Jim Cook, Chairman CHA, Inc.

Appreciating Mao’s Revolutionary Genius: Applying Mao’s ways of winning hearts and minds to commerce in China today Jim Cook, Chairman CHA, Inc. Sponsored by : The Confucius Institute Wayne State University

What can we learn from the Chairman … … that can be applied today?

Contents • An Ambitious Vision - China for Chinese under Party rule • Daunting Obstacles - tradition, army, war lords, history, $$ • Resources - knowledge, determination, mastery, innovation • Innovations?- troops, military, enemy, occupation, culture, pace • Lessons – odds, process, “behavioral culture”, social benefits • Case – KFClearned the lessons that made the revolution succeed

And, the Winner will be?

Mao’s Challenges • Well entrenched and vested competitor who has a large, well equipped, and well trained army • Well heeled (farm land) owner class with war lords for enforcement • Deeply held Confucian traditions (creating order at the cost of repressing all but first born males and any structural change) • An ignorant, fractured, and penniless peasant class accustomed to being crushed whenever they so much as protest • Lack of financial aid and lack of an army, but nonetheless considered the number one threat to status quo

The Long March

Mao’s Resources • A wealth of knowledge about China’s history, great ideas from the West, and peasants’ lives • An unsentimental readiness to go the way that facts, logic, and history dictate • An unrelenting pursuit of his vision coupled to a readiness to accept risk and to inflict pain • A mastery of organization and an authenticity and fairness that inspires others to follow • Innovation, grounded in the above, resulting in ways to transform his ideals into effective action

The Unreasonable Man Persists

Mao’s Innovations • Arm peasants and don’t wait for urban uprisings as Marx’s theory stipulates • Conquer minds and spirits, not territory (hold nothing, but treat people fairly and they’ll follow), address the needs they understand • Discard tradition in the military and elsewhere if it isn’t true to the (political) message • Unify Chinese sentiment by picking a universal enemy –Japanese, for disgracing China’s face • Take the long view, 20-30 years, not the quick one commanded by Sūn1 Zǐ3 孙子

There’s 1.3 Billion of Us

Lessons from the Chairman • Don’t be discouraged if you are in the minority (e.g., 2009 Ford with 2.6% while GM has 13%) • Learn from Mao’s process: study (behavioral culture) intensively then explore China intimately, innovate appropriately • Consider Behavioral Culture as “everyday decision making below articulation and awareness” • “Face” trumps performance as one example: status and alliance messages, values, dynamics, … • Be sure to benefit the customers/Chinese as a GROUP, not just as an INDIVIDUAL

Lessons Applied by KFC • KFC China headed by a Chinese reporting to Yum! Chairman “Localization strategy has been a key to the company's success” • KFC = 40% of fast food market (McDonalds = 16%) • part of the local community, not a foreign presence (Mao’s enemy was Japanese; Food can’t be foreign, tech can) • Adapted USA model to serve Chinese consumer (Mao adapted Marx and military to Chinese Characteristics) • Foods for Chinese tastes + specific local/regional (Mao’s government set up autonomous ethnic governments) • Chicky says, 认真 rènzhēn 学习 xuéxí, 开心 kāixīn 游戏 yóuxì (Mao said 敢想 gǎnxiǎng 敢干 gǎngān= dare to think, dare to act) • KFC develops partnerships with schools, teachers, & parents (check the #s; 6 pocketbooks/doters for every child)

Finally China’s Open (for discussion)! • Questions and Comments • Take this with you: 天时、地利、人和 • Thank you, again. On the Internetat (5.33 MB): http://cha4mot.com/Mao-lessons.ppt For more on Mao, you’re welcome to visit: http://cha4mot.com/Mao.html

Jim Cook, Chairman CHA, Inc.