Skilled Warrior Case Study: Sam Zemurray and United Fruit

The following is a great story about Sam Zemurray, the American businessman who made a fortune in the banana trade, that details Zemurray's adept use of Sun Tzu's principles. This passage is from Ryan Holiday's bestselling book The Obstacle is the Way.

"In 1915, deep in the jungles of South America, the rising conflict between two rival American fruit companies came to a head. Each desperately wanted to acquire the same five thousand acres of valuable land.

The issue? Two different locals claimed to own the deed to the plantation. In the no-man’s-land between Honduras and Guatemala, neither company was able to tell who was the rightful owner so they could buy it from them.

How they each responded to this problem was defined by their company’s organization and ethos. One company was big and powerful, the other crafty and cunning. The first, one of the most powerful corporations in the United States: United Fruit. The second, a small upstart owned by Samuel Zemurray.

To solve the problem, United Fruit dispatched a team of high-powered lawyers. They set out in search of every file and scrap of paper in the country, ready to pay whatever it cost to win. Money, time, and resources were no object.

Zemurray, the tiny, uneducated competitor, was outmatched, right? He couldn’t play their game. So he didn’t. Flexible, fluid, and defiant, he just met separately with both of the supposed owners and bought the land from each of them. He paid twice, sure, but it was over. The land was his."
- Ryan Holiday, The Obstacle is the Way, p. 98

ANALYSIS
For Sun Tzu, the critical element in warfare is time. The longer you are doing battle, the more resources you will likely use up, including the momentum (shih) you need to overwhelm the enemy in battle. The quicker you are able to resolve a conflict, then, the more you are able to keep your resources and gains intact (quan).

Sam Zemurray's handling of the battle with United Fruit over the five thousand acre plantation, though simple, displays a keen understanding of this concept. While United Fruit was willing to spend a lot of time, money, and energy to resolve the issue, Zemurray understood that time and money was not on his side. Being much smaller than the giant corporation, he knew he had to act quickly to get this conflict resolved so that he could move forward and expand his business.

His solution displays precisely the five main qualities of a winning strategy (profitable, protected, easy, quick, and surprising), allowing him to achieve total victory (quan sheng) in this situation. Let's look at how:

1. Profitable. The upside to the strategy was obtaining the 5,000 acre land in dispute and build his banana trade business.
2. Protected. In buying from both locals, there was no case for disputing who owned the land. Thus, there was no real risk of losing the land through legal dispute.
3. Easy & quick. The strategy of paying both locals was fairly easy and quick to execute. It certainly didn't require hiring a team of lawyers to search for any piece of paper to resolve whose land it was.
4. Surprising. United Fruit certainly had the money to pay both men. But as a huge corporation for whom money and time were no object, they never thought of the possibility of paying two locals who claimed ownership. The solution, which would have been easier and quicker to execute for them than Zemurray, went right under their nose.

As a result of this strategy, Zemurray was able to gain the land and continue building his own successful banana business (Cuyamel Fruit Company).