Apple is also a great company. The ethos needs to be summarized in an evocative statement pointing to the behaviors desired in the organizations members. For example, as the products of Huawei in their pioneering years were not yet well developed he visited many R&D offices abroad. That's how we started out. Do you think she's a hostage in this broader US-China trade battle? In a way Zhengfei works hard to always keep clear to himself a kind of meta-view that enables him to make informed strategy decisions. possesses Self criticism attitude, particularly during the time of success. In China, leadership has traditionally been grounded in a hierarchical top-down management system. Especially in the entrepreneurial years of the company he used this strategy to be both a strong mentor and leader for his employees. 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. He created a new position, director of external relations, and placed that director and the director of marketing on the management committee. Action strategy is about making things happen. In 2019, soon after Metro Bank revealed an accounting error involving the misclassification of more than $1 billion in loans, Hill resigned. Instead, we will use it to fund universities and scientists for their research and explorations into the future. 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. Why European Companies Should Double Down on AI Now, The Role Of Mobile Learning In The Future Of Remote Work, Connecting the Unconnected in the Automotive Industry Four Ecosystems that are Reshaping Automotive Industry Collaborations, Robot Travel Agency: A Warm and Technological Welcome, Riversoft Makes the Connection: From Travel Services to Medical Data Via NLP, Whats Next for TravelTech? That requires two skills. He is recognized as a leader who motivates to facilitate innovation at all levels. For example, Huawei equipment broke down frequently, so Huawei technical engineers went to customer equipment rooms to repair the equipment at night when the equipment was not being used. It often makes sense to adopt a stealth strategy rather than a formally declared one and to bring people along gradually, as it starts to prove itself. All he cares about is how to thoroughly solve every problem his company meets and how to improve the efficiency of the whole group. We have raised our prices and now many people think Huawei is expensive. In the words of Zhengfei: Chaos was removed and structure entered Huawei. But in both cases he was brought down partly by accusations of inappropriate dealings with insiders, such as getting his banks to buy services from his wifes architectural firm. When he talks about his skills and qualities he always emphasises that he is not the most knowledgeable. 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. 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. 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. His message resonated throughout the Chinese corporate world; one of the sledgehammers now sits in the National Museum of China. . Effective moments of theater have three important characteristics. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. China has a population of 1.3 billion consumers. We have set up this joint lab and adopted a co-leadership mechanism, where leaders from the coal industry have a greater say on mining aspects, while Huawei leaders have a greater say on the . When we were negotiating with the German government about signing such an agreement, we didn't know top officials from the Chinese government were also discussing the same thing. You dont want to be like John DeLorean, who battled nearly everything on his way up in and then out of General Motors. If they attack a country, that country will fight back. This message has been reiterated by many senior officials of the Chinese government, including Yang Jiechi, who stated his position at the Munich Security Conference, and Premier Li Keqiang, who made similar statement at a press conference shortly after a recent session of the National People's Congress. 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. One story that stayed with Zhengfei was the overthrow of King James II of England by a union led by William of Orange in 1688, which was called the Glorious Revolution. But what we've seen publicly is senior officials in the government talking at times on Huawei's behalf. 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 is continuously focused on the future and hardly ever ruminates about the past. Our financial statements are audited by KPMG, which can clearly show whether or not we are supported by the Chinese government. Even if AI poses other threats, we can manage them with laws and rules. Particularly the Silk Road Economic Belt and the 21, 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. 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. We can give you a copy if you want. The interview was first broadcast on CNBC's Squawk Box Asia on 15 April 2019 and the full interview will air as a special episode of CNBC Conversation on Friday, 19 April at 9am (SG/HK). Executives may want to develop these OQ competencies on the way up the ladder and theyll certainly need them if they are to succeed at the most senior levels. To rebel from the top, leaders must strike a difficult balance. Ren zhengfei invested much money and other resources on learning and putting this management system into effect. Back then, it would reach minus 20-something degrees Celsius in the winter. Bill Gates changed his mind though during his later speeches, suggesting that AI could greatly boost social progress. As can be expected of a man with an army background he served in the Peoples Liberation Army he is known to be intense and tough and never loses control. Because the board members were top executives, he brought one or two senior academics to each meeting to present their research, emphasizing that they needed to make it relevant to the audience. What's next for Meng Wanzhou in her life, in her career? 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. We want to hear from you. There has also been questions about your past as a communist party member and what that means for Huawei. 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). Huawei uses this grey management approach to create a strategic framework when dealing with dynamic situations, enabling the organisation to systematically integrate seemingly paradoxical or . But unfortuetely he fails to, achieve military rank, due to which he was not allowed to join communist party of China for, continuing his career in Military field as, Ren Zhengfei family belongs to social background and, Ren Zhengfei was accountable for many, technological achievements. We don't talk about anything else, because we know that our communication is being monitored. His company reflects these traits. This was because we were never intended to engage in military operations. 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. Huawei is to a large extent no stranger to this system. Mr. Ren: First, I think our customers already know Huawei pretty well since we have worked with them for nearly 30 years. Fostering an ethos requires taking two important steps. October 01, 2018, Source: Being born blind and deaf is caused by missing of genes. It allows a leader to impose expectations and define the outcomes. We won't test your products. Then scientists realized the value of genes and DNA. As we noted earlier, often references to past historic events are used to shape actions and beliefs towards the future. Arjun Kharpal: You said Huawei should not be used as leverage between the US and China, and Donald Trump, President of the United States, said that he could intervene in the Meng Wanzhou case as part of a bigger trade deal between the US and China. If a technology is 20,000 kilometers away, we can invest a little more, like an apple. Steve Jobs is known more internationally. I had no idea. 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. This is an idea that scares people, but right now, it is not yet anywhere near reality. Germany proposed the establishment of a unified global convention that would bar all equipment vendors from installing backdoors, and require them to sign a no-spy agreement. and pay only $8.00 each. CNBC is a division of NBCUniversal. The differences of leader skill in America and China. Arjun Kharpal: Do you have a succession plan in place when you eventually do retire? Third, follow the small rules so that you can break the big ones. Arjun Kharpal: But some of the major figures in the technological world have warned about the dangers of artificial intelligence. Mr. Ren: I don't know about technology, management, or finance. It has grown the market, enabling many other companies to survive. Just tell me what you think are going to be some of the significant technological developments over the next two years that you see coming. Data is a real-time snapshot *Data is delayed at least 15 minutes. You often use military imagery and images of battles in your speeches and communications with the employees at the company. We don't have much influence over China-US trade relations. But he also has shortcomings. High-OQ leaders stage moments of theater that will be told and retold throughout the organization. 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. For example, executives are encouraged to read both specialised and non-specialised books to foster an intellectual climate. But the US is in a different situation. 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. (Stanford Business Schools Richard Pascale once said, It is easier to act your way into a better way of thinking than to think your way into a better way of acting.) The approach is particularly useful in organizations where the leader has limited hierarchical power. So we would never follow anyone's instructions to install backdoors. Strong leaders usually have strong views about how things should be done, which can lead them to take on too many fights too early in their careers. She's, of course, facing extradition to the U.S. How did you feel after her arrest in December? Because they are simple and easy to understand. The second is the maturity tonotengage in unimportant issues. This company philosophy was inspired by the heroic tales of the Glorious Revolution that took place in England in 1688. Last but not least, Ren zhengfei has experiences of serving the army. Many of them thought at that time that he was crazy. So instead, we choose to narrow our focus, like a needle point, on a specific area where we can make breakthroughs. At the time, the market economy was beginning to take shape in China, at least in coastal cities. Our employees are used to the way I speak. The leadership of Ren Zhengfei, however, does differ from this rather "controlling only" style in important ways. Otherwise, they will become overweight and won't be able to move fast. The railway and machinery troops were let go along with us. With Huawei becoming the largest telecommunications equipment manufacturer in the world, Ren zhengfei has already become a paradigm 2023 CNBC LLC. 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. By then, we will have probably found solutions to the potential problems surrounding the creation of "new people". I only wanted to keep my belly full. And they are generally low-cost and relatively easy to execute. What is the problem with translation software that has faster computing? Despite this controversy, Huawei received support from both Ericsson and Nokia, stating that in their view Huawei was not dumping its products. I majored in architecture back in school, but I studied electronics technology myself. Data Analysis Methods Every Business Needs To Know How To Perform, Are You Ready to Lead in a Digital World? I think that is how this story is likely to end. Summary. By taking a set of coordinated actions that add up to a strategic change, a leader can kickstart the process without creating organized opposition. Huawei is now the world's largest telecoms equipment maker. If a technology is just five kilometers away, we will invest heavily (a business version of a Van Fleet Load). Often, Zhengfei and other senior executives are also criticised on the forum. 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. I raised a total of over 20,000 RMB to pay the variety of fees needed to start a company. Enterprises can now transfer their funds in other countries back to the US because of a low tax rate of 12%. So our products needed to be standardized. All Rights Reserved. Its founder, Ren Zhengfei, has recently even referred to Europe as a market where they feel at home as a telecom company. Tian Tao is codirector of Ruihua Innovative Management Research Institute at Zehjiang University. 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. Want to buy more than 1 copy? It at least might give us time to find real cures. Like a judo master, you must practice getting the maximum effect from your large organization with a minimum effort on your part: the judicious email, the sharp moment of theater. The secret is to take advantage of opportunities to do something symbolic in a surprising, high-impact way that will capture the attention (and, hopefully, the hearts and minds) of the organizations members. Arjun Kharpal: I want to also address some of other criticisms towards your company. Is it your ultimate aim to get back to business in the US market or just clear your name there? None. Or do you feel sometimes they are intimidated by that style of leadership? You also have the option to opt-out of these cookies. Really effective leaders learn early to target only important issues and ones they have a fair shot of winning. We have become what we are today with our own strength. I think this challenge will be good for my daughter. Arjun Kharpal: Have you tried to reach out to the president to speak to him about it? This is thanks to Trump. They carry a clear message. Arjun Kharpal: So would you say the US is scared of Huawei? They don't choose certain goods just because a politician says so. Zhengfei has a strong interest and passion for learning about historic events. The first is the ability to accurately estimate the level of conflict a particular course of action will elicit. Mr. Ren: I think the most essential factors to judge guilt are facts and evidence. The US has highly developed technology, but it also has a shortage in labor. It is an invention of Erdal Arikan, a Turkish professor in mathematics. 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. No backdoors. I think currently AI has greatly improved productivity. The US is a strong economy and offers many high-quality products. The leadership of Ren Zhengfei, however, does differ from this rather controlling only style in important ways. Why do I like to use military terms? Do you think that companies like yours are too powerful and need to be regulated? But I still had to find a job to feed my family. After I joined the army, I was tasked to establish a chemical fiber factory in Liaoyang, a city in the northeast of China. And you've said that you want to be number one in smartphones. The best illustration of how rewards are shared is the fact that Zhengfei only holds 1.4% of the companys total share capital whereas 82,471 employees hold the rest of the shares (stated in Huaweis 2014 Annual report, as of December 31, 2014). For example, In the UK, Huawei has put much effort into convincing the British government and general public that they and their procedures can be trusted, by (a) Setting up the Cyber Security Evaluation Centre in Banbury to ensure the quality of their equipment, and (b) Cooperating with the GCHQ, the UKs signals-intelligence agency, to ensure that the networking equipment and software is reliable and secure. They also need to follow local laws and regulations and pay local taxes. As a matter of fact, one of the strengths that people usually refer to when talking about Huaweis founder is that he is always thinking about the kind of company he wants Huawei to be in the next 10 years. In other words, the emphasis of results is viewed a basic spirit of Huawei. Mr. Ren: If they aren't scared of us, why are they advertising for us everywhere they go? It emphasized clear-cut goals, hard-and-fast rules, employee dedication and absolute obedience. Is this a battle for you? Make it smaller.[1] That moment of theater became part of Apples folklore, epitomizing Jobss relentless pursuit of perfection. Elon Musk, for example, has continuously warned about the impacts on jobs and actually, artificial intelligence getting more intelligent than humans. So I'll let her face what she is facing. As a result, I read a lot of books on law and learned that the market was about two things: the product and the customer. Mr. Ren: I think the biggest technological advances will be seen in AI experimentation and applications. When two nations or companies meet, they must collaborate to achieve shared success. If we didn't abide by those laws and regulations, we wouldn't survive even a day. There was no chance for us to step back and start another business. In this article David De Cremer and Tian Tao discuss the seven important leadership lessons that have made Huawei the company it is today. Jobs then dropped the device into an aquarium, and bubbles floated up. Leading Huawei: Seven Leadership Lessons of Ren Zhengfei, The relationship between China and the European continent carries much history with it. The criticism was scathing, including from McKinsey and other top consulting firms. Do these seven lessons primarily make Zhengfei a cerebral type of leader as the power of the mind is placed so central to his philosophy? 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. After I was discharged from the army, I ran into a big trouble at work. Zhengfei made this very clear when he said: I do not know anything about technology, but I can bring people together to work for the collective. He is praised for his desire to hire better people in the areas he is weak in, with the ultimate goal to improve the quality of Huawei products and services. Its fighting spirit, however, made it resistant to many negative influences and today Huawei can be called the only true global Chinese company. Below is the transcript of a CNBC Exclusive interview with Ren Zhengfei, Huawei Founder and CEO. Mr. Ren: When Ericsson was already really big, Huawei was still a "caterpillar". 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. I said I couldn't even imagine what it would look in two or three years. When I look back on how Huawei developed in the telecom market, we actually made some missteps. 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 it's impossible for me to enjoy the same prestige as Jobs. Do you think Huawei is at that point yet? Get this delivered to your inbox, and more info about our products and services. Get your Culture in Good Shape, Not Lost in Translation: Making the Data Make Sense. Nevertheless, as the market evolved and employee characteristics shifted, the shortcomings of Ren's management model grew ever apparent. Purpose-driven Ambition The core of Ren Zhengfei's leadership is the undeniable fact that he is very clear about the purpose of Huawei, which is helping customers to realise their dreams. 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. All rights reserved. First, as our technology advanced rapidly, we managed to bring down the costs of our products. Arjun Kharpal: Mr. Ren, you've said in the past that the US government hasn't seen Huawei's technology and source code. At that time, China was just beginning with its reform and open-up policy, and was paying more attention to technology, talent, and knowledge. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Your email address will not be published. These experiences taught me to endure hardships. 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.
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