Contents
By the Dao, Sun Tzu means the unity between leaders and people. If you have it, people follow you even in danger. In companies, this unity is rare, because owners and employees often have different interests. The story of Aaron Feuerstein shows how the Unity of Leaders and People can arise, and why it is not enough on its own.
The night of the fire
Situation
On December 11, 1995, a fire breaks out at the Malden Mills plant in Lawrence, Massachusetts, probably caused by a dust fire in a piece of production equipment. It destroys three buildings and damages about 40% of the plant. The fire injures 36 people. At the time, it is the largest fire in the state’s history. Around 3,000 jobs are at stake. Among other things, Malden Mills makes the fleece fabric Polartec.
Link to the principle
For an owner, the obvious course would have been to take the insurance money and sell, or to move production to a country with lower wages. Many textile companies in New England had done exactly that long before. Moments like this show whether leaders and workforce really belong together.
The decision overnight
Situation
Feuerstein, then 70, decides overnight to rebuild. He announces that he will keep paying all employees, with full benefits. He keeps this up for at least 90 days. He says, in essence, that he will not put 3,000 people out on the street two weeks before the holidays. According to common estimates, the decision costs him about $25 million.
Link to the principle
In the crisis, Feuerstein stands beside his people, not above them. Unity does not arise from words about values but from actions that cost something. Only when leaders carry a risk themselves do people believe them.
Where the attitude came from
Situation
Feuerstein was a devout Orthodox Jew. He explained that his study of the Talmud had shaped his decision. He felt obligated not only to the shareholders but also to the workers and the town. In 1996, President Bill Clinton honored him in his State of the Union address.
Link to the principle
Sun Tzu’s Dao is not just tactics. It is a moral order that leaders and people recognize together. Feuerstein’s actions were credible because they came from a conviction he had already lived before.
Rebuilding together
Situation
Feuerstein rebuilds the plant. Part of production is soon running again, and the rebuilding is completed in September 1997. In the region and far beyond, Feuerstein became a symbol of responsible business leadership.
Link to the principle
Where leaders and people trust one another, a commitment arises that no bonus can buy. That is the deepest source of strength Sun Tzu means: not obedience but agreement.
The limit
Situation
The costs of the rebuilding and of continuing to pay wages weigh heavily on the company, and a recession comes on top. In November 2001, Malden Mills files for bankruptcy. The creditors take control, and Feuerstein loses the leadership of the company. A second bankruptcy follows in 2007, the company is sold, and the pension fund is underfunded by almost half. Feuerstein dies in November 2021 at the age of 95.
Link to the principle
The Unity of Leaders and People is a great strength, but it is no substitute for economic viability. Sun Tzu names the Dao as the first of five factors, not as the only one. If you rely on loyalty alone, you may end up losing the very people you wanted to protect.
Key takeaways
Key lessons
- A crisis shows whether you stand by your people.
- Trust arises from actions that cost you something.
- Act on convictions you have already lived before.
- Loyalty is no substitute for numbers that add up.
- Check whether your good deed will also hold up in the long run.
Summary
After the Malden Mills fire in 1995, Aaron Feuerstein kept paying about 3,000 employees and rebuilt the plant. This made him a role model and created a rare unity between owner and workforce. But the burdens led to bankruptcy in 2001, and Feuerstein lost his company. The example shows the strength of the Dao and its limit: it is the first factor but not the only one.
Sources
- Sun Tzu: The Art of War, Chapter 1. Lionel Giles (trans.): Sun Tzu on the Art of War. London: Luzac & Co. 1910.
