301: Dan Wang’s Breakneck

Dear Friends
 
I initially read Dan Wang’s Breakneck with a simple objective – to deepen my understanding of the world’s largest economies, the US and China. I got that. Unexpectedly, I also received several strategy lessons.  

Today’s letter zooms in on two of them. 

First, the difference between a procedural approach and a build approach – Wang calls it the difference between a lawyerly state and an engineering one.

Second, that technology-led growth is not solely about tools, or science, or innovation, but is what emerges from ‘communities of engineering practice’.

China’s get-stuff-done ability is phenomenal.

Wang tells us, “In 1990, there were half a million automobiles in the country; in 2024, there were 435 million, many of them electric… From 2003 to 2013, Shanghai added as much subway track as the entire system in New York City. In 2025, fifty-one Chinese cities have subway lines, eleven of which are longer than New York’s. China now has a longer high-speed rail network than the rest of the world put together… The only US nuclear plant built in the twenty-first century took fifteen years and $30 billion. In August 2024, China’s nuclear authority approved construction of eleven new reactors, which are collectively expected to cost the same amount… The average cost to construct a high-speed line in China is about $33 million per mile, which is 40 percent cheaper than in Europe and 80 percent cheaper than California’s effort… In 2023, while the United States added 6 gigawatts of new wind installations, China added 76. That year, China built two-thirds of the world’s wind and solar plants, as well as four times more than the rest of the G-7 group of rich countries put together… In 2022, China had nearly 1,800 ships under construction, and the United States had 5”.

These numbers reveal a fundamental truth: consistency compounds.

He develops an analogy to account for the differences between the two countries: describing the US as a lawyerly society and China as an engineering one. I am not completely convinced that the descriptions have full explanatory power, but they are an interesting lens.

He argues that the lawyerly society elevates process over outcomes, writing, “In American government and society, designing new rules and committees have so often become the substitute for thinking hard about strategy and ends”.

His metaphor reinforced an idea that had been gnawing at me since January when I read the NYT’s How the House Slumped to Historic Lows of Productivity in 2025. It said that only 64 bills had been passed in 2025. In the moment, it struck me as a peculiar metric. Some of the bills might have simplified citizens’ lives, but more often than not, new bills create new processes, new obligations, that accumulate like cholesterol, slowing everything down. Measuring success by the number of laws passed might not be the best idea, neither for countries nor companies.

China, he says, is ruled by engineers. In 2002, all nine members of the Communist Party’s apex structure were engineers. Xi Jinping himself studied chemical engineering. Wang comments, “China’s ruling elites have practical experience managing megaprojects, suggesting China is doubling down on engineers…”

And what do engineers do, he asks. They build. And a society that builds – strategically and consistently – generates the results we started with.

I was curious about how many of South Africa’s Cabinet Ministers are engineers. As far as I can establish – one: Minister of Electricity and Energy Kgosientsho Ramokgopa. Eskom’s turnaround is one of South Africa’s successes in recent years; chairperson Mteto Nyati and CEO Dan Marokane are also engineers. Former CEO Andre de Ruyter, who presided over some of the country’s worst periods of loadshedding? A lawyer. Not even the Minister of Public Works and Infrastructure, Dean Macpherson, is an engineer. In fact, it seems that this post has never been held by an engineer, at least not in the last thirty years.

It’s an interesting back-of-envelope exercise: what percentage of your Board and Exco have procedural and compliance backgrounds; what percentage have a history of building? You need both.

The procedural society has advantages; it allows for debate, for the contestation of ideas, a plurality of opinion. This cut-and-thrust, Wang argues, makes it easier to uncover risk and, in some areas, new ideas. It also makes it freer, which, quite aside from any utilitarian outcome, is something we all desire, to some degree. Or put differently, none of us want every aspect of our lives controlled or monitored.

The dark side of the engineering state is that it charges forward and persists even when it is incorrect or might benefit from some exploration. Wang recounts everything from the ecological damage wrought by large-scale engineering projects to the emotional devastation caused by China’s one-child and zero-COVID strategies.

He adds, “Authoritarian systems aren’t good at disseminating bad news”. Someone he interviews comments, “China feels like a space in which the ceiling keeps getting lower; to stay means that we have to walk around with our heads lowered and our backs hunched.”

It is an analogy we can apply in our own organisations. We must continuously manage the tension between managing risk, ensuring compliance, having debate, bringing people along, and creating momentum, and building stuff.

Too much process: nothing happens. Declaratively driving to outcomes with no space for debate causes people to shut down, and over time we miss risk (Read How Fear Causes Failure and Listen to the Signals). It is a polarity to be managed.

Both can be seductive: processes allow us to feel productive – look at how busy we are designing this form – but nothing improves for customers; the build focus can say, ‘look, here it is, as I declared it’, but it may be the wrong thing or ‘brute forcing’ it may mean no capabilities were created.

Wang tells us, “In 2019, United Airlines made a promotional banner about how valuable Apple was to its business. United wrote that Apple booked fifty business-class seats daily from San Francisco to Shanghai, from which the airline made $35 million each year. That’s over eighteen thousand business-class seats on one route”. And of course, for one company.

This intensity fostered communities of engineering practice.

I like his description, “When we talk about technology, we should really distinguish between three things. First, technology means tools. These are the pots, pans, knives, and ovens required to prepare a dish. Second, technology means explicit instruction. These are the recipes, the blueprints, the patents that can be written down. Third and most important, technology is process knowledge. That is the proficiency gained from practical experience, which isn’t easily communicated. Ask someone who has never cooked before to do something as simple as fry an egg. Give him a beautiful kitchen and the most exquisitely detailed recipe, and he might still make a mess.”  

It’s something we often forget when crafting strategy and in the pressure of delivering on targets – that sustained success comes from building communities of capabilities.

Creating excellence requires consistent, patient, focused resolve on building capabilities.

Too often organisations (and countries) can be cavalier when people leave. But when they do, they don’t just leave with their capabilities, they, themselves are integral links in a process, important parts of an ecosystem, and their departure is almost always more significant than we anticipate.

Wang notes, “The National Nuclear Security Administration found that it could no longer produce ‘Fogbank,’ a classified material used to detonate the (nuclear) bomb, because it hadn’t kept good records of the production process and everyone who knew how to produce it had retired. The NNSA then spent $69 million to relearn how to produce this material.”

What might we unlock by thinking of our companies and economies as communities of practice?

I’ll end with how Wang starts his book. 

He says he wrote Breakneck because “The best hedge I know against heightening tensions between the two superpowers is mutual curiosity” – true for countries, true for companies, true for any relationship.
 
Best wishes
 
Karl
 
PS: As my coaching practice evolved, I became aware of two gaps in corporate life.

The first is that in our busyness we often fail to ‘sharpen our swords’. We are so busy reacting to what is urgent that we don’t have the space or time to pull back to first principles thinking, or to refresh our minds with the latest insight.

The second is that despite the pressures, many professionals find space to read and learn. However, there are few structured spaces that allow for regular contact, dialogue and learning. Our corporate spaces are mostly action-oriented: what are we doing, what have we failed to do? But a consistent space where senior people gather to reflect on learning? That is pretty rare.

In response, I have created that space. And, at the end of this month, the subject of today’s letter – Dan Wang’s Breakneck – is at the centre of a dinner conversation I am facilitating with thirteen professionals from multiple sectors. You can read more about it here.

If you’re interested in me doing something like this in your business, email me at coaching@karlgostner.com