patiently for the opportunity to take control, in others the guest is invited to come to the rescue of a host in trouble: we will see several examples related to either case.

Whatever the balance of power between host and guest, the stratagem suggests the host take control of the situation through the timely and patient application of the following five points, which can be applied in multiple situations:

1. gaining the position of host, which requires building good relationships, or at least mutual sympathy;
2. taking advantage of the gaps, i.e. the trust gained, to catch the opponent’s weaknesses and thus expand one’s sphere of influence;
3. sticking one’s foot in the gap, that is, taking advantage of the host’s weaknesses and creating the premises for one’s involvement in decisions;
4. gradually extend one’s influence in decision-making, making use of the information that now arrives regularly;
5. transform into the host, that is, take full control of the situation with rapid action.

Type of stratagem according to the original classification

Transforming from guest to host is among the stratagems employed as the conflict takes place between opponents determined to prevail, whose power is comparable or the existing balance of power is not clear.

Historical example of application

Xiang Yu (232-202 B.C.) was the Duke of Lu and leader of the rebellion that led the state of Chu and its allies to overthrow the Qin Dynasty (221-206 B.C.).

Xiang Yu and his lieutenant Liu Bang separately led the attack to the Qin capital, Xianyang, each taking a different route.

The army led by Xiang Yu formed the main force of the alliance, while Liu Bang’s army was significantly smaller; nevertheless, Liu Bang’s army was the first to attack Xianyang and conquer it.

Xiang Yu was furious with Liu Bang, and because he saw his leadership threatened by his courage, he decided to attack him; Liu Bang’s troops numbered one hundred thousand men, while Xiang Yu’s forces were four times that number.

Liu Bang had no hope of prevailing.

Therefore, Liu Bang went to Xiang Yu’s camp to apologize and make a servile act of contrition; choosing a humble and resigned attitude, even if it meant losing the reputation he had won, was a wise move: he had acknowledged that he would not have succeeded in defeating Xiang Yu and that a head-on confrontation would have led to his defeat.

Not long after, Xiang Yu became the leader full-fledged without a fight, taking control of the Qin capital. While the post-war map was being drawn and lands were being divided, the inner circle of the military alliance had decided that the general who attacked Xianyang first would be awarded the Land within the Passes (Shensi).

But the alliance denied Liu Bang this sought-after region, instead of assigning him the remote Han Chung territory; a move he interpreted as an insult.

Infuriated, Liu Bang was determined to go into battle, but his counsellors persuaded him to be patient, as his army was unable to secure a victory; he was persuaded by their arguments, gave up his plan, and reluctantly headed for Han Chung.

Here he patiently waited for the first convenient opportunity and worked hard to reorganize the army; at the first opening, he attacked Xiang Yu, who felt he was safe from any risk, defeated him and claimed the empire for himself, founding the Han Dynasty (206 B.C.-220 A.D.).

After the defeat, Xiang Yu took his own life.

Modern examples of application

The stratagem is complex because concealment, the essential component, frequently hides it; let’s look at some examples.

Organizational context

The story I am going to share with you is an example of the application of the stratagem and the solution you can adopt when you are faced with it.

A company active in the Information Technology market, and going through a difficult period, had decided to seek re-launch by entrusting the business management responsibility to a young but proven manager who knew how to deal with similar situations.

On his first day on the new job, the manager met his new staff: among them, one, who was particularly bright, would probably have reason to aspire to the business manager position.

He now held the position of marketing manager and had taken care from the beginning to show respect and cooperation toward the new boss.

The business manager did not take long to realize that the marketing manager had played an active role in the firing of the former business manager and that his ambitions were to occupy the most important chair in the business management; moreover, the marketing manager soon realized that, for some reason, the ranks of those who would gladly walk the marketing manager to the door were quite large.

Yet the latter was very well prepared, and the business manager was determined to set the conditions for a fruitful collaboration.

In the first six months of working together, the boss saw the marketing manager patiently and resolutely pursue the first three points of the stratagem: context information and unsolicited advice had been compounded by not-quite-transparent behaviour.

When it became clear that the marketing manager would soon break ranks to proceed to step four, the business manager decided to move on; he convened a management meeting whereby he unequivocally defined the roles and delegations of all staff and asked them to agree with or propose changes.

Approval was unanimous: enthusiastic from some, tactical from others.

The marketing manager welcomed the move with a smile but clearly understood the message and returned to the ranks by giving the boss full cooperation while continuing to cultivate his alliances: but he never got to step 4, and the collaboration between the two continued smoothly over the following three years.

About consultants

Still, in the organizational arena, a rather common application of the stratagem takes place when the consultant is the one who turns from a guest into the host.

Whether they are individual professionals or companies that also provide services in outsourcing, they can capitalize mainly on three different levers: relationship building, ownership of specific knowledge, and a key role in the management of company processes.

Three levers that enable them in many cases to have a non-marginal role in the decision-making processes and open up gaps with relative simplicity; even to the point of turning the Client into an ATM point (see cartoon strip).

Negotiation

When there is a commercial negotiation taking place, it is not always clear what balance of power exists between the parties; while it is true that the buyer usually has the perception of greater power since money is seen as the central element of the transaction, it is also true that the buyer of goods or services needs them to run the operation.

This is why it is essential to prepare for the negotiation by collecting information and preparing a set of questions that can help expose the counterparty’s weaknesses, which can be used to put your foot in the door; to this end, it may be helpful to show yourself friendly and cooperative, thus getting your counterparty to lower his guard.

Business management

The stratagem is widely applied in the management of partnerships and alliances and is often the main cause of their failure.

In this case, the parties involved pool complementary intangibles, which enable both partners to rely on assets that developing individually would be extremely costly.

Consider, for example, the case of Company A, which, as a market leader in its own country, takes advantage of Company B’s business network to develop its business presence in a different country.

In such situations, it is rather difficult to determine which of the partners is the guest and which is the host

For, while it is true that Company A is all about being a host in the country where it wants to gain a significant presence, it is also true that Company B is interested in growing its business through the products and/or services that Company A provides.

While it is evident that the success of the partnership depends on how effectively both partners will jointly exploit each other’s strengths, it is unlikely that both will resist the temptation to turn from guest to host; at least one of them will underestimate the contribution of the other partner and engage in a struggle to take the partnership lead.

This behaviour takes an even more pronounced form when it comes to an alliance, in which the partners do not maintain their own legal identity but end up merging into a single body; in this case, the financially stronger partner tends to forget that it does not possess all the levers necessary to govern the business and take control of alliance: ending up thwarting shareholders’ investments.

For a striking example, you can retrace the merger between America Online and Time Warner, which I have analyzed extensively in this book.

The stratagem is also employed by financial players (banks, investment funds, etc) who intend to take control of a company and then possibly resell it; in this case, the rather common scheme is to first take a significant minority stake, assuming the role of the friendly host who comes to rescue the struggling host, and then proceed to a capital increase that the latter cannot support and take control of the company.

Family and love

Rather common in these areas as well that the guest, i.e. usually the economically weaker party can become the host: the housewife who gets to control the family budget, the child who does not study or work and lives behind the parents’ back, all the way to the mother-in-law who ends up with decision-making power in the furniture arrangement.

More generally, in a love relationship, the economically weaker party may be able to break through by capitalizing on the emotional component and taking control of resources.

Key factors in the implementation of the stratagem

To identify them, it is useful to return to the five points I described in the description of the stratagem:

• points 1 to 4 (from gaining the host position to extending decision-making power) require extreme care in building trust and constant concealment of one’s intentions;
• again, points 1 to 4 must be handled with patience and determination, keeping in mind that rushing to get to the role of host (point 5) can undermine the work done up to that moment;
• implementing point 5, speed of execution and determination remain essential, as they must distinguish all phases of an unexpected attack.

In essence, before proceeding with the application of the stratagem, it is essential to assess the forces on the ground and understand whether you are dressing the guest’s clothes or the host’s because, as Du Mu writes in commenting on Master Sun Tzu’s main rules for attack and defence,…

…if I am the host and the enemy is the guest, I will cut off his supplies and keep his way back open. If the host is me and the enemy is the host, I will attack his lord (i.e., his strategic points, e.g., the one whom the enemy must rescue).

The Risks

These are mostly related to poor management of key factors: ineffective concealment may reveal your intentions too early, impatience to get to the result may push you to rush and make decisive mistakes, and lack of rapidity in turning yourself into the host may give the opponent the reaction time needed to organize a defence.

Another important risk factor is the assessment of the situation, especially in terms of resource management before and after the application of the stratagem:

• Am I the host or the guest? Are the positions clear?
• Am I aware of the steps I need to take to implement the stratagem? Am I sufficiently prepared to implement them?
• Once I become the host, will I be able to independently manage the resources available?

The latter is a key point, too often overlooked; let’s look into it.

As I explained in the examples of modern application, in partnership and alliance management, the parties involved pool complementary intangibles, enabling each other to rely on assets that developing individually would be extremely costly or even too expensive; in such cases, the partner’s specific knowledge is a crucial element, and giving it up can be extremely risky.

However, the temptation to become the host, assuming control and underestimating the knowledge contribution that the partner can offer is the main cause of the failure of partnerships and alliances; because we get behind the wheel of a very powerful car in the belief that we are perfectly capable of driving it, just being surprised when we end up off the road.

Possible strategies for coping with the stratagem

After reviewing the above paragraphs, you may get the impression that coping with the stratagem would be extremely difficult if not impossible; indeed, the task is challenging, I admit, but not prohibitive.

Let us look at some aspects to pay attention to avoid falling into the trap.

Liking bias

It is a cognitive error whereby we prefer the relationship, the company, and/or the point of view of a person we like because of physical appearance and/or because of sharing opinions, habits, religion, social class, or political party; in short, we tend to trust people to whom we feel attracted. With such people, we tend to establish, more easily than with others, relationships that make us open up, and confide insecurities that can be instrumentally employed to open up gaps.

This does not mean that we should always distrust the people around us; rather, it means being very careful about the people we ask for help and in what situations: the strength of relationships is measured by time and by the evidence people gave us in the past.

The liking bias is widely used in sales, business management and consulting; through it, “guests ” can enter business processes and influence decisions to their advantage. That is why as a coach I am always very careful to separate the domains of responsibility, making sure that decisions were made independently and responsibly by the client and avoiding conflicts of interest.

The pursuit of power

In managing partnerships and alliances, the urge to take control, taking advantage of the partner’s weaknesses, can be very strong; and dangerous.

One of the partners may be tempted by circumstances to take control of the partnership, forgetting that the other party holds complementary knowledge and would be unlikely to achieve its business goals by giving it up.

How to protect yourself against a partner who becomes aggressive?

When we are hosts and decide to welcome a guest, we will do well to take some preventive measures:

• Analyze the scenario in which the partnership/alliance is going to develop. Does it make sense to develop the partnership? Do we have alternatives to the partnership? What are the potential partners? What do we know about them?
• Analyze the history of the partner you have selected. Do they have experience in managing partnerships? Do we know the names of the managers who will be involved? How did they perform in similar situations?
• Structure the partnership appropriately. What happens if the partner suddenly decides to kick us out? Is our knowledge somehow protected from inappropriate employment? Have we given the partnership an appropriate contractual structure?

In any case, it would be wise to remember that too many people decide to start a partnership by sharing complementary assets, but they forget about it when they cannot resist the temptation to take the power.

Concealment

How to unmask people who pretend friendship and desire to build a good relationship and who conspire behind your back?

A good question, isn’t it? I don’t have an answer, because the situations can be the most diverse; however, I want to share with you a reflection that I think may be useful for you.

Dissimulation skills and patience are rarely present in the same person to an equal degree, because those who feign tend to rush and do their best to turn themselves into the host in the shortest possible time.

Here then, it may prove useful to leverage patience by putting the guest’s good intentions to the test of time.

How?

Making it clear that the 5 points we have analyzed, which can give him the rank of the host, require time and investment that may have no return.

Here are some possible actions you can take:

• ask questions about the positions the guest is gradually taking, forcing him to maintain coherence between what he thinks and the attitude he shows;
• test his loyalty by maintaining some confidentiality about what is happening in your home and about real plans;
• show great cooperative attitude, by confiding irrelevant information and asking questions aimed at catching possible contradictions in the guest;
• identify a set of challenging activities that involve time and commitment;
• define as significant only the medium/long-term goals, to grasp which will require hard work;
• conceal your weaknesses.

A final thought

What I would ask anyone wishing to adopt the stratagem is to answer two simple questions:

• After transforming yourself from a guest into a host, would you be able to manage the profitably of that house?
• Are you prepared to do it?