If no one dares to invest in the US, then how can they make up for lost tax revenue? The simpler and clearer, the better; organizational members at all levels suffer from information overload, so leaders need to be selective about what messages to send. When he reduces taxes, he must be hoping to attract more investment. So he emphasized action. They are buying our products in large quantities as the US government is advertising for us. What were you thinking at the time and what were your expectations for the company? Nevertheless, Zhengfei remained persistent in talking about his ambitions at all kind of occasions. We were living in an adobe house that only provided us a little shelter from the wind. If a technology is just several thousand kilometers away, we will invest a lot more, like a watermelon. I want to use a case analogy here. They wouldn't need to rest, just to refuel. 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. With Huawei becoming the largest telecommunications equipment manufacturer in the world, Ren zhengfei has already become a paradigm But our strategy of focused investment never changed as our capital grew. Thirdly, its his sense of management that helps him to become an excellent leader. In 1994, Huawei is still a company that has been working for no more than seven years. 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. That creates a kind of balance. When the state wanted to give me some awards for all of this, I felt ashamed. This is a copyrighted PDF. Why cannot we edit human genes? So we will leave these issues up to the courts. Interestingly, such a strategy suggests that a power of thinking attitude aligns with a shared learning orientation. Nothing we've achieved would give us the right to neglect any laws or overlook the technologies of any country. He created a new position, director of external relations, and placed that director and the director of marketing on the management committee. October 01, 2018, Source: So you said she doesn't want to leave anymore. Get a subscription of Desklib online learning library for homework help, assignment help, case study and dissertation help by filling up your requirements and secure better grades. For midlevel leaders, strategy is generally about persuading others of the need to change. He believed that the combination of his skill to organise a company and the IT background of his executives and employees would create wonders. This category only includes cookies that ensures basic functionalities and security features of the website. Then a large number of our employees would resign, but I cannot leave. Ren has unique qualities which make him different from other, leaders. Looking at the Fortune Global 500 list, Huawei is the only mainland Chinese company (out of 91 Chinese companies listed) earning more revenue abroad (67%). Another strategic objective was better cooperation between faculty and staff. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. His company reflects these traits. Vernon Hill was transformationally successful in leading Commerce Bank in the USA and then Metro Bank in the UK. Our relationship with the Chinese government is primarily defined by these two points. That's why I said he is a great president. The TV channel is available in more than 415 million homes worldwide. After I was discharged from the army, I ran into a big trouble at work. Publication Date: What they lack and what successful leaders embody, down to their marrow is organizational intelligence. If they have too much money, they would be obsessed with capital gains. We have become what we are today with our own strength. To give you a simple example. CNBC is a division of NBCUniversal. You often use military imagery and images of battles in your speeches and communications with the employees at the company. Tian Tao is codirector of Ruihua Innovative Management Research Institute at Zehjiang University. What makes Huawei interesting is its rate of growth and . When I was young, I had no ideals. Arjun Kharpal: Would you support similar ideas about no-spy agreements in other countries, including the US? Leadership Style Assignment : Ren Zhengfei. And it needs to be communicated widely. Ren Zhengfei leads Huawei Technologies, one of the world's largest manufacturer of telecommunication hardware and mobile phones. Mr. Ren: I think technology will advance even faster than we could ever imagine. If they attack a country, that country will fight back. Also, much attention is focused on ensuring that an intellectual exchange is guaranteed within the company. This ability derives from his pro-active attitude. Technologies are advancing. The US is a strong economy and offers many high-quality products. Our company was very small then and almost had no capital or technology. So he and his managers smashed the defective appliances. I couldn't really get what the market economy was about, so I ended up making a mistake while working for a state-owned company which got me let go. If so, what did she say to you? Is that useful to the company, or do you find that a distraction? Fuelled by his passion, Ren Zhengfei works hard to translate the purpose of the company into a vision aimed at Huawei achieving a world leading status. Neither side has mentioned Huawei, which means Huawei does not actually carry much weight. If a single backdoor was found in even one of the countries where we operate, our sales would shrink in all of them. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. During one of these visits, in 1997, he visited the Bell labs in the USA. However, it kills employees creativity and . Ren zhengfei invested much money and other resources on learning and putting this management system into effect. Mr. Ren: Huawei is based in China. Arjun Kharpal: So would you say the US is scared of Huawei? If we couldn't make ends meet, we wouldn't be able to survive. People don't object to the editing of plant genes. I majored in architecture back in school, but I studied electronics technology myself. Ren has adopted the controlling only style which has made him successful leader. With higher prices, we have started earning more. Leahy succeeded with both dramatic changes in part because he maintained a modest demeanor throughout. The last thing we want is to have bureaucrats or managers lead our way in technology. Leading Huawei: Seven Leadership Lessons of Ren Zhengfei, The relationship between China and the European continent carries much history with it. Moving forward, we will invest more in this direction. They need to recognize what aspects of the status quo need to be challenged and they need the discipline to avoid wasting time rebelling in ways that are not strategic and wont move the organization forward. The US needs the Chinese market, and China needs technology from the US. 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. I can share some numbers with you. As a leader, Ren Zhengfei insists on self-criticism and careful consideration. Do you think that companies like yours are too powerful and need to be regulated? I believe China and the US should stress collaboration and shared success. 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. This introductory chapter offers an overview of the entire book on the management transformation of Huawei. Mr. Ren Zhengfei has been capable of pioneering the development of technology while growing in the world. The industry had high requirements. More and more companies are harnessing new technologies more quickly. Arjun Kharpal: In terms of the way he's negotiated with China, some people would say that actually he's managed to get concessions for the US. There was nothing much wrong with them just a few scratches and other minor defects. His passion to be the best technology company they can be in service of the customer ensures that he has deserved the reputation of being eager to keep learning and stay informed all the time. Create a free website or blog at WordPress.com. The US stock market may witness a significant rise this July. We can scale down a little bit. This is an idea that scares people, but right now, it is not yet anywhere near reality. February 9, 2021. This selective messaging was not popular, but it was highly effective. These cookies will be stored in your browser only with your consent. The authors describe seven characteristics of Zhengfei's leadership style, including 'adaptive vision', 'humble dedication' and 'winning by cooperating'. You also have the option to opt-out of these cookies. This is a challenging competency and a powerful one. Instead, he believed it was a strength. 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. As CEO, he introduced Tescos distinctive online model, based not on the classic centralized warehouse but on existing stores, where Tesco.com employees picked and packed online orders during off-peak periods. For example, as the products of Huawei in their pioneering years were not yet well developed he visited many R&D offices abroad. Because we want to grow our harvest and produce actual results. They can transfer to other industries though, and take on new roles. It was all about hard work to bring the company up to the level that it was able to provide higher-quality service. 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 . He said, Those are air bubbles. Typically, they've been used in Huawei's products. 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. Now we talk a lot about genetic modification, or gene editing. 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. Second, customers have the right to make their own choices. At that time, Ren zhengfei often told all kinds of stories to encourage its employees to imagine the splendid future and try to cast them into reality with their own hands. But by 2003 Sainsburys had followed suit by which time Tesco had a five-year head start and an expanding user base. Where was I supposed to go from there? Elon Musk, for example, has continuously warned about the impacts on jobs and actually, artificial intelligence getting more intelligent than humans. 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. Trusted by 2+ million users, 1000+ happy students everyday, You are reading a previewUpload your documents to download or Become a Desklib member to get accesss. Some people asked me what the world would be like in 20 or 30 years. Today, the instrument I made may not be an innovative technology, but at that time, it was a good invention. Google is now helping blind people see the world with nerve sensors, although they are not as good as human eyes. That means there is space in there. Ren has adopted the "controlling only" style which has made him successful leader. What we have is not some kind of nuclear bomb or weapon. Otherwise, we wouldn't be able to enter the network equipment industry. At the time, the market economy was beginning to take shape in China, at least in coastal cities. I think this challenge will be good for my daughter. Many companies' financial statements last year weren't great because they needed to pay income tax arrears. It is a well-known fact that Zhengfei truly lives this purpose and pursues it with unlimited energy, making Huawei his natural born mission. Mr. Ren: We have worked closely with our customers for 30 years. Arjun Kharpal: But you created the world's largest telecom company. As I said, this is because we have no real presence in the US market. In his view, it was necessary in the second phase to wear the shoes of the Americans, and if your feet would not fit then we have to cut it. After we were discharged, we were assigned to different places across China. This fact inspired him to embrace the idea that one can win and still be cooperative. It is an invention of Erdal Arikan, a Turkish professor in mathematics. We only focus on edge computing. Therefore, we will count on the law to address these issues. Even if we were ordered to, Huawei would still not install backdoors. 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. This way, we will be able to make world-leading products. It will greatly increase productivity. Although this multinational company surpassed Ericsson in 2012 as the world leader in terms of sales revenue and net profit, the company is still relatively unknown to the European business audience. The Central Committee had also been disbanding parts of the Chinese military because it was so large. When Huawei was just founded, the world of communications was extremely under-developed. She has understood the difficulties that the company is facing and wants to help us see this through. 3.2 Findings 3.2.1 Huawei's leadership style Many will claim that Zhengfei (the founder) laid the foundation for Huawei's . Amazon, Google, and many others all have their own focus areas. Ren described it as a blend of three qualities: extreme resilience, a willingness to self-sacrifice, and sharp predator instincts. Tanks can cross a swamp, but needles can pierce hard things through. Take machine translation as an example. Therefore, he often uses similar way to manage the company like the military system does. 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. Mr. Ren: She will continue to do what she has been doing. These cookies do not store any personal information. Jobs then dropped the device into an aquarium, and bubbles floated up. So Microsoft is the winner and it dominates the market. I think that is how this story is likely to end. Third, follow the small rules so that you can break the big ones. If we spread things too thin, there is no way we will be successful. A Division of NBCUniversal. If that happens, we will just sell our products to other countries that do accept us. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. Mr. Ren: The first time I heard warnings about the societal impact of AI was from Bill Gates and Stephen Hawking. So instead, we choose to narrow our focus, like a needle point, on a specific area where we can make breakthroughs. Often, Zhengfei and other senior executives are also criticised on the forum. Our subsidiaries in other countries also have this relationship with local governments. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. His message resonated throughout the Chinese corporate world; one of the sledgehammers now sits in the National Museum of China. In fact, the recent and growing success of Huawei in Europe can also be attributed partly in addition to their service-oriented focus (see again the point of purpose-driven ambition) to their philosophy of explicitly incorporating a strategy to develop cooperative relationships with competitors in the market. 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. Nothing but life. AI can help translate text into 70 different languages simultaneously. When I can't find a better term to easily describe how business works, I use military terms. In a newly published speech originally given in June 2020, Ren called for decentralised . Otherwise, they will become overweight and won't be able to move fast. Living in such extremely harsh conditions and working on such a highly modernized project was really a good experience for me. Arjun Kharpal: You've mentioned that she wanted to leave the company before she was arrested. In this article David De Cremer and Tian Tao discuss the seven important leadership lessons that have made Huawei the company it is today. In the early years, Huawei, as a private company, had to battle primarily the State Owned Enterprise (SOE) dominated market. I liked reading books, doing homework, and solving math equations on scrap newspaper. 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. It's a wealthy country, so it has a lot to lose. If we didn't pay taxes or follow the laws and regulations in the over 170 countries where we operate, we wouldn't have survived in those countries. Ren said, "Huawei people, especially the leaders . He began by abandoning the tradition that the dean chaired all defenses of doctoral dissertations; he made it clear that his priority was engaging with external stakeholders, particularly corporate executives. 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. Register as a Premium Educator at hbsp.harvard.edu, plan a course, and save your students up to 50% with your academic discount. Ren Zhengfei is known for avoiding quick decisions and forcing himself to take time to reflect. President Trump hasn't shared his thoughts with me. CEO's are the driving force behind any for-profit organisation. However, there was no way back. I think it's the right thing for them to do. We just wanted to produce some small things that could easily be sold. 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. We have raised our prices and now many people think Huawei is expensive. It was hard times. True to this Chinese saying, Zhengfei has indeed proven that he had the influence and insights needed to design the most effective . Add copies before, China Europe International Business School, A Better Way to Manage Corporate Alliances, Primerica: Sandy Weill and His Corporate Entrepreneurs, J. C. Penney: Activist Investors and the Rise and Fall of Ron Johnson, Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World, Buy 5 - 10 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. On this forum, ideas are communicated frequently by senior executives and Zhengfei and feedback from all 170,000 employees is encouraged. OQ, as well call it, consists of five competencies: sending messages that reinforce strategy, fostering an ethos, using action strategy, rebelling from the top, and staging moments of theater. But even if it did happen, it would be at least 30 years from now. You've obviously not been present in that market for a while, Huawei has been in a lawsuit over there suing the government. She's, of course, facing extradition to the U.S. How did you feel after her arrest in December? Arjun Kharpal: You mentioned you abide by the local laws here in China. Where does this idea of competing in a cooperative way come from? I only wanted to keep my belly full. 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). 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. While pursuing this vision, he continuously has proven his ability to design strategies that enabled him to adapt his vision to the challenges that the company faces. Second, thanks to the Western management approaches we brought in, our operational costs were also kept low. 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. We are also collaborating with many vendors in the storage domain, trying to do better, because in edge computing, we will see either CPUs embedded into storage devices or the other way around. So the standards the US finds so compelling are actually all built on a single mathematics article. Otherwise, we will be hindering scientific advancement. The road to success for Huawei started in 1987 where it was founded in the economic testing zone of Shenzhen. High-OQ leaders send messages that reinforce the strategy and minimize other messaging. With an "umbrella", Apple sells at high prices and maintains high quality. Investor and consumer confidence will increase, and the US economy may take a turn for the better. .. . .. .. Ren Zhengfei is successful Chinese businessman. On the other hand, Zhengfei is also known to give much freedom when it comes down to how decisions are executed. However, most of us didn't really understand how important this decision made by the CPC's Central Committee was. Required fields are marked *. Technology has moved on so rapidly in the past few years that a lot of people are talking about the impact of technology on society. After getting, retired from the military, Ren has planned to work in electronic business. Do you think Huawei is at that point yet? Nevertheless, as the market evolved and employee characteristics shifted, the shortcomings of Ren's management model grew ever apparent. So I'll let her face what she is facing. Mr. Ren: We have calls quite often, talking about family. Directive Style. We will not distribute the extra profit to shareholders, either. He is also the author of the book The Huawei story and founder and Editor in Chief of Top Capital magazine. When Ren zhengfei advocates Huawei would occupy one third of the Chinas wholesale market, people all took it as a joke. 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