And you've said that you want to be number one in smartphones. So I'll let her face what she is facing. The relationship between China and the European continent carries much history with it. 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. 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. We believe US laws are open, transparent, fair, and just. 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. Create a free website or blog at WordPress.com. Arjun Kharpal: Would you support similar ideas about no-spy agreements in other countries, including the US? As far as I know, Huawei has never been mentioned in any of the China-US talks or in any official news releases. Nothing we've achieved would give us the right to neglect any laws or overlook the technologies of any country. We don't have much influence over China-US trade relations. Does China feel under pressure from President Trump's tactics in the negotiations? I believe they may not have the evidence or the facts to prove her guilt. This will change the architecture proposed by John Von Neumann. With AI, workers will be ten times more efficient, so the US will be a major technological powerhouse with an output equal to that of 3 billion people. Arjun Kharpal: You mentioned you abide by the local laws here in China. 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. So Microsoft is the winner and it dominates the market. 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 am just taking as a bucket of "glue". Arjun Kharpal: You mentioned the Ericsson CEO at the time said it was a bold move to jump into this space. 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. When the state wanted to give me some awards for all of this, I felt ashamed. This is thanks to Trump. 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 to adapt his style in light of new challenges at the company. At the time, the market economy was beginning to take shape in China, at least in coastal cities. How do you respond to some of these very, very strong criticisms from governments around the world? In particular, we will build the simplest networks, ensure cyber security, and protect user privacy. Moving forward, we will invest more in this direction. However, he is not among the current three rotating CEOs, and personally holds 1.42% of the shares of 'Huawei,' valued at over US$2,200 million in 2018. So we will leave these issues up to the courts. If we get caught in the middle, we will be crushed like a watermelon when these two powers clash. A great opportunity arose when one senior professor complained that the teaching program staffers acted as if the faculty worked for them, rather than the other way around. Underlying these beliefs is clearly an idea of sharing responsibility but also sharing the rewards that are earned because of these collective successes. 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. Google is now helping blind people see the world with nerve sensors, although they are not as good as human eyes. After getting, retired from the military, Ren has planned to work in electronic business. So AI will make the world better, not worse. Jobs then dropped the device into an aquarium, and bubbles floated up. This revolution was also referred to as the bloodless revolution because the victory of William of Orange was achieved without bloodshed. With Huawei becoming the largest telecommunications equipment manufacturer in the world, Ren zhengfei has already become a paradigm for businessmen to study and learn from. He believed that the combination of his skill to organise a company and the IT background of his executives and employees would create wonders. In the first decade of the developing of the company, Huawei is needy for all kinds of human resources. So he emphasized action. When I can't find a better term to easily describe how business works, I use military terms. More and more companies are harnessing new technologies more quickly. So we've decided that our. Lets look at each, drawing on examples from our own experience and that of well-known successful leaders. At that time, Zhengfei clearly used a competitive mindset as the driving force to grow as a company. As a leader, Ren Zhengfei insists on self-criticism and careful consideration. We will comply with European cyber security standards and the GDPR. Neither side has mentioned Huawei, which means Huawei does not actually carry much weight. During one of these visits, in 1997, he visited the Bell labs in the USA. Would you invite Donald Trump and his administration to your campus here in Shenzhen to let them see the technology that you have, to put their fears at rest? When we first entered the telecom industry, we started by reselling products from another company. We will wait for the court to make its judgment. Join us in Amsterdam for the 2023 European Compliance & Ethics Institute! They wouldn't need to rest, just to refuel. Again, he ties this in part back to their ownership structure:. I only wanted to keep my belly full. When two nations or companies meet, they must collaborate to achieve shared success. 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, The European Business Review uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. If that happens, we will just sell our products to other countries that do accept us. Huawei is to a large extent no stranger to this system. When he talks about his skills and qualities he always emphasises that he is not the most knowledgeable. High-OQ leaders send messages that reinforce the strategy and minimize other messaging. PIC:A portrait of Ren Zhengfei, the founder of Huawei. He is very careful not to feed the myth of his leadership and rather emphasises the importance of working hard in the success story of Huawei. We support transparent regulation over companies with new technologies, and we are willing to be subject to such regulation. I raised a total of over 20,000 RMB to pay the variety of fees needed to start a company. Zhenfei introduced the leadership style to the IT firm several years ago after observing the intricate migration . In that case, billions of dollars would be stuck in the US. Second, Huawei is being stuck in an extremely difficult situation the US is launching intense attacks against us. The contrasts were stark. 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. It helps reduce many people's workloads. Another strategic objective was better cooperation between faculty and staff. 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. Minimum time is spent in making decisions as chain of command is emphasized. She has understood the difficulties that the company is facing and wants to help us see this through. First, as our technology advanced rapidly, we managed to bring down the costs of our products. You have entered an incorrect email address! Thirdly, its his sense of management that helps him to become an excellent leader. People will be afraid of getting trapped there. Around 2008, Professor Arikan published a mathematics paper. 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. Huawei is to a large extent no stranger to this system. As a leader he was used to delivering a vision and as a mentor he was guiding his employees towards their goal. David De Cremer is the KPMG Professor of Management Studies at the Judge Business School, University of Cambridge, UK, an honorary professor at Wenzhou University, China, and a research fellow at the Ruihua Innovative Management Research Institute at Zehjiang University, China. Nevertheless, Zhengfei remained persistent in talking about his ambitions at all kind of occasions. Huawei is now the world's largest telecoms equipment maker. If a single backdoor was found in even one of the countries where we operate, our sales would shrink in all of them. This introductory chapter offers an overview of the entire book on the management transformation of Huawei. If we didn't abide by those laws and regulations, we wouldn't survive even a day. How can I live a life like that? He has maintained the company as private and his management style has been extremely . Mr. Ren: We have calls quite often, talking about family. Mr. Ren: First, Mr. Yang Jiechi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee, made a statement at the Munich Security Conference that the Chinese government always requires Chinese firms to abide by international rules and laws and regulations of the country where they operate, and that China has no law requiring companies to install backdoors or collect foreign intelligence. We remained focused on this same single point. However, Ren zhengfei and Huawei made it in the end. Being born blind and deaf is caused by missing of genes. Is that useful to the company, or do you find that a distraction? Ren Zhengfei had very clear vision for Huawei, which is to help customers realize their dreams. although employees even management employees were not used to it, since it need a thorough change. Cuts and bruises toughen her up, and even since ancient times, heroes were born of hardship. 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. In Huaweis early years, Zhengfei retained authority on major decisions such as corporate development strategies and culture building, but fully empowered employees when it comes to R&D, manager appointment, compensation & benefit allocation, and other areas. When George started as RSMs dean, in 2008, he was an outsider and a foreigner. Whether or not we can get back to business in the US depends on whether our customers want to buy from us. The road to success for Huawei started in 1987 where it was founded in the economic testing zone of Shenzhen. We will not be affected by increased tariffs, either. By taking a set of coordinated actions that add up to a strategic change, a leader can kickstart the process without creating organized opposition. Ren described it as a blend of three qualities: extreme resilience, a willingness to self-sacrifice, and sharp predator instincts. I'm not the one responsible for these achievements, and I shouldn't be the one receiving honors. Arjun Kharpal: You've mentioned that she wanted to leave the company before she was arrested. If a country is poor and they have nothing to lose, they aren't afraid of being attacked. For me, it was an exciting experience. They carry a clear message. Don't worry that Huawei would end up having no successor. We should not worry that it will hinder social progress. So we would never follow anyone's instructions to install backdoors. So I don't think they are intimidated. Collective decision-making ensured that Huawei made fewer mistakes and absorbed collective wisdom, but it also caused rigidity. Although he is a billionaire, Zhengfei prefers a low profile lifestyle and even travels on the public transport. Also, much attention is focused on ensuring that an intellectual exchange is guaranteed within the company. In the past, no one spoke up for us. Huawei was founded by Ren Zhengfei when he was in the mid-age crisis. 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. Ren Zhengfei's Media Interview After the Opening Ceremony of the Intelligent Mining Innovation Lab in Taiyuan. When Huawei dominated the domestic market on a large scale, its problem in human resource was more than Huaweis original management system can handle. That approach may not be an option at the top. Arjun Kharpal: So would you say the US is scared of Huawei? With higher prices, we have started earning more. And its founder Ren zhengfei is thought be be one of the best leader in the business world. Consequently, Huawei's performance took a nosedive and employee satisfaction also sank. 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). Taiyuan, Shanxi. It was hard times. If a technology is 20,000 kilometers away, we can invest a little more, like an apple. Any one of these things could help them conquer the world. Some governments have criticized the relationship between Huawei and the Chinese government. "Every generation produces its own great character, and each exerts impact for hundreds of years.". 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.. The factory's equipment was from France, and at the time, it was some of the world's most advanced equipment with a high level of automated controls. They will be able to produce more quality products than the whole world can consume. 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. 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. Investor and consumer confidence will increase, and the US economy may take a turn for the better. But by 2003 Sainsburys had followed suit by which time Tesco had a five-year head start and an expanding user base. I also participated in a large project that brought equipment in from France. What do you make of his views? By the time I got my business license, I didn't have a single penny left. Do you think Huawei is at that point yet? 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 have limited resources and technologies. You dont want to be like John DeLorean, who battled nearly everything on his way up in and then out of General Motors. Is that something you would welcome? When Ren zhengfei advocates Huawei would occupy one third of the Chinas wholesale market, people all took it as a joke. For that reason, phase 3 focused on simplifying management and creating conditions that more creative chaos could be brought back into the structured management models. 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. Many of them thought at that time that he was crazy. We also use third-party cookies that help us analyze and understand how you use this website. Every night, we took turns fueling the stove, because if it went out, we would have frozen. Later, that company stopped working with us. Bill Gates changed his mind though during his later speeches, suggesting that AI could greatly boost social progress. If the Chinese government or any other government ask you to hand over data, how would you react? China has a population of 1.3 billion consumers. 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. The slogan at that time was: We shall drink to our hearts content to celebrate our success (ren sheng de yi xu jin huan), but if we should fail lets fight to our utmost until we all die (ju gong jin cui, si er hou yi). Apple is also a great company. The billionaire founder of Chinese telecoms equipment giant Huawei rarely. 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%). The country paid little attention to technology and knowledge, but we were working on a project that required technology and knowledge. 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 . The second is the maturity tonotengage in unimportant issues. 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. At Huawei, we have two major areas that we are focusing on for the future. Mr. Ren: I think my children have grown up without experiencing much hardship. Mr. Ren: Collaboration and shared success. And he was on a four-year contract and had limited time. Second, customers have the right to make their own choices. All he cares about is how to thoroughly solve every problem his company meets and how to improve the efficiency of the whole group. Huawei was not mentioned in any of the negotiation meeting minutes published by the US and China. Facts and evidence should be made public and transparent in the courts, which are the basis for fair and just judgment. If they attack a country, that country will fight back. And he initiated an annual conference whose panels combined executives and faculty members. This represents Chinese state leaders' position on backdoors, so we will never install backdoors on our equipment. 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. Before moving to UK, he was a Professor of Management at China Europe International Business School in Shanghai. Why cannot we edit human genes? China Europe International Business School. 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. High-OQ leaders use action strategy rather than consensus building to pursue strategic goals. Arjun Kharpal: A bit about the US market. I said I couldn't even imagine what it would look in two or three years. We just focus on a single point. We will also push the Chinese government to sign a cyber security agreement with the German government. Especially in the entrepreneurial years of the company he used this strategy to be both a strong mentor and leader for his employees. This is beyond what anyone had imagined. But the US is in a different situation. Ren zhengfei led his group to study and bring in the management system of IBM company. 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. 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