We won't test your products. What Industries are the Best Teachers for International Managers? We earned a bit of money this way. What did you learn at the time that helped you start Huawei and guide your philosophy? Apple is also a great company. Particularly the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives, which include a patchwork of diplomacy and free trade zones, have received their share of attention. Arjun Kharpal: A bit about the US market. His message resonated throughout the Chinese corporate world; one of the sledgehammers now sits in the National Museum of China. But Meng Wanzhou will definitely not be the successor. If we spread things too thin, there is no way we will be successful. But I still had to find a job to feed my family. Before I was able to settle into this new position though, China disbanded many of its military forces and everyone had to go find another job. Interestingly, such a strategy suggests that a power of thinking attitude aligns with a shared learning orientation. Over the next 20 to 30 years, we will never do anything that compromises security and we will remain secure. Typically, they've been used in Huawei's products. Whether or not we can get back to business in the US depends on whether our customers want to buy from us. Copyright 2023 Harvard Business School Publishing. He made this persuasively clear by literally saying that it is necessary To cut off your feet to wear the shoe, In China, leadership has traditionally been grounded in a hierarchical top-down management system. We always focus all of our energy on this same single point. Huaweis competitors assumed that they only had to provide the technology to the customer. 2023 | A2Z Pte.Ltd. For midlevel leaders, strategy is generally about persuading others of the need to change. Any one of these things could help them conquer the world. Back home in Shenzhen, Zhengfei told everyone that the passion that he felt for that lab was equal to love. Part of making the dreams of customers to come alive is the idea that providing the best service possible is crucial to the success of the company. He relentlessly convinces his employees through stories and actions. Arjun Kharpal: Mr. Ren, as we come to the end of the conversation, I want to focus on your future. Even with those qualities, many leaders fail at the top job often because they dont know how to get the organization to do what they want. Facts and evidence should be made public and transparent in the courts, which are the basis for fair and just judgment. However, most of us didn't really understand how important this decision made by the CPC's Central Committee was. But Zhang wanted to send the message that even minor defects are unacceptable and that Haier intended to match the quality of any competitor worldwide. I want to use a case analogy here. Its fighting spirit, however, made it resistant to many negative influences and today Huawei can be called the only true global Chinese company. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. The contrasts were stark. At that time, since the number of the employees is limited, the difficulty Ren zhengfei and its group encountered in the human resource management is little. Even if we were ordered to, Huawei would still not install backdoors. We also had to understand the law. Academics were reluctant to engage with executives. Arjun Kharpal: Do you have a succession plan in place when you eventually do retire? Of course, large equipment still relies on an architecture of no other elements but computing, storing and connecting, so we will also work hard to contribute to a cloud world. Small projects like this ignited my passion for scientific research. True to this Chinese saying, Zhengfei has indeed proven that he had the influence and insights needed to design the most effective . Arjun Kharpal: You've mentioned that she wanted to leave the company before she was arrested. Everyone at GE knew what to expect from Neutron Jack Welch. Ren Zhengfei's Media Interview After the Opening Ceremony of the Intelligent Mining Innovation Lab in Taiyuan. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. The US hasn't been scared of anyone or anything though. Mr. Ren: Because I don't actually know technology that well, and I didn't invent anything. Ren joined Peoples Liberation Army with the aim of making synthetic fiber. But I don't think Huawei can help solve the disputes between the US and China. What do you make of his views? But even if it did happen, it would be at least 30 years from now. Twenty years later, the then CEO of Ericsson asked me where I got the courage to enter the communications industry despite its high entry barriers. We have become what we are today with our own strength. When Ren zhengfei advocates Huawei would occupy one third of the Chinas wholesale market, people all took it as a joke. This introductory chapter offers an overview of the entire book on the management transformation of Huawei. This company philosophy was inspired by the heroic tales of the Glorious Revolution that took place in England in 1688. Leahy succeeded with both dramatic changes in part because he maintained a modest demeanor throughout. So instead, we choose to narrow our focus, like a needle point, on a specific area where we can make breakthroughs. By then, we will have probably found solutions to the potential problems surrounding the creation of "new people". Mr. Ren: I think technology will advance even faster than we could ever imagine. Arjun Kharpal: So would you say the US is scared of Huawei? As of February 2019, he had an estimated net worth of US$3.3 billion. For example, in 2014, the company made a decision on bonuses, which received over 70,000 negative comments, leading to a modification of that decision. In fact, we have too many. So AI should be a force for good. This proves our equipment is secure. company using his skills and core competencies. We believe US laws are open, transparent, fair, and just. Ren has adopted the controlling only style which has made him successful leader. By the time I got my business license, I didn't have a single penny left. Many companies' financial statements last year weren't great because they needed to pay income tax arrears. We also sued the US government in Dallas. There are various types of leadership styles (Fiaz et al., 2017) 1. Some top military officers didn't understand it, either. Arjun Kharpal: Let's talk a little bit about the US for a moment. Mr. Ren: I don't know. This category only includes cookies that ensures basic functionalities and security features of the website. . Along the way he introduced one important innovation: the Clubcard, the UKs first supermarket loyalty card, which allowed Tesco to leapfrog Sainsburys into the number-one retail spot. What company can outperform Microsoft in Office and Windows? We will expand it, and dive deeper into it. All references must be sourced to a "CNBC Interview'. Does China feel under pressure from President Trump's tactics in the negotiations? Second, thanks to the Western management approaches we brought in, our operational costs were also kept low. Really effective leaders learn early to target only important issues and ones they have a fair shot of winning. During China's Cultural Revolution, I designed a small instrument using my math skills, and actually received recognition from the government for this device. In particular, the emergence of AI has accelerated social progress. Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. For example, Huawei plans the development of the company by decade, whereas most of their competitors such as Ericsson and Motorola plan it by financial quarter or year. Dong Mingzhu, Chinas most successful businesswoman and the head of Gree Electric, has a persona that says, Where Sister Dong walks, no grass grows meaning she is really, really tough. One of the consistent qualities that have been attributed to Ren Zhengfei is his ability to inspire others. Our company was very small then and almost had no capital or technology. The story goes that Zhengfei was so moved by the work done in those labs that he cried. The US government must present evidence to substantiate their charges against Huawei as this lawsuit proceeds. Second, Premier Li Keqiang reiterated this point at a press conference following a recent session of the National People's Congress. The country wanted to reform and open its doors. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. Arjun Kharpal: Mr. Ren, you started Huawei over 30 years ago with 5,000 US dollars. He also. Leadership styles. Ren: First of all, we want to delegate the decision-making power to our experts. I liked reading books, doing homework, and solving math equations on scrap newspaper. Take machine translation as an example. Its CEO, Ren Zhengfei, has long identified grey management as a principle of his leadership and employed it to provide his firm with a clear direction. Our strategy for investment is like this: If a technology is still two billion light years away, we may invest just a little money, like a sesame seed. Why do I like to use military terms? Famous is the story where Zhengfei in Huaweis fifth year of existence, suddenly rushed out of the kitchen when cooking for Huawei employees abroad his hobby is cooking and announced, Huawei will be a top three player in the global communications market 20 years from now!. Get this delivered to your inbox, and more info about our products and services. and pay only $8.75 each, Buy 11 - 49 He is frequently quoted as saying that the most important thing to value is the power to think. It has grown the market, enabling many other companies to survive. Mr. Ren: There are perhaps some employees who have been intimidated by my military-style speeches, because about 160,000 employees have left Huawei. We were living in an adobe house that only provided us a little shelter from the wind. My younger daughter is a fan of Mr. Jobs, so she proposed that we stop for a moment of silence to mourn him, and we did. 5. Huawei, in contrast, decided to provide these services to their customers. Ren zhengfei himself attributes his success to several characteristics. Let's look at an example. Indeed, as the Chinese say: Every generation produces its own great character (Jiang shan dai you ren cai chu) and each exerts impact for hundreds of years (Ge ling feng sao shu bai nian). Is only slower computing good for us? On October 25, 1944,Ren Zhengfei was born in Zhenning County, Guizhou Province.He spent his primary and junior high school in the mountain village near his home. He is the founder as well as founder of, Huawei Technologies Co.Ltd. What we have is not some kind of nuclear bomb or weapon. In this case study that focus on leadership, leadership is defines as the behaviour of an individual when he or she is directing the activities of a group towards a shared goal. But we will not distribute this extra money to our employees or shareholders. A great increase in material wealth would also help to significantly enrich culture. Beset by internal and external challenges, Huawei needed to completely rethink its approach to business, corporate culture and company management. Fostering an ethos requires taking two important steps. But if investors are scared that they won't get their money back, they won't dare to invest in the US. After he reduced taxes, he should have been friendlier to other countries and try to convince everyone that the US is a great place to invest. However, Ren zhengfei and Huawei made it in the end. Google is now helping blind people see the world with nerve sensors, although they are not as good as human eyes. Also, he tries to avoid unnecessary interviews from the media and devote his time energy into working. We are actually learning from US companies. You're seen as a visionary very much here in China in the technology world. It's a wealthy country, so it has a lot to lose. Ren's own military experience shaped Huawei's early corporate culture and management structure. Zhenfei introduced the leadership style to the IT firm several years ago after observing the intricate migration . They also need to follow local laws and regulations and pay local taxes. Arjun Kharpal: I want to also address some of other criticisms towards your company. He said recently that could potentially wipe out humanity. At the time, the market economy was beginning to take shape in China, at least in coastal cities. Every generation produces its own great character, and each exerts impact for hundreds of years. True to this Chinese saying, Zhengfei has indeed proven that he had the influence and insights needed to design the most effective strategies to ensure that Huawei has grown into a world leading company. So he emphasized action. She's, of course, facing extradition to the U.S. How did you feel after her arrest in December? By David De Cremer and Tian Tao. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. So the standards the US finds so compelling are actually all built on a single mathematics article. Those with organizational intelligence have the following competencies: they can effectively communicate the top strategic priorities, foster an organization-wide sense of how we do things here, get things done even in the absence of consensus, stage moments of theater, and rebel from the top. I could not keep up with the times. There is nothing else that I want to share with him. It does not depend on what Donald Trump has to say. If you'd like to share this PDF, you can purchase copyright permissions by increasing the quantity. With the accounting error, Hill broke a big rule but we suspect that had he followed the smaller rules around issues like showing favoritism to family members, he would have had a better chance of survival. Is that the right way forward? Ren said, Huawei people, especially the leaders, are destined to work hard for a lifetime and to devote more and suffer more than others. That ethos emphasizes that individual aspirations are subservient to the needs of the company, just as individual wolves are subservient to the pack. Photos/ Taddeo Bwambale . I don't think we need to worry too much about the adverse impact of this technology. If the US opens its telecom industry and its operators say they are going to purchase tens of billions of dollars in equipment from us, I wouldn't believe it and wouldn't be willing to make billions of investments. 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But opting out of some of these cookies may have an effect on your browsing experience. Zhengfei is a big fan of the practice of story telling and makes extensive use of it as a vehicle to deliver his ideas to employees in a passionate manner. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. This approach transformed Huawei into a company of strivers and fueled rapid business growth. Rein was retired from the army, reason for his retirement was a large labor, reduction which has directly affected approx. It is great in that it has always pushed to make the market bigger, not smaller. Mr. Ren: They are more than welcome to come visit us in Shenzhen. Its founder, Ren Zhengfei, has recently even referred to Europe as a market where they feel at home as a telecom company. For that, they need organizational intelligence (OQ), or the ability to get the organization to do what they want it to do. And I don't really care about all that. Recommended Lists: Scorpio Entrepreneurs They wouldn't need to rest, just to refuel. These cities were moving away from the previous planned economy. The Opportunities and Challenges of Global Teams. It was all about hard work to bring the company up to the level that it was able to provide higher-quality service. We can give you a copy if you want. In a similar vein, since the beginning of Huawei, it is a known fact that Zhengfei is not a technical expert, but he never saw that as a weakness. European countries want to think over all their options a bit. Elon Musk, for example, has continuously warned about the impacts on jobs and actually, artificial intelligence getting more intelligent than humans. So we will leave these issues up to the courts. People back then thought his discovery was useless and ignored it for 100 years. The US has highly developed technology, but it also has a shortage in labor. The importance of thinking, in his view, is that it provides the skills to connect the dots needed to work with an agile vision and strategy. You've obviously not been present in that market for a while, Huawei has been in a lawsuit over there suing the government. We have reflected on this a lot. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. Ren innovation skills and technical knowledge. It's not up to me to designate a successor. In China, leadership has traditionally been grounded in a hierarchical top-down management system. In the words of Zhengfei: Chaos was removed and structure entered Huawei. This way, we will be able to make world-leading products. Mr. Ren: In a long run, I can tell you clearly that I will retire as I won't be alive forever but in a short term, it depends on my mental agility as I get older. 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