Five Basic Elements of the Universe

Chinese Wisdom

The Five Basic Elements are Fire, Earth, Water, Metal, and Wood.

These elements are understood as different types of energy in a state of constant interaction and flux with one another.

The Five Elements do not only mean Fire, Earth, Water, Metal, and Wood. They also mean Movement, Change, and Development. They are changing, moving, waning, and expanding all the time.



Balanced Company

The most important of all is the balance of all five elements. The movements of five elements are stable and predictable when they are in balance, and vice versa.



Business Classification

according to the theory of Five Basic Elements







Balanced Company




Affinity Relationships between Five Basic Elements


Water can help tree (Wood) grow

Customer success fuels systemic innovation and helps the tree of business grow


Wood can help Fire to burn

Innovation helps achieve corporate vision


Fire can help to produce dust (Earth)

Corporate vision defines the organisational structure


Earth can help mineral (Metal) to form

Organisational structure defines processes


Metal can hold Water

Processes and love for customers help win customers over and retain them



Enmity Relationships between Five Basic Elements


Water quenches Fire

Short-term goals focused on sales success decrease the perceived importance of the corporate vision and strategic intent


Fire melts Metal

Daring top-line growth strategies require radical change of established processes and cause resistance to change


Metal chops Wood

Over-empowered employees diffuse distinctive corporate capabilities that serve as the main source of sustainable competitive advantage


Wood parts Earth

Radical innovation projects need to be insulated from the main business because innovation and operations require radically different approaches to management


Earth absorbs Water

Corporate bureaucracy slows value innovation down and diminishes customer results