The Art of Management

28 June 2005

It’s been 55 years since I founded my company. It has grown from a small enterprise with a few staff in 1950 to a multinational conglomerate with 200,000 employees and operations in 52 countries. I did not have the benefit of a formal education, and would not dare compare myself to management gurus. All my life, I’ve worked hard to learn on my own. What exactly is the “art of management”? I can only share with you my thoughts and experiences.

Art is defined as the creation, production, principle, method or expression of a human endeavor, generally considered beautiful, and is capable of transcendence and has a unifying effect. It is also a branch of learning that can be gained through learning, imitation, practice and observation. On the basis of this definition, art and management appear to share many common aspects.

Are you a boss or a leader?

I often ask myself: Would I rather be the boss or the leader of an organization? Generally speaking, being the boss is much simpler. Your authority is derived from your position of power, which may be granted to you through destiny or hard work and professional knowledge. Being a leader is more complicated. Your authority is derived from your expert power and charismatic power. To be a successful manager, attitude and ability are equally important ingredients. A leader inspires others to greatness. A boss dominates his subordinates and makes them feel small.

If you want to be a good leader, you must realize that self-management is a major responsibility. In a transient and ever-changing world, to discover your true self and understand what you are aiming to achieve is the foundation upon which dignity is built. Much has been written about Confucian ethics, self-reflection, conscience, and the discipline of western religions. A plethora of Do-It-Yourself (DIY) books and tips can be found in bookstores and on the Internet. But I believe that self-management is a passive type of management—fundamental to cultivating rational thought, a catalyst for transforming knowledge and experience into power. This “chemical reaction” is set off by a series of questions. In different phases of life, one needs to constantly ask oneself, “What do I wish to achieve?” I dream of greatness, but can I rein in my passion? I have the will to reshape destiny, but do I have the courage to face my fears? I have information and opportunity, but do I have the wisdom to succeed? I believe in my own ability, but do I have the strength to weather the storms? Your answers may vary in different times and under different circumstances. Self-reflection is Heaven’s gift to man, a shield with which to defend his destiny. Many people confuse improper self-management with bad luck, which is a defeatist, and to a certain degree, irresponsible attitude.

When I was a poor kid at 14, my self-management method was simple. I knew that I had to earn enough money to support the family, and I knew that without knowledge, I could not reshape my destiny. I wanted to be a high-flyer, but I didn’t have the means to make it to the top. I always remembered my grandmother’s words, “Ah Shing, when can we be as rich as so-and-so in Chaozhou?” I didn’t want to follow Icarus, the Greek mythological figure who plunged to his death when he flew too close to the sun and his wings of wax melted. On the one hand, I kept my nose to the grindstone. I was just an apprentice then, but I insisted that anything worth doing is worth doing well. On the other hand, I wasted no time in acquiring new knowledge. I spent every last dime on buying secondhand books. I knew that I could not depend on pure luck to succeed. With a knowledge base far inferior to that of my peers, I wouldn’t even know if opportunity knocked. By the way, a nice, kempt appearance is a reflection of self-discipline and self-respect, and is always appreciated by others.

After I founded my company at the age of 22, ambition began to take on a different meaning. I realized that dogged perseverance had served its purpose and now its time had passed. Though a universal formula for success is difficult to come by, caution signs for failure are posted everywhere. Establishing a structure that serves to minimize failure will prove to be a shortcut to success. Combine knowledge with determination. The method of self-management should be extended towards active management. The power of reason should be supplemented by the power of rationality. The crux of the problem is how to keep smart organizations from making stupid mistakes. The words “What if?” held a new meaning for me. Multi-dimensional thinking and multi-tasking are extremely valuable, but “hindsight” can only play a limited role. Human beings are unique not only in our ability to contemplate the meaning of things, but also in our capacity to keep promises, correct past mistakes, adhere to values, and pursue our ideals.

Flexible commercial enterprises must be built on a system of checks and balances. I’m talking about not only accounting systems, but also a responsive system that unleashes energy from tension, built on platforms of trust, time, and ability. No doubt you have heard me say that our Group seeks progress while maintaining stability. Under this umbrella heading, there are other factors that include but are not limited to the following: revenue growth versus cost cutting; governance versus innovation and empowerment; intuitive versus scientific management; when to stop versus when to proceed, etc.

Each organization faces unique challenges. It’s difficult to find one-size-fits-all solutions. To be honest, I am wary of management philosophies proliferated by self-proclaimed experts; their general direction may be correct, but their form is far from perfect. It is perhaps most important for managers to have intimate knowledge of their organization and the respective industry in which it operates. Having a detailed map of the inner workings of the organization can often prevent disasters from happening.

Successful managers should also have a keen eye for talent. They not only select people who are smarter than themselves, but also avoid picking corporate superstars whose reputation precedes them. In a highly competitive society, an efficient organization can ill afford to carry employees who lack passion for their work or prima donnas who only desire to hog the limelight. Loyalty is fundamental to the formation of a good organization, but even more importantly, loyal followers who suffer from a deficit in skills and moral ethics are most unreliable and will sooner or later bring the ship down. The first rule of building a tight unit is learning to listen not only to diverse views, but also to the silent minority. Question whether you and your team have rapport, whether you are open and honest, whether you can recognize and respect each member’s dignity and creative abilities, and whether or not you are overcompensating for mistakes.

Team leaders have to understand the appropriate use of “leverage”. Archimedes, who proved the law of the lever, was a Greek mathematician who famously said, “Give me a place to stand, and I will move the world”. The fulcrum is the key to maximum efficiency and resource management. Compared to the brute strength of Hercules, Archimedes was much more efficient in his use of resources. This concept of leverage was somehow twisted as a way to risk a smaller amount for a larger return. Smart managers are focused on finding the fulcrum for therein lies the key to success. You have to rely on your expert knowledge and your powers of deduction, on whether you can discern the invisible layers and levels of connections. Today, many companies over-extend themselves and founder in a financial quagmire because they see only the leverage but fail to find the correct fulcrum.

I was not fortunate enough to have the opportunity to listen to lectures in business school, but when I was young, company annual reports were my favorite reading material. They may look dull on the surface, but they reveal a great deal about the company’s accounts, strategic direction and resource allocation.

A manager’s grasp of accounting principles, control of positive cash flow, and management of the budget are basic to his success. Two other things: first, managers need to pay greater attention to weak links; second, in any organization, both indecisive and hasty people are like a deadly virus, having the potential to bring down a healthy corporation overnight.

Lastly, the art of good management lies in the capacity to accept change, and the ability to meld new and traditional thinking. We have never been and never will be “omnipotent” beings. Sometimes, I am surprised to hear managers today still boast of “hard working” as their only personal strength. Values defined by its managers breathe life into the company. This is more than inserting a mission statement in the company PowerPoint or regurgitating one or two selective humanistic quotes, but rather, it is establishing honesty and integrity in a complex commercial environment.

This is not an easy road to take. It is the core responsibility of the corporation to seek efficiency and profits and to inflate its asset value. Business is war. Responsible managers are exhausted from fighting for the interests of the company and its shareholders every day. Endless rounds of cost-cutting. Investments in new technology that may not create employment growth. Market competition and corporate responsibility are constantly at odds. Faced with a plethora of social problems, one simply tries his best to do what he can.

I tell my sons to build a team that is proud without being arrogant. In taking up a specific and limited role in the economy, it is also important that we continue to serve and contribute to society. This is not only my hope for you, but also your promise to me. Thank you.