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  • Writer's pictureRachel Treece

The Dao De Jing and its Applications to Modern Business Leadership

In my many years of experience as a business executive, I continue to revert back to Laozi’s Dao De Jing and its teachings when I show up as a leader for my team. Why? Because despite being written almost 2,400 years ago, its timeless teachings continue to be a relevant and guiding lesson for today’s modern business professional. In this great classic text of 81 brief chapters, Laozi teaches us about self-awareness, hands-off leadership, and acceptance of failure – teachings that continue to be discussed by the academics and the thought leaders of today. In this article, I would like to highlight three of Laozi’s timeless leadership lessons that you can apply in your everyday life.

1. Personal growth through self-awareness

“Knowing others is intelligence; knowing yourself is true wisdom. Mastering others is strength; mastering yourself is true power.” - Dao De ing, Poem 33

When we don’t know ourselves, how do we expect others to follow? Understanding oneself, one’s values, and one’s key strengths and weaknesses are fundamental to leading an organisation. By knowing ourselves, we become better leaders because it guides us to make better decisions, create trusting relationships, and ultimately lead our team members to do the same. According to Clarinval (2021), self-aware leaders help “create and foster a culture that encourages and promotes trust, which translates into happy employees and happy customers.” Therefore, self-awareness is the core of self-improvement and personal growth.

2. Knowing the difference between when to lead and when to follow

“The Master doesn’t talk, he acts. When his work is done, the people say, “Amazing: we did it, all by ourselves!” - Dao De Jing, Poem 17

One of the biggest misconceptions about organisational leadership is that those with authority are the only ones who should lead. While this organisational structure can help achieve goals faster, you forego the team’s potential to create impact and achieve great things together. Great leaders empower their teams to capitalise on their unique strengths and take on leading roles within the team. Great leaders do this by modelling “followership” and giving team members the space to lead (Gosnell, 2020). Knowing when to lead and when to follow is both an art and a science. While it takes time and practice, when done harmoniously, it can create fulfilment for the leader and yield extraordinary results for the team.

3. Accepting the unknown, even if it means failing

“True mastery can be gained by letting things go their own way. It can’t be gained by interfering.” - Dao De Jing, Poem 48

As human beings, it is natural to fear what we don’t know. We desire to have complete control over our environments and avoid situations with the possibility of failure. When we stick to what is familiar, however, we deprive ourselves of learning opportunities that help us grow and become better individuals. Lao Tzu teaches us that we should allow for things to naturally progress and learn to deal with the issues as they arise even if it leads to failure. These lessons help us grow so we can become better versions of ourselves and learn to show up every day with courage. It is only by accepting the unknown and allowing things to go their natural course that we develop the skills needed in a rapidly changing and dynamic society.

Putting it All Together

In conclusion, Laozi’s Dao De Jing is as relevant today as it was many years ago. Its lessons continue to be acknowledged because of their applicability on our journey to be business leaders. Self-awareness, distinguishment between hands-on and hands-off leadership, and acceptance of the unknown are key lessons all business professionals should practice in order to become great leaders. Truly, Laozi’s ancient text continues to reveal modern and profound leadership lessons for the everyday business professional.


Clarinval, P. (2021, July 26). Council post: Want to be a great leader? the first step is self-awareness. Forbes. Retrieved July 1, 2022, from

Gosnell, K. (2020, January 28). Council post: Why every leader should lead at following. Forbes. Retrieved July 1, 2022, from

Laozi, & Lau, D. C. (1982). Dao De Jing. Chinese University Press.


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