HEXAGRAM 03: ORIGINAL, INTERPRETATION AND CASES

HEXAGRAM 03 – Chun - Difficulty at the Beginning

Above K'AN THE ABYSMAL, WATER

Below CHEN THE AROUSING, THUNDER

The name of the hexagram, Chun, really connotes

a blade of grass pushing against an obstacle

as it sprouts out of the earth hence the meaning, "difficulty at the beginning."

The hexagram indicates the way in which heaven and earth bring forth individual beings.

It is their first meeting, which is beset with difficulties.

The lower trigram Chen is the Arousing;

· its motion is upward and

· its image is thunder.

The upper trigram K'an stands for the Abysmal, the dangerous.

· Its motion is downward and

· its image is rain.

The situation points to teeming, chaotic profusion;

thunder and rain fill the air.

But the chaos clears up.

· While the Abysmal sinks,

· the upward movement eventually passes beyond the danger.

· A thunderstorm brings release from tension, and

· all things breathe freely again.

THE JUDGMENT

DIFFICULTY AT THE BEGINNING works supreme success,

Furthering through perseverance.

Nothing should be undertaken.

It furthers one to appoint helpers.

Times of growth are beset with difficulties.

They resemble a first birth.

But these difficulties arise from the very profusion of all that is struggling to attain form.

Everything is in motion:

therefore if one perseveres there is a prospect of great success, in spite of the existing danger.

When it is a man's fate to undertake such new beginnings, everything is still unformed, dark.

Hence he must hold back, because any premature move might bring disaster.

Likewise, it is very important not to remain alone;

in order to overcome the chaos he needs helpers.

This is not to say, however, that he himself should look on passively at what is happening.

He must lend his hand and participate with inspiration and guidance.

THE IMAGE

Clouds and thunder: The image Of DIFFICULTY AT THE BEGINNING.

Thus the superior man

Brings order out of confusion.

Clouds and thunder are represented by definite decorative lines;

this means that in the chaos of difficulty at the beginning, order is already implicit.

So too the superior man has to arrange and organize the inchoate profusion of such times of beginning, just as one sorts out silk threads from a knotted tangle and binds them into skeins.

In order to find one's place in the infinity of being,

one must be able both

· to separate and

· to unite.

THE LINES

0 Nine at the beginning means:

Hesitation and hindrance.

· It furthers one to remain persevering.

· It furthers one to appoint helpers.

If a person encounters a hindrance at the beginning of an enterprise,

he must not try to force advance but

· must pause and

· take thought.

However, nothing should put him off his course;

he must persevere and constantly keep the goal in sight.

It is important to seek out the right assistants,

but he can find them only if he

· avoids arrogance and

· associates with his fellows in a spirit of humility.

Only then will he attract those with whose help he can combat the difficulties.

Six in the second place means:

Difficulties pile up.

Horse and wagon part.

He is not a robber.

He wants to woo when the time comes.

The maiden is chaste.

She does not pledge herself.

Ten years-then she pledges herself.

We find ourselves beset by difficulties and hindrances.

Suddenly there is a turn of affairs,

as if someone were coming up with a horse and wagon and unhitching them.

This event comes so unexpectedly that we assume the newcomer to be a robber.

Gradually it becomes clear that he

· has no evil intentions but

· seeks to be friendly and to offer help.

But this offer is not to be accepted, because it does not come from the right quarter.

We must wait until the time is fulfilled; ten years is a fulfilled cycle of time.

Then

· normal conditions return of themselves, and

· we can join forces with the friend intended for us.

Using the image of a betrothed girl who remains true to her lover in face of grave conflicts,

the hexagram gives counsel for a special situation.

When in times of difficulty a hindrance is encountered and unexpected relief is offered from a source unrelated to us,

we must be careful and not take upon ourselves any obligations entailed by such help;

otherwise our freedom of decision is impaired.

If we bide our time,

· things Will quiet down again, and

· we shall attain what we have hoped for. 1

Six in the third place means:

Whoever hunts deer without the forester

Only loses his way in the forest.

The superior man

· understands the signs of the time

· And prefers to desist.

To go on brings humiliation.

If a man tries to hunt in a strange forest and has no guide, he loses his way.

When he finds himself in difficulties he must not try to steal out of them unthinkingly and without guidance.

Fate cannot be duped;

premature effort, without the necessary guidance, ends in failure and disgrace.

Therefore the superior man, discerning the seeds of coming events,

· prefers to renounce a wish

· rather than to provoke failure and humiliation by trying to force its fulfillment.

Six in the fourth place means:

Horse and wagon part.

Strive for union.

To go brings good fortune.

Everything acts to further.

We are in a situation in which it is our duty to act,

but we lack sufficient power.

However, an opportunity to make connections offers itself.

It must be seized.

Neither false pride nor false reserve should deter us.

Bringing oneself to take the first step,

even when it involves a certain degree of self-abnegation, is a sign of inner clarity.

To accept help in a difficult situation is not a disgrace.

If the right helper is found, all goes well.

0 Nine in the fifth place means:

Difficulties in blessing.

A little perseverance brings good fortune.

Great perseverance brings misfortune.

An individual is in a position in which

he cannot so express his good intentions

that they will actually take shape and be understood.

Other people interpose and distort everything he does.

He should then be cautious and proceed step by step.

He must not try to force the consummation of a great undertaking,

because success is possible only when general confidence already prevails.

It is only through faithful and conscientious work, unobtrusively carried on,

· that the situation gradually clears up and

· the hindrance disappears.

Six at the top means:

Horse and wagon part.

Bloody tears flow.

The difficulties at the beginning are too great for some persons.

· They get stuck and never find their way out;

· they fold their hands and give up the struggle.

Such resignation is the saddest of all things. Therefore

Confucius says of this line:

"Bloody tears flow: one should not persist in this."

1. A different translation is possible here, which would result in a different interpretation:

Difficulties pile up.

Horse and wagon turn about.

If the robber were not there,

The wooer would come.

The maiden is faithful, she does riot pledge herself.

Ten years-then she pledges herself.

03 - INITIAL DIFFICULTIES

MANAGERIAL ISSUE:

The CEO – managing a corporation/project’s birth and its initial difficulties.

When Heaven (Hexagram 1) and Earth (Hexagram 2) join together, they give birth to something new (Hexagram 3) and like all births, it brings initial difficulties with it.

This Hexagram represents the initial difficulties of:

· a new corporation, or

· a new project for both

o a newly established corporation as well as in

o a well-established corporation.

This is the beginning of what appears to be a good enterprise, one that will take a few years to develop. Yet what seems to be an acceptable investment, will eventually encounter

· Many obstacles, as well as

· A final solution.

MANAGERIAL LESSON:

The Superior CEO:

1) Prepares for conflicts and perhaps even for chaos. He knows that:

In a corporate start up, new people will come together to execute a new project which usually means conflicts and hardships.
New projects, like new births are often difficult, painful and stormy.

2) Concentrates on the smaller projects and gives up any grand schemes. He knows that:

After the storm there usually comes the calm.
Tension gives way to peace and the dangers that threaten a project will go away.

3) Finds able executives to support him in reaching his objectives. However, he knows he must work side by side with his executives, even though they might be more experienced than him.

4) Keeps in motion at all times. Perseveres till the end. He knows the success of any initial startup requires of:

· Great perseverance on the part of those who gave birth to the corporation, or those who gave birth to the new project.

· Plenty of help on the part of those who had the genius to develop the idea.

· Plenty of patience on the part of the investors who are backing it up.

· A strong leader in management who will impose order and purpose.

This applies to almost all the companies, whether large or small, or whether they are listed in the stock exchange or not. General U.S. Grant’s constant motion and tenacity during the “Initial Difficulties” of the Civil War, easily come to mind,

5) Takes an active lead. He only has to eliminate all the layers of chaos to get to the perfect corporation.

The I Ching says: “in the chaos of difficulty at the beginning, order is already implicit. So too the superior man has to arrange and organize the inchoate profusion of such times of beginning, just as one sorts out silk threads from a knotted tangle and binds them into skeins. In order to find one's place in the infinity of being, one must be able both to separate and to unite.”

The story of Apple’s extremely successful iPod project is a good example of managing the initial difficulties of a project.

How Steven Jobs:

· Listened to Tony Fadell (after Real Networks and Phillips had turned Fadell down)

· Established a very small team for its development to avoid the pitfalls of creating by committee (committees never work).

· Supported Fadell 100%

· Kept a proper balance between delegating and personally getting involved.

· Gave absolute power to a single person for the ultimate decision making.

These are classic lessons of how to put together Heaven (The Creative) with Earth (The Receptive) and manage the Initial Difficulties.

INVESTMENT ADVICE:

For the investor, the Initial Difficulties represent an unfavorable Time-Space to invest.

By itself (without any moving lines) it carries the possibility of success provided nothing new is undertaken (that is, stay with the project till completion, do not lose the focus):

DIFFICULTY AT THE BEGINNING works supreme success,

Furthering through perseverance.

Nothing should be undertaken.

It furthers one to appoint helpers.

Times of growth are beset with difficulties. They resemble a first birth. But these difficulties arise from the very profusion of all that is struggling to attain form. Everything is in motion: therefore if one perseveres there is a prospect of great success, in spite of the existing danger. When it is a man's fate to undertake such new beginnings, everything is still unformed, dark.

Hence he must hold back, because any premature move might bring disaster. Likewise, it is very important not to remain alone; in order to overcome the chaos he needs helpers. This is not to say, however, that he himself should look on passively at what is happening. He must lend his hand and participate with inspiration and guidance.

The lines, however, present no real investment opportunity as none point to Good Fortune (except in line 4 and even then it is kind of relative).

Generally, this investment as in all investments in start-ups will be difficult and painful. Because of the difficulties the corporation will encounter, this stock should be considered as a very long-term investment, full of ups and downs. For the persistent, long-term investor, there might eventually be good returns; but in general, the best course of action would be to look for a better investment for now and to keep this company in a watch list as a future investment.

The following are cases of corporations under the Initial Difficulties Time-Space:

· General Electric Co. GE under CEO Jeffrey R. Immelt

There are many cases of CEOs managing under the Initial Difficulties, but one of the most striking is that of the Time-Space created in General Electric when GE’s Board of Director, under the leadership of Jack Welch, elected Jeffrey Immelt

The I Ching’s main recommendation to Immelt was:

Clouds and thunder are represented by definite decorative lines; this means that in the chaos of difficulty at the beginning, order is already implicit. So too the superior man has to arrange and organize the inchoate profusion of such times of beginning, just as one sorts out silk threads from a knotted tangle and binds them into skeins. In order to find one's place in the infinity of being, one must be able both to separate and to unite.

Immelt has failed to separate and to unite. Read at the end of the Hexagram.

THE LINES

NINE IN THE FIRST LINE

Managerial Issue: The CEO – managing a Corporation/project’s initial difficulties - arising at its start up.

Managerial Lesson: Be calmed/ be persevering.

Managerial Warning: At the first stage of the Initial Difficulties Time-Space, the CEO will encounter obstructions during the start of the corporation/project and might be tempted to force the birth of the project to overrun any obstruction.

Managerial Advice: The Superior CEO:

· Pauses when he encounters resistance

· Continues tenaciously once the resistance has passed.

· Changes his tactics if necessary but keeps the ultimate goal in mind.

· Seeks the best executives in the market,

· Rewards them based only on merit,

· Keeps an unassuming posture so as to inspire his employees.

· Makes sure everyone involved is humble. NO PRIMA DONNAS ALLOWED.

Investment Advice: Do not invest

SIX IN THE FOURTH LINE

Managerial Issue: The CEO - managing a corporation/project’s initial difficulties - clearly requiring outside help.

Managerial Lesson: Be open.

Managerial Warning: At the fourth stage of the Initial Difficulties Time-Space, the CEO:

· Lacks the strength to hold the team together,

· Cannot execute this project alone without outside assistance, and

· Knows of the need of outside help but will not listen to the warning.

Managerial Advice: The Superior CEO has the inner strength and vision to both: to realize he needs help and to take it. He knows there is no shame in realizing one’s own weakness and in making the necessary corrections when needed. He knows there is a manager out there who can save the project and will do everything within his power to find him.

Investment Advice: Do not invest.

NINE IN THE FIFTH LINE

Managerial Issue: The CEO - managing a corporation/project’s initial difficulties - arising from a lack of confidence created by a lack of communication.

Managerial Lesson: Be expressive/be cautious.

Managerial Warning: At the fifth stage of the Initial Difficulties Time-Space, the CEO must realize:

· His difficulties arise from the fact that he cannot communicate his plans and therefore cannot create confidence in the project.

· His opponents are seizing this opportunity to create confusion and to misinform the other executives.

· No new project, especially large ones, should be carried out without the proper communication and the employee’s general understanding of the project and confidence in the same. This is crucial to create ownership, trust and loyalty to both the CEO as well as his project.

Managerial Advice: The Superior CEO:

Continues to take one step at the time.
Refrains from going for great projects because this would require of a great consensus in which all the parts are in common agreement.
Gets a clear mandate from the investors and employees,
Continues to work hard in those goals where everyone is in agreement.
Pays attention to the smallest details.
Is patient. He knows conditions will return to normal and all obstacles will disappear.

Investment Advice: Do not invest.

SIX IN THE SIXTH LINE

Managerial Issue: The CEO – managing a corporation/project’s initial difficulties - that overwhelm him.

Managerial Lesson: Be determinate.

Managerial Warning: At the sixth stage of the Initial Difficulties Time-Space, the CEO’s initial difficulties will prove too much for him as well as for his assistants. The financial and human resources are exhausted. In the case of a project, it will not be completed. In the case of a startup company it might head for bankruptcy,

Managerial Advice: The Superior CEO is aware that even if the financial and human resources are exhausted, what really brings a company to its bankruptcy when facing its initial difficulties is management’s unwillingness to continue the fight.

The I Ching says: “Such resignation is the saddest of all things”.

Confucius says of this line: "Bloody tears flow: one should not persist in this."

Investment Advice: Do not invest.

MANAGERIAL CASES

General Electric Co. GE under CEO Jeffrey R. Immelt

Jeffrey R. Immelt’s Performance: ROI= (52.62%) Annualized Return= (7.29%)

SPY’s Performance: ROI= 186.46% Annualized Return= 6.21%

Jeff Immelt became CEO of General Electric on September 7, 2001. Since then, his performance has been absolutely dismal as evidenced by the 50% drop in the value of the stock since his appointment. His performance has been so poor that he was named one of the five worst Non-Financial-Crisis-Related CEOs of 2008 by the Free Enterprise Action Fund.

Points the investor should consider:

1) THE HEXAGRAM

Initial Difficulties (3) tends to be negative.

DIFFICULTY AT THE BEGINNING works supreme success,

Furthering through perseverance.

Nothing should be undertaken.

It furthers one to appoint helpers.

2) THE ADVICE

Clouds and thunder: The image Of DIFFICULTY AT THE BEGINNING.

Thus the superior man

Brings order out of confusion.

3) THE LINES:

There are four moving lines which describe the Time Space that GE is and will be going through. The fact that there are so many moving lines is unusual and point to danger. But what is of great concern is the six at the top which is very negative.

0 Nine at the beginning means:

Hesitation and hindrance.

It furthers one to remain persevering.

It furthers one to appoint helpers.

If a person encounters a hindrance at the beginning of an enterprise, he must not try to force advance but must pause and take thought. However, nothing should put him off his course; he must persevere and constantly keep the goal in sight. It is important to seek out the right assistants, but he can find them only if he avoids arrogance and associates with his fellows in a spirit of humility. Only then will he attract those with whose help he can combat the difficulties.

Six in the fourth place means:

Horse and wagon part.

Strive for union.

To go brings good fortune.

Everything acts to further.

We are in a situation in which it is our duty to act, but we lack sufficient power. However, an opportunity to make connections offers itself. It must be seized. Neither false pride nor false reserve should deter us. Bringing oneself to take the first step, even when it involves a certain degree of self-abnegation, is a sign of inner clarity. To accept help in a difficult situation is not a disgrace. If the right helper is found, all goes well.

0 Nine in the fifth place means:

Difficulties in blessing.

A little perseverance brings good fortune.

Great perseverance brings misfortune.

An individual is in a position in which he cannot so express his good intentions that they will actually take shape and be understood. Other people interpose and distort everything he does. He should then be cautious and proceed step by step. He must not try to force the consummation of a great undertaking, because success is possible only when general confidence already prevails. It is only through faithful and conscientious work, unobtrusively carried on, that the situation gradually clears up and the hindrance disappears.

Six at the top means:

Horse and wagon part.

Bloody tears flow.

The difficulties at the beginning are too great for some persons. They get stuck and never find their way out; they fold their hands and give up the struggle. Such resignation is the saddest of all things. Therefore

Confucius says of this line:

"Bloody tears flow: one should not persist in this."

4) THE MOVING HEXAGRAM

Progress (35) is positive and points to the possibility that Immelt might pull it off after much difficulties. But the question is: can the investor go through so many difficulties when there is a better alternative?

The hexagram represents the sun rising over the earth. It is therefore the symbol of rapid, easy progress, which at the same time means ever widening expansion and clarity.

THE JUDGMENT

PROGRESS.

The powerful prince

Is honored with horses in large numbers.

In a single day he is granted audience three times.

As an example of progress, this pictures a time when a powerful feudal lord rallies the other lords around the sovereign and pledges fealty and peace. The sovereign rewards him richly and invites him to a closer intimacy.

A twofold idea is set forth here. The actual effect of the progress emanates from a man who is in a dependent position and whom the others regard as their equal and are therefore willing to follow. This leader has enough clarity of vision not to abuse his great influence but to use it rather for the benefit of his ruler. His ruler in turn is free of all jealousy, showers presents on the great man, and invites him continually to his court. An enlightened ruler and an obedient servant - this is the condition on which great progress depends.