HEXAGRAM 51: ORIGINAL, INTERPRETATION AND CASES

HEXAGRAM 51 – Chen - The Arousing (Shock, Thunder)

Above CHEN THE AROUSING, THUNDER

Below CHEN THE AROUSING, THUNDER

The hexagram Chen represents the eldest son,

who seizes rule with

· energy and

· power.

A yang line

· develops below two yin lines and

· presses upward forcibly.

This movement is so violent that it arouses terror.

It is symbolized by thunder, which

· bursts forth from the earth and by its shock

· causes fear and trembling.

THE JUDGMENT

· Shock brings success.

· Shock comes-oh, oh!

Laughing words-ha, ha!

· The shock terrifies for a hundred miles, And

· he does not let fall the sacrificial spoon and chalice.

The shock that comes from the manifestation of God

within the depths of the earth

makes man afraid,

but this fear of God is good,

for joy and merriment can follow upon it.

When

· a man has learned within his heart what fear and trembling mean,

· he is safeguarded against any terror produced by outside influences.

Let the thunder roll and spread terror a hundred miles around:

· he remains so composed and reverent in spirit

that

· the sacrificial rite is not interrupted.

This is the spirit that must animate leaders and rulers of men –

· a profound inner seriousness from which

· all outer terrors glance off harmlessly.

THE IMAGE

Thunder repeated: the image of SHOCK.

Thus in fear and trembling

The superior man

· sets his life in order And

· examines himself.

The shock of continuing thunder brings

· fear and

· trembling.

The superior man

· is always filled with reverence at the manifestation of God;

· sets his life in order and

· searches his heart,

lest it harbor any secret opposition to the will of God.

Thus

· reverence is the foundation of true culture.

THE LINES

Nine at the beginning means:

Shock comes-oh, oh!

Then follow laughing words-ha, ha!

Good fortune.

The fear and trembling engendered by shock

come to an individual at first in such a way that

he sees himself placed at a disadvantage as against others.

But this is only transitory.

When

the ordeal is over,

· he experiences relief,

and thus

· the very terror he had to endure at the outset

· brings good fortune in the long run.

Six in the second place means:

Shock comes bringing danger.

A hundred thousand times

You

· lose your treasures And

· must climb the nine hills.

Do not go in pursuit of them.

After seven days you will get them back again.

This pictures a situation in which

· a shock endangers a man and

· he suffers great losses.

Resistance

· would be contrary to the movement of the time and

· for this reason unsuccessful.

Therefore

he must simply

· retreat to heights inaccessible to the threatening forces of danger.

He must

· accept his loss of property without worrying too much about it.

When the time of shock and upheaval

that has robbed him of his possessions has passed,

· will get them back again without going in pursuit of them.

Six in the third place means:

Shock comes and makes one distraught.

If shock spurs to action

One remains free of misfortune.

There are three kinds of shock –

1. the shock of heaven, which is thunder,

2. the shock of fate, and, finally,

3. the shock of the heart.

The present hexagram refers

· less to inner shock

· than to the shock of fate.

In such times of shock,

· presence of mind is all too easily lost:

the individual

· overlooks all opportunities for action and

· mutely lets fate take its course.

But if

· he allows the shocks of fate to induce movement within his mind,

· he will overcome these external blows with little effort.

Nine in the fourth place means:

Shock is mired.

Movement within the mind depends for its success partly on circumstances.

If there is

· neither a resistance that might be vigorously combated,

· nor yet a yielding that permits of victory –

if, instead,

· everything is tough and inert like mire –

movement is crippled.

Six in the fifth place means:

Shock goes hither and thither.

Danger.

However, nothing at all is lost.

Yet there are things to be done.

This is a case

· not of a single shock

· but of repeated shocks with no breathing space between.

Nonetheless,

· the shock causes no loss,

because

one takes care

· to stay in the center of movement

and in this way

· to be spared the fate of being helplessly tossed hither and thither.

Six at the top means:

Shock brings

ruin and

terrified gazing around.

Going ahead brings misfortune.

If it

· has not yet touched one's own body

But

· has reached one's neighbor first,

There is no blame.

One's comrades have something to talk about.

When inner shock is at its height,

it robs a man of

· reflection and

· clarity of vision.

In such a state of shock

it is of course impossible to act with presence of mind.

Then

the right thing is to keep still

until composure and clarity are restored.

But this a man can do only

when he himself is not yet infected by the agitation,

although its disastrous effects are already visible in those around him.

· he withdraws from the affair in time,

· he remains free of mistakes and injury.

But his comrades,

who no longer heed any warning,

will in their excitement certainly be displeased with him.

However,

he must not take this into account.

51 THE AROUSING

MANAGERIAL ISSUE:

The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) – Developing the fear of God to generate the proper attitude.

Hexagram 51 refers to a forceful violent upward movement and the CEO’s need to develop the proper attitude to deal with it. Both the I Ching and the Bible would appear to coincide that a shocking experience usually leads a man to the fear of God, and in that fear of God is the beginning of wisdom. However, there is a difference between fear and terror. Fear implies acknowledgment of a great power and it provides the CEO with the proper mental attitude to deal with such circumstances, particularly because fear provides the first and most important of the virtues - Prudence. Fear will keep the CEO on edge and keep him from making mistakes. And even under the worst circumstances the CEO will not drop the ball. Terror, on the other hand, implies such a degree of fear that the CEO is completely paralyzed. Terror will push him over the edge and lead him to serious errors.

MANAGERIAL LESSON:

The Superior CEO knows shock can come about by two types of events:

1) Natural, and

2) Man-made, such as the birth of a new industry or a hostile takeover of another CEO against his corporation. To deal with this type of event, the Superior CEO turns unmanageable terror into manageable fear. We can use as an example the advent of the Internet industry and Netscape’s browser. Bill Gates could have felt terror at the notion Microsoft would be left behind, but he turned terror into manageable fear. Gates realized that the Internet was a new industry with a tremendous potential, he also realized that Netscape’s browser represented a threat to Microsoft’s operating system. He was afraid Microsoft would be left out of the Internet market and did something positive with his fear.

The Superior CEO (Bill Gates) at the Arousing Time-Space:

1) Seeks the truth. Bill Gates asked himself if the development of the browser was a true trend or just a fashion.

2) Looks deep within his soul as well as within his corporation’s soul. Bill Gates asked if Microsoft had the inner strength to be successful in this new industry.

3) Works on his proper attitude. Bill Gates attained a serious, almost reverend attitude to develop a Microsoft’s browser. His confidence was based on a healthy fear of Netscape rather than terror. If Bill Gates had been terrified, he would have been paralyzed and Netscape would have been the standard browser today.

The I Ching says: “This is the spirit that must animate leaders and rulers of men - a Profound inner seriousness from which all outer terrors glance off harmlessly.”

In the case of man-made events there are so many examples of hostile takeovers. While healthy fear of such an event would force any CEO to create poison pills to repel such hostile takeover; terror, on the other hand, guarantees his opponents’ success.

INVESTMENT ADVICE:

For the investor, the Arousing represents in general terms an unfavorable Time-Space to invest. After all, few CEOs can handle such a terrifying upward movement.

By itself (no lines) the Time-Space points to a turbulent condition followed by eventual success (Shock brings success)

Shock brings success.

Shock comes-oh, oh!

Laughing words-ha, ha!

The shock terrifies for a hundred miles,

And he does not let fall the sacrificial spoon and chalice.

The shock that comes from the manifestation of God within the depths of the earth makes man afraid, but this fear of God is good, for joy and merriment can follow upon it.

When a man has learned within his heart what fear and trembling mean, he is safeguarded against any terror produced by outside influences. Let the thunder roll and spread terror a hundred miles around: he remains so composed and reverent in spirit that the sacrificial rite is not interrupted. This is the spirit that must animate leaders and rulers of men - a profound inner seriousness from which all outer terrors glance off harmlessly.

The lines, however, include only one possibility of good fortune (the first). The rest are a mixture of negative to extremely negative.

The following cases are those of corporations under the Arousing Time-Space:

· Johnson & Johnson JNJ under CEO William C. Weldon

(Read at the end of the Hexagram)

THE LINES

NINE IN THE FIRST PLACE

Managerial Issue: The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) – its initial stages.

Managerial Lesson: Be brave.

Managerial Warning: At the first stage of the Arousing Time-Space, the CEO faces:

· The beginning of a terrifying upward movement, a shocking situation, an arousing, which has placed the corporation in a dangerous position.

· The risk he might fall into the wrong attitude and start fearing everything is lost for the corporation.

Managerial Advice: The Superior CEO knows that:

· It is proper to feel fear, and

· Once he sees this difficulty through, in the end the corporation will come out better than before.

In this particular case, the Arousing will do no harm to the corporation as fate has ordained it so.

Investment Advice: Invest. Be prepared for initial difficulties.

SIX IN THE SECOND PLACE

Managerial Issue: The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) - its stronger stages – losing and recovering.

Managerial Lesson: Be strategic.

Managerial Warning: At the second stage of the Arousing Time-Space, the CEO faces serious losses such as industry leadership.

Managerial Advice: The Superior CEO:

· Faces losses by conquering himself.

· Must first deal with his own personal attitude during a much stronger upward movement; that is, when the corporation has really been negatively affected by new market or industry developments.

· Changes his behavior to a serious attitude by realizing there is a risk that the forces that have arisen against the corporation are too strong and any opposition will end in defeat.

· Knows such change in attitude will enable him to recover what he lost. In the case of Bill Gates, at first he suffered losses in the war of the browsers but by accepting the possibility of catastrophic losses, he changed his attitude and recovered from the previous losses.

The Superior CEO manages these strong opposing forces by:

· Withdrawing to where the corporation’s enemies can do no harm. This could mean to strengthen his core products or to focus on a few key products where the corporation has the natural advantage.

· Cutting the corporate loses by eliminating non profitable divisions, much like General Electric managed to do successfully (only 1^st or 2^nd places in each industry).

Luckily for the CEO, however, in the end, fate has ordained that this particular hostile thrust by his competitors will not succeed and his corporation will prevail and go back to business as usual.

Investment Advice: Do not invest. Look for a better alternative.

SIX IN THE THIRD PLACE

Managerial Issue: The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) – when fate caused it.

Managerial Lesson: Be alarmed.

Managerial Warning: At the third stage of the Arousing Time-Space, the CEO must prepare for a dangerous condition created by fate rather than by outside developments such as those of the market or of the industry. This is one of the worst types of situations as the CEO can easily lose his inner strength, fall prey to terror and become paralyzed.

Managerial Advice: The Superior CEO:

· Makes the most of fear by allowing it to penetrate his heart and give him the proper attitude of seriousness and urgency.

· Knows the proper attitude will drive him to take the right path even if sometimes, this path will consist of imitating his competitors, Japanese style (if you cannot beat them join them).

· Knows that path is correct provided his competitor’s product is the proper one for his corporation. This was the case of Microsoft and the war of the browsers when Microsoft was forced to copy Netscape’s browser or be destroyed..

Investment Advice: Do not invest. The CEO might not respond properly to his fears.

NINE IN THE FOURTH PLACE

Managerial Issue: The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) – when the Arousing that causes his fears is mired.

Managerial Lesson: Be still.

Managerial Warning: At the fourth stage of the Arousing Time-Space, the CEO finds the arousing forces that move against him are losing strength.

Managerial Advice: The Superior CEO knows that:

· Sometimes it is best to do nothing, neither to resist nor to give in.

· This “do nothing” attitude will make things very difficult for his opponents.

Investment Advice: Do not invest.

SIX IN THE FIFTH PLACE

Managerial Issue: The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) – his attitude under a continuous series of terrifying upward movements that threatens his corporation and which allow it no time to recover.

Managerial Lesson: Be centered.

Managerial Warning: At the fifth stage of the Arousing Time-Space, the CEO faces “repeated shocks with no breathing space between”.

Managerial Advice: The Superior CEO goes for the middle road, avoids the extremes - the cutting edge and the bleeding edge. He knows that by being centered, he is “spared the fate of being helplessly tossed hither and thither”.

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

SIX IN THE SIXTH PLACE

Managerial Issue: The CEO – managing the Arousing (the shock of a terrifying upward movement symbolized by thunder) – his proper attitude when facing the Arousing at its height.

Managerial Lesson: Be cautious.

Managerial Warning: At the sixth stage of the Arousing Time-Space, the CEO faces such a sudden threat to his corporation that he goes into panic rather than a healthy manageable fear. Thus he can neither define the problem nor find the solution. He sees how the Arousing has negatively affected others in the industry. This shock makes him lose the “clarity of vision”.

Managerial Advice: The Superior CEO:

· Knows when to standstill or pull back to protect his corporation. He knows sometimes it is better to do nothing than to do something foolish which will only increase the threat.

· Prepares for the criticism he will find from his colleagues for “doing nothing” and continues to “do nothing” regardless of their criticism.

In the case of corporations which teamed together to fight another corporation (Motorola and IBM to fight Intel or Sun Microsystems and Oracle to fight Microsoft), it would have been better for a member of these teams to pull out in time with a clear conscience rather than stay and try and face a threat which was much too stronger for them to conquer.

Investment Advice: Do not invest.

MANAGERIAL CASES

Johnson & Johnson JNJ under CEO William C. Weldon

William Weldon’s Performance: ROI= 1.32% Annualized Return= 0.14%

SPY’s Performance: ROI= 3.97% Annualized Return= 0.41%

William C. Weldon has been CEO of Johnson & Johnson since April of 2002. Since then, his performance has been flat and worse than the SPY’s.

However, because he has been CEO for almost a decade, we have to ask of the Oracle once more about his future performance. His new Time Space is the Arousing.

Points the investor should consider:

1) THE HEXAGRAM

HEXAGRAM 51 – Chen - The Arousing (Shock, Thunder)

The hexagram Chen represents the eldest son, who seizes rule with energy and power. A yang line develops below two yin lines and presses upward forcibly. This movement is so violent that it arouses terror. It is symbolized by thunder, which bursts forth from the earth and by its shock causes fear and trembling.

THE JUDGMENT

Shock brings success.

Shock comes-oh, oh!

Laughing words-ha, ha!

The shock terrifies for a hundred miles,

And he does not let fall the sacrificial spoon and chalice.

The shock that comes from the manifestation of God within the depths of the earth makes man afraid, but this fear of God is good, for joy and merriment can follow upon it.

2) THE ADVICE

Thunder repeated: the image of SHOCK.

Thus in fear and trembling

The superior man sets his life in order

And examines himself.

The shock of continuing thunder brings fear and trembling. The superior man is always filled with reverence at the manifestation of God; he sets his life in order and searches his heart, lest it harbor any secret opposition to the will of God. Thus reverence is the foundation of true culture.

3) THE LINES:

Six at the top means:

Shock brings ruin and terrified gazing around.

Going ahead brings misfortune.

If it has not yet touched one's own body

But has reached one's neighbor first,

There is no blame.

One's comrades have something to talk about.

When inner shock is at its height, it robs a man of reflection and clarity of vision. In such a state of shock it is of course impossible to act with presence of mind. Then the right thing is to keep still until composure and clarity are restored. But this a man can do only when he himself is not yet infected by the agitation, although its disastrous effects are already visible in those around him. If he withdraws from the affair in time, he remains free of mistakes and injury. But his comrades, who no longer heed any warning, will in their excitement certainly be displeased with him. However, he must not take this into account.

4) THE MOVING HEXAGRAM

HEXAGRAM 21 - Shih Ho - Biting Through

This hexagram represents an open mouth (cf. hexagram 27) with an obstruction (in the fourth place) between the teeth. As a result the lips cannot meet. To bring them together one must bite energetically through the obstacle. Since the hexagram is made up of the trigrams for thunder and for lightning, it indicates how obstacles are forcibly removed in nature. Energetic biting through overcomes the obstacle that prevents joining of the lips; the storm with its thunder and lightning overcomes the disturbing tension in nature. Recourse to law and penalties overcomes the disturbances of harmonious social life caused by criminals and slanderers. The theme of this hexagram is a criminal lawsuit, in contradistinction to that of Sung, CONFLICT (6), which refers to civil suits.

THE JUDGMENT

BITING THROUGH has success.

It is favorable to let justice be administered.

When an obstacle to union arises, energetic biting through brings success. This is true in all situations. Whenever unity cannot be established, the obstruction is due to a talebearer and traitor who is interfering and blocking the way. To prevent permanent injury, vigorous measures must be taken at once. Deliberate obstruction of this sort does not vanish of its own accord. Judgment and punishment are required to deter or obviate it.

However, it is important to proceed in the right way. The hexagram combines Li, clarity, and Chen, excitement. Li is yielding, Chen is hard. Unqualified hardness and excitement would be too violent in meting out punishment; unqualified clarity and gentleness would be too weak. The two together create the just measure. It is of moment that the man who makes the decisions (represented by the fifth line) is gentle by nature, while he commands respect by his conduct in his position.

THE IMAGE

Thunder and lightning: The image Of BITING THROUGH.

Thus the kings of former times made firm the laws

Through clearly defined penalties.

Penalties are the individual applications of the law. The laws specify the penalties. Clarity prevails when mild and severe penalties are clearly differentiated, according to the nature of the crimes. This is symbolized by the clarity of lightning. The law is strengthened by a just application of penalties. This is symbolized by the terror of thunder. This clarity and severity have the effect of instilling respect; it is not that the penalties are ends in themselves. The obstructions in the social life of man increase when there is lack of clarity in the penal codes and slackness in executing them. The only way to strengthen the law is to make it clear and to make penalties certain and swift.