The Yin and Yang of Business Leadership*

Confucius and Lao Tse were two great Chinese philosophers who lived in the same age. Confucius was younger than Lao Tse. Confucius taught Confucianism while Lao Tse taught Taoism. One of the principles of Taoism is that of Yin and Yang.

Yin and Yang represent the two different forces that form everything that exists on earth. Yin is the ‘soft’ force, while Yang is the ‘hard’ one.

Confucius was a typical Yang while Lao Tse was a typical Yin. Confucius taught in a straightforward and clear way what was and was not permitted, while Lao Tse was a little abstract and was difficult to understand.

At one time Confucius asked Lao Tse, “By the end of the day, which is stronger Yin or Yang?” Lao Tse’s answer initially left Confucius very confused.

He only opened his mouth very wide and asked Confucius to look inside closely. He then offered no further explanation.

After considering briefly, Confucius knew the answer. Lao Tse was then quite elderly. All his teeth had already fallen out, but his tongue was still intact. What did that mean? The soft tongue—which illustrated Yin—could apparently survive longer than the hard teeth —which illustrated Yang.

This was an interesting story that triggered laughter among its listeners when Professor Hong Hai, Dean of Nanyang Business School, told it at an Asian Globe-The Jakarta CEO Club event organized by MarkPlus&Co held in Jakarta on 1 November 2004.

I was fortunate to be able to invite the Professor to the event to share his wisdom on the application of Yin and Yang to leadership in the business world.

Nanyang Business School is itself one of the best business schools in Asia and is the only business school from Southeast Asia included in the 2004 rankings of top 100 MBA schools by Economist Intelligence Unit. One of the secrets of its success is the application of Yin and Yang in its curriculum, which provides the best balance between the ‘hard’ and ‘soft’ skills of business in Asia.

Yin represents the ‘soft’ skills of business study; those based on divergent thinking processes such as creativity, leadership and visioning, field knowledge, and innovation. Typical Yin disciplines are marketing and entrepreneurship.

Yang represents its ‘hard’ skills; those based on convergent thinking processes such as controlling, structuring, exact knowledge, and conservation of system and procedures. Typical Yang disciplines are quantitative ones and basic accounting procedures.

The principles of Yin and Yang are rooted in Chinese philosophy but have universal meanings that we commonly meet with in our daily lives. The sun is often associated with the force of Yang and the moon with the force of Yin. Men are often associated with the force of Yang and women with the force of Yin.

The force of Yin must be balanced by the force of Yang and vice versa. Both forces can oppose one another and at the same time be interdependent. This is what Professor Hong Hai calls the paradox of Yin and Yang.

Three phenomena make up this paradox. First, Yin and Yang oppose each other, but are also interdependent.

I have observed that this also occurs in the business world. Finance— Yang in nature—is frequently in opposition to marketing— whose nature is Yin. But both are still needed in a company’s activities and need to be kept in balance so they can make their best contribution to the company. I even often say that the best CEO is the one who understands both finance and marketing.

The second paradox is that Yin and Yang wax and wane, and can transform into each other. If Yin increases, then Yang reduces and vice versa. Yin can transform into Yang and vice versa.

In the business world, one transformation of Yang into Yin can be seen with Ericsson. That company, before becoming Sony Ericsson was a typical Yang because it greatly relied on technology. Since being defeated in the competition for cell phone business by Nokia, which is a typical Yin, Ericsson, which then joined with Sony, transformed into a company that was more customer-centric, a typical Yin like Nokia.

The third paradox goes: “In Yang you will find Yin, in Yin you will find Yang.” Metrosexuals—men who have become more empathetic—are one clear example that within a man whose nature is Yang, emotion and empathy can also be found, both of which are Yin. Many of these more empathetic men have become successful CEOs, including Steve Ballmer, CEO of Microsoft Corp.

On the other hand, there are also many women whose nature is more systematic and rational. Many have also become successful CEOs. One example is Carly Fiorina, Chairman and Chief Executive Officer of Hewlett Packard (HP). Carly is a powerful and rational woman even though she is also a sensitive and feeling one, too.

What lesson can we then take from this in order to become a good business leader? To answer that, I want quote Lao Tse’s words: “Be still like a mountain and flow like a great river.” In other words, balance the Yin and Yang in your leadership style. That’s all it takes to be a great business leader.

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