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A summary of the books written by enlightened political advisor kuan tzu, who is actually even more enlightened than Sun Tzu, giving strategies that can help you attain power and anything else you are looking to attain.
Citation preview
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
About the Translation
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.
About the Translation
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
Kuan Tzu's SUPREME SECRETS4
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
I n t r o du c t i o n
Kuan Tzu's SUPREME SECRETS6
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.
I n t r o du c t i o n
Kuan Tzu's SUPREME SECRETS8
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
The Ancient Wisdom of Master Kuan
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
Kuan Tzu's SUPREME SECRETS12
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-
The Ancient Wisdom of Master Kuan
Kuan Tzu's SUPREME SECRETS14
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-
The Ancient Wisdom of Master Kuan
Kuan Tzu's SUPREME SECRETS16
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
The Ancient Wisdom of Master Kuan
Kuan Tzu's SUPREME SECRETS18
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
The Ancient Wisdom of Master Kuan
Kuan Tzu's SUPREME SECRETS20
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
agri- cultural 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
The Ancient Wisdom of Master Kuan
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.
Kuan Tzu's SUPREME SECRETS22
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
Kuan Tzu's SUPREME SECRETS24
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
Kuan Tzu's SUPREME SECRETS26
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
Kuan Tzu's SUPREME SECRETS28
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
Achieving Supremacy in Leadership and Administration
Kuan Tzu's SUPREME SECRETS30
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
Achieving Supremacy in Leadership and Administration
Kuan Tzu's SUPREME SECRETS32
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