Crucial business lessons all company leaders can learn from Chinese management philosophy

Management is a discipline characterized by both art and science. Chinese-style management is also imbued with a strong philosophical orientation, and the bamboo tree provides a useful metaphor to help unpack its essence.

Bamboo has many valuable and unique characteristics. Its hollow fibrous stalk makes it lightweight, flexible and resilient in the face of extreme weather. It grows rapidly and is evergreen – resonant of constant vitality. Bamboo’s interconnected roots and the overlapping stalks of a bamboo forest are also indicative of collective strength. And, of course, bamboo is multi-functional.

The qualities of bamboo share similarities with Chinese management philosophy. Chinese business leaders, consciously or not, often follow similar, deep-rooted guiding principles when managing their enterprises. These include building flexibility and resilience, maintaining good growth momentum, promoting teamwork and creating social value. As a result, typical bamboo characteristics highlighted in Chinese philosophy also often show up in modern management styles.

Bamboo’s versatility and flexibility are important qualities for companies, which often need to continuously adapt to changing business conditions. This can help minimize the impact of challenges while allowing companies to find the optimal development pathway in a complex business environment.

NetEase, founded in 1997, is a good example of this. It started as an email service provider and web portal. After a Nasdaq delisting crisis, the company took decisive action to rebrand itself as a value-added telecommunication service provider and online gaming provider. It later added the education platform Youdao, streaming service NetEase Cloud Music and e-commerce platforms NetEase Yanxuan to its portfolio.

The speed at which bamboo grows also reflects ideas of growth and learning valued by Chinese philosopher Confucius. Companies must be open to such ideas to operate successfully in a fast-changing global economy and amid accelerated technological advancement. As the external environment shifts rapidly and new competitors emerge, continuous learning is crucial – as is continuous benchmarking against competitors.

Li Xiang, the founder of Chinese electric vehicle startup Li Auto, is also a loyal follower of the continuous learning doctrine. He turned to other companies including tech companies like Huawei and ByteDance for insights on how to develop a systemic organization that encourages co-creation. Specifically, Li Auto adapted Huawei’s "Integrated Product Development" and "Business Leadership Model" practices (which Huawei had imported from IBM) for its product and strategy development. Li Xiang has also spoken publicly about learning from Tesla and Apple.

This shows how a new generation of Chinese entrepreneurs are benefitting from traditional Confucian values like constant learning.

The crisscrossing stalks of a bamboo forest are also an apt analogy for the Confucian view on family and society— that is, that individuals should support but also be supported by society.

Drawing on this idea, Ma Mingzhe, founder of financial services company Ping An Group uses collective wisdom to help manage a group company with multiple businesses. Instead of one CEO, Ping An is governed by an executive committee, the top decision-making body for business issues. It adopts a matrix model to manage subsidiary companies, with all key decisions made collectively.

External events can create new challenges for companies, which need to have the tenacity and resilience to manage through these events – and even turn a crisis into an opportunity. In an old Chinese proverb, an old man who loses his horse experiences multiple positive and negative outcomes throughout his life as a result of the loss. This allegory teaches us that crises can sometimes be opportunities in disguise.

A real-life example of a company using this lesson to manage through a crisis is when the largest online travel agency in China, Ctrip Group, was severely impacted by the COVID-19 pandemic. It saw a nearly 50% decline in revenue and profit losses in 2020. But Ctrip managed the impact of this crisis by capturing growth opportunities in new product categories and developing more innovative marketing. It turned losses into profits, with revenues in 2023 exceeding that of 2019 by 25%.

Bamboo spirit and Chinese management philosophy have helped many Chinese companies stay resilient and grow rapidly like bamboo. However, the effectiveness of this approach has largely depended on the decisiveness and personal charisma of the business leaders deploying these philosophies and strategies.

Here are some steps all business leaders can take to make Chinese management philosophies work for their organizations:

1. Think about the long-term, while constantly developing new short-term tactics. The external environment is complex and ever-changing, so make sure long-term vision and strategic direction are clear. Prioritizing flexibility and rethinking short-term tactics can help companies maintain vitality and competitiveness – even in the face of a crisis.

2. Build flexibility and resilience. Flexibility and resilience should not rely on a few individuals, but should be built upon an effective organizational structure, management mechanisms and corporate culture. Firms that establish flat, agile and platform-based organizational structures can respond quickly to market changes. Scenario planning can also help to identify uncertainties and create contingency plans, spreading a mindset of flexibility across the organization.

3. Foster continuous learning. CEOs and top executives must be open to the Confucian idea of maintaining a zeal for learning. In addition to learning from leading companies in your field, others with strengths in specific domains can also offer great benchmarks for analysis.

4. Value collaboration. Avoid dictatorial decision-making by being open to diverse viewpoints. Be ready to relinquish power and use collective decision-making. This can also help to avoid errors of personal judgment.

5. Shoulder social responsibility. Finally, Chinese management philosophy suggests companies should promote the harmonious growth of both the business and of society.

All business leaders should consider thinking about these management philosophy ideas and keep the bamboo and its strengths in mind when making important decisions or changes. Using the metaphor to nudge your thinking might help you approach business and leadership issues more effectively.

Christoph Nettesheim, Senior Advisor at BCG, also contributed to this article.