kuan tzu global secrets for the ceo

Kuan Tzus

SUPREME SECRETS

for the Global CEO:

37 Important Lessons onHow to swallow world market share,

Gain political power,Project a statesmanlike aura, and

Achieve maximum global thinking

Kuan TzuWilliam Bodri

Top Shape Publishing, LLC

1135 Terminal Way Suite 209

Reno, Nevada 89502

To find us on the web and get our free newsletter, look for

www.CEOoutpost.com

www.WilliamBodri.com

Originally published as

The Means to Win: Strategies for Success in Business and Politics

ISBN 0-9721907-1-6

Library of Congress Cataloging-in-Publication Data

Kuan, Chung, d. 645 B.C.

The means to win : strategies for success in business and

politics / by Kuan Tzu ; commentary by William Bodri.

p. cm.

Includes bibliographical references.

ISBN 0-9721907-1-6 (pbk. : alk. paper)

1. Leadership. 2. Success in business. I. Bodri, William.

II. Title.

HD57.7 .K8 2000

658.4'092--dc21

00-022200

Copyright 2000 by William Bodri. All rights reserved. No part of this book

may be reproduced, stored in a retrieval system, or transmitted, in any form

or by any means, electronic, mechanical, photocopying, recording or other-

wise, without the written permission of the publisher except for brief pas-

sages quoted in a review.

Contents

To the Global Executives and Statesmen - The New Global Senators v

Dedication ix

About the Translation xi

Introduction 1

Chapter 1 9

With All My Faults, Am I Still Qualified to Lead?

Chapter 2 11

The Ancient Wisdom of Master Kuan

Chapter 3 23

Achieving Supremacy in Leadership and

Administration

Chapter 4 121

Some Interesting Strategies for Winning Without

Fighting

Chapter 5 135

Heed the Advice of A Sage

Chapter 6 139

The Ultimate Goal

Notes 143

Selected Bibliography 155

To the Global Executives and Statesmen

The New Global Senators

It is rare for people to be able to name the phase of history

they are in, for it is usually only identified years later after most of the

significant change defining the era has already taken place. But the

trends are extremely clear, so the truth is already known even now:

globalization is the name of our era, and the extent of its influences

on society has only just begun.

The princes of this new world being created will be not be the

previous leaders such as the national industrialists, but the rising global

executives and global statesmen. They are the new global senators who

will have the power, privilege, wealth and means to shape the world

for good or bad. They are the exact modern day equivalents to the

dukes, kings and emperors of old who had to establish peace, defend

their realms from invasion, promote economic growth and prosperity

within their realms, form alliances to maintain good relations with

their neighbors, and strive to gain any advantages that would turn

their own states into superpowers. The purpose of this book is to

teach the qualified how to become a more successful and wiser

member of this group of movers and shakers.

No one has created strategic lesson plans that teach the new

global leaders how to act, and so they have had to stumble along

learning the ins and outs of global leadership themselves. However,

this strategy guide is the first such product to help remedy this situation.

No one has previously offered a world code of conduct for the global

senators either, such as whether these individuals should chastise their

peers who may overstep ethical lines, for the pursuit of power and

profits across borders often affects the judgement of inferior ones

lacking wisdom. The height to which a man rises reflects the merit

v

vi

and excellences he cultivates, so virtuous deeds and the lack thereof,

are important topics in these discussions.

Since there are no organizational bodies that can impose balance

among the new princes and their actions, it is desirable to have strong

leaders in this growing fold who hold a higher purpose than others,

and who will act as benevolent protectors rather than as Machiavellian

manipulators who will pursue selfish aims detrimental to the whole.

Those who become world protectors are the ones to whom the world

will naturally gravitate. It is imperative that men of virtue and vision

climb within these ranks, and that they are trained how to preserve

and protect varied interests within the complicated world networks

of interlocking relationships. It is not just important that they know

how to keep their own states strong and well, but that they learn

how to rise above the pack to win a prominent seat of world influence,

and establish their own moral authority at the global table.

These men need access to new strategies and tactics, new

thinking, new relationships, and new information otherwise they

and their firms will not be able to survive, let alone rise to the top.

This book supplies them with the knowledge they need. It is a manual

on leadership and excellence, written by Kuan Tzu, Chinas foremost

geo-political sage. Kuan Tzu was the strategic superior to Sun Tzu,

who primarily dealt with tactical concerns, and Kuan Tzu won his

own wars through diplomacy and through economics. In this manual,

he not only explains how to win a premier position in this new

competitive global landscape, but how to act so as to become widely

regarded as a moral leaderor even saviorrather than as a despot

or robber in this larger dog-eat-dog environment.

If you want to become head of a country, corporation or

organization; if you want to unite a disparate group into a united

whole; if you want to learn how to establish balance among competing

interests; if you want to learn how to deal with multiple cultures and

influences; if you want to learn how to plan and time effective actions;

if you want to make better use of expedient circumstances; if you

want to know how to attract and use the best advisors and executives

to your inner circle; if you want to learn when pushing ahead or

holding back is the best strategy, or when other strategies are better

used; then this is the book for you. Be forewarned: it will help

vii

reshape you and help you develop the dignity of a ruler, the tact of a

diplomat, the strategies of a general, and the wisdom of a sage so

that you can successfully carry out your visions.

The new order of globalization will not go away, so we must

train and prepare ourselves with how to deal with it. Here is an initial

solution: in your hands is the global power, leadership, and personal

cultivation primer for this new era. It reveals the various means that

will propel the qualified to ascendancywhether in business or politics

or any other type of organizationsand the proper means to manage

or administrate a global kingdom, whether it be of corporate or

political or other design.

DEDICATION

For the United States of America

Much too often do the legislators of today assume the roles of

politicians rather than statesmen, making decisions based on re-

election concerns rather than through considering what is actually

best for the nation. Because of such behavior, very few of our lead-

ers can be compared with the likes of Winston Churchill who dis-

dained the popular when his country was at stake. Great leaders are

those who will risk taking such a difficult path, but who will thereby

reverse the trends that have put their nation in peril.

To determine whats in the best interests of a country indeed

requires a great deal of insight and wisdom, but politics is a field

where that insight is more often directed towards someones self-

interests rather than towards the national benefit. With this under-

standing of human nature in mind, theres very little one can do or

say that will have any effect on improving this tendency. The root of

the issue doesnt lie in our system, but in the character and integrity

of the officials we elect and in the means we institute for selecting

them.

Most nations suffer from the sickness of self-serving officials,

so each must encourage selfless leaders who possess exceptional na-

tional foresight and who can serve as examples of true public ser-

vants. As a general rule, those who follow ethical principles will

sometimes find themselves lonely and isolated, but these are the in-

dividuals we can depend upon to tackle the difficult issues that will

ensure a nations long term peace and prosperity.

ix

The far-sighted ones with character and principle are most of-

ten those who will emphasize what is strategically best for a country,

even if it means facing a chorus of opposition. We must remember

that when a nations leaders do not possess this strength of character

and no longer choose what is wisest in decisions, and when a nations

public servants are unwilling to jeopardize their own positions be-

cause self-interest ranks higher than love of the country, that nations

system cannot last long.

With these issues in mind, the purpose of this work is to make

possible my hope that access to Kuan Tzus teachings can help our

worlds leaders incorporate more wisdom into their decisions, be-

cause in studying the Kuan Tzu, one can definitely learn to identify

what is harmful to a nation. Only when you first know whats harm-

ful and how its harmful can you next determine how best to act in

order to improve your state of affairs. Today our nations are run

according to the dictates of economics and politics that ultimately

bias the correctness of most leadership decisions. If our leaders lack

the necessary wisdom for being able to recognize whats wrong in

this arena of competing interests, what hope is there for our current

and future generations? It is only when people recognize what is

harmful that they can steer a better course for bringing peace, pros-

perity and stability to the land. When someone realizes what is harm-

ful or disadvantageous, thats when they can properly bring strategy

to bear on the issue.

Most importantly, however, I especially hope that this small

work will help the United States deeply reconsider its domestic and

international affairs, for the nation no longer holds the highest posi-

tion of world respect it once did. If the United States can mature in

its mindset, policies and administration, it can regain the esteem it

once held from others and become a more consistent, balanced, and

welcomed leader of world affairs. To this end, I place this work be-

fore our nations business and political leaders so that they can con-

struct a more harmonious and prosperous future for all.

x Dedication

About the Translation

This book is not a strict academic rendering of the Kuan Tzu,

for it is not a literal word-for-word translation. The main goal of this

book, rather than to produce a strictly accurate translation, has been

to make this work more accessible to the present day reader in the

hopes that the Kuan Tzu will attain just as much popularity as Sun

Tzus Art of War. After all, while Sun Tzu emphasizes the skills of

warfare, Kuan Tzu talks of diplomacy and economics as the preemi-

nent means to accomplish national aims. Is this not a more prefer-

able strategy, rather than the destructive route of military aggression,

when trying to protect or fortify a nation?

Because of my choice to produce an easier translation rather

than a strictly academic rendering, there are sure to be some errors in

this work. However, this has the added benefit of leaving room for

the much finer translations of the Kuan Tzu, which I hope will soon

follow. If the popularity of Sun Tzu translations (denoted by the nu-

merous versions) are any indication of what we can expect, Im sure

that we will see countless future translations of the various Kuan Tzu

chapters. Why should I be emphasizing the Kuan Tzu rather than

some other work? I believe this is the work that can help guide our

modern era.

In order to have produced an easily readable work, much of

the background material within represents an interweaving of vari-

ous Kuan Tzu stories compiled from numerous different sources.

xi

xii

There are also various places where the main text can be read in one

of several alternative ways, and in these instances Ive tried to select

those interpretations which seemed to most directly carry forward

the meaning of the passage.

My boundless thanks go out to the many individuals who as-

sisted in preparing and reviewing the translations for this text, in-

cluding Douglas Wile, William Brown, Mathew Tang, and Zhang Li-

Chu. All these individuals tirelessly worked in preparing portions of

the translations or in overlooking and reviewing the finalized version

of the main text. Of these individuals, I am most indebted to Dou-

glas Wile for his extensive work in editing the final passages. Without

his criticism, corrections and input, the text wouldnt possess any-

thing near the polish it has today.

Paul Wong, Margaret Yuan, Hung Jen, Lee Shu Mei, Sami Kuo,

and Paul Rath also have my sincerest thanks for their assistance in

helping me to interpret various portions of this work, as well as Mar-

tial Gabin and Martial Adair for their most helpful comments on the

text.

In preparing this work, I must also pay my respects to the pre-

vious translations of the Kuan Tzu produced by Lewis Maverick and

W. Allyn Rickett, which served as invaluable references when trying

to interpret this material. If you want to further research Kuan Tzus

ideas and his methodologies or peruse his other writings, these trans-

lators have produced invaluable guides, and theyre the first place to

start.

Finally, of all the individuals to whom I owe a debt for this

work, the very greatest of thanks goes to Nan Huai-Chin, who first

introduced me to Kuan Tzu when I asked him which sages writings

could best help America today. As Nan Huai-Chin commented

when he was teaching me,

There are many Chinese sages who have written on the problems of

humanity, and each has captured a portion of the larger picture and

spoken of what was relevant for their time. But the choice of best

political philosopher and geo-strategist for our times should end up

with Kuan Tzu and no other. Of the various Chinese sages who have


xiii

spoken in the fields of economics, administration and politics, without

doubt it is Kuan Tzu whom Westerners should be studying if they

wish to manage the problems of the world today. Most people dont

know it, not even the scholars, but Kuan Tzu was a realized sage who

had actually achieved enlightenment.

This encouragement and advice is why you have this text today.


Introduction

Kuan Tzu (ca. 720-645 B.C.E.), who served as prime minister of

the state of Qi during the Zhou dynasty, is considered one of

ancient Chinas greatest sages. His highly inventive diplomatic

policies during this time of turmoil unified Chinas individual states

through treaty rather than through war, and thus he personally saved

the countrys imperial system from collapse. Kuan Tzus highly

unique, but extremely successful administrative and economic

policies also helped his state become the foremost within China.

Because of the high profile nature of his tasks, which he always

completed to satisfaction, as well as his legendary ability to turn his

lords mistakes into advantages, his policies and writings have

subsequently served as a guide and inspiration for countless

generations.

Kuan Zhong, whom posterity has rewarded with the title of

Kuan Tzu, was born to a poor family in Ying-shang, a northwestern

district of Chinas present Anhui province. While young, he and his

good friend Bao Shu Ya were partners in a trading business which

dealt with Chinas various feudal states. In their partnership, how-

ever, Kuan Zhong always took the larger share of the profits, which

caused Bao Shu Yas servants to complain, but Bao Shu Ya always

defended Kuan Zhong saying, Kuan Zhong isnt greedy. I let him

take most of the profits because his family is poor. At another time,

Kuan Zhong served as a low level officer in a military expedition and

stayed in the rear when his army attacked. On the trip homewards,

however, he returned at the very head of his column of troops.

When some laughed at him and called him a coward, his friend Bao

Shu Ya simply pointed out, Kuan Zhongs mother is old and alone,

so he has to stay alive to take care of her. Actually, he isnt afraid to

fight at all.

Bao Shu Ya often remarked, A wise person can achieve noth-

1

Kuan Tzu's SUPREME SECRETS2

ing if he is born at the wrong time. I am sure that Kuan Zhong will

make a great figure if he is only given the chance. Three times Kuan

Zhong was made an official and then dismissed (because no one

recognized his talents), but Bao Shu Ya only looked at this and re-

plied, What a shame it is that Kuan Zhong hasnt yet encountered a

wise ruler. When Kuan Zhong heard of his friends remarks, he

could only say, My parents are the ones who gave me birth, but it is

Bao Shu Ya who really understands me!

Because of their learning and ability, Kuan Zhong, Bao Shu Ya

and a third friend, Shao-hu, were each made an advisor to one of the

three sons of Duke Xi, ruler of the Chinese state of Qi (which is

now known as Shandong province). Kuan Zhong was appointed

advisor to Prince Jiu, Bao Shu Ya was appointed advisor to Prince

Xiao Bai, and Shao-hu was made advisor to the dukes firstborn son.

Of this trio, the friendship between Bao Shu Ya and Kuan Zhong

was particularly strong so that both agreed to recommend the other

should their respective patrons assume the throne. In this way, they

could both enjoy high positions together if fate ever permitted it.

Duke Xi eventually named his firstborn as the successor to his

throne, but this prince, who became Duke Xiang upon ascension,

was an unpopular ruler because of his extravagance and arrogance.

He often quarreled with the feudal lords of Chinas other states and

was equally disdainful of his homage duties toward the emperor. He

was eventually killed in a palace scuffle organized by his maternal

uncle and two generals whom he had offended. Upon the outbreak

of rebellion, Kuan Tzu fled with Prince Jiu and his followers to the

Chinese state of Lu, while Bao Shu Ya and Prince Xiao Bai stationed

themselves in the neighboring state of Ju.

The usurper to the throne did not win any support from his

courtiers and soon was also assassinated, giving Prince Jiu and Prince

Xiao Bai their chance to assume power. When the ruler of Lu, Duke

Zhuang, heard that Qis minister Gao Xi was welcoming Prince Xiao

Bai home as the new ruler, he quickly sent Kuan Zhong and some

soldiers into Ju so that they could kill Prince Xiao Bai before officially

becoming ruler. During an ambush, Kuan Zhong shot an arrow at

Prince Xiao Bai wounding him, and the arrow would have killed the

prince had it not bounced off his metal belt buckle. Thinking quickly,

3Bao Shu Ya told the prince to crouch down in their carriage feigning

death, and the two continued racing onwards to Qis capital where

Prince Xiao Bai was successfully installed as the new duke. Thinking

the prince had been killed, however, Kuan Zhong took his time to

finish his journey.

Eventually, it was surprisingly discovered that Prince Xiao Bai

had indeed survived the arrow and ascended to the throne, assuming

the coronation title of Duke Huan. Duke Zhuang of Lu was en-

raged at this turn of events, and sent an army into Qi in order to

defeat the new duke and help Prince Jiu assume the rulership of Qi.

However, the new duke proved the winner of the conflict and de-

manded that his brother be put to death. The state of Lu, which was

harboring Kuan Zhong, had no choice but to throw him into prison

as well.

Having become the uncontested ruler of Qi, Prince Xiao Bai

(the new Duke Huan) next decided to reward all those who had

helped him win the dukedom, and asked his long term advisor Bao

Shu Ya to become the states prime minister. However, Bao Shu Ya

declined saying he did not possess the requisite abilities for running

the state! When Duke Huan next asked how he could then become

supreme ruler of the entire realm, Bao Shu Ya surprisingly replied

that the duke should employ the talents of Kuan Zhong if he wished

to become the supreme leader of China! Kuan Zhong, he said, was

the only man who could make the dukes dreams come true.

Naturally, the dukes immediate response was to reject such

advice since Kuan Zhong had previously tried to kill him in battle. It

was only because the duke had been wearing a bronze belt buckle

that his life had been saved. How could the duke forgive his would-

be assassin, let alone adopt him as a trusted advisor? Knowing the

dukes mind, Bao Shu Ya pointed out that at the time of the fighting,

Kuan Zhong was simply serving his own master and doing what

would be expected in this role. His attempt to kill the duke, so that

Prince Jiu could ascend the throne, was quite natural and proper un-

der these conditions. Bao Shu Ya also argued that Kuan Zhongs

own previous loyalty to Prince Jiu was also ample proof that he

would be loyal to the new duke, who was now the lawful sovereign.

Employing Kuan Zhong was not only necessary, Bao Shu Ya

I n t r o du c t i o n


argued, but the correct course of action because it was to the dukes

own benefit. In a frank discussion with his ruler, Bao Shu Ya insisted

that the duke should forget the past and employ Kuan Zhong as a

minister because as a policy, a ruler should always put aside his own

personal feelings, including his dislikes and resentments, for the

good of the state. Inferiors, he reminded the duke, must always do

that in regard to their superiors, so a superior must sometimes do

that for one of his inferiors. In this case, Bao Shu Ya argued that the

duke should grant Kuan Zhong amnesty and use him, for only Kuan

Zhong had the genius to make the dukes hopes come true.

Furthermore, Bao Shu Ya also pointed out that if the new duke

could both forgive and grant a high position to someone like Kuan

Zhong who had offended him, such generous behavior would be-

come known throughout the land. The magnanimous reputation

thus earned would work greatly to the dukes advantage in attracting

others with outstanding talents to Qi, who could also be used in

building the state.

In time, perhaps because he was generous of heart or perhaps

because he was simply shrewd enough to realize that Kuan Zhong

could help him, the duke concurred with Bao Shu Yas advice. Un-

fortunately, Kuan Zhong was now held prisoner by the neighboring

state of Lu, which quite recognized his great abilities if he were

freely employed as a senior minister. Such a talented individual could

become a danger to Lu if his abilities were to be used by another

state. Knowing they had to get around this suspicion, Duke Huan

and Bao Shu Ya therefore came up with a clever strategy in order to

regain Kuan Zhong alive.

In this ruse, Duke Huan requested that Lu hand Kuan Zhong

over to Qi so that the duke might personally witness Kuan Zhongs

execution. Of course the ruler of Lu was not totally naive, and har-

bored suspicions as to Duke Huans true intentions. Nevertheless, he

ordered that Kuan Zhong be returned to the state of Qi. If Duke

Huan did not really wish to employ Kuan Zhong as a minister, yet

the state of Lu killed Kuan Zhong without regard to Qis request, a

premature execution would only increase the enmity between the

two states, whose initial relations had already gotten off to a bad

start. However, had Duke Zhuang of Lu known for certain that

5Kuan Zhong would be used in the new government, he would cer-

tainly have killed his prisoner so that Qi could not avail themselves

of Kuan Zhongs talents. Weighing the risks, Duke Zhuang ordered

that Kuan Zhong be returned home.

And so, Duke Huans ruse successfully tricked Lus ruler into

deciding to send Kuan Zhong back to Qi. While Kuan Zhong was

being transported by prisoners cart, he remembered his good friend

Bao Shu Ya and began to think of hope rather than death, for why

else should Qi demand that he be returned alive rather than be ex-

ecuted? Surmising that the request was some ruse, Kuan Zhong then

began fearing that Duke Zhuang would suspect as much as well, and

that he might still send orders for his execution before reaching the

border. Indicative of his strategic alertness, he therefore taught his

military escort several marching songs so that the soldiers would

quicken their pace in transporting him back to Qi. His hopes con-

firmed, Kuan Zhongs life was spared upon arriving in Qi where he

was met with great welcome by his good friend Bao Shu Ya.

Duke Huan subsequently forgave Kuan Zhong for attacking

him and on an auspicious day, held a grand ceremony for Kuan

Zhongs reception where he was made prime minister of the state.

Kuan Zhong quickly gained the complete confidence of the duke

and held the position of prime minister for the next forty years until

his death. In time, the duke so trusted Kuan Zhong that he consid-

ered him as family, going so far as to call him grandfather. This can

only be attributed to Kuan Zhongs trustworthiness and his accom-

plishments, as well as to his personal self-cultivation.

There are several important lessons we can learn from this in-

troductory story before moving on to the main text. Firstly, the

dukes behavior showed that he was wise enough to recognize Kuan

Zhongs talent and sufficiently broad-mindedor opportunistic

to forgive his earlier trespass and employ him in an important posi-

tion. Secondly, Bao Shu Ya, without ill will, was deferential to his

friends great genius and voluntarily assumed an inferior post in the

state. Perhaps because of friendship, but definitely to his own credit,

Bao Shu Ya admitted his own limitations and refused to occupy the

countrys highest post because he felt this was best for the country.

In both cases, these men could be called great because they were



able to forget their personal feelings for the good of the nation,

which is what great leaders do. Such behavior is an admirable com-

ponent of statesmanship and a necessary characteristic of those

aspiring to lead men. This is the type of behavior which the Kuan Tzu

tries to teach.

In deciding which of the Kuan Tzus many chapters might be of

the most use to a modern audience, I have selected Chapter 23

which teaches how to administer a state and how an individual might

become the single leader of a country (its ruler), or a Lord Protec-

tor, or even the supreme leader of the world. The greater part of

the Kuan Tzu includes additional policy discussions on how to make a

state supreme among rivals and how to use its power to unify a con-

federation of states which comprise either a single country or greater

alliance. However, the advice on attaining a leadership position

with the relevant tactics and strategies one must employas well as

the instructions for wisely managing a country (or other organiza-

tion), seem the most appropriate for today.

The selection presented within was therefore chosen in order

to help someone rise to the top of his or her organizationwhether

it be involved with political or business or other affairsand details

the methods necessary for achieving prosperity for the group. There

are ample lessons for the business executive who desires commercial

success, the statesman who wishes to save his country, and for gov-

ernments wishing to forge their own states into superpowers. In

short, the lessons are all about leadership strategy.

Providing such teachings is always dangerous because they can

come into the possession of the immoral who may be smart enough

to use medicine as poison. As a warning, the perverse and sinister are

fond of using strategy to destroy. Therefore, I always urge everyone

to be careful when they select their leaders: you should examine the

signs, such as personal nicknames and past history, before you en-

trust someone with high office. Will a prospective leader act for

popularitys sake, or will he risk his popularity to be frank with the

nation and make the difficult decisions necessary for the countrys

welfare? These are just some of the concerns to consider.

In this modern age when most leadership positions are deter-

mined by elections rather than by conquest, you must recognize that

7the great leader is the one who will do everything for the sake of his

country, not for the sake of his popularity or position. He may not

necessarily be popular at all times or in all things, but popularity often

has little to do with actually saving a nation.

On this note, I often reflect upon the excellent response of the

general Fabius Maximus, one of the few Roman emperors who were

awarded the title of Maximus. Fabius is famous for the strategy of

having continually shadowed Hannibals invading army without en-

gaging it in battle, despite the pressure and criticism of his country-

men. Despite a vociferous chorus of jeers, Fabius stuck with his

strategy and refused to fight with Hannibal, knowing that the Ro-

man troops were not strong enough to win, and in this manner he

saved Rome from destruction. In response to his vociferous critics,

Fabius never deviated from what he felt was best,1 giving the immor-

tal response,

I should be more faint-hearted than they make me, if, through fear of

idle reproaches, I should abandon my own convictions. It is no inglori-

ous thing to have fear for the safety of our country, but to be turned

from ones course by mens opinions, by blame, and by misrepresenta-

tion, shows a man unfit to hold an office such as this, which, by such

conduct, he makes the slave of those whose errors it is his business to

control.2

Such advice is precious and timeless: that to save a country, a

leader must often hold an unpopular course despite the pain and

public outrage it may cause. When the errors of decades are cor-

rected at a stroke, there is absolutely no way to avoid pain, protest

and suffering. Taking bitter medicine is always an unpleasant affair,

but if you refuse the medicine, your illness cannot be cured. So if

leaders can accept such pain and hold to a wise course despite rising

opposition, they have learned the lesson of this book and can truly

distinguish themselves as earning the title of Maximus, or Na-

tional Savior. These are our modern day equivalents to what the

Chinese called a Lord Protector.


CHAPTER 1

With All My Faults,

Am I Still Qualified to Lead?

When Duke Huan, the ruler of Qi, and Kuan Tzu first met,

they talked for three days and nights without stop, discussing the

dukes plans for becoming the supreme lord of China. The duke

asked Kuan Tzu, I have three great vices. In spite of these, can I still

rule the country?

I havent heard anything about this, replied Kuan Tzu.

What three vices are you talking about?

The first vice, said the duke, is that I like to hunt and can

disappear for days at a time on hunting expeditions. As a result, while

I am away on these trips, the business of the state stops because my

officials, and the emissaries of the other lords, have no one to report

to.

Well, that is bad, replied Kuan Tzu, but its not vital.

The duke continued, My second vice is that I like drinking

and entertainment at all hours of the day and night. When Im being

entertained, the business of the state stops because my officials, and

the emissaries of the other lords, have no one to report to.

Yes, that is bad, replied Kuan Tzu, but its not crucial.

Well, my serious vice, said the duke, is that Im preoccupied

with women and sex. I love women so much that I havent even

married off my aunts and sisters.

Yes, that is bad, replied Kuan Tzu, but it is not vital.

At this response, the duke became flushed with anger and

shouted, If these three things are okay, then tell me what isnt

okay!

Kuan Tzu calmly replied, When a ruler is too indecisive or too

slow to take action, this is inappropriate behavior. When a ruler is too

indecisive, he will lose the support of the people. When he is too

slow to act, he will never undertake what is necessary in time.3

9

If you want to lead a state, it is absolutely essential that you

possess, or that you cultivate these two characteristics. This is whats

crucial, this is whats vital, this is the important thing. And because

you are both decisive and quick to take action when necessary, then

despite these other vices you can indeed succeed in leading the coun-

try.

10 Kuan Tzu's SUPREME SECRETS

CHAPTER 2


Thus begins our tale of the Prime Minister Kuan Zhong (re-

spectfully titled Kuan Tzu), which takes place during Chinas Zhou

dynasty somewhere between 685 and 645 B.C.E. At this time in his-

tory, Chinas various feudal states were constantly engaged in wars of

conquest and annexation, each state vying to become foremost in

the nation. Confucius therefore named these turbulent times the

Spring and Autumn period to denote the successive rise and fall of

these various states and their rulers.

It was the custom during this period for the feudal lords to seek

the guidance of worthy ministers for governing their state affairs,

and since the success or failure of any state rested squarely on the

policies it followed, the wise ruler was always on the lookout for

trustworthy advisors who knew the art of making states peaceful

and prosperous, and military forces powerful. This was the reason

that Duke Huan, as ruler of Qi, eventually invested Kuan Tzu as his

prime minister, for in Kuan Tzu he felt he had finally found the capa-

bility he was seeking.

At the time of our story, the emperor of China had lost so

much of his original power and prestige that the eight to ten feudal

lords which ruled the smaller Chinese states making up the realm

were able to treat him as a mere figurehead rather than as the su-

preme ruler of the land. Though the emperor was still considered

sacrosanct and his position gave order and structure to society, his

situation could be compared to that of the Mikados in Japan, who

were rulers in name but subject to the control of the powerful

Shoguns. At certain times in Europes past, various Roman Catholic

popes had shared a similar fate; they were dependent upon sover-

eigns who both protected and manipulated the Church. So in this

way, the situation in China was not historically unique.

One could best summarize the overall situation by saying that

in Kuan Tzus day, the various Chinese states were neglecting their

11


homage duties to the emperor, and in their quest for power were

presuming more and more imperial rights for themselves. Further-

more, each of the feudal lords (the dukes or princes controlling

Chinas individual states) was engaged in a continuous struggle for

dominance over his peers. Chinas national cohesion was not only

threatened by these internal competitive struggles but by another

danger as well; the threat of foreign Tartar invasions from the north.

Hence when Duke Huan of Qi first met Kuan Zhong, he natu-

rally inquired about his ideas on governing in this environment and

asked Kuan Zhong if he had any plans for how the duke might be-

come the countrys ultimate leader. So intent was the duke on ac-

complishing these goals that the two ended up discussing state mat-

ters for several days and nights without stop. They touched upon

economics, diplomacy, social welfare, agriculture, increasing the

wealth of the state, military defense, educational policyin general,

Kuan Tzus overall strategy for making Qi into Chinas strongest and

most prosperous state. Throughout these initial discussions and

throughout Kuan Tzus long reign of office, the sage emphasized

that the duke or any other ruler should always act at the right mo-

ment and never bypass an opportunity, as these are necessary for

being able to succeed in grand schemes.

To rule successfully, Kuan Tzu furthermore stressed that a

leader must address the call of the times. If a leader missed the

opportunities that came to him and hesitated to act when the timing

was proper, perhaps because he was unsure of himself or inflexible

or ill-informed or unprepared, he would never be able to accom-

plish anything grand for his state. Opportunities typically come but

once, so if a leader were too inflexible or unresponsive so as to let

them pass by, Kuan Tzu warned that such leaders would achieve

little in their lifetime.

What Kuan Tzu also emphasized again and again is the great

importance one should place on making careful plans and prepara-

tions. Planning is absolutely essential for any leaders who wish to

succeed in their activities because without careful planning, the ex-

ecution of strategy is bound to fail. But its no good just to be able to

plan, for you must also be ready to act. For instance, all the prepara-

tion that a professional athlete puts into a contestthe game plans,

13

analysis of certain moves, special practices and so onis useless if

he cannot put them into action when game time comes.

Kuan Tzu also stressed that the leader of a nation must actively

search for capable people who can develop as well as execute effec-

tive strategies because to succeed in his plans, a leader needs to make

use of the finest talents available. No man is an island, so to succeed

in grand plans, you need to depend upon others. But for a ruler to

avail himself of the greatest talents and resources available, he also

needs some means to attract and encourage the capable to step for-

ward and assist him.

In Kuan Tzus view, rulers who neither made careful prepara-

tions for change beforehand, nor trusted capable ministers with

power and authority, would never be able to institute beneficial poli-

cies for their country. When a leader cannot recognize who is ca-

pable, or fails to use the capable he has available (perhaps appointing

them to high positions but failing to trust them), he simply endan-

gers his own cause. Hence the ability to recognize talent and prepare

for change are some of Kuan Tzus essential requirements for gov-

erning a country.

This view seems quite disquieting when we compare it with the

emphasis more common today, for a nations press and public seem

to place more focus on their leaders sexual affairs than on his gov-

erning abilities and actual plans for the nation.4 As the French might

correctly argue, a nations overriding concern should be whether a

ruler actually possesses the required leadership abilities. No leaders

are paragons of virtue, but they certainly must be able to manage the

state. When they can, countless other issues will fall into place.

These various teachings and the majority of what we know

about Kuan Tzu, come down to us from The Book of Master Kuan,

which is known in short as the Kuan Tzu. The Kuan Tzu is actually a

compilation of some 24 smaller books with a total of 86 sections, 10

of which have been lost to posterity. Many of the 76 sections which

have been left to us cannot actually be attributed to Kuan Tzu him-

self, but are by authors of a later date who appended Kuan Tzus

name to their own writings in order to give them an air of authority.

This was a common practice in ancient China where the tradition

was to revere the ancient, and so individuals would sometimes ap-



pend some respected name onto their own works in order that they

might gain acceptability. Hence, a large portion of the Kuan Tzu is

undoubtedly by later authors who wished to add their own thinking

to the masters original words.

The collection of essays in the Kuan Tzu covers an extremely

wide variety of governing matters, though the majority of sections

deal with questions of economics. However, the overall theme of

the collection is to discuss various strategies and the effective tactics

of power politics that will bring prosperity to a country, strengthen

its military capabilities, and make its ruler the supreme leader of a

region. In short, we can call these discussions leadership strategies

which you can apply to running a country, a business or any other

organization or institution.

The leader employing Kuan Tzus strategies, though he might

not be able to become the rightful king of the realm because he was

not in line for the hereditary succession, could still become the stron-

gest leader of the land and earn the title of the nations Lord Pro-

tector. This title referred to an individual who always held the

countrys best interests at heart, who always acted for the nations

overall benefit rather than for his own parochial concerns. The Lord

Protector was therefore in effect the preeminent leader of the coun-

try, someone who stood heads above the other lords because he was

the most righteous, richest and most powerful leader in the realm.

Thus while Duke Huan could never become the legitimate emperor

of China, Kuan Tzus policies effectively raised the duke to this very

position.

So effective were Kuan Tzus domestic and foreign policies

that Qi became the most prosperous state in the realm and the duke

won substantial influence over Chinas other feudal states, eventually

presiding over three armed confederations and six peace confer-

ences where previously there had been little cooperation between

the states. Armed with Kuan Tzus policies and wearing the mantle

of moral righteousness, Duke Huan became the natural leader of

these confederations because the other feudal lords, with their minis-

ters and subjects, viewed his actions as unselfish, taken for the best

interests of the country as a whole. Hence the duke was able to unify

the country though diplomacy rather than through warfare.

15

In achieving these objectives, it is easy for people to immedi-

ately imagine that Kuan Tzu was a sneaky man without morals or

scruples rather than an individual wise in the ways of strategy and

human nature, but this is far from the truth. In fact, Kuan Tzu re-

peatedly stressed that a rulers actions must be as genuine in outward

graciousness as they are in virtuous, inward intent. In other words,

political strategies must be founded on virtue. Otherwise, strategic

plans will not succeed because the foundation is faulty and because

others will always suspect you, for individuals will never voluntarily

take an untrustworthy individual to be their leader. So Kuan Tzu was

more insightful than the Chinese strategist Chen Ping who helped

Emperor Kao Tsu of the Han dynasty unify the nation. Chen Ping

helped the emperor engage in tactics of political trickery and so pre-

dicted that his own descendants would not fare well, since secret

schemes are prohibited by the Tao school. Kuan Tzu, on the other

hand, fully recognized that if you deal with the yin factors of devi-

ousness, a person brings about his own destruction.

Leaders who simply act according to their own inclinations

who aim to increase their power through military force and various

manipulative schemes without legitimate justificationcan never

gain true public backing. Whether from the practical or idealistic per-

spective, Kuan Tzu noted that without righteousness on ones side,

leaders could never be sure of solid support. Thus they could never

be considered true Protectors of the Realm. True Lord Protectors

have their foundations imbedded in virtue.

Wise leaders throughout history have all recognized this simple

lesson, and know that military might and authoritarian force never

secure the genuine obedience or respect of the people. Nor does

military power guarantee lasting conquest either. Military campaigns

can indeed succeed in outwardly subjugating a nation, but they are

an inadequate recipe for establishing a secure governing relationship

within.

All people naturally recognize that Might is not right! and an

indignant populace will always defy the policies of a tyrant, waiting

for the chance to break free of his hold. When a nation no longer

fears its rulers oppression, then the exercise of authority is sure to

meet with defiance and revolt. As Kuan Tzu pointed out, it is there-



fore far better to master strategies and human psychology, rather

than force, in order to win control of a realm. There is even a Chi-

nese military maxim that captures this very thought: It is better to

win hearts than it is to win cities; it is better to battle with hearts than

it is to battle with weapons.

Thus in the Kuan Tzu we have many lessons for becoming the

supreme leader of a country or group of confederate statesles-

sons quite relevant to the United States, Canada, the Russian Con-

federation of Independent States, or European Community today.

Foremost in this advice is a leaders need to achieve popular support

among the people so that his policies are accepted and his reign se-

cures firm foundations. Those who aspire to leadership must first

conquer mens hearts and minds, and to do this they must exhibit

virtue, justice and fairness in their actions. Otherwise, should an as-

piring leader violate the unwritten laws of humanity, he would bring

upon himself the distrust, if not wrath and indignation of the

people. So whether you aim to be an elected official, whether you are

the legitimate heir to a throne or even an aspiring revolutionary, the

best means for coming into power is through the display of inherent

virtue that genuinely wins the peoples trust. You cant fake these

thingsthey must be real. On the other hand, leaders who claim alle-

giance to lofty motives and high principles, but who act hypocritically,

will lose any adherents and be condemned by history.

To gain influence, it is imperative for an aspiring leader to pro-

mote a simple theme which everyone can understand, an ability aptly

illustrated by the example of Ronald Reagan. To achieve popular

support, you must publicly communicate a grand vision in tune with

the nations will; you must give the public a vision they can appreci-

ate, a vision with which they can easily identify.5 You must communi-

cate a message which everyone can understand.

Furthermore, you must embody your message in your very be-

ing so that your words match with actions that demonstrate your

sincerity. If your personal identity merges with the essence of the

message youre trying to convey, the public will then have confidence

in your sincerity. In this way youll win the confidence of the public.

However, those without the support of the common man will always

stand on shaky ground, and when a leaders position is insecure, this

17

is the time when others will broadcast upon their personal failings

and moral deficiencies.

The Kuan Tzu thus details many strategies for gaining power

and influence, applicable regardless of whether one wishes to be-

come the supreme leader of a group, a nation or a confederation of

states. The lessons are aimed at politics and rulership, but they can

just as easily apply to the world of business today, where firms are

like little states in themselves. After all, these are lessons on leader-

ship and strategy that can be applied almost anywhere. Furthermore,

corporations and even small businesses are like governments in that

they need these lessons as well.

If you decide to study the Kuan Tzu and master its lessons, as

Japanese strategists of realpolitik have often done, you must not over-

look the moral dimensions of the work which are often neglected by

those with devious intentions in mind. In truth, no one can really

succeed nor long prosper with grand schemes unless his or her plans

are soundly founded upon virtuous intent. Yin is always replaced by

yang, so in the long run evil cannot prosper.

Kuan Tzu is not to be considered a heartless, scheming Chi-

nese Machiavelli, for he personally loved the people and always em-

phasized that a leader treat them with concern. Hence, although he

does not outwardly appear so, we must remember that Kuan Tzu was

in fact a sage who responded to the calls of the time. As a sage, Kuan

Tzu felt that leaders should guide themselves privately and publicly

by just and moral principles, for these are the foundational principles

behind a well-run organization. Adopting some false ethical stance,

taken for expediencys sake, would just not do. Everything, he

stressed, should always revolve around virtue.

As most recognize, there is no amount of propaganda nor

public relations which can mask the lack of virtuous intent; it is im-

possible to adequately camouflage or disguise selfish actions which

lack a moral basis. Those who do act in terms of self-interest, lacking

virtuous motives while fueled by greed and lust, will always be found

out in the end. It is simply a matter of time before this inevitably

happens, the final reckoning and loss of support coming sooner or

later. One can always rely on the publics good common sense and

collective wisdom to spot falsity and identify who isnt sincere with



regard to the greater good of the nation. So great leadersleaders

who are greatalways operate with a mind devoted to saving the

nation. This motivation is the pillar around which they receive the

support of the people.

Even though Kuan Tzu emphasized benevolent government

and despised the use of force, this did not mean that he was a paci-

fist when it came to the topic of war. He was not totally averse to

military undertakings, but insisted that there should be no military

campaign without just cause. After all, military maneuvers are expen-

sive in terms of lives and economics, and they can be rather unpre-

dictable affairs. No ruler wishes to risk his kingdom on the battle-

field.

In Kuan Tzus view, military might was an instrument of policy

to be used like any other, but strength had to be subordinate to the

idea of right; as King Arthur might say, military activities could never

be conducted if they were not in harmony with righteousness, and

were naturally to be avoided if the chance of losing was greater than

the chance of winning. Since nothing can cause greater loss than

war, where a single days fighting can destroy an entire generations

worth of labor, Kuan Tzu adopted the realistic policy of being care-

ful about entering into any forceful engagements. For those who are

wise, there are always a variety of alternatives to an end, including a

multitude of ways to win without fighting. So Kuan Tzus guiding

principle was that his state should be strong for war if needful, oth-

erwise practice benevolence.

Kuan Tzu was therefore anything but an idealistic dreamer

who felt a nation could survive if it left itself unprotected. His em-

phasis that countries build up their economic strength and internal

stability was not only championed for prosperitys sake, but because

these characteristics were often the best deterrents to invasion. A

wise nation, he felt, must always be prepared for war, but as with all

other great strategists, Kuan Tzu also insisted that the best strategy

was to win without fighting,6 or else to win with but a single battle.

Sun Tzu pointed out that those exhibiting the very highest

skills of warfare are those who never fight with anyone! Kuan Tzu

therefore revealed his genius by deriving a number of strategies for

making his own state strong, from which it could subdue opponent

19

states through economic and diplomatic means rather than through

aggressive military methods. To become a supreme nation or su-

preme leader, it has never been prudent to put blind faith in force,

but rather, it is always much wiser to rely on insightful strategy.

Today it is popular to study the writings of the famous general

Sun Tzu in order to understand military strategy, but many of Sun

Tzus writings are simply paraphrasings of Kuan Tzus earlier obser-

vations! While Sun Tzu and Kuan Tzu came from the same state and

commented on similar topics, in terms of the deep understanding

required of military and geo-political affairs, Kuan Tzus observa-

tions far surpass Sun Tzus tactical considerations. This is because he

was a sage who could discern the very beginning, the progression

and outcome of an affair, whereas Sun Tzu exhibited the factors of

intelligence and observation rather than the truest wisdom of a sage.

This is what separates the two, the analysis of which could become a

book in itself.

Despite the mastery of warfare and military maneuver shown

by both individuals, it is important to once again emphasize Kuan

Tzus insistence on Sun Tzus most important maxim, which is often

overlooked today: To win without fighting is best of all. This is a

very important reminder to individuals who become gleefully excited

upon learning some new military strategy or clever scheme, anxious

to put it into play. After all, fighting is to be avoided at all costs.

Furthermore, no strategy will guarantee success in battle anyway, for

victory is not dependent on military might alone. Hence, one should

not misconstrue this small volume as a blueprint for militaristic or

imperialistic designs.

In addition to rivaling Sun Tzu in his proficiency of strategy

and warfare, it must be mentioned that Kuan Tzus civil and admin-

istrative policies were on par with those of Confucius who appeared

over 150 years later. In fact, much of Confucius personal adminis-

tration mirrored the substance of Kuan Tzus teachings. He also ac-

knowledged Kuan Tzus great merit in that he had enabled Duke

Huan to assemble the feudal lords nine times without need of force,

and it was Kuan Tzus administration which had saved the Chinese

Empire from collapse! In effect, it is Kuan Tzus reforms which had

prevented the Tartar barbarians from conquering the nation, thus



preserving the Chinese civilization from dissolution. So the Chinese

are still enjoying the benefits of such actions today.

Such praise bears witness to Kuan Tzus political, administra-

tive and military abilities, but says nothing about his contributions in

the soft field of social philosophy. But anyone who bothers to

investigate the Kuan Tzu carefully will find many sections which rival

Mencius, and will find it packed full of Taoist thoughts pre-dating

Lao Tzu and Chuang Tzu. Many will claim that these ideas are from

the latter contributing authors, but it must also be remembered that

Kuan Tzu was himself considered a sage.

Turning to economic matters, it was Kuan Tzu who originated

a number of novel economic policies which made Qi the richest and

most stable state in China. He reformed the agricultural taxation sys-

tem by replacing the traditional land rental with taxes levied in accor-

dance with the size and quality of the land under cultivation. This

acted to stimulate Qis agricultural and sericultural production and

freed the peasants from the crush of a burdensome and ineffective

tax system which did little to help fill the states coffers. Furthermore,

Kuan Tzu organized the citizenry into special work groups by classi-

fying them as either traders, workers, farmers or scholars. By relying

primarily on the economically unproductive as soldiers in times of

war, while shielding the more productive farmers and commercial

classes, this new strategy enabled the state of Qi to stay productive

during both times of peace and difficulty. Hence by encouraging

agricultural production, reforming the tax system, and by discour-

aging private extravagance while encouraging good behavior

through effecting a system of rewards and punishments, Kuan Tzu

nurtured an environment conducive to the work ethic, enabling Qi

to lay strong economic foundations and accumulate the resources

necessary for military expenditure.

Like the economist Lord Keynes, Kuan Tzu sanctioned the

principle of government economic intervention, namely fiscal

policy, to strengthen the national economy, and he specifically en-

couraged public works in times of recession. He advocated the gov-

ernment monopoly and taxation of key industries such as salt, iron

and timber production in order to avoid excessive direct taxation on

the populace. He was originator of the policy of the light and

21

heavy, basically a regulation of the money supply to control infla-

tion, and he advocated the careful manipulation of prices and

money by the state. This made him one of the worlds first Monetar-

ists, who clearly recognized that the circulation of money and the

variability of prices influenced the supply and demand of commodi-

ties, as well as employment and immigration. Kuan Tzu even used his

understanding of monetary policy to strategically inflict damage on

opponent states without resort to open warfare, a potential danger

well understood by many Asian nations who limit foreign ownership

during the development stages of their capital markets. Kuan Tzus

successful combination of Keynesian and Monetarist policies still

offers useful lessons for policy makers today.

In short, as prime minister to Duke Huan of Qi, Kuan Tzu

instituted a series of economic, administrative, social, diplomatic

and military measures which sought to foster the welfare to the

people, and which gradually turned Qi into the foremost state of

China. Relying on his advice, Duke Huan was able to form a strong

confederation of the previously disunited and uncooperative feudal

states. This confederation professed a renewed loyalty to the em-

peror and repulsed the invading barbarians of the North. In restor-

ing the dignity of the emperor and the imperial privileges, forcing

the leading vassal states to fulfill their liege responsibilities and put-

ting a stop to the local wars of ambition, Kuan Tzu was responsible

for resuscitating the moral basis of the imperial system and for re-

unifying the Chinese nation. Kuan Tzus policies and actions during

this period made Duke Huan the first Lord Protector of China,

but the sage and master strategist Kuan Tzu should be considered

the actual savior of the nation.

What Prime Minister Kuan Zhong has left to us in the Kuan Tzu

is therefore a masterpiece on economics, military affairs and overall

statecraft, an ancient work of geo-politics with few equals. Though

Duke Huan, as ruler of the state of Qi, always retained his right to

question and alter Kuan Tzus policies and strategies as he saw fit,

Kuan Tzus success across the entire spectrum of government affairs

lead the duke to place great trust in most all of his recommenda-

tions. It is ironic and unfortunate that someone with such great abili-

ties was not used by his previous superiors, but such are the twists of


fate that the great sometimes go unnoticed until it is their time. As to

the effectiveness of Kuan Tzus policies, Qis ascension to the posi-

tion of preeminent state of China in itself speaks of his wisdom and

statecraft. Thats one reason that his policies deserve a careful exami-

nation today, so that all the worlds nations might benefit by them.


CHAPTER 3

Achieving Supremacy in

Leadership and Administration

LESSON 1: What Is It That Distinguishes the Great Leaders

There are certain conditions which distinguish the lord protectors and

kings. Such individuals model themselves on the workings of Heaven

and Earth. They educate the people and transform society. They estab-

lish laws and regulations for the nation and a hierarchy among the feu-

dal lords. They treat everyone within the four seas as guests and always

act at the proper time. Acting in this fashion, they are able to restore

law and order to the whole world.

In order to lead the world, you must love the people as if they

were your own children, and you must cultivate the attitude to nour-

ish all the creatures of the earth. Confucius said that the first thing a

ruler should do for a people is to improve their circumstancesto

nourish and enrich them and bring them out of poverty. This is why

most leaders are elected today, for they promise to lead their coun-

tries to prosperity. Prosperity is a basic issue because it is by virtue of

prosperity that a domain can be made orderly.

When we talk about helping the people and contributing to

society, the first thought everyone has is to make the people more

wealthy, such as helping an economy develop. Well maybe we can

provide the people with more material wealth or the means for

wealth, but whether that will make them happier is another question

entirely. Yet one thing is for sure: its harder to instill virtue and peace

in a nation when the people are idle and hungry. When society is

impoverished, it is hard to establish the rule of law.

Confucius therefore said that the second task of a leader is to

educate and instruct the people, which means teaching the people to

cherish virtue, and if necessary, transforming a nations social cul-

23

ture. So a leader must teach the people as if they were a new genera-

tion, and work to transform their sense of identity. A leader must

always be willing to promote innovative changes that go against out-

moded traditions. In the task of instructing and enlightening the

public, a leader should encourage virtuous behavior by rewarding the

good and by having erroneous doings and mistakes corrected. How-

ever, during this process a leaders private actions must be consistent

with the values he publicly advocates. After all, the inner and outer

should never conflict with one another.

In order to lead others, it is absolutely important for a leader to

develop plans which people can follow. Furthermore, a leader must

also instruct the people about these policies so that everyone under-

stands their purpose and intent. In instituting these policies, an

organizations governing system should be fair so that all people are

given equal consideration and so that no one is looked down upon as

an inferior. If this doesnt happen, a leaders audience will fragment

into separate pieces and he will no longer lead a whole.

To illustrate the policy of fairness, we can turn to the example

of the Roman Empire, which consisted of a number of vastly differ-

ent territories. Although the Romans were known as conquerors,

which tends to negate the idea of being fair, the Roman adminis-

trative system was flexible, tolerant and open. In fact, given the time

period, Rome was known for its equitable taxation policies and its

rational framework of justice over the lands the Empire controlled.

While the Empire was composed of over forty provinces peopled by

different tribes and nationalities with entirely different customs, lan-

guages, practices and traditions, the Romans respected these sepa-

rate cultures, gave them real authority, and let them manage their

own affairs. Under the short-lived policies of Alexander the Great

on the other hand, the defeated were treated as enemies, whereas the

Romans treated their provincial subjects as Romans, as contributors

rather than outsiders. Hence the local elites in particular provinces

were given important positions in the Roman hierarchy, and most

every position in the Empire was open to a suitable candidate, irre-

spective of his origin.

This attitude is to be contrasted with the old policies of the

British Empire, wherein the British considered themselves a culture


superior to the colonies they established. For instance, the British

would never fill important administrative posts with local citizens.

One only need compare the longevity and reach of these two Em-

pires, or even add to the comparison the Empire of Alexander the

Great, to understand which means of governing constituted the

wiser course of action. If a nation wishes to lead the world, it must

also learn this lesson and refrain from imposing its own cultural, po-

litical, and ethical standards on others. Many multi-national corpora-

tions follow this principle and therefore let the locals, rather than the

head office, run the show in every country where they stand.

In short, everyone should be respected and honored equally,

and a supreme leader treats others with equal consideration, as if

they were all important guests. When leaders treat everyone fairly

and value their input and presence, they will readily acquire the nec-

essary influence to be able to steer their organization in new direc-

tions. Using these principles, a supreme leader will then be able to

successfully correct whats wrong in the world. When a leader acts

for the sake of the world he draws the world to himself, and when he

consistently shows his love for the world, he subsequently wins the

trust of the world. Thats why he can correct things. When youre

loved by the people you can accomplish even a gargantuan task with

little assistance because of receiving true cooperation from those

youre serving.

LESSON 2: The Challenges to Becoming the Supreme Leader

There are several tasks to accomplish [when the lord protectors or

kings wish] to become supreme. They reduce the size of large states

and correct those states which behave in an unprincipled manner.

They cut down the might of those states which are excessively strong

and reduce the influence of those states considered important. They

bring unity to states racked by rebellion and dispose of rulers who have

indulged in violence. They punish the guilty, demote the unworthy

holding rank, and become the new leaders in order to sustain the

people and establish them again.

Achieving Supremacy in Leadership and Administration 25


To actually become the head of a nation, or even leader of the

world, requires skillful strategy, patience, timing, and effort. Because

strategy is a primary concern, Kuan Tzu therefore advises several

tactics for becoming the eventual leader of a large realm. These tac-

tics include: cutting a countrys larger states down to a smaller size,

curbing the military might of states which are too powerful, and de-

creasing the stature of states which wield too strong an influence

over others. As in warfare, this is the practice of trimming an enemys

strength by cutting his forces apart, like a butcher who dismembers a

carcass. The reason these strategies work is because they rely on an

inherent principle within: to harmonize any conditions that have

grown to an extreme, because extreme situations represent imbal-

ance. By diminishing the strength of any elements which have grown

beyond measure, you will be able to restore balance and deal with

such conditions more effectively.

Those who aspire toward supreme leadership also assume the

task of admonishing and disciplining rulers who exercise absolute

power in a deviated fashion. Furthermore, by providing a refuge to

the oppressed, they serve as protectors to the fallen. When they can

restore situations to a level of equilibrium and moderation, by re-

placing the rule of tyrants with benevolent administration, then

there can be peace rather than disorder in a realm. And remember

that realm may represent a business or other type of organization.

Leaders aspiring to attain worldwide influence should match

their desire with the objective of helping the whole world. Because

of this goal, they must rescue states facing extinction, states whose

very survival is in jeopardy. However, supreme leaders never inter-

vene in other peaceful countries with the intention to harm the

reigning regimes. Rather, they only interfere when motivated with

the intent to preserve people in disorder who are on the brink of

destruction. This is why they assume control over states misruled by

tyrants, and why they intervene to dispose of such despots.7

A Chinese maxim captures this idea for it says, Launch an

expedition to punish the sinner and save the people. Thus a su-

preme leaders military interventions should be motivated by be-

nevolence rather than by the desire for gain or conquest. In such

cases, Kuan Tzu also feels that the responsible leader should protect

27

and govern the fallen until they are once again prosperous and able

to raise their own leader. If one is a hegemon, however, he will con-

tinue to rule over the people indefinitely because the intervention

was never motivated by benevolence. So one must always be suspi-

cious of an aspiring leaders true intentions.

While strategic interest and foreign alliances are the most com-

mon reasons for becoming involved in foreign interventions, a su-

preme leader doesnt cherish isolationism so as to refuse involvement

with others at all other times. To become supreme, a ruler must go

out of his way to interact with foreign countries on a regular basis.

For instance, if he truly loves the worlds people and wants them all

to prosper, like the Red Cross, he will offer help to heal those who

have been harmed and assist them to rebuild again, even if there is

no strategic value to these actions. Eventually, such states will be able

to stand on their feet again, and will remember the assistance theyve

been rendered. In this way, a leaders greater goals will thereby be

accomplished.

An influential leaders motivation for such involvement, and

the reason he can become a world leader in the first place, is simply

because he loves the worlds people. However, despite his motiva-

tion of compassion and desire to help, he must often show great

restraint. He must temper his actions with wisdom, rather than fool-

hardiness, when trying to achieve grand objectives. Not all the prob-

lems in the world can be, nor should be solved, nor should even be

addressed. For instance, some people are so stubborn that they can

never be convinced they are wrong, and so one should not waste

time on the effort. In other cases, an interventionist cure can be

worse than the original problem. Good leaders therefore establish

priorities for their activities, and since they are aware that some ob-

jectives can represent futile undertakings and others will naturally

resolve themselves over time, are careful of over-extending their ef-

forts and commitments.

LESSON 3: The Difference Between the Superior and Inferior

Leader

The ruler who merely enriches his own state is qualified to become a

Achieving Supremacy in Leadership and Administration


lord protector, but one who is righteous is qualified to become a king.

A true king should possess great wisdom. He does not attack states

that uphold the same virtues as his own nor establish his rule over

those that are alike in adhering to the Way. However, among those who

are contending for dominance of the realm, it is common practice to

use force to overthrow tyrants.

There is a great difference between the leader of a nation and

one of its minor statesmen, or between the president of a corpora-

tion and one of its divisional managers. This difference is not simply

the status of their office, but the intended scope and audience for

their actions. The great address the larger, the lesser address the

smaller.

For instance, the minor leader is preoccupied with concerns

subordinate to group interests as a whole. He pursues strategies

which focus on a small group, and addresses the limited in number

rather than the many. The Congressman or divisional manager both

fall into this category because their efforts are mainly targeted at pa-

rochial concerns; and by definition, individuals who over-emphasize

minority interests disqualify themselves from being majority leaders.

Each group typically asks for its own in-group advantages over oth-

ers, and if you only champion the causes of a tiny unit, without ever

learning how to balance these interests with the interests of the

whole, you will never learn how to manage great things.

To become a supreme leader, the individual must therefore ex-

pand his focus to address greater concerns and issues, and a larger

audience as well. His viewpoints must unfold to envelop the whole,

and in order to triumph over equal competitors, his morality must be

higher than that of other contenders. Unfortunately all of this places

a greater burden on the majority leader, because the larger and more

diversified the population he addresses, the greater the challenge he

faces in crafting a story which has a heterogeneous audience appeal.

This makes it most likely that the message he will need to portray be

a simple one.

For an entire nation to become a superpower, it must adopt

sound policiesforged of wide vision and wisdomthat will bring

wealth and prosperity to the entire nation at large, for it is the coun-

29

try which becomes rich throughout that ultimately attains super-

power status. The leader who has the wisdom to enrich an entire

nation rather than some tiny select group within, or the executive

who can make his entire company flourish rather than just some

single division, are both qualified for the leadership helm. In other

words, true leaders have the necessary wisdom and apply their ef-

forts to benefit the interests of the whole.

However, just as you must possess greater vision and more ef-

fective actions than your opponents to win in any competition, those

aspiring to the leadership helm need the wisdom of a sage and the

virtual power of a dictator to attain their standing. In this way, they

will have the freedom to carry out their vision without outwardly

appearing to be despots. It would be nice to think that virtue is suffi-

cient in itself for an individual to rise in life. However, those who

become successful leaders are often those who have simply accumu-

lated enough political capital, and who know the expert means of

motivating others. Like successful movie directors, parents, manag-

ers and even dictators, great leaders are superb motivators who can

influence people toward much greater ends. To be successful at this

on a grand scale, however, you must do this through virtuous means.

In the struggle for supremacy, there will be many contenders

jockeying for power. Kuan Tzu insists that those competing for posi-

tion must never try to overlord those contenders who share the same

values, as this will alienate your peers. In other words, an executive

businessman should never attack his colleagues, and in terms of

politics, if another country is as virtuous as your own, you should

never try to overlord it using force. As an example, it would be ludi-

crous for the United States to try and control a France or Germany,

for these countries are peers who can be said to share its same prin-

ciples and virtues. If the United States ever tried to strongarm

these peers, it would alienate these close friends and allies. On the

other hand, sharing the same virtues does not mean holding exactly

congruent views, nor does it suggest that countries holding the same

values will be reliable or consistent allies.

While one should refrain from attacking other parties with the

same virtues, the leader who aspires to have supreme influence in the

world will not shy away from attacking the aberrant. In the political



realm, these are individuals who use violence to harm the people,

which imperils their own as well as other states. Therefore a world

protector shows no hesitancy in taking over other countries politi-

cally unsettled due to the misrule of a tyrant or group of vicious

villains. Overlording the deviant has always been a common practice

among those wishing to become world leaders, who righteously em-

ploy force to end the misuse of force, and to correct what everyone

knows is wrong.8

There is a caveat here, for whenever a leader intervenes to save

another nation, he must avoid wavering in this type of foreign com-

mitment. When a nation assumes this responsibility, it must recog-

nize from the outset that it is a long term proposition.9 A leader who

practices such intervention must be prepared to remain with his

ward for decades if need be, perhaps even assuming control over its

affairs in order to nurse it back to health. Otherwise, to initiate some

foreign involvement without the followthrough of patient commit-

ment will result in an incredibly damaged reputation. Furthermore,

the memory of such abandonment can last for centuries. For one

thing, such actions will cast doubt upon a leaders true motivations,

and secondly, lead others to question his stability and surety as an

ally. Hit and run interventions are also deficient in that theyve often

been shown to inflict even greater damage to a situation than existed

at their commencement. None of these consequences are something

a leader desires.

Business executives, who wish to dominate their industries, can

find inspiration in Kuan Tzus advice as it suggests taking over com-

panies on the verge of bankruptcy and managing them back to

health. In this way, business leaders will become heroes not only due

to saving family livelihoods by preserving employment, but will ac-

quire assets cheaply while strengthening their own competitive posi-

tion. So such a course of action has both humanitarian and strategic

benefits. To save an entity from the brink of destructionhow

could this not be considered beneficial?

LESSON 4: The Tao of Accomplishment

Ruling over the people has its principles (tao), and becoming a lord

31

protector or king has its timing. To have your own state in perfect order

while the neighboring states are in disorder is a major opportunity for

becoming a lord protector or king.

There are definite principles to follow for being a good leader,

or in becoming a leader at all. One such principle is to always act at

the proper time, for this is the way to accomplish your aims. A suc-

cessful lord protector or king always uses strategic timing to achieve

his goals which even includes the use of opportune timing for

climbing into power. An executive who wishes his proposals to gain

acceptance must also learn the virtues of timing, for there is nothing

more appropriate than waiting until the time is right to receive fric-

tionless approval for ones plans and submissions.

Another important principle to put into practice, when you

have already become a leader, is to establish a formal means of gov-

erning your organization. To govern a country or any other type of

organization, you definitely need an organized structure of adminis-

tration; even an impromptu jazz musician relies on a harmonious

structure for his melodies.

On the other hand, when a nation lacks an impartial system of

rules (fairness often equates to procedural justice) for regulating its

affairs, there is bound to be disorder within the state. When an orga-

nized means for ruling the people is absent, there will always be

chaos in internal affairs. As Virgil reminds us in the Aeneid, the great

art behind the success of the Roman Empire was its ability To gov-

ern the peoples with authority, To establish peace under the rule of

law. In other words, to have peace in a large nation, you need the

structure of law and order. No matter whether your country is au-

thoritarian, republican, socialist, democratic, capitalist or commu-

nist, it still requires some form of law and order.

History shows that the greatest success and stability has always

come to nations who conducted internal matters according to an

established rule of law. This provides the benefit of allowing indi-

viduals to plan their affairs and take calculated economic risks, for

they can then know what treatment to expect from the state. On the

other hand, the lack of clarity in an environment tends to stifle many

worthwhile activities.10 Even fish have trouble navigating when the



waters are muddy.

While a nation needs some form of organized structure for

efficiently administering its internal affairs, it must make use of stra-

tegic actions and timely opportunities to promote its external,

worldly standing. With this in mind, a superpower that wishes to

grow even larger will use its influence to overtake other states politi-

cally unsettled. While relying upon the law to ensure order within

itself, it will take advantage of the difficulties suffered by neighbors

to advance its own position.

When the enemy of ones state suffers some casualty, the wise

leader of a realm sees this as an opportunity for national advantage,

just as when a corporation notices a competitor making some strate-

gic blunder. In such cases, rivaling firms in the business field will use

these opportunities to strengthen their own positions. Some compa-

nies will simply try to expand their market shares in such situations,

while others will attempt to annex or even destroy a beleaguered

colleague. The principle is that a rivals difficulties can become your

advantage.

In Taoist terminology, Kuan Tzu therefore advises a leader to

take advantage of a neighbors yin tide to increase ones own yang

tide.11 In other words, a neighbors instability is your own opportu-

nity for gain; a neighbors misfortune can be your good fortune if

you seize the chance. To become the supreme leader of all, you abso-

lutely must seize these chances because opportunities rarely repeat

themselves. In geo-politics, you must not fail to make use of any

such chances that come your w

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