Chairman Mao: An Unlikely Business Guru A recent study published in the Harvard Business Review found that 14 out of 15 Chinese CEOs said they turned to Chairman Mao for inspiration. Chinese businessmen are employing tactics from even such dark periods as the Cultural Revolution.
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Chairman Mao: An Unlikely Business Guru

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Chairman Mao: An Unlikely Business Guru

Chairman Mao: An Unlikely Business Guru

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MELISSA BLOCK, host:

Now, to the culture of business in China. That country's former leader, Mao Zedong, has been immortalized as a guerilla fighter, a political leader, a mass murderer, and a pop-art icon. Now, 32 years after his death, Chairman Mao is being reinvented as a business guru.

NPR's Louisa Lim has this story on what modern entrepreneurs could possibly learn from a man whose policies caused tens of millions of death.

LOUISA LIM: I'm in a bookstore in bustling Shanghai. It may seem a strange place to stop, but that was an early stop in Chairman Mao's own journey. He himself once ran a successful chain of bookstores catering to university students. So the man who later outlawed businessmen of capitalist (unintelligible) was himself once an entrepreneur. That may seem hypocritical, but some argue that grappling with such contradiction is key to understanding China.

Ms. SHEILA MELVIN (Author, "The Little Red Book of Business; Former Director, U.S.-China Business Council): Mao argued that the unity of opposites or contradictions was the fundamental law of the universe.

LIM: Sheila Melvin is the author of "The Little Red Book of Business," a primer on doing business in China. She spent seven years at the United States-China Business Council, and her book offers lessons for foreign companies based on some of Mao's core principles.

Ms. MELVIN: Another one is the idea of using foreign things to serve China. That was Mao's basic idea, anything - everything he did was in the interest of serving China, and I believe that basic philosophy is still here and foreign companies should understand that. If they're coming here to invest, they're being used. This seems kind of bad in the beginning, but actually, if you accept the fact that you're being used, you can found out how to be useful, you'll get a lot of return and you can be quite successful.

(Soundbite of archived speech)

Chairman MAO ZEDONG (Founder, People's Republic of China): (Speaking in foreign language)

LIM: Chairman Mao at the founding of the People's Republic. Almost six decades on, his legacy is still pervasive. Fourteen out of 15 Chinese CEOs interviewed for one recent study in Harvard Business Review said they turn to Mao for inspiration.

Ms. MELVIN: One aspect of Mao's thoughts that's popular was the guerilla warfare techniques. There's companies like a big soft drinks company that couldn't take on Coca-Cola in the city, so they decided to surround it from the countryside like Mao surrounded the nationals from the countryside. So they started in third-tier cities and they went second-tier, and then they went and attacked it on its own ground in the cities. So that's one philosophy.

(Soundbite of people chanting)

LIM: Even the chaos of the Cultural Revolution years provide inspirations for some Chinese executive. For example, at one appliance maker, employees are made to detail their own failings at self-criticism sessions, which were common during that time.

Xiao Zhixing, a professor at China Europe International Business School, says in the early '90s, most Chinese businessmen modeled themselves on Mao. And that's still true among older executives.

Professor XIAO ZHIXING (Management, China Europe International Business School): They just don't have other possible model to learn from. For instance, many entrepreneurs, they try to follow the mass-movement measures Chairman Mao had (unintelligible) during the Cultural Revolution period to try to launch their corporate culture in their own companies.

(Soundbite of music)

LIM: Mao uses branding genius to convey his ideas to the masses, this song is one example. It set to music the code of conduct for Mao's guerilla army, which forbade them from taking even a single needle from ordinary civilians. Sixty years on, many elderly Chinese remember every single word. Some Chinese businessmen are learning from Mao's darker management techniques.

He was famous for repeatedly deposing his chosen successors, being secretive with information, using a divide-and-rule strategy to set factions off against each other, and being autocratic - bypassing formal decision-making processes.

Patrick Moreton manages an executive MBA program in Shanghai for Washington University and Fudan University. He says Chairman Mao's example have limitations.

Professor PATRICK MORETON (Managing Director, Washington University's EMBA Program, Shanghai): I think that most of what people would agree on as effective management now requires candor and direct conversations on what needs to get done and a straight forwardness, and a number of things that do not come through as hallmarks of Mao's management style.

LIM: Mao's spirit of rebellion ultimately caused economic mismanagement, chaos, and millions of deaths. Sheila Melvin says this complex figure also serves as a good teacher by negative example. And Professor Xiao says in the long term, using Maoist strategy tends to be counterproductive in business.

Prof. XIAO: Deep down inside you, this kind of Maoist manager, they tend to disregard rules and regulations. They tend to disregard the value of respect, of individual respect of rule of the game.

Unidentified Man: (Speaking in foreign language)

LIM: A future crop of Chinese business leaders at an executive MBA class. They're now learning more standardized management techniques. But it's a quirk of fate - or perhaps an example of the unity of opposites - that the man who abhorred private business is now inspiring the successes of those he once persecuted.

Louisa Lim, NPR News, Shanghai.

BLOCK: And at our Web site, you can learn about our program's explorations in China. Next month, we will be hosting the show from the city of Chengdu, that's the capital of Sichuan province. You can read impressions from Chengdu and let us know what you'd like us to cover. You can also watch a video of baby pandas at a panda base that I was visiting, and we'll be doing a story next month. Pandas, Robert, you cannot lose with panda babies.

SIEGEL: Oh, the pandas are - well, they're being babied in the video.

BLOCK: And they're extremely cute.

SIEGEL: That's right. All of that is at npr.org/chinadiary.

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