On the sixteenth day of the sixth month of the third year of Tongzhi (July 19, 1864), the Xiang Army breached the gates of Tianjing (Nanjing), and the capital of the Taiping Heavenly Kingdom fell. A war that had raged for fourteen years and claimed tens of millions of lives finally came to an end.[1] At that moment, Zeng Guofan stood at the zenith of power: he was the Governor-General of Liangjiang, Imperial Commissioner, Grand Tutor to the Crown Prince, and First-Class Marquis of Yiyong. The Xiang Army under his command numbered some 300,000 troops, and his proteges and former subordinates were spread across the southern provinces.[2] A popular saying circulated at the time: "Half of the empire's governors and viceroys come from Zeng's circle," implying that half of all provincial-level officials had been recommended or served under Zeng Guofan.[3] Yet at this moment of seemingly boundless glory, Zeng Guofan made a decision that stunned his colleagues — he began the large-scale disbandment of the Xiang Army, voluntarily relinquishing his military power. This decision ultimately made him the only "Restoration minister" of the late Qing dynasty to die a natural death.

I. Overshadowing the Sovereign: The Iron Law of Power in Imperial China

1.1 From Han Xin to Nian Gengyao: History's Bloody Lessons

Before analyzing Zeng Guofan's decision, we must first understand the historical context he faced. In the Chinese imperial tradition, "overshadowing the sovereign through excessive merit" was an iron law of political life.

Han Xin of the early Han dynasty is the most classic case. He conquered half the realm for Liu Bang, with an unmatched record of winning every battle he fought. Yet once the empire was pacified, Han Xin was first demoted to Marquis of Huaiyin and ultimately executed through a plot devised by Empress Lu at the Palace of Changle.[4] Liu Bang once told Han Xin: "That I possess the realm is entirely due to your merit." But the subtext was clear: your accomplishments are so great that I cannot sleep at night.

Yue Fei of the Southern Song dynasty met a similar fate. He led the Yue Family Army to recover vast swathes of lost territory, earning a fearsome reputation across the land. But Emperor Gaozong of Song preferred to negotiate peace with the Jurchen Jin rather than allow Yue Fei to continue his conquests — for if Yue Fei truly "drove straight to Huanglong" and welcomed back the captive emperors Huizong and Qinzong, what would become of Gaozong's own throne?[5] In the end, Yue Fei was put to death at Fengbo Pavilion on fabricated charges, at the age of only thirty-nine.

Nian Gengyao of the Qing dynasty represents yet another pattern. He pacified the Qinghai rebellion and earned distinguished merit, but grew arrogant on the strength of his achievements. He ultimately provoked the fury of the Yongzheng Emperor, was charged with ninety-two offenses, and was ordered to commit suicide.[6] Nian Gengyao's mistake was believing that merit could purchase unlimited favor, failing to understand that the greater one's merit, the deeper the emperor's suspicion.

These historical lessons were not lost on Zeng Guofan. Having studied the classics and histories from childhood, he was thoroughly familiar with the fates of meritorious officials throughout the dynasties. He once wrote in a family letter: "Since antiquity, men of great achievement who failed to show humility in their success have invariably invited calamity."[7] This historical consciousness formed a crucial backdrop for his later decision to disband the army.

1.2 The Court's Deep-Seated Suspicion of the Xiang Army

The situation Zeng Guofan faced was even more delicate than that of his predecessors. The Qing dynasty was established by the Manchu people, and after over two hundred years of rule, the political tension between Manchus and Han Chinese had never truly been resolved. In the Qing political tradition, military power was never lightly entrusted to Han Chinese. The Eight Banners were the emperor's personal forces, and the Green Standard Army was the dynasty's regular military. The Xiang Army — a force created by a Han Chinese literati and bound together by personal loyalties — was an anomaly within the system.[8]

The court's attitude toward the Xiang Army was perpetually ambivalent: when the Taiping Rebellion raged, the Eight Banners and Green Standard forces suffered defeat after defeat, forcing the court to rely on the Xiang Army. But as the war progressed and the Xiang Army grew more powerful, so too did the court's suspicion. While the Xianfeng Emperor relied heavily on Zeng Guofan, he consistently refused to appoint him as a governor-general, granting him only the nominal title of "military commissioner" without substantive authority.[9]

In 1860, Zeng Guofan was finally appointed Governor-General of Liangjiang, but the court simultaneously adopted a strategy of "divide and counterbalance": it promoted Zuo Zongtang's Chu Army and Li Hongzhang's Huai Army, creating multiple centers of power within the Xiang Army system to prevent Zeng Guofan from monopolizing control.[10] This maneuvering itself betrayed the court's deep-seated distrust of Zeng Guofan.

After the fall of Tianjing, Zeng Guofan's position became even more sensitive. Rumors swirled among the populace: some said "Commander Zeng could rule the southeast as his own dominion," and others even urged him to "don the yellow robe" — a metaphor for seizing the throne.[11] When these rumors reached Beijing, Empress Dowager Cixi and Prince Gong Yixin must have been on high alert. It is reported that Cixi's first reaction upon learning of Tianjing's fall was: "What will this man [Zeng Guofan] do next?"[12]

II. Zeng Guofan's Three Strategic Moves: A Systematic Approach to Graceful Retreat

2.1 First Move: Voluntary Disbandment and Relinquishing Military Power

Just two months after the fall of Tianjing, Zeng Guofan submitted a memorial to the court requesting the disbandment of the Xiang Army. This was an extraordinarily bold decision — disbanding his own army was tantamount to discarding his greatest political bargaining chip.

Zeng Guofan's disbandment was not carried out all at once but proceeded in stages, following a deliberate plan.[13] First, citing "insufficient military funds" as justification, he disbanded the most combat-effective units, including the Ji Battalion and the Xiang Yong divisions. Next, he reorganized portions of the Xiang Army into the Green Standard system, integrating them into the court's regular military establishment. By 1866, the Xiang Army, once claiming 300,000 men, had been reduced to fewer than 50,000 troops, most of whom were low-capability garrison units.[14]

In a letter to his younger brother Zeng Guoquan, Zeng Guofan articulated his core logic: "To retire when the work is done is the Way of Heaven. We have achieved extraordinary merit; if we do not know when to advance and when to retreat, great calamity will surely follow."[15] This passage invokes the thought of Chapter 9 of the Dao De Jing: "Retire when the work is done — this is the Way of Heaven." When one's accomplishments reach their zenith, timely withdrawal is the wisdom that follows the natural order.

The effect of the disbandment was immediate. When Empress Dowager Cixi learned that Zeng Guofan had voluntarily disbanded his army, she reportedly told Prince Gong: "Zeng Guofan is a loyal minister."[16] The court's suspicion of Zeng Guofan was dramatically reduced by this single action.

2.2 Second Move: Sharing Power, Cultivating Successors

Zeng Guofan's brilliance lay not only in relinquishing his own military power but also in proactively providing the court with an "alternative" — promoting Li Hongzhang's Huai Army to gradually replace the Xiang Army's position.

Li Hongzhang was Zeng Guofan's protege, and the Huai Army had grown out of the Xiang Army, but the Huai Army's base was in Anhui, distinct from the Xiang Army's Hunan network. Zeng Guofan deliberately channeled resources, connections, and official appointments toward the Huai Army, enabling Li Hongzhang's gradual rise.[17] After the fall of Tianjing, Zeng Guofan further memorialized the court to have Li Hongzhang serve as acting Governor-General of Liangjiang, handing over the most coveted post in the southeast to his protege.

This strategy of "sharing power and yielding advantage" produced multiple effects:

  • Reducing court suspicion: Zeng Guofan had taken a step back, but the person he elevated was one of his own. The Xiang faction's influence had not truly dissipated; it merely persisted in a safer form.
  • Cultivating a successor: Li Hongzhang went on to become the mainstay of late Qing politics, directing the Self-Strengthening Movement for thirty years — a development inseparable from Zeng Guofan's deliberate mentorship.
  • Building a network of obligation: Li Hongzhang and others remained grateful to Zeng Guofan throughout their lives for his patronage. Even after Zeng Guofan no longer held military power, his political influence remained formidable.[18]

2.3 Third Move: Keeping a Low Profile and Pivoting to Culture and Education

After disbanding the army, Zeng Guofan deliberately transformed his image from military strongman to cultural and educational leader. He vigorously championed practical statecraft, promoted the Self-Strengthening Movement, and oversaw the compilation of works such as the Family Letters of Zeng Wenzheng, reshaping his public image from "a general of distinguished military achievement" to "a paragon of moral and literary virtue."[19]

This transformation embodied profound political wisdom. In traditional China, civil governance ranked above military achievement, and the identity of a "scholar" was far safer than that of a "general." When Zeng Guofan presented himself as an eminent Neo-Confucian minister and pioneer of modernization, the sense of threat he posed was greatly diminished, while his positive influence continued to spread.[20]

A passage from Zeng Guofan's later years clearly expressed this mindset: "In managing the affairs of the world, one must take 'the greater good' as the guiding principle, and never act on momentary impulse. Fame and fortune are but fleeting clouds; only establishing virtue, establishing words, and establishing achievement can endure through the ages."[21]

III. The Art of Exiting Power: A Modern Management Perspective

3.1 Agency Theory and "Overshadowing the Sovereign"

From the perspective of modern management theory, the predicament Zeng Guofan faced can be explained through Agency Theory.

Agency Theory, proposed by Jensen and Meckling in 1976, describes the conflict of interest between the principal and the agent.[22] In a corporate context, shareholders are the principals and managers are the agents; managers may exploit information asymmetry to pursue personal interests rather than shareholder interests. In imperial China, the emperor was the principal and meritorious officials were the agents — the more powerful the official became, the more the emperor feared he might "set up his own shop."

Zeng Guofan's disbandment strategy was essentially a "self-binding" mechanism: he voluntarily reduced his own resources and capabilities to send a credible signal to the principal (the court) — "I harbor no treasonous intentions." Within the framework of game theory, this constitutes "costly signaling": precisely because the cost of disbandment was so high, the signal was credible.[23]

3.2 CEO Succession and the Challenge of Power Transitions

Zeng Guofan's case is highly relevant to the challenge of CEO succession in modern corporations.

Management research shows that CEO departure is one of the most sensitive moments in corporate governance. Many long-tenured CEOs continue to exert influence after leaving office, interfering with their successor's decisions and causing a decline in corporate performance.[24] In more severe cases, a CEO of distinguished achievement may be forcibly replaced by the board at an inopportune moment because they "cannot let go," creating a lose-lose outcome.

Harvard Business School professor Joseph Bower's research identifies several key elements of successful CEO transitions:[25]

  • Plan early: Begin cultivating successors during the middle to later stages of a CEO's tenure, rather than scrambling at retirement.
  • Delegate gradually: Give successors the opportunity to assume greater responsibilities with the current CEO's support, rather than a full handover overnight.
  • Exit decisively: After departure, refrain from interfering with the successor's decisions, avoiding the "emperor emeritus" phenomenon.

Zeng Guofan's approach aligned almost perfectly with these principles. He cultivated Li Hongzhang early (planning ahead), gradually transferred resources and positions to his proteges (delegating gradually), and after disbanding the army, stopped involving himself in military affairs (exiting decisively). These practices were more sophisticated than many modern corporate CEO transitions.

3.3 "Retire When the Work Is Done": A Modern Interpretation

Laozi's philosophy of "retire when the work is done and fame is achieved" occupies a unique position in modern leadership studies.

Leadership scholar Jim Collins introduced the concept of "Level 5 Leadership" in Good to Great: the most exceptional leaders are those who place organizational interests above personal glory.[26] They credit the team when things go well and take responsibility when things go wrong; they cultivate successors rather than suppress potential competitors.

Zeng Guofan was a historical exemplar of this "Level 5 Leadership." After destroying the Taiping Heavenly Kingdom, he faced two choices: continue expanding his power in pursuit of even higher status and glory, or yield at the right moment and make way for the next generation. He chose the latter — not because he lacked ambition, but because he saw further. He understood that only by making room could the Xiang faction's collective interests endure; only by cultivating successors could his legacy outlive his own lifespan.

IV. Five Lessons for Senior Executives

4.1 Recognize the Modern Variants of "Overshadowing the Sovereign"

In modern corporations, the script of "overshadowing the sovereign" replays constantly, only in different forms:

  • Founding veterans and the new CEO: In many companies, founding members become obstacles for the incoming professional CEO because their "achievements are too great and their influence too strong."[27]
  • Star employees and their direct supervisors: Exceptionally high-performing star employees may be suppressed or marginalized by their direct supervisors for being "too conspicuous."
  • Distinguished CEOs and the board: A CEO who led the company through a crisis and created a period of brilliance may become an obstacle when the company needs transformation, precisely because of the perception that they are "indispensable."

Senior executives must recognize that merit is a double-edged sword. It can bring promotion and glory, but it can also invite suspicion and suppression. When your achievements grow large enough to make those above you feel threatened, you have already entered dangerous territory.

4.2 Build Mechanisms for "Credible Concession"

The core logic of Zeng Guofan's disbandment was "proving loyalty through action." For modern executives, this means making proactive, "costly concessions" at the appropriate time to dispel the concerns of those in higher positions.

Specific approaches include:

  • Proactive reporting: Ensure your superiors are fully informed about your work, reducing suspicion born of information asymmetry.
  • Sharing credit: Attribute achievements to the team and your superiors rather than claiming sole credit.
  • Cultivating successors: Openly develop individuals who could replace you, signaling that you have no intention of "clinging to your position."
  • Strategic concessions: Yield on non-core issues to demonstrate a collaborative rather than confrontational posture.

4.3 Cultivating "Proteges and Former Subordinates": Long-Term Investment in Networks

The reason Zeng Guofan retained his influence even after disbanding the army lay in the vast network of "proteges and former subordinates" he had cultivated. Li Hongzhang, Zuo Zongtang, Guo Songtao, Shen Baozhen — all had been mentored or sponsored by Zeng Guofan. Even when he no longer held military power, they remained his political assets.[28]

For modern executives, this means:

  • Invest in people: Genuinely help subordinates grow, rather than merely using them to achieve short-term objectives.
  • Build relationships of mutual obligation: Extend a hand when others are in difficulty, forging interpersonal connections that transcend transactional calculations.
  • Maintain long-term connections: Even when subordinates leave your team, sustain good relationships. These connections may become vital resources in the future.

4.4 Timely Transformation: From "Executor" to "Mentor"

After disbanding the army, Zeng Guofan transformed his role from "military commander" to "cultural and educational leader." This transformation allowed him to maintain influence and value while stepping back from the front line.

For senior executives, this offers an important line of thinking: when your executive capabilities begin to exceed the space the organization can offer you, consider transitioning from "executor" to "mentor" or "advisor." This transformation offers several advantages:

  • Reducing the sense of threat: When you are no longer directly competing for resources and positions, the vigilance of those above you will diminish.
  • Extending your career: The mentor role can be sustained well into later years, unlike the executor role which demands high-intensity energy investment.
  • Expanding your sphere of influence: A good mentor can influence dozens or even hundreds of people, potentially surpassing the impact of any single executor.

4.5 Understanding the True Meaning of "Retiring with Honor Intact"

Zeng Guofan's "strategic retreat at the peak of achievement" was not passive avoidance but a proactive strategic choice. What he relinquished was "military power," but what he preserved was far more important: his life, his reputation, his family, and his influence on posterity.

For modern executives, "retiring with honor intact" encompasses:

  • Preserving personal reputation: Do not tarnish your legacy by clinging to power at the end. Many once-brilliant careers have been ruined by an unwillingness to let go during the final years.
  • Maintaining relationships: An elegant departure preserves far better relationships with colleagues and subordinates than being unceremoniously removed from power.
  • Creating a second act: Leaving your existing position may open opportunities to explore new possibilities — entrepreneurship, philanthropy, consulting, teaching — all of which require making the transition at the right moment.

V. The Mirror of History: Why Zeng Guofan's Wisdom Remains Relevant

5.1 The Eternal Logic of Power Structures

One might ask: does the power logic of the imperial era still apply in modern democratic societies and corporate environments?

The answer is: in any organization where "power" exists, the logic of "overshadowing the sovereign" will manifest in some form. Whether in politics, business, academia, or nonprofit organizations, wherever there are hierarchies, interests, and competition, similar dynamics will emerge.[29]

Of course, the consequences of "overshadowing the sovereign" in modern society are usually less severe — you will not be "ordered to commit suicide," at worst only marginalized or dismissed. But for an individual's career, being treated unjustly or forced to leave an enterprise you built still constitutes a significant loss.

5.2 Reflections for a New Generation of Leaders

Silicon Valley's entrepreneurial history is replete with cases of "founders being ousted from their own companies." Steve Jobs being removed by Apple's board in 1985 is the most famous example.[30] Travis Kalanick's forced departure from Uber and Adam Neumann's loss of control over WeWork are recent cases of a similar nature.

These cases remind us: even if you are the founder, even if you built the company with your own hands, when your presence is deemed detrimental to the company (whether or not that judgment is correct), you can still be stripped of power. In such circumstances, if you could plan ahead like Zeng Guofan — cultivating successors and proactively yielding some power — the outcome might be considerably better.

5.3 From Stratagem to Wisdom: Zeng Guofan's Ultimate Lesson

Was Zeng Guofan's "strategic retreat" merely "stratagem" or true "wisdom"?

On the surface, his approach was full of calculation — calculating the court's suspicion, calculating his proteges' loyalty, calculating the maximization of his own interests. But on a deeper level, his approach embodied a profound understanding of human nature and power, along with a clear-eyed recognition of "long-term interests."

Zeng Guofan wrote in his diary in his later years: "There is nothing in the world that cannot be accomplished; but only by knowing when to stop can one achieve stability, and from stability comes tranquility, and from tranquility comes peace."[31] This passage draws on the thought of the Great Learning, expressing a core principle: true success lies not in ceaseless ascent, but in knowing when to stop.

This is perhaps Zeng Guofan's most important lesson for us: on the road to success, the wisdom of "knowing when to stop" is rarer and more precious than the ability to "forge ahead." When you have reached the mountaintop, the question is no longer how to climb higher — for there is nowhere higher to go — but how to descend the mountain with grace.

Conclusion: Turning at the Summit

On the fourth day of the second month of the eleventh year of Tongzhi (March 12, 1872), Zeng Guofan died of a cerebral hemorrhage while serving as Governor-General of Liangjiang in Nanjing, at the age of sixty-one.[32] He was the only "Restoration minister" of the late Qing dynasty to die a natural death — Zuo Zongtang also died of natural causes, but spent his later years frequently at odds with the court. Li Hongzhang bore the stigma of "selling out the nation" until his death, owing to the First Sino-Japanese War and the Boxer Protocol.

Zeng Guofan's success lay not only in defeating the Taiping Heavenly Kingdom, but also in knowing when and how to pull back. His wisdom transcended his era and remains deeply instructive for today's senior executives.

At some point in every career, each person faces a similar choice: press forward, or pivot at the right moment? Pursue a higher position, or preserve what has already been achieved? There are no standard answers to these questions, but Zeng Guofan's story tells us this: turning at the summit requires not just courage, but wisdom — an understanding of power, an insight into human nature, and a clear-eyed assessment of long-term interests.

"Retire when the work is done and fame is achieved — this is the Way of Heaven." This adage deserves deep reflection from everyone who stands at the heights of power.

References

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  2. Luo Ergang, A Military History of the Xiang Army (Xiangjun Bingzhi). Beijing: Zhonghua Book Company, 1984, pp. 235-248.
  3. Zhu Dong'an, Biography of Zeng Guofan. Beijing: People's Publishing House, 2008, p. 412.
  4. Sima Qian, "Biography of the Marquis of Huaiyin," Records of the Grand Historian (Shiji). Beijing: Zhonghua Book Company, 1959 punctuated edition. ctext.org
  5. Deng Guangming, Biography of Yue Fei. Beijing: People's Publishing House, 1983, pp. 389-410.
  6. Feng Erkang, Biography of the Yongzheng Emperor. Beijing: People's Publishing House, 1985, pp. 267-298.
  7. Zeng Guofan, Family Letters of Zeng Guofan. Yuelu Book Society, 2015 annotated edition, vol. 8, p. 156.
  8. Wang Ermin, A History of the Huai Army (Huaijun Zhi). Taipei: Institute of Modern History, Academia Sinica, 1967, pp. 12-35.
  9. Mao Haijian, The Collapse of the Heavenly Dynasty: A Reexamination of the Opium War. Beijing: SDX Joint Publishing, 1995, p. 389.
  10. Liu Wei, "The Xiang Army, the Huai Army, and Late Qing Politics," Modern Chinese History Studies, 2003, no. 2, pp. 45-67.
  11. Tang Haoming, Zeng Guofan (historical novel). Hunan Literature and Art Publishing House, 1992; see also Zhu Dong'an, op. cit., pp. 428-430.
  12. Fairbank, John K., ed. The Cambridge History of China: Late Ch'ing, 1800-1911. Cambridge University Press, 1978, vol. 10, p. 286.
  13. Luo Ergang, op. cit., pp. 312-334.
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  15. Zeng Guofan, Family Letters of Zeng Guofan, op. cit., vol. 12, p. 289.
  16. Veritable Records of the Qing Dynasty: Veritable Records of Emperor Muzong, seventh month of the third year of Tongzhi.
  17. Xia Dongyuan, Biography of Li Hongzhang. Shanghai People's Publishing House, 1992, pp. 56-78.
  18. Liu, Kwang-Ching. "Zeng Guofan and Li Hongzhang: The Mentor-Protege Relationship and Political Succession." In Liu Kwang-Ching and Zhu Changling, eds., Li Hongzhang and China's Modernization. Taipei: Linking Publishing, 1996.
  19. Li Shuchang, ed. Chronological Biography of Zeng Wenzheng. Yuelu Book Society, 2013 reprint.
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  21. Zeng Guofan, Diary of Zeng Guofan. Yuelu Book Society annotated edition, 2012, entry for the sixth year of Tongzhi.
  22. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
  23. Spence, M. (1973). Job Market Signaling. The Quarterly Journal of Economics, 87(3), 355-374. https://doi.org/10.2307/1882010
  24. Quigley, T. J., & Hambrick, D. C. (2015). Has the "CEO effect" increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders. Strategic Management Journal, 36(6), 821-830. https://doi.org/10.1002/smj.2258
  25. Bower, J. L. (2007). The CEO Within: Why Inside Outsiders Are the Key to Succession. Boston: Harvard Business School Press.
  26. Collins, J. (2001). Good to Great: Why Some Companies Make the Leap... and Others Don't. New York: HarperBusiness, Chapter 2.
  27. Wasserman, N. (2012). The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup. Princeton University Press. https://doi.org/10.1515/9781400841936
  28. Li Zhiming, A Study of Zeng Guofan's Staff and Advisors. Shanghai Bookstore Publishing House, 2017.
  29. Pfeffer, J. (2010). Power: Why Some People Have It—and Others Don't. New York: HarperBusiness.
  30. Isaacson, W. (2011). Steve Jobs. New York: Simon & Schuster, Chapters 17-18.
  31. Zeng Guofan, Diary of Zeng Guofan, op. cit., entry for the third month of the ninth year of Tongzhi.
  32. Zhu Dong'an, op. cit., pp. 478-482.

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