[photopress:mba_maozedong.jpg,full,alignright]China’s Chairman Mao Zedong — the illustration is of him on the bank notes — has become an unlikely role model for some of the country’s business community.
32 years after his death he is being reinvented in some quarters as a business guru.
A recent study published in the Harvard Business Review found that 14 out of 15 Chinese CEOs said they turned to Mao for inspiration.
Although looking to Mao for business inspiration may seem, at the least odd, some argue that grappling with such contradictions is key to understanding China.
Sheila Melvin, who spent seven years at the United States-China Business Council, notes that Mao argued that ‘the unity of opposites or contradictions was the fundamental law of the universe.’
Sheila Melvin has written The Little Red Book of Business, a somewhat unlikely primer on doing business in China, based on some of Mao’s core principles.
She said, ‘It does seem rather bizarre. I believe foreigners can learn a lot from studying Chairman Mao’s worldview and philosophy, which still have great influence in China on government and government leaders.’
She applies Mao’s aphorisms to the world of business — ‘Make foreign things serve China.’
Sheila Melvin said, ‘That was Mao’s basic idea. Everything he did was in the service of China.
‘Foreign companies should understand that if they’re coming here, they’re being used. This seems kind of bad in the beginning. But if you accept the fact that you’re being used, you can be . . . quite successful.’
Melvin says many companies draw upon Mao’s strategic prowess, including his guerrilla warfare techniques.
One example is of Wahaha, a Chinese soft-drink maker that at first declined to take on Coca-Cola in the cities. Instead, it decided to surround the American behemoth from the countryside, just as Mao surrounded Chiang Kai-shek’s Nationalists during the Chinese civil war.
The company ‘started in third-tier cities, then went to second-tier, then it went to attack Coke on its own ground in the cities.’
Some Chinese executives even take inspiration from Mao’s darker years, including those during the chaos of the Cultural Revolution that swept China in the late 1960s and early ’70s.
At appliance maker Hai’er, for example, employees are made to detail their own failings at self-criticism sessions, similar to those during the Cultural Revolution.
Xiao Zhixing, a professor at China Europe International Business School, says that in the early 1990s most Chinese businessmen modeled themselves on Mao. He says that even today the influence of the Great Helmsman resonates among older executives, he says, especially those in state-run industries and in China’s interior.
Xio Zhixing said, ‘They just don’t have other possible models to learn from.’
Patrick Moreton, who manages an executive MBA program in Shanghai for Washington University and Fudan University, says Mao’s example has limitations.
Effective management requires ‘candor and direct conversations on what needs to get done,’ a ‘straightforwardness and trust.’ He says Mao’s spirit of rebellion ultimately caused economic mismanagement, chaos and millions of deaths. Sheila Melvin, the author, says she thinks Mao also serves as a good teacher in terms of what not to do.
Xiao Zhixing, the professor, says that in the long term, using Maoist strategy tends to be counterproductive in business. He quotes the example of the founder of the Wahaha soft drink company, Zong Qinghou, who credits Mao with his management style — and who is reportedly under investigation for tax evasion.
He said, ‘Deep down inside, this kind of Maoist manager tends to disregard rules and regulations. They tend to disregard the value of respect for the individual, respect for the rules of the game.’