Reading Notes-Decisive Battles: How Mao and Chiang Responded to the Three Major Campaigns

by Jolin

This book was recommended to me by a friend who is an entrepreneur. We were discussing the topic of "how to maintain consistent action and deliver the right results under pressure." My friend said, "You must read this book, as it perfectly describes the psychology of 'action deformation' that you mentioned."

What's interesting about this book is that it doesn't just list the actions of Chiang Kai-shek and Mao Zedong from a historical perspective. Instead, it starts from their mentality, command, and decision-making processes in response to every change in the battlefield, to retell the entire history. Therefore, this article mainly discusses the inspiration that Chiang and Mao's response patterns (actions) can bring to investments from this perspective.

Summary

Chiang Kai-shek's combat mentality:

• He sought quick victory and often talked about "decisive battles" and "mopping up";

• He underestimated his opponents and selectively ignored facts (possibly out of self-protection);

• He knew that annihilating the enemy's living forces was the strategic goal, but he focused tactically on capturing cities (which led to the need to station troops in every city, dissipating the strength of the army and becoming more exhausted as the war dragged on);

• He focused on fighting in specific regions, using regional gains and losses as a signal of the success or failure of the war, with the overall strategy of taking East China before South China;

• He had no knowledge of the front line and continuously stretched out his forces, passing on responsibility to subordinates;

• He was overly centralized, controlling both major and minor affairs, and thus dispersed his decision-making energy;

• He dissipated the country's wealth by printing large amounts of money, further losing the support of the people;

• His short-term emotions often dominated, leading to indecisiveness, a lack of strategic decision-making ability ("wanting both...and..."), and being repeatedly defeated by the Communists in the same way without taking any countermeasures.
  

Mao Zedong's combat mentality:

• Continuously instilling the consciousness of protracted warfare within the organization, only considering the issue of strategic decisive battles in the later stages of the war;

• Uniting the masses and mobilizing grassroots forces (the people would spontaneously help the Communist Party conceal intelligence, routes, and even inform them of the movements of the Nationalist Party); Strategically aiming to annihilate the enemy's living forces, tactically not emphasizing the capture of territory, maneuvering in battle with patience and endurance;

• Using a macro perspective and a global perspective, judging the progress of the war based on the comparison of the strengths of both sides (including morale, organization, and more);

• Focusing on the enemy's core forces, with the allocation of military resources focused on attacking the Nationalist Party's main force (the core idea behind the Liaoshen, Huaihai, and Pingjin campaigns).

Comments：

My reading experience and thoughts on investments:

• The stability of underlying emotions is crucial (a practice that goes against human nature). The reason why Chiang Kai-shek had unstable decision-making, changing his mind three times a day, and refused to acknowledge the strength of the Communist Party, was not due to intellectual differences, but due to obvious stress response characteristics in his psychology. There is an interesting saying that Chiang's former subordinates said he was someone who had received an elite education since childhood and had not experienced grassroots training before entering the decision-making level. They believed that Chiang was a good politician but not a good general. On the one hand, he really lacked an understanding of the front line of combat, and on the other hand, his emotional instability made it difficult to implement many things that he knew were "right" on a rational level. How to establish a mechanism for managing emotions? I think there are some clues that can be referenced: 1. Extreme honesty, listening and accepting facts as early as possible, adjusting quickly, although it may require overcoming discomfort in leaving one's comfort zone in the beginning, it is the lowest cost of adjustment in the long run. This is reflected relatively well in the organization of the Communist Party. 2. Mechanism constraints. The organizational hierarchy, group dynamics, internal and external relationships, etc. of an organization will force the founder (in this case, the leaders of two political parties) to adopt different behavioral patterns and thinking habits. It is necessary to be wary of the arrogance that can be caused by dictatorship. The psychological cost and organizational cost of overcoming arrogance can both be very high.

• Tactics should be subordinate to strategy, and we must be extremely vigilant about the misconception of treating means as ends. Although both Mao and Chiang knew that "annihilating the enemy's living forces" was the goal, Mao's KPI was set to target the number of enemy forces annihilated and the destruction of enemy morale, while Chiang's was set to attacking cities. Obviously, attacking cities can demonstrate the number of enemy forces annihilated but is not completely equivalent. In the process of conveying organizational goals, this slight deviation actually brought about disastrous consequences for the Nationalist Party (having to divide their forces to defend every city they captured, the more they expanded their territory, the more fragile their organization became). Even in the later stages, Chiang himself forgot his original strategic goal and began to defend cities just for the sake of defending them. From an investment perspective, scale can only be a friend if it operates effectively with a proper ROIC, otherwise, it is poison. At the same time, every investment decision needs self-examination, to check whether it is returning to the "purpose" rather than being led by the "means" (such as taking growth as the goal or performance as the goal). The evaluation system currently established by BEDROCK is an attempt to overcome the psychological traction effect (or cognitive inertia) caused by a single-minded approach to means, to some extent.

• "Taking" and "letting go" are the core of strategy. The difficulty is not in "taking", but in "letting go". One of Chiang's mistakes was that he was not decisive enough in retreats, repeatedly issuing orders to generals to change their course in the hope that the retreating troops would meet and encircle the Communist forces with other military forces. But as Du Yuming said, "To give up Xuzhou, we cannot cling to the fight; to cling to the fight, we cannot give up Xuzhou." Strategically "taking" and "letting go" must first obey objective laws and secondly confront the human tendency towards "greed". The hardest thing is not "taking", but "letting go".