HEXAGRAM 17: ORIGINAL, INTERPRETATION AND CASES

HEXAGRAM 17 – Sui - Following

Above TUI THE JOYOUS, LAKE

Below CHEN THE AROUSING, THUNDER

The trigram Tui, the Joyous, whose attribute is gladness, is above;

Chen, the Arousing, which has the attribute of movement, is below.

Joy in movement induces following.

The Joyous is the youngest daughter, while

the Arousing is the eldest son.

An older man

· defers to a young girl and

· shows her consideration.

By this he moves her to follow him.

THE JUDGMENT

FOLLOWING has supreme success.

Perseverance furthers.

No blame.

In order to obtain a following one must first know how to adapt oneself.

If a man would rule he must first learn to serve,

for only in this way does he secure from those below him the joyous assent

that is necessary if they are to follow him.

If he has to obtain a following

· by force or cunning,

· by conspiracy or

· by creating factions,

he invariably arouses resistance, which obstructs willing adherence.

But even joyous movement can lead to evil consequences,

hence the added stipulation,

"Perseverance furthers"-that is, consistency in doing right - together with "No blame."

· Just as we should not ask others to follow us unless this condition is fulfilled,

· so it is only under this condition that we can in turn follow others without coming to harm.

The thought of obtaining a following through adaptation to the demands of the time is a great and significant idea;

this is why the appended judgment is so favorable.

THE IMAGE

Thunder in the middle of the lake: The image of FOLLOWING.

Thus the superior man at nightfall

Goes indoors for rest and recuperation.

In the autumn electricity withdraws into the earth again and rests.

Here it is the thunder in the middle of the lake that serves as the image –

· thunder in its winter rest,

· not thunder in motion.

The idea of following in the sense of adaptation to the demands of the time

grows out of this image.

Thunder in the middle of the lake indicates times of

· darkness and

· rest.

Similarly, a superior man, after being tirelessly active all day,

allows himself rest and recuperation at night.

No situation can become favorable until one

· is able to adapt to it and

· does not wear himself out with mistaken resistance.

THE LINES

Nine at the beginning- means:

The standard is changing,

Perseverance brings good fortune.

To go out of the door in company

Produces deeds.

There are exceptional conditions in which the relation between leader and followers changes.

It is implicit in the idea of following and adaptation that if

· one wants to lead others,

· one must remain accessible and responsive to the views of those under him.

At the same time, however,

· he must have firm principles, so that

· he does not vacillate where there is only a question of current opinion.

Once

· we are ready to listen to the opinions of others,

· we must not associate exclusively with people who share our views or with members of our own party; instead,

· we must go out and mingle freely with all sorts of people, friends or foes.

That is the only way to achieve something.

Six in the second place means:

If one clings to the little boy,

One loses the strong man.

In friendships and close relationships an individual must make a careful choice.

· He surrounds himself either with good or with bad company;

· he cannot have both at once.

· he throws himself away on unworthy friends

· he loses connection with people of intellectual power who could further him in the good.

Six in the third place means:

· one clings to the strong man,

· One loses the little boy.

Through following one finds what one seeks.

It furthers one to remain persevering.

When

the right connection with distinguished people has been found,

a certain loss naturally ensues.

A man must part company with the

· inferior and

· superficial.

But in his heart

· he will feel satisfied, because

· he will find what he seeks and needs for the development of his personality.

The important thing is to remain firm.

He must

· know what he wants and

· not be led astray by momentary inclinations.

Nine in the fourth place means:

Following creates success.

Perseverance brings misfortune.

To go one's way with sincerity brings clarity.

How could there be blame in this?

It often happens,

when

a man exerts a certain amount of influence, that

he obtains a following by condescension toward inferiors.

But the people who attach themselves to him are not honest in their intentions.

They

· seek personal advantage and

· try to make themselves indispensable through flattery and subservience.

If one

· becomes accustomed to such satellites and

· cannot do without them,

it brings misfortune.

Only when

a man is

· completely free from his ego, and

· intent, by conviction, upon what is right and essential,

does he

· acquire the clarity that enables him to see through such people, and

· become free of blame.

0 Nine in the fifth place means:

Sincere in the good.

Good fortune.

Every man must have something he follows –

something that serves him as a lodestar.

He who follows with conviction the beautiful and the good

may feel himself strengthened by this saying.

Six at the top means:

· meets with firm allegiance And

· is still further bound.

The king introduces him To the Western Mountain.

This refers to a man, an exalted sage,

who has already put the turmoil of the world behind him.

But a follower appears who

· understands him and

· is not to be put off.

So the sage

· comes back into the world and

· aids the other in his work.

Thus there develops an eternal tie between the two.

The allegory is chosen from the annals of the Chou dynasty.

The rulers of this dynasty honored men who had served them well

by awarding them a place in the royal family's temple of ancestors on the Western Mountain.

In this way they were regarded as sharing in the destiny of the ruling family.

17 FOLLOWING

MANAGERIAL ISSUE:

The CEO - managing to create a following among the employees/customers.

Hexagram 17 focuses on the CEO’s need to create a following amongst his employees and his customers.

The I Ching says (*): " Joy in movement induces following . . . An older man defers to a young girl and shows her consideration. By this he moves her to follow him. “

Note: it is fascinating to see how, over three thousand years ago, the I Ching was advising men how to make women fall in love with them. The secret is not in viewing men as Martians or women as Venusians but rather giving women what they really want: simple CONSIDERATION.

MANAGERIAL LESSON:

The Superior CEO:

1) Adapts:

a. To the conditions of the times. A CEO who is not in harmony with the times will not create following among his employees and customers. He will ask his employees to create products that no longer are in demand and will be promptly abandoned by his customers. That is one of the reasons why CEOs must be relatively young.

b. To the corporate culture. Observe before making any changes (John Boyd’s OODA). A typical case was Merrill’s CEO Bill Schreyer, who used to advice the newly appointed CEOs not to make any changes for the first six months or at least not until they got a feeling for the way to go.

2) Serves:

a. Is in front of marketing. The CEO should be the first one so serve the customers. Wendy’s Dave Thomas serving hamburgers himself comes to mind. Everyone will follow a CEO who leads by example, who first is willing to serve before telling others to serve.

b. Makes sure the top executives serve the junior executives, and everyone serves each other. Taking care of their employees is what has made many Japanese companies so successful. The CEO who takes care of his good employees and fires the bad ones will in turn be taken care of by the good employees left.

3) Knows the corporate business well.

4) Leads customers and employees with joy and consideration. When an action plan is carried out with joy and consideration, all conditions are then given for all the employees to follow the CEO. This advice is extended to the higher-ranking executives who must also be considerate with the lower ranking executives.

5) Keeps in mind the good of the employees so that they will eventually serve him well in carrying out his plans. The same applies to his customers.

6) Is friendly and positive at all times. There will always be discontent during the time a new policy is implemented. If a new policy is interrupted during the first sign of discontent, there won’t be any success. The policy has to be kept until the employees finally accept it. A policy, which is based on positivism, is always superior to one based on negativism.

7) Rests after completing a project. The CEO must adapt to the rhythm of the Universe. To take a reasonable break to replenish the corporate strength is crucial. To continue to push relentlessly creates exhaustion. No one wants to follow a CEO who will drive his employees to the ground. A “following-mode” policy must be followed by a “relaxation-mode” policy so that the CEO can once again demand a “following-mode” from his employees, and so on. When the time comes for the CEO to give the employees a break, the CEO and his top executives must also relax. The idea is not to go against the cycle’s concept, but rather to make the most of both modes: the following mode and the relaxation mode. Like the heart which not only compresses but must also relax.

The Superior CEO creates following by consideration and joy. He does:

1) Not force others to follow him. That is, not lead by force, cunning or conspiring by creating division amongst the ranks. That would only arouse resistance which in turn, will obstruct the same willingness to follow he seeks from the employees and customers.

2) Not ask others to follow him in doing what he would not do himself. He must do the right thing at all times and ask others to do the right thing. By asking no one to do harm to others or to themselves, he creates respect and following among his customers and employees. This is the essence of the problem with Altria (Philip Morris). By asking his customers to smoke and kill themselves and by asking its employees to produce a poisonous drug, the CEO creates a feeling of hatred from his customers who know they are buying death in a box and contempt from his employees who know they are producing something harmful.

3) Not forcing the employees to follow him in accomplishing unrealistic goals. No CEO can ever create an atmosphere of following-mode among the employees, if he forces unrealistic goals upon them, or forces them to work under demeaning conditions, or if he lies or cheats them with false promises, or if he tries to divide them to make them fight amongst each other. This creates the opposite of a following-mode. It creates only hatred and resentment.

INVESTMENT ADVICE:

For the investor, the Following is in general a favorable Time-Space to invest.

By itself (no lines) the Hexagram is positive because the CEO has the opportunity to adapt to the demands of the time.

FOLLOWING has supreme success.

Perseverance furthers.

No blame.

In order to obtain a following one must first know how to adapt oneself. If a man would rule he must first learn to serve, for only in this way does he secure from those below him the joyous assent that is necessary if they are to follow him. If he has to obtain a following by force or cunning, by conspiracy or by creating factions, he invariably arouses resistance, which obstructs willing adherence. But even joyous movement can lead to evil consequences, hence the added stipulation, "Perseverance furthers"-that is, consistency in doing right - together with "No blame." Just as we should not ask others to follow us unless this condition is fulfilled, so it is only under this condition that we can in turn follow others without coming to harm.

The thought of obtaining a following through adaptation to the demands of the time is a great and significant idea; this is why the appended judgment is so favorable.

Most of the lines are positive (two are Good Fortune).

The following are two cases under the Following Time-Space.

· QUALCOMM Inc. QCOM under CEO Paul E. Jacobs

· Vertex Pharmaceuticals Inc. VRTX under CEO Matthew Emmens

(Read at end of hexagram)

THE LINES

NINE IN THE FIRST PLACE

Managerial Issue: The CEO – managing to create a following among the employees/customers - opening his plans to new opinions and suggestions

Managerial Lesson: Be encouraging.

Managerial Warning: At the first stage of the Following Time-Space, the I Ching warns the CEO that in order to lead he must:

· Be accessible to everyone. Listen to everyone including top executives/employees and customers – including those who agree with him as well as those who disagree with him.

· Be responsive. Be ready to change the plans accordingly.

· Be principled as to what can and what cannot change.

The success of the Japanese system has to do in part with the fact that the CEO must listen to everyone and that any employee has the right to give his opinion to improve the productivity of the corporation. Legend has it that any worker in Toyota’s assembly line can stop the production should he find a faulty part.

Managerial Advice: The Superior CEO listens because he is:

· A man of principles and integrity,

· Courageous enough to accept changes.

· Clear about his vision of objectives,

· Willing to change the means to fulfill his vision.

That is why he also looks for ideas and opinions from outside his inner circle and looks for external advisors to help him complete his vision.

Here there is a parallel with Unisys’ idea of creating a new computer with a team, whose members came from diverse backgrounds including not only engineers but also a priest and a philosopher. It is always positive to incorporate fresh ideas from various disciplines, which are not related to their corporate business. In this way, we create our own disruptive technologies rather than get caught by surprise by someone else’s.

· The I Ching says (*): " There are exceptional conditions in which the relation between leader and followers changes. It is implicit in the idea of following and adaptation that if one wants to lead others, one must remain accessible and responsive to the views of those under him. At the same time, however, he must have firm principles, so that he does not vacillate where there is only a question of current opinion. Once we are ready to listen to the opinions of others, we must not associate exclusively with people -, who share our views or, with members of our own party; instead, we must go out and mingle freely with all sorts of people, friends or foes. That is the only way to achieve something.”

Investment Advice: Invest.

SIX IN THE SECOND PLACE

Managerial Issue: The CEO - managing to create a following among the employees/customers – and failing.

Managerial Lesson: Be uncompromising.

Managerial Warning: At the second stage of the Following Time-Space, the I Ching warns the CEO of the dangers of holding on to the mediocre employees and customers of his misguided intent on keeping his bad advisors and worst managers either because of lack of character or because of friendship. This creates a bad precedent and the good employees leave.

Managerial Advice: The Superior CEO is ruthless when choosing his advisors, executives, employees and even customers in general. He shows at all times that he will only accept the best. There can be no compromise with mediocrity. The CEO cannot serve two masters. He must tolerate neither lack of capacity nor lack of total commitment. Eagles only gather with eagles. The men of merit seek the men of merit. If he hires highly competent people, only the competent will apply for work. Google has that kind of attitude – only geniuses please. To mix the good with the bad will only make the good leave. The same applies to the customers.

In this case the CEO fails to create a following-mode and the men of merit reject the CEO for his poor leadership.

· The I Ching says (*): “In friendships and close relationships an individual must make a careful choice. He surrounds himself either with good or with bad company; he cannot have both at once. If he throws himself away on unworthy friends he loses connection with people of intellectual power who could further him in the good.”

Investment Advice: Do not invest.

SIX IN THE THIRD PLACE

Managerial Issue: The CEO – managing to create a following among the employees/customers – ruthlessly firing the worst and keeping the best.

Managerial Lesson: Be committed.

Managerial Warning: At the third stage of the Following Time-Space, The I Ching warns the CEO – once he brings in the men of talent, he must let go of the incompetent. There must be no compromise with mediocrity if he wants to succeed.

Managerial Advice: The Superior CEO fires the incompetent and surrounds himself with the best employees only. In this way, he will show his commitment to the highest principles and his commitment to excellence. The Superior CEO will create a following from those employees who remain with him much faster if he fires the incompetent employees, even if this means a temporary slowdown for the corporation. The employees who remain with him will, in turn, bring men of same quality, character and style, thus creating the conditions for success. To be successful, the CEO must remain inflexible in the execution of this policy to show he knows his goals as well as himself.

· The I Ching says: “When the right connection with distinguished people has been found, a certain loss naturally ensues. A man must part company with the inferior and superficial. But in his heart he will feel satisfied, because he will find what he seeks and needs for the development of his personality. The important thing is to remain firm. He must know what he wants and not be led astray by momentary inclinations.”

Investment Advice: Do not invest. Look for better alternatives.

NINE IN THE FOURTH PLACE

Managerial Issue: The CEO – managing to create a following among the employees/customers - with the wrong employees/customers.

Managerial Lesson: Be focused.

Managerial Warning: At the fourth stage of the Following Time-Space, the I Ching warns the CEO dishonest and inept employees have gotten too close to him by adulation rather than merit and capacity or because of his own leniency. These employees are only interested in advancing their personal agenda rather than thinking about the corporation. There is a danger he will become too attached to them to the point they are becoming indispensable.

Managerial Advice: The Superior CEO is clear about and remains focused on the basics – to reward merit and punish inefficiencies. The inept employees can influence him only if he allows them to inflate his ego. It is not clear that the CEO has the inner strength to keep firm in the execution of the I Ching's advice.

Investment Advice: Do not invest.

NINE IN THE FIFTH PLACE

Managerial Issue: The CEO - managing to create a following among the employees/customers – within their own interests.

Managerial Lesson: Be sincere.

Managerial Warning: At the fifth stage of the Following Time-Space, the I Ching warns the CEO every employee/client has his own interest. Do not look outside of it.

Managerial Advice: The Superior CEO:

Seeks what really interests the customers and employees.
Provides for that which interests his customers/employees.

The Superior CEO’s policy aims to seek and provide his customers/employees real interests by rewarding merit, honesty and talent only. His success is contingent upon his executing this policy with all his strength and conviction. This policy should be his north, his compass, and the result will be success. The lesson is that the CEO who seeks for merit among his employees and does it with all his strength will surely succeed.

Investment Advice: Invest.

SIX IN THE SIXTH PLACE

Managerial Issue: The CEO – managing to create a following among the employees / customers - finding wise advisors from outside his circle.

Managerial Lesson: Be open.

Managerial Warning: At the sixth stage of the Following Time-Space, the I Ching advices the CEO that even a retired CEO can have his own following. Many retired CEOs are constantly called upon to provide advice on important issues. Some even keep offices in the building.

Managerial Advice: The Superior CEO looks for external advice from retired executives, perhaps from a retired CEO. He will find a real wise man that used to have his own following and really knows the business. The Superior CEO recognizes his merits, gets him out of retirement to help him in the execution of his plans, and gets his loyalty and support. This will lead to a long-lasting friendship and to the corporation’s success.

The managerial lesson is that it is never too late to recognize merit because merit is beyond age, that the Superior CEO will look for men of merit everywhere, and that he must surround himself by men of merit to ensure his own success. Many corporations keep an office for their retired CEOs to readily have access to their experience.

Investment Advice: Do not invest.

MANAGERIAL CASES

QUALCOMM Inc. QCOM under CEO Paul E. Jacobs

Paul E. Jacobs’ Performance: ROI= 52.55% Annualized Return= 7.19%.

SPY’s Performance: ROI= 3.44% Annualized Return= 0.56%

Paul E. Jacobs has been CEO of Qualcomm since July 2005. Since then, his performance has been excellent compared to that of the SPY’s. Qualcomm’s Time-Space under the leadership of Paul Jacobs has no moving lines therefore the outcome of the Judgment Supreme Success.

Points the investor should consider:

1) THE HEXAGRAM

HEXAGRAM 17 – Sui - Following

The trigram Tui, the Joyous, whose attribute is gladness, is above; Chen, the Arousing, which has the attribute of movement, is below. Joy in movement induces following. The Joyous is the youngest daughter, while the Arousing is the eldest son. An older man defers to a young girl and shows her consideration. By this he moves her to follow him.

THE JUDGMENT

FOLLOWING has supreme success.

Perseverance furthers.

No blame.

The thought of obtaining a following through adaptation to the demands of the time is a great and significant idea; this is why the appended judgment is so favorable.

2) THE ADVICE

Thunder in the middle of the lake: The image of FOLLOWING.

Thus the superior man at nightfall

Goes indoors for rest and recuperation.

In the autumn electricity withdraws into the earth again and rests. Here it is the thunder in the middle of the lake that serves as the image - thunder in its winter rest, not thunder in motion. The idea of following in the sense of adaptation to the demands of the time grows out of this image.

Thunder in the middle of the lake indicates times of darkness and rest. Similarly, a superior man, after being tirelessly active all day, allows himself rest and recuperation at night. No situation can become favorable until one is able to adapt to it and does not wear himself out with mistaken resistance.

3) THE LINES:

There are no moving lines.

4) THE MOVING HEXAGRAM

There is no moving Hexagram because there are no moving lines. Therefore the judgment becomes the focus point.

Vertex Pharmaceuticals Inc. VRTX under CEO Matthew Emmens

Matthew Emmens’ Performance: ROI= 49.77% Annualized Return= 17.59%.

SPY’s Performance: ROI= 34.96% Annualized Return= 14.28%

Matthew Emmens has been CEO of Vertex Pharmaceuticals since May 2009. Since then, his performance has been better than the SPY’s. It is still too early to assess his entire performance, but Vertex pharmaceuticals’ Time-Space under the leadership of Matthew Emmens has three positive moving lines which will continue to give support to his performance.

Points the investor should consider:

1) THE HEXAGRAM

(Same as Above).

2) THE ADVICE

(Same as Above).

3) THE LINES:

Nine at the beginning

The standard is changing,

Perseverance brings good fortune.

To go out of the door in company

Produces deeds.

There are exceptional conditions in which the relation between leader and followers changes. It is implicit in the idea of following and adaptation that if one wants to lead others, one must remain accessible and responsive to the views of those under him. At the same time, however, he must have firm principles, so that he does not vacillate where there is only a question of current opinion. Once we are ready to listen to the opinions of others, we must not associate exclusively with people who share our views or with members of our own party; instead, we must go out and mingle freely with all sorts of people, friends or foes. That is the only way to achieve something.

Six in the third place

If one clings to the strong man,

One loses the little boy.

Through following one finds what one seeks.

It furthers one to remain persevering.

When the right connection with distinguished people has been found, a certain loss naturally ensues. A man must part company with the inferior and superficial. But in his heart he will feel satisfied, because he will find what he seeks and needs for the development of his personality. The important thing is to remain firm. He must know what he wants and not be led astray by momentary inclinations.

0 Nine in the fifth place

Sincere in the good.

Good fortune.

Every man must have something he follows - something that serves him as a lodestar. He who follows with conviction the beautiful and the good may feel himself strengthened by this saying.

4) THE MOVING HEXAGRAM

HEXAGRAM 62 - Hsiao Kuo - Preponderance of the Small

While in the hexagram Ta Kuo, PREPONDERANCE OF THE GREAT (28), the strong lines preponderate and are within inclosed between weak lines at the top and bottom, the present hexagram has weak lines preponderating, though here again they are on the outside, the strong lines being within. This indeed is the basis of the exceptional situation indicated by the hexagram. When strong lines are outside, we have the hexagram I, PROVIDING NOURISHMENT (27), or Chung Fu, INNER TRUTH (61); neither represents an exceptional state. When strong elements within preponderate, they necessarily enforce their will. This creates struggle and exceptional conditions in general. But in the present hexagram it is the weak element that perforce must mediate with the outside world. If a man occupies a position of authority for which he is by nature really inadequate, extraordinary prudence is necessary.

THE JUDGMENT

PREPONDERANCE OF THE SMALL.

Success.

Perseverance furthers.

Small things may be done; great things should not be done.

The flying bird brings the message:

It is not well to strive upward,

It is well to remain below.

Great good fortune.

Exceptional modesty and conscientiousness are sure to be rewarded with success; however, if a man is not to throw himself away, it is important that they should not become empty form and subservience but be combined always with a correct dignity in personal behavior. We must understand the demands of the time in order to find the necessary offset for its deficiencies and damages. In any event we must not count on great success, since the requisite strength is lacking. In this lies the importance of the message that one should not strive after lofty things but hold to lowly things.

The structure of the hexagram gives rise to the idea that this message is brought by a bird. In Ta Kuo, PREPONDERANCE OF THE GREAT (28), the four strong, heavy lines within, supported only by two weak lines without, give the image of a sagging ridgepole. Here the supporting weak lines are both outside and preponderant; this gives the image of a soaring bird. But a bird should not try to surpass itself and fly into the sun; it should descend to the earth, where its nest is. In this way it gives the message conveyed by the hexagram.

THE IMAGE

Thunder on the mountain: The image of PREPONDERANCE OF THE SMALL.

Thus in his conduct the superior man gives preponderance to reverence.

In bereavement be gives preponderance to grief.

In his expenditures he gives preponderance to thrift.

Thunder on the mountain is different from thunder on the plain. In the mountains, thunder seems much nearer; outside the mountains, it is less audible than the thunder of an ordinary storm. Thus the superior man derives an imperative from this image: he must always fix his eyes more closely and more directly on duty than does the ordinary man, even though this might make his behavior seem petty to the outside world. He is exceptionally conscientious in his actions. In bereavement emotion means more to him than ceremoniousness. In all his personal expenditures he is extremely simple and unpretentious. In comparison with the man of the masses, all this makes him stand out as exceptional. But the essential significance of his attitude lies in the fact that in external matters he is on the side of the lowly.