This guest article was written by William Laraque who is the Managing Director of US-International Trade Services. 

“The rules of strategy are few and simple. They may be learned in a week. They may be taught by familiar illustrations or a dozen diagrams. But such knowledge will no more teach a man to lead an army like Napoleon than a knowledge of grammar will teach him to write like Gibbon.” ~ Stonewall Jackson

Psychology in a battle

One of the fascinating aspects of military strategy is human psychology and the vulnerability of the human ego. The psychological vulnerability of the high and mighty was often the subject of Greek tragedy, and many of Shakespeare’s plays. Tolstoy’s Anna Karenina is another great example, arguably the greatest psychological novel of all time.

My personal favorite exercise in psychology as it applies to military strategy is the battle of Austerlitz. Also known as the Battle of the Three Emperors, it holds lessons in psychology that apply to this day.

I must first explain the most prominent uses of psychology in battle before I apply its lessons to today’s world.

The first use of psychology in battle is to move forces rapidly and to attack the enemy in diverse places, giving the impression of his being opposed by a force of great size.

This impression was used with great effect by Robert E. Lee in numerous battles. It was also used by Thomas “Stonewall” Jackson’s ‘foot cavalry’ with great effect during the Shenandoah Valley campaign.

By these tactics, George Brinton McClellan was fought to a literal standstill, leading to Lincoln’s famous statement: “Caesar crossed the Rubicon but will McClellan ever cross the Potomac?”

L’attaque debordante

Another prominent tactic is to apply what Napoleon called “l’attaque debordante”, or the discombobulating attack. By rapidly attacking the enemy’s flank, he would cause his enemy to re-position his forces to meet the sudden attack.

By doing so, the hinge point was weakened, and this is precisely where Napoleon would launch his combined artillery, heavy cavalry and infantry assaults.

The third and most psychological of the tactics that I will describe today is that of feigned weakness. By deliberately weakening one’s front, a tactician invites the hubris of his opponent, tempting him to attack at precisely this point.

The perception of weakness and entrapment was used by Hannibal (with his back to the river) at Cannae and by Napoleon on the Pratzen Heights of Austerlitz.

Fog and terrain hid the French emperor’s feigned manoeuvre against the young and impulsive Russian Tsar Alexander I who chose to go ‘hey diddle diddle, right up the middle’, despite the counsel of his older, more experienced and battle-hardened general, Michael Llarionovich Kutuzov.

Now to apply all of this to today.

Bureaucratic psychology, ego-driven hubris, self-infatuation and the idolatry of technology all lead today’s government and corporate commanders to act in a manner which exposes their flanks to an extraordinary vulnerability.

This clear and present danger is described by James Comey, FBI Director. He said on 14 November 2013 that cyber-attacks are increasingly representing the most serious threats to homeland security and in the next decade they will likely eclipse the risk posed by traditional international terror organizations.

The cashless society

Fintech, the promise of a cashless society and the sheer ease of making purchases electronically is an invitation to the idle and impoverished hands and minds of unemployed youth.

I provided the statistics regarding global youth unemployment in a prior post on LinkedIn, entitled ‘Terrorism: the Causes and Cures’. The utter confidence that technologists have in their craft opens their hinge points to electronic attack.

This vulnerability is not confined to bureaucrats or technologists. It also applies to entrepreneurs. The entrepreneur or provider of new ideas thinks that all that is necessary is crowdfunding, P2P financing or angel capital and poof, they will instantly turn into Markus Persson (who sold Minecraft to Microsoft for a cool personal $1 billion), and that they, like he, can purchase a $70 million mansion in Beverly Hills.

The reality is quite different.

About different realities

The failure rate of startups is huge. Russia, Malaysia, Chile and Argentina have all spent huge amounts trying to replicate the unique ecosystem of Silicon Valley and Silicon Alley. The result is an entrepreneurial fiasco.

The greatest of all psychological calamities is that of pooh-poohing the advice of the battle-scarred veterans of combat and countless corporate engagements.

Age is looked upon as a problem, an impediment instead of what it could be: an opportunity to learn. This applies in particular to Fintech. Why? Because Fintech is mainly money transfer, and is small potatoes when compared to the technological brass ring.

The brass ring is trade finance, in which Fintech plays a critical role. The McKinsey Global Trade Institute report of 2014 estimates that trade flow in goods, services and finance (including FDI) will amount to $85 trillion by 2025.

Expertise in trade finance yields a much greater treasure than does a Fintech limited to money transfer, but hey, what do I know? I’m a dinosaur!