How did you come up with it? 

I did my Ph.D. in strategy from the University of Maryland, but I was not satisfied with how academia currently approaches the issue, which is to study the individual and micro “pieces of the puzzle” without ever assembling the whole puzzle. So I began reading widely everything I could find about strategy in other areas that are clearly “strategic”, like military, politics, sports, chess etc. and looking for the common core that I could “build the puzzle” around. Doing this revealed that all things “strategic” innately involve where and when one places one’s own resources vis-à-vis rivals doing the same. This placement suggested the four generic resource moves of attack, defend, retreat and avoid. The difficult part facing managers is not the obviously simple categorization of movement, but rather the assessment and decision of which of these four moves to make, at any given time, particularly knowing that your rivals are moving their own resources in an attempt to prevent your success and capture success for themselves. It’s quite challenging, and suddenly not nearly so obvious.

How does this strategy apply for any business—large or small? 

All businesses, regardless of size, move and deploy resources – daily. Without this there is no chance for gain, for profit, and no reason to exist. Unfortunately, most decision-makers have not been trained in how to think strategically to move resources – this is why we have developed our strategy seminar for managers. Strategic decision makers must decide where to place discretionary amounts of time, people, capital, plant and equipment, and these decisions result in attack, defend, retreat movements of resources to and away from preferred “battles,” meaning where one engages the opponent. All businesses are making these attack-defend-retreat decisions all the time, whether they are aware of these labels or not. Managerial skill at doing this, at correctly moving and counter-moving resources, directly affects the profitability and the pool of resources situation available for future moves. This applies to all business, in all industries, so possessing the skill of resource movement directly pays off regardless of the business.

What benefits does it have for companies who use it? 

Choosing the right “battles” (rival engagements) to fight or not fight is essential to success in the business world, military world, chess world, or sports world. It all comes down to an understanding of the issue of resource movement to the right battles. With it, resources and capabilities are leveraged and companies enjoy gains. Without it, firms waste enormous amounts of time fighting battles that either they cannot win (as with Schnuck’s and Dierberg’s trying to fight Wal-Mart on prices.) ADR provides a practical approach to strategy and strategic thinking for managers to recognize which battles to fight, and which not. Resources should be redirected from unwinnable and low-stakes battles to those fights where the firm possesses greater strength and the market offers greater stakes. Although it sounds easy, in reality it is not an obvious skill.

Therefore, Chuck Cook (former VP of Ashland Chemical) and I have developed a seminar to teach this skill to managers and executives. The seminar is titled, “Attack–Defend–Retreat: Real-time Strategy for the Real-time World”. In this seminar, we give managers the tools to understand when and how to move resources strategically, and then we provide a practical hands-on approach by using the Capstone Strategy Simulation to give the participants a chance to apply strategic thinking by simulating “running” a $100 million dollar company against other managers. The feedback on the seminar and the approach has been extraordinary, and we are looking forward to doing more seminars for companies.

Can you give us a recent example where you have seen Attack, Defend, Retreat in action by a company? Did they make the correct decision in your opinion?  Did their move work?   

A current example would be DaimlerChrysler deciding to "retreat" from the SUV, pickup truck and minivan segments when they sold the Chrysler division pull back resources for redeployment in other “battles”. Time will tell if this was the right decision for Daimler, although I believe it will prove out to be right for Daimler. Likewise, computer manufacturer, Dell, has historically "attacked" the low end of the PC market by placing the majority of its resources in this segment. Now Dell is repositioning and redeploying some of those resources to attack in the high end of the market. The logic of the move is that Dell possesses the relative competitive strength to compete in the high end; additionally the high end of the market is where the stakes are greatest and margins the highest. Therefore, attack move makes perfect sense. Likewise, as Webster University makes decisions about where to place resources — domestic sites or international campuses, online or classroom, etc. — these decisions should be based on the university’s relative competitive strength in each of those possible areas of competition, and at the same time, the potential stakes of such a move. Both strength and stakes have to be considered simultaneously to make the correct attack, defend, retreat or avoid decisions.

Professor O’Bannon (left) has been teaching at Webster since 1994 and is an expert in dynamic corporate strategy. He holds a Ph.D. in strategy and human resource management from University of Maryland, an MBA with an emphasis in finance, and a B.S. in management from Arizona State University.

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