11 December 2014

Conscious Capitalism is not Future but Ancient Chinese Confucius Business Practices

The call for Conscious Capitalism is not at all new to the Overseas Chinese Businessmen, who for centuries past, have been following the Confucian values in doing business. They are know as the Confucian Busineemen 儒商 Ru Shang. Here are some poems that describe their values and practices.
From the decade, there are many books written to encourage us to add 'Conscience' to the capitalism of money only economy. Some examples are Conscious Capitalism: Liberating the Heroic Spirit of Business by John Mackey,  Megatrends 2010: The Rise of Conscious Capitalism by Patricia AburdeneFirms of Endearment: How World-Class Companies Profit from Passion and Purpose… by Rajendra S. Sisodia etc.

The present concerns with the poison milk power, using sub-standard and industrial materials for consumer oil and foods in PRC and Taiwan, also tells us that such Chinese businessmen also need to follow the call of the West to put our conscience back when doing business. They have departed much from the good practices of their fathers and fore-fathers.

Here are some poems that capture the spirit, the values, and the practices of the Ancient Confucian Businessmen.

Their Values:
Pay attention to race and culture. Foundation of Love, Rightness, Conduct, Wisdom & Honesty. Care for country and social responsibility. Follow ethical business practices. Don’t take money from unrighteousness means. Speak integrity, emphasize charity. Build up top level business culture rationale. Care for staff. Help the poor and weak. Build reputation and raise business opportunities.

Their Practices:
Dress like a gentleman, speak with wisdom and open-mindedness. Know about the culture and lifestyles of the world. Know about the great mountains and rivers. See and forget not. Speak with wisdom. Count with the heart and speak out the answer. No matter who, can be like old friends. Everyone like them and loose out not to celebrities.  Good reputation and win many friends. Keep promises made. Walk the talk. Gather the country wealth and bring benefits to all people.

Their History and Practices:
古有陶朱子贡,今有儒商千万。 Past has TaoZhu ZiGong  Now has many Ru Businessmen.
打造诚信品牌,虽予千金不换。 Build the Integrity Brand  Incorruptible by money.
不求日进斗金,但求无亏无欠。 Don’t seek lots of profits daily. Only ask not to have losses and debts.
力保供求双赢,有钱大家同赚。 Try best to preserve win-win for both. All share the money to be made.
先要成为朋友,再做合作伙伴。First become friends then become business partners.
友谊醇酒醉人,生活香茶一盏。 Friendship is like good wine. Living is having tea together.
经商必先做人,本是儒商高见。Being a person comes before business. Root is key to us.
经商必做儒商,不负今生所愿。 Must be a Ru Businessmen to do business. Don’t neglect the wish of this life.
打下人品根基,自有风光无限。Build a strong character foundation and future will be unlimited.

We can do a google search to findout some of the work and contributions of the famous Overseas Chinese Businessmen like Aw Boon Har (of Tiger Palm fame), Tan Kah Kee, Lee Kong Chian etc.
They used their wealth to build schools, hospitals, charities, support governments in their war efforts against their agressors etc.

Of course, it does not mean that there were no bad business practices and bad businessmen. There were called 奸商 Evil Businessmen and not busineemen. Businessmen are supposed to be honest.

Let's promote such values in business. 

Lim Liat (c) 11 Dec 2014

27 October 2014

Sun Zi's Art of War, WTA Final 2014 and Halep

The WTA Final in Singapore 2014 gave us a rare opportunity to show how strategy, especially of Sun Zi's Art of War could be used in winning a tennis championship. Two Art of War principles will be highlighted here. Firstly the famous 'Know Others Know Self' and the lesser know "Pick an Easy to Win Opponent" principles for winning.
For the usual tennis competitions, there is no strategy to play. The player just have to beat the opponent to rise to the top. However, for the WTA Final, due to the group round robin format, like the world cup, there is possibility of playing strategically. This happened for Simona Halep. In the final round robin match between Halep and Ivanovic, Halep has already gained the entry to the semi-final. While the win or loss does not affect Halep, it does affect the entry of the top seed Serena Williams into the semi-final. If Halep 'allowed' Ivanonic to beat her in two straight sets, the Serena is out and Ivanovic is in. Halep had the total control of the outcome of choosing her opponent in the final! She could choose to meet Williams or Ivanovic. Which opponent should Halep choose for the final? 

We know that Halep finally choose Williams by denying Ivanovic straight set win. Ivanonic won their first set at 7-6. Halep fought back in 2nd set to win it. Ivanovic finally won in the 3rd set.
Halep then defeated Radwanska to meet William who defeated Wozniacki narrowly in the other semi. William beat Halep with a 6-3 6-0 revenging her defeat of 0-6 2-6 by Halep in the round robin earlier. Halep could have won if perhaps she choose Ivanovic since the other players are closer in their ranking.

Strategy is used much in sport. Consider Formula 1 championship. In the past, they disallowed team order. But then recently, they put it back again. In a championship of many races, strategy is of utmost important. You do not want to commit the error of winning a battle and losing the war. True champion does not win by showing off and risk their chance of winning by beating their rivals with a great gap. They just need to minimize their risks, preserve their engine and car, and win by the least margin of perhaps a few seconds only. In the final race, if one only need to come in 5th to win, then there is no need to fight for any position higher than fifth and risk crashing or spoiling the car. These are some of the winning principles from Art of War - Maximizing Returns at minimum risks and costs.

Principle of Know Others Know Self 知彼知己 and Understanding Statistics
Firstly, players must know how they stand against others. Strength or weakness is measured relative to the opponent. So, is Halep a better player than S Williams? For the stats and ranking, it is obvious that S Williams is one step on top the others. Halep's win against Williams was just a statistical large deviation from normal rather than a true structural shift that Halep has become better than Williams. Stats gives us the 68-95-99.7 rule. It could be just a point in the 2 or 3 standard deviation normal distribution curve but it is not from a new population of Halep better than Williams. The abnormal win gave Halep the misguided overconfidence. You can't base you decision on a point of observation when there are many other stats that give a different conclusions. e.g. Williams never loose twice in the same tournament.

Principle of Picking an Easy to Defeat Opponent
This is a lesser known principle. The common and popular teaching on war is to win against a famous and mighty opponent and become the greatest. But that is not the objective of Art of War. Art of War is about winning with maximum net returns using minimum costs and if possible no risk of loosing at all. Here is the original Chinese text about choosing the enemy.

军形第四:Chapter 4 Formation Shape

The wise warrior of the past choose opponent that they can beat easily.

Therefore, the victory of the wise warrior, is not after glory, not known from bravery, and hence his victory is never of error.

Never of error is because his winning method is to win against someone who has defeated himself.

Hence, the wise warrior stands on indefeasible ground and miss not seizing the 'defeatability'/errors of the enemy.

The key in winning is then not about going after glory, nor reckless bravery and thereby taking on opponent that you have little chance of winning. 

Implication for Business

The successful serial entrepreneur follows in basic principle of maximizing returns and minimizing risks. For any new venture, the first identify the risks, the critical show stoppers, and then take steps to estimate their likelihood of happening, and seeing there be any options that could eliminate or minize the impact of such risks. Li Ka Shing famously said that you must have some business such that even if the sky fall down, you can still make profits. That is the objective function of Sun Zi's Art of War. See Durians, Singaporeans, Li Ka Shing and Sun Zi's Art...

For more, see Ancient Chinese Wisdom

Lim Liat (C) 27 Oct 2014