He relentlessly convinces his employees through stories and actions. We endorse unified global standards that make installing backdoors a crime. Data is a real-time snapshot *Data is delayed at least 15 minutes. Many companies' financial statements last year weren't great because they needed to pay income tax arrears. The TV channel is available in more than 415 million homes worldwide. All he cares about is how to thoroughly solve every problem his company meets and how to improve the efficiency of the whole group. 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. As Ren was dissatisfied with his job, he planned to, Despite of his low profile, Ren has managed to transform small business into a successful. 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. 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. Second, ultra-broadband connections, and ultra-large storage systems, as well as micro-computing storage and edge computing. Saying that he was great is an understatement. If they don't, they might not buy our products. That's my only ideal. although employees even management employees were not used to it, since it need a thorough change. CNBC is a division of NBCUniversal. 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. Mr. Ren: I think my children have grown up without experiencing much hardship. When I was young, I had no ideals. Arjun Kharpal: And part of that R&D budget has gone into 5G, into chips, you've got your own 5G chip. Terry Leahy steadily worked his way up to become the CEO of UK-based Tesco, one of the worlds largest supermarket companies. Among his other, achievements, Ren is accountable of development of cooperative programs, Chinas interior regions. Director, CEO Born on October 25, 1944 into a rural family where both parents were school teachers, Mr. Ren Zhengfei spent his primary and middle school years in a remote mountainous town in Guizhou Province. No reviews should be taken at face value, always conduct your research before making financial commitments. 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. 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. Intel only makes chipsets. To give you a simple example. After learning from the West for almost 20 years, Huawei has established an increasingly standardized and institutional decision-making system. As a leader, Ren Zhengfei insists on self-criticism and careful consideration. This can help us address the problem of how we distribute our increasing profit. However, it kills employees creativity and . Even if AI poses other threats, we can manage them with laws and rules. If President Trump continues intimidating other countries and companies, and keeps randomly detaining people, who would risk investing in the US? For such a powerful country to be scared of a small company like us, some other countries are saying, "Your products are so good that the US government is scared. That means there is space in there. 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 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. Otherwise, we wouldn't be able to enter the network equipment industry. 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. If a technology is 20,000 kilometers away, we can invest a little more, like an apple. 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 . We want to sign such an agreement because we think it's the right thing to do. There was no chance for us to step back and start another business. The cost of using a warship is high. We obviously couldn't control our customers, so we had to get hold of the products. So our products needed to be standardized. We have raised our prices and now many people think Huawei is expensive. During one of these visits, in 1997, he visited the Bell labs in the USA. 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. What we have is not some kind of nuclear bomb or weapon. Google is now helping blind people see the world with nerve sensors, although they are not as good as human eyes. We don't talk about anything else, because we know that our communication is being monitored. 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!. I had no idea. Since China has become the second largest economy in the world, this relationship has taken new forms in the shape of several business initiatives. We will also increase our sales revenue, which is now more than 100 billion US dollars, to around 250 billion US dollars. Huawei has kept a low profile, ever since it was founded. His message resonated throughout the Chinese corporate world; one of the sledgehammers now sits in the National Museum of China. We cannot deny the role that enthusiasm plays in the procedure. Is only slower computing good for us? So the standards the US finds so compelling are actually all built on a single mathematics article. It helps reduce many people's workloads. Mr. Ren: I think technology will advance even faster than we could ever imagine. The criticism was scathing, including from McKinsey and other top consulting firms. 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. That's why I said he is a great president. Copyright 2023 Harvard Business School Publishing. It will never happen. In many ways the second skill is the more difficult one to develop; most top managers are competitive, and their natural reaction to a challenge is to take it head-on. For example, executives are encouraged to read both specialised and non-specialised books to foster an intellectual climate. Do you feel that technology has been a force for good or a force for evil? Genetic inheritance was discovered by Gregor Mendel during his experiments on pea hybridization. The ethos needs to be summarized in an evocative statement pointing to the behaviors desired in the organizations members. Although he is a billionaire, Zhengfei prefers a low profile lifestyle and even travels on the public transport. We don't need customers' information. 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. China has a population of 1.3 billion consumers. In fact, we have too many. Arjun Kharpal: But you created the world's largest telecom company. Taiyuan, Shanxi. He said recently that could potentially wipe out humanity. For midlevel leaders, strategy is generally about persuading others of the need to change. So there is no need to worry too much about some comments posted on the Internet. Due to his technical skills, He was appointed as a delegate from, PLA for attending the National Science Conference in 1978 (, ).It was a golden opportunity for Rein to lean and gain knowledge, about the field. This ability derives from his pro-active attitude. In other words, the emphasis of results is viewed a basic spirit of Huawei. Arjun Kharpal: I want to talk a bit about your management style. So he and his managers smashed the defective appliances. The country wanted to reform and open its doors. November 12, 2015. So he emphasized action. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. She has understood the difficulties that the company is facing and wants to help us see this through. Any one of these things could help them conquer the world. Is that the right way forward? They will be able to produce more quality products than the whole world can consume. Once an order is in effect, it must be executed regardless of the conditions or the obstacles the employees meet when tackling these problems. Ren: First of all, we want to delegate the decision-making power to our experts. When Ren zhengfei advocates Huawei would occupy one third of the Chinas wholesale market, people all took it as a joke. Vernon Hill was transformationally successful in leading Commerce Bank in the USA and then Metro Bank in the UK. If a single backdoor was found in even one of the countries where we operate, our sales would shrink in all of them. Use the strengths of your organization to achieve your goals. Without the leadership Ren zhengfei has, there could not have been todays Huawei. 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. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. We will rush towards and focus all of our efforts on this technology. Arjun Kharpal: Do you feel that your military-style speeches empower the employees here? Leadership styles. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. And I don't really care about all that. Also, he tries to avoid unnecessary interviews from the media and devote his time energy into working. Indeed, EU officials initially wanted to investigate the anti-dumping act in relationship to Huaweis products. Arjun Kharpal: Let's talk a little bit about the US for a moment. So we believe our engagement with the German government will be endorsed by the Chinese government. When we first entered the telecom industry, we started by reselling products from another company. What they lack and what successful leaders embody, down to their marrow is organizational intelligence. Our relationship with the Chinese government is primarily defined by these two points. The US and Canadian legal systems are open, transparent, just, and fair. Every night, we took turns fueling the stove, because if it went out, we would have frozen. So instead, we choose to narrow our focus, like a needle point, on a specific area where we can make breakthroughs. Because we want to grow our harvest and produce actual results. When Huawei was just founded, the world of communications was extremely under-developed. Is that useful to the company, or do you find that a distraction? Take machine translation as an example. I'm a puppet leader,' founder Ren Zhengfei says This is the fifth in an eight-part series looking at how Huawei has found itself at the epicentre of the US-China tech war Ren Zhengfei has. I said this as an outsider without considering his treatment of Huawei. In the words of Zhengfei: Chaos was removed and structure entered Huawei. At the same time, the company acknowledged the contributions of dedicated employees by remunerating them generously. An interesting consequence was that because of this purpose-driven strategy they acquired much experience in developing robust equipments and materials, which helped them later on to win several big business accounts in the Middle-East. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. Accelerate your career with Harvard ManageMentor. Zhengfei was worried that phase 2 created a kind of decision-making that was less than efficient. We live in a very connected world. 500000 employees in military field. Thirdly, its his sense of management that helps him to become an excellent leader. At Huawei, we have two major areas that we are focusing on for the future. Second, we don't really sell in the US market, so we will not be affected by a sales ban. Is that something you would welcome? 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. Arjun Kharpal: Mr. Ren, I want to move onto a bigger picture of the world of technology. What is the problem with translation software that has faster computing? Secondly, we need to pay taxes to the Chinese government. We just focus on a single point. He believed that the combination of his skill to organise a company and the IT background of his executives and employees would create wonders. Arjun Kharpal: I want to go back a little bit to talk about the US-China trade war because Meng Wanzhou was arrested in Canada on behalf of the US authorities. Important in this whole management process is that his use of an adaptive vision never compromises the purpose and values of the company. Do you think she's a hostage in this broader US-China trade battle? It has grown the market, enabling many other companies to survive. What else can we talk about? When attending a summit in Croatia, Premier Li also told our employees not to install backdoors. If the US thinks we can be used as a pawn, I'd say they probably have the wrong person. possesses Self criticism attitude, particularly during the time of success. Nothing we've achieved would give us the right to neglect any laws or overlook the technologies of any country. Publication Date: I would be afraid that they would pull out suddenly and stop doing business with us. Beset by internal and external challenges, Huawei needed to completely rethink its approach to business, corporate culture and company management. We have limited resources and technologies. The major form of analog control was a proportional-integral-derivative control. You also have the option to opt-out of these cookies. Mr. Ren: I don't know. So Microsoft is the winner and it dominates the market. 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. Ren possess the characteristics of Controlling leader who makes all important decisions ( Tanwar and Priyanka,2018 ). In his view this could only be achieved by providing excellent services. Turning to personnel, George replaced the people likely to generate the most opposition and appointed a new, supportive vice dean from among the existing department chairs. Back home in Shenzhen, Zhengfei told everyone that the passion that he felt for that lab was equal to love. For that, they need organizational intelligence (OQ), or the ability to get the organization to do what they want it to do. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. And there is concern that some of these large technology companies just have too much power. The multinationals that were present in China at that time did not consider this to be their problem, but rather that of the customer. These figures show that we are still growing, not declining. What did you learn at the time that helped you start Huawei and guide your philosophy? No backdoors. Or do you feel sometimes they are intimidated by that style of leadership? At Huawei, we often talk about the term of "Van Fleet Load", which was invented by a general of the US army. Some US politicians are criticizing Huawei everywhere they go. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. 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. The role that enthusiasm plays in the USA recently that could potentially out... Of decision-making that was less than efficient items just for attracting eyes be! 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