Words of Wisdom

A 2500-year-old Chinese philosophy holds new meaning for modern-day entrepreneurs.

Magazine Contributor

November 1, 1997 7 min read

This story appears in the November 1997 issue of Entrepreneur. Subscribe »

Paul D'Souza had been trying to contact two prospective clients for more than a week and had all but given up. Then one day over lunch, he felt a sudden urge to try again. "I got the phone numbers, one in Milpitas, California, and the other in New York City, and called these people. They were both in, and ready and willing to talk," says the vice president and partner of Health Innovations, a 15-person health-care consulting firm in Santa Cruz, California.

What may sound like a lucky break is much more to D'Souza, who is a longtime student of the Chinese philosophical system called Taoism. Says D'Souza, "What I call the Tao--intuition or what have you--told me to call these people."

The Tao (pronounced "dow") has been talking to a lot of businesspeople, even encouraging them to write books on applying its principles to management, negotiation, leadership, organization and even sales. As part of what seems like a renaissance of spiritual concerns about work, Taoism stands out as one of the oldest and most widely applied.

Back to the Beginning

The Chinese philosopher Laotzu is credited with writing the Tao-te Ching more than 2,500 years ago. This book, whose title translates into "Classic of the Way," contains 81 poems outlining a philosophy that stresses uniting with and yielding to the natural flow of the universe. Although that may seem an unpromising source of business wisdom, it seems even more so considering the fact that the Tao or "way" cannot be described in word or thought. But the Tao has spawned, in addition to many business books, a number of quiet but devoted businesspeople who find its philosophy not only comprehensible but applicable every day.

"The whole concept of Tao is to work with the laws of nature," says D'Souza. "To me, the Tao is a continuous sensitivity to the laws of nature flowing through my business activity."

The Tao is often cited as a source of wisdom for leaders. Diane Dreher, chairman of the English Department at Santa Clara University in Santa Clara, California, and author of The Tao of Personal Leadership (HarperBusiness), points to one of the best-known Tao verses as an example of its relevance to leadership:

"With the best of leaders,
When the work is done,
The project completed,
The people all say,
`We did it ourselves.' "

This verse, like many in the Tao-te Ching, is contradictory, or at least difficult to grasp. How can you lead without appearing to? Dreher says, however, that Tao leadership is nearly identical to the contemporary discipline of teamwork. "The Tao leader," says Dreher, "is someone who can remain centered, be mindful, assess a situation, bring people together, build consensus and discover solutions by drawing on the talents of everyone involved."

Exactly how to accomplish this is not always clear. The Tao-te Ching seems at times purposely vague or ambivalent. While many of its verses may ring true, it's not always easy to know what to do with them. Other Taoist verses are more straightforward. "The longest journey/begins with a thousand steps" is clearly an admonition to break tasks into manageable steps, then tackle them one by one, Dreher says.

Dreher's book offers a number of "Tao Exercises" designed to help put the ideas into action. On dealing with failure, she suggests people ask themselves whether they are haunted by some mistake from the past. Face it and ask what you have learned from it, she advises. Explore what you might have done differently, and decide what you'll do next time. Then, she says, move on.

While much of the Tao seems applicable to your personal life, it's also invoked as an aid to strategic planning in business life as well. "Every once in a while, you ought to get off the treadmill and ask yourself some basic questions," says Stanley Herman, a management consultant in Escondido, California, and author of The Tao at Work: On Leading and Following (Jossey-Bass). "Is this the life you want to lead? Is this the way you want to operate in your business? The Tao helps you think about those things."

The Tao may also be useful in conversing with other people in business negotiations, says Joel Edelman, a Santa Monica, California, attorney and author of The Tao of Negotiation: How You Can Prevent, Resolve and Transcend Conflict in Work and Everyday Life (HarperBusiness.) A negotiator using Tao principles, says Edelman, tries to be in tune with nature, to give and take things impersonally and yet to take responsibility for his or her own conduct. "The first intention is to be objective," he says. "To be cool and calm, not to be without feelings but to stand back and get outside yourself."

Being in tune with natural cycles such as the change of seasons is a core Tao teaching. Herman says this Taoist understanding of cycles is highly useful in business. For example, he points to the need for an entrepreneur to recognize when it's time to stop running a business alone and bring in professional management. "The Tao helps you realize that there are stages and to be alert [to them], not wait until your business isn't going well," says Herman.

The Taoist approach is especially important during rapid change, says Dreher. "The Tao shows us a vision of life as dynamic," she says. "We don't accept the status quo, and we learn to deal with change." This ability to cope with change makes Taoism a popular philosophy in the fast-moving firms of the Silicon Valley, she says.

The Tao may even teach you to be a better competitor. "One of the things it tells you is not to make unnecessary enemies," says Herman. "If you're in contests, be in them to win; however, be a gracious winner. Don't [draw] unnecessary blood. That's the seed of a vendetta."

Knowing the Limits

Few, if any, companies describe themselves as Taoist organizations. Even consultants, such as Herman, who espouse Taoist concepts don't label themselves as such when advising business clients. Some say that's because hard-nosed businesspeople won't accept a seemingly soft Eastern mysticism as a rationale for management. Others say that the Tao is simply best applied in a subtle manner. "It's something to be used, not necessarily talked about," says Edelman.

Nobody recommends, say, writing Taoist objectives into your mission statement. "Communicate it by example," advises Herman. "If people pick up on it, good. If they don't, let it go, do something else and try it again later on."

It's a Taoist truism that any attempts to define the Tao are doomed, which still hasn't kept many scribes from ancient to modern times from trying. D'Souza describes Taoism's role in business as "a hypersensitivity to nonverbal, nontangible cues and activity." Employing Taoist principles helps entrepreneurs make better, more appropriate decisions, he says. And, perhaps equally important, a Taoist entrepreneur learns to be, if not fatalistic, at least able to transcend the inevitable reversals and disappointments of business.

"When one is sensitive to the Tao, one sees beyond what's at hand, one senses a higher logic," D'Souza says. "And one is armed with a sense of confidence that everything works out just the way it's [supposed to]."

Mark Henricks is an Austin, Texas, writer specializing in business topics.