The Tao of Strategy: 12 Principles and 4 Action Directives

The Tao of Strategy is not simply about Taoism and strategy. The word “Tao” in the title has a variety of meanings — the Way, “the nature,” the origin of all things — while also connoting Eastern wisdom. Our observations of institutions facing strategic challenges, plus recent research positing strategic intuition as the source of novel strategies, led us to explore how Eastern philosophy complements Western strategy-making.

Our focus is on how leaders of institutions might achieve the creative insights that provide novel, and potentially winning, courses of action. Our premise is that as important as Western analytical tools are in the process of understanding industries and competitors, true insights and novelty are achieved through what the Buddha called beginner’s mind, the state of mind characterized by emotional detachment from outcomes, abandonment of preconceived notions and openness to learning as conditions unfold. Logic and analyses help, but only as foundations and preparation, not as the source. Hindu, Buddhist, Confucian and Taoist philosophies and practices provide a path to beginner’s mind and offer perspectives on how to achieve this open, unencumbered mindset.

We conclude with an invitation to develop and nurture a facility for encouraging your own coup d’oeil — the ability to see things simply and comprehensively in order to experience a flash of insight.

Examining Eastern philosophies collectively, they reveal four action directives for strategists:

1. Build a foundation.
2. Prepare the mind.
3. Adjust the lens.
4. Take action.

The 12 principles that elaborate on the directives follow.

Action Directive I: Build a Foundation

Principle 1: Preparation is the sine qua non for successful strategizing.

Strategy requires extensive preparation. Do your homework and analyses long before you need them.

Principle 2: Build a foundation on the continuous pursuit of knowledge.

Practice and preparation allow us to separate our actions from our emotions, while wide-ranging knowledge provides fertile ground for experiencing coup d’oeil and strategic insight.

Action Directive II: Prepare the Mind

Principle 3: Cultivate beginner’s mind.

Beginner’s mind is key to achieving insight breakthroughs. In Western practice, paralysis by analysis is too often the result of extensive research into historical data. By approaching strategy with beginner’s mind, we can clear our heads of any “this worked before” bias. New developments do not fall into the trap of being mistaken for history repeating itself, and true breakthroughs are possible.

Principle 4: Presence of mind perpetuates coup d’oeil.

Insight is achievable only through clear thinking, which requires one to develop methods for clearing one’s mind. It is difficult, if not impossible, to have strategic insight during moments of duress.

Principle 5: Let go of the illusion of control by embracing detachment and acceptance.

While difficult to cultivate, a focus on process, rather than results, is key to helping organizations reach their ultimate potential. To promote this attitude, leaders can deploy metrics that evaluate how outcomes were achieved, not just whether they met expectations. This approach will also help leaders engage in the coup d’oeil cycle by enabling them to maintain their presence of mind regardless of results.

Action Directive III: Adjust the Lens

Principle 6: Strategic discovery is a function of fluidity and receptivity.

Creating a strategic plan is a critical exercise. It helps the participants clarify currently available resources, understand the market, define goals and prioritize the variables that will enable or prevent success. Once the planning is done and it is time to act, the effective strategist must constantly survey the landscape for newly available resources. Targets also must be adjusted accordingly. Sticking too rigidly to a planned course of action puts us at risk of failure, or at the very least of losing out on unanticipated opportunities. This does not mean that we lose sight of long-term goals at the first unexpected turn of events. Rather, we are willing to adjust our path to these goals based on changing circumstances.

Principle 7: Impermanence is the only reality.

Change is not only constant, but a reality that strategists must incorporate into their expectations.

Principle 8: Circularity and iteration complement linearity.

If today looks like an extension of yesterday, don’t expect the future to follow suit. In fact, those who expect reversion to the mean but accept that they cannot predict when it will happen are more likely to go with the flow of water, bend with the wind, receive calamities with equanimity and open themselves to new insights.

Principle 9: Self-discipline vs. self as an illusion

To varying degrees, the teachings described in this book emphasize the notion of shifting focus away from the individual as a separate entity and toward a recognition of a broader fabric of the universe connecting all of us. By letting go of the preexisting views of our organizations, our subordinates, our managers and ourselves, we can better optimize a strategy to achieve success while remaining resilient in the face of obstacles that the strategy will encounter.

Action Directive IV: Take Action

Principle 10: Resolve is fundamental to mobilization.

Effective strategy is crucial, but its value can be captured only through determined, effective execution. Of course, strategists and decision-makers must in their own behavior prioritize a resolute commitment. Just as important, in their management, delegation and the organizational culture they inspire, leaders must position their teams to pursue committed effort. In this way, the organization can benefit from the working-level expertise of those responsible for execution.

Principle 11: Timing is everything.

Exercising patience may seem obvious in theory, but it often is brutally challenging to put into practice. Even the best decision-makers are flawed human beings with unconscious biases, navigating through a sea of shifting currents. To engage with this principle, then, requires training. More than an attitude or a personality trait, eastern philosophies view the capacity for patience as a skill to be cultivated through focused practice. The capacity for nonreactivity is a core reason for many Eastern philosophers’ emphasis on the power of meditation.

Principle 12: Good strategy is about balance, the middle way and moderation.

Strategists must not interpret Eastern philosophy’s emphasis on moderation as a proscription against ambitious targets. From the Buddha’s search for nibbana to Musashi’s mastery of samurai combat, the Eastern sages showed little reluctance to take on a challenge. What’s more, their teachings are not short on examples of intense, committed action, from the persistence with which Zen students pursue the answer to a koan (riddles like the famous “one hand clapping” question) to the Buddha’s long meditation under the bodhi tree until he achieved enlightenment. A Westerner might see these as parables for unrelenting hard work. Yet, they are not in conflict with the focus on moderation. Moderation here refers to a quality of openness through which we are well positioned to remain fluid, present and ready to receive coup d’oeil when insight strikes.

The preceding is excerpted from The Tao of Strategy: How 7 Eastern Philosophies Help Solve 21st Century Business Challenges (University of Virginia Press), by L.J. Bourgeois III, Serge Eygenson and Kanokrat Namasondhi, which includes many more insights, numerous CEO-level examples and discussions of Eastern philosophies in relation to business strategy.