Timeless business principles from ancient China

When business practitioners talk of top management thinkers, they normally think of American modern-day gurus like Peter Drucker, Michael Porter, Henry Mintzberg, Jack Welch or Tom Peters. Let us not forget that there are many more business lessons to be learned from ancient China which are applicable to modern business.

The most famous strategy guru from ancient China is Sun Tzu, whose writings in the Art of War have been translated by many authors. But I think that the most relevant to today’s business world and our times are the writings of Tao Zhu-gong. The best interpretation is the book written by Wee Chow Hoo entitled The Inspirations of Tao Zhu-gong: Modern Business Lessons from an Ancient Past.

The book discusses the Twelve Business Principles, the Twelve Business Pitfalls and the Sixteen Business Lessons of Tao and relates them to today’s corporate setting.

The Twelve Business Principles date back around 2,500 years. But they remain significant because they deal with ageless and universal complexities of managing a business organization.

Sun Tzu and Guan Gong are two classical strategists in Chinese history. However, they never became businessmen like Tao.

Tao Zhu-gong was also a great military strategist.  He was the right-hand man, the equivalent of a modern-day prime minister, of Gou Jian, the emperor of Yue around 500 BC. The Kingdom of Yue was in constant war with the Kingdom of Wu until ultimately Wu was conquered by Gou Jian using the advice of Tao.

Tao was a great judge of character and knew the strengths and weaknesses of his enemies and his master.  After they won the war, Tao was able to recognize that his emperor was a great leader to work with in times of hardship, but a bad master to serve in times of peace and prosperity.

He resigned as a court official. Prior to his leaving, he warned his successor about the dangers of serving under Guo Jian as times had changed.  Unfortunately, his successor did not listen to him and was subsequently executed.

Tao-Zhu-gong became a businessman.  According to Wee Chou Hoo: “In fact, he (Tao) is commonly identified as the first multimillionaire of China.  If one were to project his wealth to present-day value, then I would reckon his wealth would not be any less than what Bill Gates has today.”

The author Wee Chou Hoo believes that the Twelve Business Principles capture the essential business philosophy of Tao. However, Wee also believes that some scholars later on attempted to expand on the 12 principles by adding the 12 business pitfalls and 16 business lessons.  Here are Tao’s principles:

First Business Principle. Ability to know people:  knowing the character of people will ensure the soundness of your “accounts.”

Second Business Principle. Ability to handle people: treating people with respect will gain one wide acceptance and improve the business.

Third Business Principle:  Ability to focus on the business: forgetting the old for the new is the curse of many businesses.

Fourth Business Principle: Ability to be organized: when products are well displayed, they will attract the attention of many people.

Fifth Business Principle: Ability to be agile and flexible: hesitation and indecisiveness will end in nothing.

Sixth Business Principle: Ability to demand payment: diligence and prudence will gain a lot more for the company.

Seventh Business Principle: Ability to use and deploy people: choosing the right person for the right job will ensure that he can be trusted and depended upon.

Eighth Business Principle:  Ability to articulate: eloquence can be a way of gaining fortune and enlightening people.

Ninth Business Principle: Ability to excel in purchasing: haggling over every ounce in purchasing may not reduce one’s cost of capital.

Tenth Business Principle: Ability to diagnose and seize opportunities and combat threats: shrewd business practices require the ability to sell and store at the right time.

Eleventh Business Principle: Ability to initiate and lead by example:  comradeship and trust will emerge naturally when discipline and high standards are enforced.

Twelfth Business Principle: Ability to be farsighted: when to go for more and when to tighten or loosen, depending on the situation.

Wee Chow Hoo ends his book with an epilogue entitled, “Old Wine in New Bottles: What Else is New?” He says: “… it is also very revealing and insightful to realize that management concepts and principles are actually both basic and universal. What makes them appear different is the way in which such principles and concepts have been packaged over the years.

“Indeed, it has always been my firm belief that management principles and concepts are universally similar.”

Indeed, if we examine just the last four business principles of Tao, they continue to be widely practiced, albeit under different terminology.

The Ninth Business Principle is now supply chain management; the Tenth Business Principle is now entrepreneurship; the Eleventh Business Principle is now leadership; the Twelfth Business Principle is now strategic thinking.

Whether from the East or the West, every management practitioner will have many lessons they can learn from the Twelve Business Principles of Tao Zhu-gong.

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