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12Principle · Group 2

Reserve

Building strategic reserves

“Deliberately hold back strength so that you can respond to the unexpected and exploit a success.”

No plan survives contact with reality unchanged. If you commit all your forces from the start, you can no longer respond to a surprise or seize an opportunity.

Group 2: Forces and ResourcesT1 Classical Theory of War
Go to the in-depth section ↓
A line of teal dots stands in front of mist-blue arcs, and a little behind it rests a single golden circle. When the arcs press at an unexpected point, the golden circle glides there and closes the gap, while a second line without a circle breaks; at the end, the circle pushes through a gate that opens on the other side.
In short

Deliberately hold back strength so that you can respond to the unexpected and exploit a success.

What it’s about: No plan survives contact with reality unchanged. If you commit all your forces from the start, you can no longer respond to a surprise or seize an opportunity. A reserve is strength that you deliberately hold back. Its value lies in the fact that it has not yet been committed.

In depth

The principle in detail

Three steps through the principle: grasp it, place it, put it to work. Open each topic on its own.

The core messageCore statement and 3 clarifications
In essence

Uncommitted strength, time or money gives you freedom of action when the plan does not work out or an opportunity opens up.

It does not say
That more reserve is always better. Every reserve is missing at the front, and too much of it fritters away your strength.
It does not say
That you should spare the reserve. A reserve that is never committed out of hesitation is lost.
It also says
The reserve has to be ready. If you treat it as second-class, you will not have it when it counts.
The explanationFresh forces meet tired ones, and people who know help is standing by hold out longer.

A reserve works in two ways.

  • Fresh forces meet tired ones, and people who know help is standing by hold out longer.
  • But it comes at a cost: whatever you hold back is missing at the front.
The question

What do you keep free, and when do you commit it?

The signs3 signs when you heed it · 3 when you overlook it
When you heed it
  • Not every hour in your team is scheduled, and everyone knows what the slack is for.
  • When something fails, you can help without opening new gaps.
  • When an opportunity arises, you can quickly commit more.
When you overlook it
  • Every crisis pulls people off other tasks.
  • Free time or financial reserves are seen as waste and get cut.
  • Or there is a reserve that is never committed because the right moment is always still to come.
The backgroundFrom Carl von Clausewitz’s “On War” (1832), Book III, Chapter 13. · T1 Classical Theory of War
  1. 1832
    OriginCarl von Clausewitz

    On War

  2. 1963
    SupplementedRichard M. Cyert and James G. March

    A Behavioral Theory of the Firm

  3. 1996
    SupplementedNitin Nohria and Ranjay Gulati

    Is Slack Good or Bad for Innovation?

  4. Tradition T1
    TraditionClassical Theory of War

    Carl von Clausewitz, Antoine-Henri Jomini, Helmuth von Moltke the Elder, Frederick William Lanchester

    See the tradition on the Origin page
Read more: the full background

From Carl von Clausewitz’s “On War” (1832), Book III, Chapter 13. Supplemented by research on uncommitted resources (slack) by Richard M. Cyert and James G. March as well as Nitin Nohria and Ranjay Gulati.

The research3 sources: 1 classic, 1 theory, 1 primary study · 1832–1996 · with limitations of the research
3 sources1832–1996 period1 classic1 theory1 primary study
Strength of evidence
  1. weak
  2. moderate
  3. strong

One empirical study supports the benefit of uncommitted resources up to a moderate level; the rest is based on theory and the experience of war.

  1. 1832
    Classic
    Carl von Clausewitz

    “On War” (in German), Book III, Chapter 13, “Strategic Reserve”: two purposes of the reserve; a reserve meant to be used only after the main decision is absurd.

  2. 1963
    Theory
    Richard M. Cyert and James G. March

    “A Behavioral Theory of the Firm”: uncommitted resources help organizations absorb fluctuations and conflicts.

  3. 1996
    Primary study
    Nitin Nohria and Ranjay Gulati

    “Is Slack Good or Bad for Innovation?”: in 264 departments of two corporations, both too little and too much slack harm innovation; a moderate amount helps most.

Where the research reaches its limits
  • Every reserve is missing at the front.
  • If you hold back too much, you fritter away your strength just as much as someone who spreads it out, and in doing so you run counter to the Concentration of Force.
  • Carl von Clausewitz expressly warns against holding back strength for a decision that has already been made.
  • Nitin Nohria and Ranjay Gulati’s study measures innovation in departments, not the response to crises.
  • How large the right reserve is cannot be stated in general terms.
Read more: what research shows

In “On War,” Carl von Clausewitz distinguishes two purposes of a reserve: to prolong and renew the fight, and to respond to the unforeseen. For strategy on the grand scale, he is cautious. He calls a reserve that is meant to be used only after the main decision absurd, because it is missing exactly where it is needed. In organizational research, the reserve is called slack: uncommitted resources. In 1963, Richard M. Cyert and James G. March described how such cushions help organizations absorb fluctuations and conflicts. Nitin Nohria and Ranjay Gulati studied 264 departments in two multinational corporations. They found that both too little and too much slack harm innovation, and that a moderate amount helps most.

The related principles07 Concentration of Force · 13 Culminating Point · 18 Friction · 19 Fog of Uncertainty
Concentration of Force

The reserve stands in tension with 07 Concentration of Force both call for deliberate trade-offs.

FrictionFog of Uncertainty

It absorbs the frictions described in 18 Friction, and because you do not know everything, it is your answer to 19 Fog of Uncertainty

Culminating Point

If you hold back forces, you can push back the 13 Culminating Point

Read more: the full text

The reserve stands in tension with 07 Concentration of Force; both call for deliberate trade-offs. It absorbs the frictions described in 18 Friction, and because you do not know everything, it is your answer to 19 Fog of Uncertainty. If you hold back forces, you can push back the 13 Culminating Point.

The action steps5 things you can actually do

  1. Decide how much time, money and capacity in your area will deliberately remain unscheduled, and write it down.

  2. Name what the reserve is for: for setbacks, for opportunities or for both.
  3. Decide in advance who releases it and how you will recognize the moment. Then no one will hesitate when it counts.
  4. Keep the reserve ready for action: those who are to step in need knowledge and practice and must not be seen as mere gap-fillers.

  5. Replenish the reserve after every use before you take on new tasks.

The reflection questions3 questions: What in your area is not scheduled, and who knows that?
  1. What in your area is not scheduled, and who knows that?
  2. When did you last commit your reserve, and was it the right moment?
  3. Which crisis in the coming months could you absorb today only by opening a gap somewhere else?

Take your time with one question. Write down your answer – or talk it over with someone you trust.

To finish
The picture to rememberThe animation once more, with an explanation
  1. A line of teal dots stands in front of mist-blue arcs, and a little behind it rests a single golden circle
  2. When the arcs press at an unexpected point, the golden circle glides there and closes the gap, while a second line without a circle breaks
  3. At the end, the circle pushes through a gate that opens on the other side
Strategy Check

What do you keep free?

Get your profile across all 12 groups in about 10 to 15 minutes.

Start the Strategy Check
In context

Group 2: Forces and Resources

Guiding question: Where do you commit your forces, and how long will they last?

Stage 3 of 5: Choose the path

Where the 92 principles come from: eight traditions of strategy, from classical war theory to dealing with uncertainty.

More about the origin

Background: WEGVISOR’s own selection from the strategy literature · More about the origin

Examples

The principle in practice

From the different spheres of society.

Government

Joseph Joffre, the Marne and the Reserve

In late summer 1914, the French and British armies fall back before the German advance. Joseph Joffre uses the retreat to form new forces, among them the Sixth Army near Paris. When the German flank lies open, it attacks, and the advance on Paris comes to a halt at the Marne.

Reserve
Culture & Sports

Alex Ferguson, the 1999 Final and the Reserve

In the 1999 Champions League final, Manchester United trails Bayern Munich 1–0 until the 90th minute. Alex Ferguson has brought on two strikers, Teddy Sheringham and Ole Gunnar Solskjær. In stoppage time, both score.

Reserve
Business

Warren Buffett, Goldman Sachs and the Reserve

In September 2008, a few days after the collapse of Lehman Brothers, Berkshire Hathaway invests $5 billion in the investment bank Goldman Sachs. This is possible because Warren Buffett deliberately runs Berkshire with plenty of cash.

Reserve
Government

Movie: The Lord of the Rings: The Two Towers

In Peter Jackson’s “The Two Towers” (2002), King Théoden defends the fortress of Helm’s Deep against an overwhelming army. Gandalf is not there. He fetches the banished riders under Éomer, and when the defenders are at the end of their strength, they arrive at dawn as a relief force.

Reserve
FAQ

Questions about the Reserve

What does the principle of the Reserve say?

You deliberately hold back part of your forces so that you can respond to the unforeseen or exploit a success. The reserve gives you freedom of action when the plan does not work out.

Where does the principle of the Reserve come from?

It is as old as the art of war. The classic description comes from Carl von Clausewitz in “On War” (published starting in 1832), Book III, Chapter 13. There he distinguishes the two purposes of a reserve and warns against strategic reserves that are too large.

What are some examples of the principle of the Reserve?

In 1914, Joseph Joffre stopped the German advance at the Marne with a newly formed army. In 1999, Alex Ferguson won the Champions League final with two substitutes, and in 2008, Warren Buffett used his cash cushion in the middle of the financial crisis.

How well is the Reserve supported by research?

Evidence: moderate – one empirical study supports the benefit of uncommitted resources up to a moderate level; the rest is based on theory and the experience of war.

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