The Enemy Within: Why Internal Politics Kills Companies Faster Than Any Competitor

TL;DR: The collapse of the Qing Dynasty's Beiyang Fleet in 1894 is often taught as a failure of technology or a victory for Japanese modernization. It was neither. It was a classic case of Corporate Cannibalism. When the internal "Board of Directors" (The Qing Court) spends more energy fighting each other than the competition, the organization is dead long before the first shot is fired. This is a case study on how factionalism creates "Political Debt" that makes "Technical Debt" fatal.

I am James, CEO of Mercury Technology Solutions. Taipei - December 21, 2025

We often look at failed giants—whether it’s Kodak, Nokia, or the Qing Dynasty—and blame "Market Forces" or "Disruptive Competitors."

But if you look at the autopsy of the Beiyang Fleet (the Qing Dynasty’s modern navy), you realize the Japanese Navy wasn't the primary killer. The fleet was destroyed by a deadlock in its own headquarters.

The destruction of the Beiyang Fleet is the ultimate lesson in how Internal Conflict renders an entity incapable of surviving External Competition.

1. The Tech Stack Dilemma: Monolith vs. Microservices

First, let's look at the "Hardware." In the late 19th century, naval tech was moving as fast as AI is today.

• The Legacy Stack (Beiyang): Li Hongzhang (the pragmatic CEO type) bought the Dingyuan and Zhenyuan ironclads from Germany in the 1880s. These were "Big Gun" tanks—high defense, slow speed, massive damage.
• The Agile Stack (Japan): A few years later, the meta shifted. Following the Anglo-German rivalry, Japan bought British cruisers (like the Yoshino). These were "Rapid Fire" units—low defense, high speed, high DPS (Damage Per Second).

By 1894, the Beiyang Fleet was arguably "legacy hardware." But legacy hardware doesn't necessarily lose wars; unmaintained hardware does.

2. The "Opposition Algorithm": Weng vs. Li

Enter Weng Tonghe, the Emperor’s tutor and the leader of the "Moralist Faction." Weng hated Li Hongzhang. His algorithm for governance was simple: If Li supports it, I oppose it.

This wasn't a debate about naval strategy. It was a Party Struggle (Factionalism). Weng blocked funding for the Navy not because the Navy didn't need it, but because giving money to the Navy meant giving power to Li.

The Toxic Logic: Weng argued: "The Beiyang Fleet is already #1 in Asia and #5 in the World. Japan is tiny. Why do we need to keep burning cash on this? You must be embezzling it."

This is the sound of a CFO cutting the R&D budget because "we already have a product." Because of this political blockade:

1. The fleet couldn't buy new rapid-fire guns to match Japan.
2. They couldn't even buy training ammunition.
3. The boilers were old and couldn't be replaced, killing the ships' speed.

3. The Death Spiral of Accountability

This created a deadlock loop that kills companies today:

1. Resource Starvation: The Moralists cut funding.
2. Hesitation: Li Hongzhang, knowing his equipment was degrading, became risk-averse. He didn't want to fight.
3. Accusation: The Moralists interpreted this caution as cowardice or treason. "Why aren't you fighting? Is it because the ships are fake? Is it because you stole the money?"
4. Escalation: To prove they were right, the Moralists pushed for war with Japan, escalating diplomatic tensions to a breaking point.

Japan looked at this and saw a giant (China) with a dysfunctional brain. They saw an opportunity. They went "All In" on naval spending because they knew the Qing couldn't coordinate a response.

4. The Battle of the Yellow Sea: The Validation of Rot

When the war finally started, the tragedy wasn't that the Chinese ships were bad. Both doctrines actually worked.

• The Chinese Ironclads (Dingyuan/Zhenyuan) were indestructible tanks. They took hundreds of hits and did not sink.
• The Japanese Cruisers were fast and rained fire on the decks.

The Beiyang Fleet lost because they ran out of shells. They lost because their speed was crippled by unmaintained engines. They lost because the "Moralists" in Beijing were busy auditing Li Hongzhang instead of supplying him.

Conclusion: The "Moral" Killer

The most dangerous people in an organization are often the ones with the highest "Moral Standing" but zero operational responsibility.

In the Qing court, the "Pure Scholars" (like Weng) ruined the empire because they weaponized ethics to destroy their political rivals. They claimed Li was a traitor for wanting to negotiate or build up strength, while they—who refused to learn about modern warfare—claimed the moral high ground.

The Takeaway for Leaders: If your internal teams are fighting each other more than they are fighting the market, you are already dead.

• The "Land Army" (Conservatives) blamed the "Navy" (Reformers) to save face.
• The Board (Imperial Court) paralyzed the CEO (Li) to keep him in check.

External competition (Japan) was just the stress test. The structural integrity of the Qing Dynasty had already been eaten away by the termites of internal politics.

The future of your entity is not determined by your competitor's innovation speed. It is determined by your internal coherence. If you have a "Weng Tonghe" in your C-Suite blocking progress just to win a political point, fire them. Or prepare to be sunk.

Mercury Technology Solutions: Accelerate Digitality.