company using his skills and core competencies. We will rush towards and focus all of our efforts on this technology. If that happens, we will just sell our products to other countries that do accept us. By the time I got my business license, I didn't have a single penny left. In the fiscal year of 2014 Huawei reached an all-time high sales revenue of CNY288.197 billion (US$46.515 billion) and CNY27.866 billion (US$4.49 billion) in net profit. This case is undergoing legal procedures, and we believe it will be solved in court. Second, thanks to the Western management approaches we brought in, our operational costs were also kept low. Arjun Kharpal: I want to also address some of other criticisms towards your company. Unlike many Chinese companies that set up many businesses but most cannot be called successful, US companies know how to narrow their focus and then charge forward. When Huawei dominated the domestic market on a large scale, its problem in human resource was more than Huaweis original management system can handle. Effective moments of theater have three important characteristics. Arjun Kharpal: And part of that R&D budget has gone into 5G, into chips, you've got your own 5G chip. Whether or not we can get back to business in the US depends on whether our customers want to buy from us. Otherwise, they will become overweight and won't be able to move fast. In a way obsessed by doing good for the customer, Zhengfei is relentless in communicating this purpose by means of stories to his employees and convincing them that they all should be dedicated to pursue the mission of the company: To connect people via communication.. To give the new changes time to take effect, he delayed a formal discussion of the new strategy until his third year, by which time both revenue and ranking were higher and attitudes had become more favorable. This website uses cookies to improve your experience while you navigate through the website. Many will say that the blueprint of Huaweis success has been laid out by Zhengfei and even though Huawei nowadays makes use of a rotating leadership system in which every six months another board member is the acting CEO, its founder still has a significant impact on the pace and direction of the company. I believe China and the US should stress collaboration and shared success. When we first entered the telecom industry, we started by reselling products from another company. In-person is back! We will put more money into research in new frontiers. Our costs were low for two reasons. However, after this change, the effiency gradually increases. Leading Huawei: Seven Leadership Lessons of Ren Zhengfei, The relationship between China and the European continent carries much history with it. For example, in the early years of Huawei (Phase 1), he regularly told stories to employees that he believed that in 20 years Huawei would have 1/3 of the market share in the world, despite the fact that at that time Huawei only employed about 200 employees. I majored in architecture back in school, but I studied electronics technology myself. As a result, I went back to where I started and jumped into the market economy. Huawei is now China's most prominent multinational company and a leader in 5G mobile telephone technology, which will be rolled out across the world in the next few years. With higher prices, we have started earning more. You often use military imagery and images of battles in your speeches and communications with the employees at the company. But our strategy of focused investment never changed as our capital grew. 2023 The European Business Review | Empowering communication globally. He brought in editors from the target journals to help train the faculty on how to write more effectively for them. But he also has shortcomings. In the early years, Huawei, as a private company, had to battle primarily the State Owned Enterprise (SOE) dominated market. AI has emerged because of several key advancements: First, massive computing power. So I'll let her face what she is facing. At first, we had several hundred employees focus on this point, then we had several thousand, tens of thousands, and now we have hundreds of thousands. We will not distribute the extra profit to shareholders, either. 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. Not really, we think. The US stock market may witness a significant rise this July. In a newly published speech originally given in June 2020, Ren called for decentralised . Huawei the Ren Zhengfei Way: the "Tough Guy" and His Corporate Philosophy By: Jiing-Lih Larry Farh, Xin Pi This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether he needed Length: 13 page (s) Since China has become the second largest economy in the world, this relationship has taken new forms in the shape of several business initiatives. I would like to express my own opinions instead of as a Huawei representative. 5. What did she speak about? We always focus all of our energy on this same single point. The first is the ability to accurately estimate the level of conflict a particular course of action will elicit. Mr. Ren: We have calls quite often, talking about family. Rebelling from the top means taking on the biggest challenges only when you have the most firepower. Technologies are advancing. Our subsidiaries in other countries also have this relationship with local governments. Required fields are marked *. Otherwise, how can we make ends meet? We have become what we are today with our own strength. Lets look at each, drawing on examples from our own experience and that of well-known successful leaders. I only wanted to keep my belly full. Access more than 40 courses trusted by Fortune 500 companies. They don't need a warship to conquer the world. At Huawei, we have two major areas that we are focusing on for the future. This incentive performance system ensures that people are not only motivated to work hard towards collective success, but probably even more importantly it ensures that Huawei really is an employee-owned company. Back then, it would reach minus 20-something degrees Celsius in the winter. and pay only $8.00 each. Typically, they've been used in Huawei's products. Mr. Ren: I think technology will advance even faster than we could ever imagine. If President Trump continues intimidating other countries and companies, and keeps randomly detaining people, who would risk investing in the US? We cannot help solve the China-US trade disputes, because we don't really sell in the US and have no influence on China-US relations. Huawei was not mentioned in any of the negotiation meeting minutes published by the US and China. If no one dares to invest in the US, then how can they make up for lost tax revenue? Do you think Huawei is at that point yet? Steve Jobs is known more internationally. I want to use a case analogy here. Arjun Kharpal: You were in the People's Liberation Army. To reinforce the message, he sent congratulatory emails when faculty had acceptances in such journals (but not for acceptances in academic publications). We will wait for the court to make its judgment. Cuts and bruises toughen her up, and even since ancient times, heroes were born of hardship. That approach may not be an option at the top. Beset by internal and external challenges, Huawei needed to completely rethink its approach to business, corporate culture and company management. And its founder Ren zhengfei is thought be be one of the best leader in the business world. We live in a very connected world. Is that something you would welcome? Data is a real-time snapshot *Data is delayed at least 15 minutes. Publication Date: I liked reading books, doing homework, and solving math equations on scrap newspaper. So he emphasized action. We earned a bit of money this way. This approach transformed Huawei into a company of strivers and fueled rapid business growth. Mr. Ren: Regarding the allegations against Meng Wanzhou and Huawei, the US Department of Justice has sued Huawei, and Huawei has pleaded not guilty in the court. AI can help translate text into 70 different languages simultaneously. Meng is now in a similar situation. He said, Those are air bubbles. The leadership of Ren Zhengfei, however, does differ from this rather "controlling only" style in important ways. Got a confidential news tip? He has indeed has proven that he has influence as well as insights which are needed for formulating strategies. What else can we talk about? To stay one step ahead of your competition, sign up today to our exclusive newsletters to receive exciting insights and vital know-how that you can apply today to drastically accelerate your performance. Bringing this emotion-laden message was meant to motivate his own people and eventually to make his R&D people believe that they could one day be better than the researchers at the Bell labs. Really effective leaders learn early to target only important issues and ones they have a fair shot of winning. His ability to critically reflect on past successes and at the same time to identify the future challenges in the next decade makes Zhengfei an impactful business leader in the eyes of many Chinese. Mr. Ren: I think my children have grown up without experiencing much hardship. The US has highly developed technology, but it also has a shortage in labor. But I don't think Huawei can help solve the disputes between the US and China. Ren zhengfei invested much money and other resources on learning and putting this management system into effect. Chinas Huawei rapidly became one of the worlds most successful telecommunications equipment companies, with revenue exceeding $122 billion in 2019. President Trump hasn't shared his thoughts with me. Decisions were taken much slower than in the first more chaotic years of the company and fear existed that the bravery and courage underlying the companys striving for innovation would disappear. Over the next 20 to 30 years, we will never do anything that compromises security and we will remain secure. Arjun Kharpal: So that's a metaphor for your daughter? Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. The differences of leader skill in America and China. Mr. Ren: First, I think our customers already know Huawei pretty well since we have worked with them for nearly 30 years. If we get caught in the middle, we will be crushed like a watermelon when these two powers clash. That's why I said he is a great president. I don't know what the government officials have said, what concessions they have made, or what opportunities or benefits they've received. This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether. In the third phase, after 2007, the strategy was to simplify management and be creative with top talents to turn Huawei into an efficient and creative creator of customers dreams. Obviously this has required a strict control of information, which attaches a flavor of secrecy and even mystery to the behavior of Mr. Ren Zhengfei. So instead, we choose to narrow our focus, like a needle point, on a specific area where we can make breakthroughs. If they have too much money, they would be obsessed with capital gains. Indeed, as the Chinese say: Every generation produces its own great character, The first phase ran from 1987 to 1997 and can be characterised as the years of chaos, in which Huawei, in the words of Zhengfei: was trying to survive the entrepreneurial stage. On this forum, ideas are communicated frequently by senior executives and Zhengfei and feedback from all 170,000 employees is encouraged. CNBC.com is the preeminent financial news source on the web, featuring an unprecedented amount of video, real-time market analysis, web-exclusive live video and analytical financial tools. Then scientists realized the value of genes and DNA. They replied that they could not make it smaller. We did not know that these small things were designed to connect the whole city or even the whole world. He is recognized as a leader who motivates to facilitate innovation at all levels. If a country is poor and they have nothing to lose, they aren't afraid of being attacked. Mr. Ren: When I was a kid, I didn't have many hobbies mainly because my family was poor. As mentioned earlier, the first two decades of Huaweis existence were dominated by the force of attack in order to survive and gradually become a better service provider. However, Ren zhengfei and Huawei made it in the end. 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. I think that is how this story is likely to end. In the words of Zhengfei: Chaos was removed and structure entered Huawei. We were living in an adobe house that only provided us a little shelter from the wind. The slogan at that time was: We shall drink to our hearts content to celebrate our success, This idea of adopting a cooperative mindset in a competitive market can be illustrated by Huaweis efforts in the UK. This company philosophy was inspired by the heroic tales of the Glorious Revolution that took place in England in 1688. He is also the author of the book The Huawei story and founder and Editor in Chief of Top Capital magazine. It takes a lot to get to the top of an organization: a high IQ, emotional intelligence, technical competence, and a variety of personal characteristics, such as fortitude and resilience. As a leader, Ren Zhengfei insists on self-criticism and careful consideration. Underlying his focus on story telling is his strategy to energise people and introduce a sense of vitality to the projects that need to be undertaken. 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. When Huawei was just founded, the world of communications was extremely under-developed. I would have to repay tens of billions of dollars in debts. After, completing his school, He attended the university named Chongqing and then Ren Zhengfei, joined Peoples Liberation Army research institute as, he wishes to work as a military technologist, reportedly in the PLA's Information Technology research unit. As he spent decades building one of the biggest tech companies on the planet, Ren Zhengfei kept a low public profile. And there is concern that some of these large technology companies just have too much power. Ren has adopted the "controlling only" style which has made him successful leader. So we won't do that. Ren Zhengfei now serves as a deputy chairman of the board of directors. Without the leadership Ren zhengfei has, there could not have been todays Huawei. Arjun Kharpal: Mr. Ren, you talk a lot about the distance between Huawei and the Chinese government. When he reduces taxes, he must be hoping to attract more investment. Do you think she's a hostage in this broader US-China trade battle? Leading Huawei: Seven Leadership Lessons of Ren Zhengfei. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. Its success stems in no small part from its ethos, "the wolf spirit of Huawei," created by founder and chairman Ren Zhengfei at the start. High-OQ leaders send messages that reinforce the strategy and minimize other messaging. Ren joined Peoples Liberation Army with the aim of making synthetic fiber. Mr. Ren: I don't know about technology, management, or finance. I was naive and took it for granted that I could earn money playing with this huge industry. Of course, several decades from now, that would potentially cause other side effects that we can't predict, but mitigating the side effects is better than immediate death. 2023 | A2Z Pte.Ltd. To rebel from the top, leaders must strike a difficult balance. Zhengfei was very clear about this ambition and demanded that all Huawei employees would adopt the US-based way of looking at business as introduced by IBM. Jobs then dropped the device into an aquarium, and bubbles floated up. Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. Academics were reluctant to engage with executives. That's why we told the German government that we are willing to accept their regulation. In his pursuit of the Huawei dream, Ren Zhengfei seems to know his own limitations and does not portray himself as the ultimate know-all leader. It allows a leader to impose expectations and define the outcomes. Get this delivered to your inbox, and more info about our products and services. These figures show that we are still growing, not declining. People will be afraid of getting trapped there. The US government must present evidence to substantiate their charges against Huawei as this lawsuit proceeds. Arjun Kharpal: Have you tried to reach out to the president to speak to him about it? (This is where EQ can support OQ. ) And he was on a four-year contract and had limited time. Specifically, in this section the leadership style of Huawei will be analysed, as well as its impact on the employee engagement and overall organisational performance, and findings and discussions will be presented. Mr. Ren: First, it's understandable that government leaders would take pride in the great companies of their country. And he left other core aspects of the business, such as steadily improving the retail offer (Every little helps), untouched. Arjun Kharpal: You said you've not had any communication with Donald Trump. Arjun Kharpal: One of the concerns is that these powerful technologies like artificial intelligence are being developed by a small group of very, very big technology companies. Apple is also a great company. When George started as RSMs dean, in 2008, he was an outsider and a foreigner. At Huawei, we often talk about the term of "Van Fleet Load", which was invented by a general of the US army. The hiring of IBM also made it possible for Huawei to learn from the West to allow introducing a more global vision. It is good for society and can greatly increase social wealth. For formulating strategies publication Date: I do n't think Huawei can help translate text 70! 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