The Center for International Studies at MIT is located between Kendall Square and the Charles. The view of downtown Boston from this side of the river is just stunning. It has been very nice to see that the old building (across the street) of the Sloan School of Management is being refurbished. It is old but with very strong personality. I remember when I attended here, several years ago, a program on Intelligent Organizations by Professor Malone. It took place at the Faculty Club on the upper floor of the building overlooking the river and the city. What an excellent view!

As I wrote in a different article, I attended this very interesting conference that was part of the MIT Security Studies Program Seminar Series. The speaker was Professor Sally Paine from the Naval War College, and the title: “China between Continental and Maritime World Orders”.

According to Professor Paine the Chinese government is at a crossroads. It is facing three existential problems:

• Democracy and Communism do not mix. They knew it from the Gorbachev era in the former USSR. That is why they had to choose, and they chose Communism.
• Democracy and Empire do not mix. China has decided to keep Tibet what, again, made them to choose Communism. In the tradeoff between Stability and Liberty it is Stability the clear winner.
• Legitimacy without elections. This has not an easy solution but there is a remedy at hand: Nationalism. You boost it by creating foreign threats or claiming old territories or whatever. It works internally since more people are united against “somebody from outside” so legitimacy becomes a second tier “problem”.

I’m a great admirer of China in many ways. I think what they have done in many fields for the last 25 years is just amazing. I’m not saying their decisions are good or bad. I just want to illustrate that, in any arena of life, you need to take decisions and, those decisions, have consequences. If you do not take them you also face consequences. It is very important then to take the right ones.

A fundamental one refers to the fact that we need to pick “wars” on “wealth creation” and no “territory”. Unfortunately all of us know the pervasive “turf wars” in which executives engage in “winning and keeping territory” to feel secure. This is a “zero-sum” war. The one that wins gains what other is losing. There is not wealth creation actually there is “wealth destruction” since always you fight over territory “it gets deteriorated”.

Choosing the “right war”, the war on strategic innovation, value creation, business model reconstruction, new markets creation, etc. leads to wealth creation to everybody. In order to do that people need to concentrate on “what can we do?” and not in “what is my turf?” It seems simple but it is not. A strategy that clearly establishes a direction after a thorough analysis of the situation with very clear goals will always help to align efforts towards the common good.

By Enrique Cortés PhD. Strategic Thinker-Advisor.