CHAPTER 8

Thinking Strategically

Managing Risk, Establishing Reserves, and Setting Incentives

In AD 228, the military leader Kong Ming and a few of his bodyguards had retreated after defeat in battle to the city of Yangping, China. Fleeing an army of 50,000 soldiers, Ming opened the gates to the city, made all the guards hide, and removed all battle flags from the city walls. He then placidly sat in one of the towers, in unobstructed view of the approaching army, playing a lute. Suspecting a trap, the large army quickly departed. The moral of the story is that a little strategic thinking can deliver big results.1 Like Kong Ming, organizations can benefit tremendously from strategic thinking when it comes to managing risk, establishing reserves, ...

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