Are you a quantum manager?

Hello! I’m very glad to be with you this morning. I’m sorry that I can’t be there in person. I will return to China as soon as border restrictions allow, but for today we will have to make this video do.

I want to introduce you this morning to quantum management theory and to argue that quantum management theory in essence is Chinese management theory. The Chinese have been quantum ever since the time of Lao Tzu. The whole tenor of Chinese philosophy, including Taoism, Confucian virtue ethics, and much of the philosophy of Wang Yangming mirrors very closely what quantum physics tells us about the world today.

In the book that I’m writing now, I’m arguing that China today is closer to being a quantum society than America.

Quantum Management vs. Traditional Management

Quantum management draws its principles from the defining principles of quantum physics, especially as those principles are expressed in the living quantum systems that complexity science calls “complex adaptive systems“.

I am going to argue that quantum physics itself is really traditional Chinese thought with the addition of equations and experiments.

Traditional management theory that companies are using, even companies in China, is outdated. We need a new management theory for the 21st century.

Taylorian management, which is the basis of traditional Western management thinking and the management thinking that has largely been adopted by China’s large companies, was inspired by the physics of Isaac Newton. When Newton summarized all of the universe in three simple laws of motion at the beginning of the 17th century, the effect was so powerful that every thinker in every field wanted to copy what Newton had said about the laws of the universe.

• Freud wanted to be the Newton of psychology
• Adam Smith wanted to be the Newton of economics
• The founders of liberal democracy in the West wanted to be the Newtons of social thinking
• Frederick Taylor, a Scottish engineer, wanted to be the Newton of management theory

The Taylorian company follows the general paradigm inherent in Newtonian physics. But that is 17th century physics – a 17th century concept of the universe.

Newton thought the world we live in is simple, law-abiding and predictable. But today’s world is nothing like that. The world of the 21st century is complex, chaotic and radically uncertain.

Today’s technology is also very different from the technology of the machine age. Newtonian physics and Taylorian management worked very well during the industrial revolution, but today’s technology is not machines – it’s microchips.

Our computers and everything that depends on computers relies on the silicon chip, and the silicon chip could not exist without the discoveries of quantum physics. The internet is quantum technology, laser technology is quantum technology, solid state physics and material science is quantum technology.

Indeed, the CEO of Haier, Zhang Ruimin, says that we live in the quantum age, and I agree with him. We need a quantum management theory for the quantum age.

Key Differences Between Quantum and Newtonian Approaches

Matter vs. Energy

Newton said the world is made of matter – atoms are the smallest units of the material world. Newton said we live in an entirely material world. We human beings, our projects, our thinking, our hopes, our dreams have nothing to do with the laws of physics.

The Taylorian organization is modeled on the machine. Just as Newton said the universe is a giant machine, Taylor thought the company should be like a machine.

But Chinese philosophers have always said the universe is made of energy. The universe is dynamic and evolving.

Quantum physics says the same thing. Quantum physics tells us the universe is not made of matter but indeed it is made of energy, and that what we take for matter is simply very concretized units of energy. The word “quantum” itself refers to the smallest unit of energy required to make any event happen.

Quantum management sees the company as an energy system, as a dynamic evolving system, as a conscious living complex adaptive system. One of the tricks of quantum management is learning where the points of energy are in the company and getting the company’s energy flow in equilibrium.

Atomistic vs. Relational

Newtonian physics said the world is atomistic, and these atoms were pictured like billiard balls – hard, impenetrable boundaries that could not be violated. The Taylorian company therefore divides the company into siloed functions and departments. It separates everything from everything else. There are boundaries between everything.

But Chinese thought has always said the universe is a complex web of relationships. It is relationships that make reality.

Quantum physics says exactly the same thing – that we live in an entangled universe. Everything is related to everything, everyone is related to everyone else. The universe and our world and the world of human affairs is holistic.

The quantum company is a network of multi-functional teams or, as Haier here in China calls them, micro enterprises. These teams are all forming a network of cooperation and collaboration. The quantum company, like the Chinese universe and like the quantum universe, is a complex web of relationships.

Observer vs. Observed

Newtonian physics says there’s a sharp split between the subject and the object, between me the observer and what I observe. Observers are separate from the reality they observe and they can only observe it – they can’t really affect it except by applying forces to it.

The Newtonian company sees its customers as “out there,” the community in which it’s located as “out there.” There is no dynamic relationship between the normal Newtonian or Taylorian company and its customers, no dynamic relationship between the leadership team of the company and the employees.

But traditional Chinese thought has always said there is no distinction between the observer and the observed. We observers, for the Chinese, have always been part of the universe that we observe – an intimate part of it. No distinctions, no boundaries between us and the universe.

Quantum physics says the same thing as Chinese thought. Quantum physics says the observer and the observed are a co-creative unity. They cannot be separated. The way I observe a phenomenon will influence what I observe. I help to make reality with my observations.

In the quantum company, the company sees itself as being in a co-creative relationship with its customers. Haier, China’s own large company that was the first ever to implement all the principles of quantum management, maintains an intimate, constant co-creative dialogue with its users. The users and the employees of the Haier micro enterprises co-create new innovative products.

Haier doesn’t just say “the customers are out there, they get the products we decide to make.” Instead, they go to the customers and say “what do you need? What would you like? Let’s work together to make it.”

Passive vs. Active Participation

In the Newtonian universe, we human beings are just passive observers, victims of reality, victims of events. We cannot control the laws of physics.

In the Newtonian organization, employees are just passive units of production. They have no say in how they do their jobs or in what they do during the day. The employee of the Taylorian company does what he is told. Senior management calls all the shots and employees just follow the rules.

But in traditional Chinese philosophy, particularly in Taoism but also in Confucianism and Wang Yangming, we see the human being, the individual, as a point source of action. The kind of human beings we are and what we do as human beings, the traditional Chinese philosopher felt, actually affected the way the Tao itself unfolded and the way the Tao can come into this world.

Therefore, these Chinese philosophers put a great deal of emphasis on self-cultivation. In order to play my role in the universe more effectively, these Chinese philosophers believed, I must constantly improve myself, perfect myself, learn more, become a better person.

In quantum physics, we’re told a similar kind of thing. Quantum physics says we live in a participatory universe. We the observers, we human beings, by how we relate to the material world, by the questions we ask of the material world, by the experiments we do, make reality. We make the world we live in.

We are not passive witnesses of the laws of physics. We actually influence the way the laws of physics unfold and express themselves in the world in which we live.

In the quantum company, employees are seen as co-creative partners, not tools of the company, not just instruments of production for the company, but creators of the company. Therefore, they are allowed to self-organize, be independent, make decisions, help to build the company of which they are a part.

Either/Or vs. Both/And

Newtonian physics is a physics of either/or. Things are either particles or they’re waves. Newtonian physics came to its end really with the problem that physicists couldn’t decide: is light wave-like or particle-like? Because different experiments were showing them different things.

The Newtonian company is also very either/or. The worker has this skill or that skill. He works in this functional unit or that functional unit. The Newtonian leader believes there is one best way, one best decision, one best product.

But the Chinese have always felt that we live in a world of complementary polarities. Yin and Yang are each part of each other. They build each other, they make each other. The relationship between them makes the reality, and all Chinese polarities are complementary.

Chinese thought is also a thought of “both/and” – yes, this is true, but also that is true. This is possible, but also that is possible. It’s even in the Chinese language – every Chinese pictogram is a complex relationship of polar meanings that through their relationship gives you the meaning of the word.

Quantum physics also is “both/and.” Its answer to Newtonian physics about light was: “You guys have got it wrong. Light isn’t wave-like or particle-like. Light is both wave-like and particle-like.”

The quantum wave function underlying quantum reality is a superposition of multiple possibilities. Many of these possibilities might appear to contradict each other, but that’s a Western way of looking at them. Instead, these multiple seemingly contradictory possibilities are like the complementary polarities in Chinese thought – they enhance each other. It is the relationship between them that makes the reality that they become.

The quantum company also sees that the independent self-organizing team or micro enterprise is particle-like because it is independent and can make its own decisions. At Haier, it relates to its own customers, makes its own products. But each team or micro enterprise in the quantum company is in a collaborative network, fully cooperating with, constantly communicating with all the other independent teams or micro enterprises in the company. So in that respect, the quantum company is also wave-like.

The quantum leader doesn’t make either/or decisions. He or she is aware that there are many possibilities. There are as many products that could be made as there are customers out there who want them. There are as many ways from A to B as the many teams or micro enterprises in the company can follow.

At Haier, there are 4,000 of these independent self-organizing micro enterprises, and each one is a finger into the future. Each one explores a possibility, each one relates to a segment of the market, each one innovates a product in dialogue with its users. It’s a world of both/and.

Reactive vs. Contextual

The Newtonian world is a world of reaction. The laws of physics are absolute. They produce the same results in every context, in every situation. An observer here in this situation will make the same observation as an observer over here in a different situation. So we can only react to events in the Newtonian universe.

The Newtonian company, the standard business-as-usual company, is reactive. It reacts to changes in the market, it reacts to geopolitical changes, it reacts to sudden unexpected events. It’s always one step behind. The Newtonian company sees itself as an island unto itself. It has no relationship to the context in which the company is operating, almost no relationship to the community in which it is located, no real relationship to the needs and wishes of the market – it reacts to them.

But the Chinese have always known – even the modern Chinese know – that situations are contextual. The way the Tao expresses itself here or there depends on the context in which it is unfolding. A Chinese word means something in this context but means something different in that context. It’s a contextual philosophy.

It is exactly the same for quantum physics. Quantum physics says that you can only know something when you know its situation or its context. Things become what they are through the relationships that they’re in.

You and I are different people when we’re at home with our families than when we’re attending a business conference like this today. We’re different with some of our friends than we are with other of our friends.

[Personal anecdote about daughter at school with different teachers showing different behaviors in different contexts]

All of our relationships are contextual. All of our business situations are contextual.

So the quantum company realizes it is contextual. It looks for the relationships that it has, it looks to make more and better relationships. It knows that it is situated in the community and forms a co-creative relationship with the community. It knows that it is in the Earth’s environment and it feels responsible for the Earth’s environment.

The quantum company, like everything quantum and like everything Chinese, is contextual. A quantum leader does not make a decision without seeing what all the relationships are, what all the parameters of the situation are.

Single Force vs. Dual Forces

The Newtonian universe says there is just one active force in the universe. God created the universe at the beginning of time, but then it just goes on forever, except for the destructive force of entropy. Entropy is always tearing things apart, making things wind down, destroying relationships.

The Newtonian company has a finite lifespan. Most Fortune 500 companies go out of business within five years.

China has always recognized that there are the two forces of Yin and Yang – the positive force and the negative force – and that it is the relationship between them, the dialogue between them, that makes the universe function as it does.

Quantum physics also says there are two forces: the creative force that makes ever more relationships, ever greater complexity, and creates ever more information, and then the negative destructive force of entropy.

The quantum company will see some of its products go out of date, but it’s constantly innovating. So it’s subject to both forces – the destructive forces of the market losing interest or the market drying up, but the creative force of constant new innovation, because it’s dialoguing with the customer, dialoguing with the market, co-creating and innovating with the customer and the market.

So the quantum company can have an infinite life. It can sustain itself, evolve and just continue in existence.

Amoral vs. Moral

Newtonian physics is completely amoral. The laws of the universe have nothing to do with right and wrong, good or bad. They just are what they are. Newtonian companies tend to be amoral. Most capitalist business is amoral, certainly in the Western world. It doesn’t bother itself with values.

But in Chinese thought, the Tao is thought to be both a cosmological principle and a moral principle. The relationship of Heaven-Man-Earth means that man is aligned with heaven so that man can then align things here in the Earth with heaven or the Dao. The cosmos itself has a moral principle to it that we are meant to bring into our world of human affairs. We realize this through what the ancient Chinese philosophers called ganying – an intuitive understanding of the way of the universe.

Quantum physics also has the same notion. Because the observer is part of what he observes, because we humans participate in making the universe, the laws of the universe are our laws. The way the universe works tells us how to conduct ourselves and build our world.

Thus, the quantum company structures itself and is led by the laws of quantum physics and complexity science – complex adaptive systems. You can manage a quantum company according to the defining principles of a complex adaptive system, and your company will literally be aligned with the cosmos.

Conclusion

I hope I have said enough to show that you Chinese have always been quantum, and I believe that therefore it gives you a competitive advantage in the 21st century. The West discovered quantum physics but it has never understood it. You understand it in your bones.

I think therefore that China will excel in quantum technology as the 21st century unfolds, and I believe that Chinese companies should stop looking to the West for their management principles and have faith that you Chinese know what you’re doing. You Chinese know best and should follow quantum management, which I have argued today is the same as Chinese management.

Xièxiè and zàijiàn!