If we get caught in the middle, we will be crushed like a watermelon when these two powers clash. I'm not the one responsible for these achievements, and I shouldn't be the one receiving honors. During World War II, there was a famous Il-2 aircraft that kept flying after being riddled with bullets from both other planes and anti-air defenses. Although he is a billionaire, Zhengfei prefers a low profile lifestyle and even travels on the public transport. We were living in an adobe house that only provided us a little shelter from the wind. Second, we don't really sell in the US market, so we will not be affected by a sales ban. Thirdly, its his sense of management that helps him to become an excellent leader. Wearing nice clothes or seeking further education was not what I wanted. 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. The story goes that Zhengfei was so moved by the work done in those labs that he cried. A Division of NBCUniversal. I think he was super great. We don't have much influence over China-US trade relations. Otherwise, we will be hindering scientific advancement. 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. Many of them thought at that time that he was crazy. The leadership of Ren Zhengfei, however, does differ from this rather "controlling only" style in important ways. In phase 2, running from 1997 to 2007, Huawei became more structured by hiring IBM to implement management structures as these were completely lacking at that time. AI can help translate text into 70 different languages simultaneously. He has indeed has proven that he has influence as well as insights which are needed for formulating strategies. 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 . The major form of analog control was a proportional-integral-derivative control. Some governments have criticized the relationship between Huawei and the Chinese government. Technologies are advancing. For the rest, let the organization keep doing what it does well. But this year, once the slate is wiped clean, the financial statements they will release in July will be much healthier. I felt very uncomfortable with the transition from the military to Shenzhen which was becoming at forefront of the reform and opening-up. Arjun Kharpal: But what was the personal effect of her arrest on you as a father? We can scale down a little bit. Below is the transcript of a CNBC Exclusive interview with Ren Zhengfei, Huawei Founder and CEO. Ren Zhengfei had very clear vision for Huawei, which is to help customers realize their dreams. Sign up for free newsletters and get more CNBC delivered to your inbox. Intel only makes chipsets. On April 12, at the "16+1 Summit" in Croatia, Premier Li repeatedly told all our employees not to install backdoors on networks. I was later told that she sent me a letter, where she mentioned that she wanted to leave the company. CNBC is a division of NBCUniversal. Tanks can cross a swamp, but needles can pierce hard things through. We need to make our value distribution reasonable. 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. According to him, Huawei should be focused on building a company where peoples minds are the main asset and resource to rely on. 2023 CNBC LLC. He is continuously focused on the future and hardly ever ruminates about the past. AI will benefit our society. And I don't really care about all that. But Meng Wanzhou will definitely not be the successor. Why cannot we edit human genes? 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. Right now, the support of the Chinese government may not necessarily help our sales, but when the US government criticizes us, it tells the world how great Huawei is. The number of Chinese companies investing and engaging in acquisitions in Europe has seen a steep growth curve. In fact, the company only seems to be growing stronger. Indeed, 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%). If a technology is 20,000 kilometers away, we can invest a little more, like an apple. He took. Make it smaller.[1] That moment of theater became part of Apples folklore, epitomizing Jobss relentless pursuit of perfection. 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. They viewed the rat problem as one the company had the responsibility to solve. Mr. Ren: First, it's understandable that government leaders would take pride in the great companies of their country. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. It will never happen. What were you thinking at the time and what were your expectations for the company? The road to success for Huawei started in 1987 where it was founded in the economic testing zone of Shenzhen. No reviews should be taken at face value, always conduct your research before making financial commitments. We did not know that these small things were designed to connect the whole city or even the whole world. The US government is actually advertising for us in a good way. For that reason he looked for alternative ways to attract customers. So productivity will be greatly improved. Sales of our consumer business increased by more than 70% in the first quarter of the year. 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. Enterprises can now transfer their funds in other countries back to the US because of a low tax rate of 12%. His management of the company is heavily influenced by the childhood hardship he endured during the Cultural Revolution and the military values instilled in him during his 6 years in the PLA. The negotiations between China and the US have nothing to do with Huawei. This is beyond what anyone had imagined. During China's Cultural Revolution, I designed a small instrument using my math skills, and actually received recognition from the government for this device. They will be able to produce more quality products than the whole world can consume. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. Back then, China was still going through the Cultural Revolution. 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. However, we are not in any position to require other companies to do the same. Leading Huawei: Seven Leadership Lessons of Ren Zhengfei, The relationship between China and the European continent carries much history with it. In China, leadership has traditionally been grounded in a hierarchical top-down management system. Third, follow the small rules so that you can break the big ones. Microsoft focuses on Windows and its Office Suite. If the Chinese government or any other government ask you to hand over data, how would you react? We will not distribute any extra profit to our employees. It was analog technology, analog automatic control. We want to hear from you. China Europe International Business School. Google is now helping blind people see the world with nerve sensors, although they are not as good as human eyes. We set prices based on our costs, which were relatively low. He said recently that could potentially wipe out humanity. With higher prices, we have started earning more. Among his other, achievements, Ren is accountable of development of cooperative programs, Chinas interior regions. Huawei is to a large extent no stranger to this system. From what has been discussed above, we can easily find the relationship between the leadership of Ren zhengfei and the rise of Huawei. and pay only $8.75 each, Buy 11 - 49 Arjun Kharpal: Do you feel that your military-style speeches empower the employees here? The US stock market may witness a significant rise this July. In China, leadership has traditionally been grounded in a hierarchical top-down management system. AI is also developing faster than what we can imagine. She has understood the difficulties that the company is facing and wants to help us see this through. Arjun Kharpal: You said you've not had any communication with Donald Trump. Data Analysis Methods Every Business Needs To Know How To Perform, Are You Ready to Lead in a Digital World? The second is the maturity tonotengage in unimportant issues. So I don't think there will be a significant impact on Huawei's business. It was all about hard work to bring the company up to the level that it was able to provide higher-quality service. In the past, no one spoke up for us. This practice allowed managers to become more active and creative, but also created chaos. 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. It is great in that it has always pushed to make the market bigger, not smaller. We remained focused on this same single point. 5. China has a population of 1.3 billion consumers. HBR Learnings online leadership training helps you hone your skills with courses like Business Plan Development. At first, this focus approach let us start pulling ahead of our Western peers in a given area. Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. At this time, Ren Zhengfei's family was starving. 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. I also participated in a large project that brought equipment in from France. In the Qingdao headquarters of the Chinese company Haier stands a display case containing a sledgehammer. 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. 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 Facts and evidence should be made public and transparent in the courts, which are the basis for fair and just judgment. Will Europe understand us when they see how much effort we are putting into this? And there is concern that some of these large technology companies just have too much power. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. AI has emerged because of several key advancements: First, massive computing power. In the first decade of the developing of the company, Huawei is needy for all kinds of human resources. The ethos needs to be summarized in an evocative statement pointing to the behaviors desired in the organizations members. Whether or not we can get back to business in the US depends on whether our customers want to buy from us. 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. 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. We'll buy them directly." Gradually, we have become a leader in this narrow, focused area. You dont want to be like John DeLorean, who battled nearly everything on his way up in and then out of General Motors. Our network equipment sales dropped 1.5% last year, but enjoyed a 15% increase in Q1 of this year. (This is where EQ can support OQ. ) Vernon Hill was transformationally successful in leading Commerce Bank in the USA and then Metro Bank in the UK. 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. She's, of course, facing extradition to the U.S. How did you feel after her arrest in December? 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. If we didn't abide by those laws and regulations, we wouldn't survive even a day. 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.. He brought in editors from the target journals to help train the faculty on how to write more effectively for them. One defining feature of the Huawei culture is that it is able to bring together opposing forces and tendencies. Amazon, Google, and many others all have their own focus areas. 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. At that time, Zhengfei clearly used a competitive mindset as the driving force to grow as a company. 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. Ren joined Peoples Liberation Army with the aim of making synthetic fiber. Arjun Kharpal: If you say that Meng Wanzhou is maybe a hostage in this US-China trade battle, does that mean some of the allegations, from a legal point of view, you don't believe in? When two nations or companies meet, they must collaborate to achieve shared success. Mr. Ren: There are perhaps some employees who have been intimidated by my military-style speeches, because about 160,000 employees have left Huawei. 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. Nothing but life. This introductory chapter offers an overview of the entire book on the management transformation of Huawei. And its founder Ren zhengfei is thought be be one of the best leader in the business world. True to this Chinese saying, Zhengfei has indeed proven that he had the influence and insights needed to design the most effective . As the dean of Rotterdam School of Management (RSM), one of us, George, set the strategic objective of persuading faculty members to publish in practitioner journals like HBR and MIT Sloan Management Reviewin addition to academic journals. As a leader, Ren Zhengfei insists on self-criticism and careful consideration. In the early years of Huawei, Zhengfei was very much aware that their products did not meet the standards of those of its competitors. 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These experiences taught me to endure hardships. | All rights reserved. It is clear that although very ambitious and action-driven he also cares about the value of being humble. Those with organizational intelligence have the following competencies: they can effectively communicate the top strategic priorities, foster an organization-wide sense of how we do things here, get things done even in the absence of consensus, stage moments of theater, and rebel from the top. Tian Tao is codirector of Ruihua Innovative Management Research Institute at Zehjiang University. We have raised our prices and now many people think Huawei is expensive. Mr. Ren: I think the most essential factors to judge guilt are facts and evidence. China also didn't have its own testing instruments, so I invented one. So it would be impossible for us to provide customer information to any third party. 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. We will wait for the court to make its judgment. Its this kind of spirit in Ren zhengfei that propels his company to become one of the best in China even the world. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. If President Trump continues intimidating other countries and companies, and keeps randomly detaining people, who would risk investing in the US? Mr. Ren: As technology develops, the future world will become "winner-takes-all". 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!. Autocratic leadership: It is also known as pragmatic leadership. High-OQ leaders foster an understanding, or ethos, of who we are. When leaders move from managing individuals or small groups to leading entire organizations, they need to create a shared understanding of whats important and what the organization stands for in other words, an ethos. You often use military imagery and images of battles in your speeches and communications with the employees at the company. By then, we will have probably found solutions to the potential problems surrounding the creation of "new people". Investor and consumer confidence will increase, and the US economy may take a turn for the better. 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. If a technology is just five kilometers away, we will invest heavily (a business version of a Van Fleet Load). Second, Premier Li Keqiang reiterated this point at a press conference following a recent session of the National People's Congress. Over the next five years, we will invest more than 100 billion US dollars in R&D to restructure our networks. President Trump hasn't shared his thoughts with me. Ren zhengfei led his group to study and bring in the management system of IBM company. By David De Cremer and Tian Tao. Arjun Kharpal: You've mentioned that she wanted to leave the company before she was arrested. So I'll let her face what she is facing. So we believe our engagement with the German government will be endorsed by the Chinese government. Lets look at each, drawing on examples from our own experience and that of well-known successful leaders. But I still had to find a job to feed my family. Mr. Ren: I don't know what the US is after and have no idea how they are going to resolve the trade disputes. Terry Leahy steadily worked his way up to become the CEO of UK-based Tesco, one of the worlds largest supermarket companies. So George revamped the universitys advisory board meetings. Mr. Ren: I often talk about staying focused. I raised a total of over 20,000 RMB to pay the variety of fees needed to start a company. Any one of these things could help them conquer the world. If everyone went to invest in the US, the US economy would grow dramatically. He realized he would not be able to institute rapid change through persuasion, because the national culture emphasized slow, intensive consensus building. I think Google might one day come up with a medicine that helps people live forever, but I may not be able to see it coming. Or do you feel sometimes they are intimidated by that style of leadership? We will also increase our sales revenue, which is now more than 100 billion US dollars, to around 250 billion US dollars. We won't test your products. Huawei's achievements were not created by me alone, but by our 180,000 employees. 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. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. I think this challenge will be good for my daughter. and pay only $8.00 each. Required fields are marked *. When there is no cure to a disease, maybe we can look into gene editing. Before I was able to settle into this new position though, China disbanded many of its military forces and everyone had to go find another job. Mr. Ren: First, I think our customers already know Huawei pretty well since we have worked with them for nearly 30 years. 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. So this won't impact us too much. Harshal Pawar In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. Early life. 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). That's why we told the German government that we are willing to accept their regulation. CEO's are the driving force behind any for-profit organisation. 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? We have given up on supercomputing and intermediate computing. You are less known internationally. Arjun Kharpal: Mr. Ren, you said you haven't spoken to Mr. Trump, but what do you think of his leadership style and his tactics? Ren Zhengfei has lead Huawei to become a global brand making the top global 100 by 2017 (Huawei 2017). When designers showed the first iPod prototype to Steve Jobs, he said it was too big. Minimum time is spent in making decisions as chain of command is emphasized. So you said she doesn't want to leave anymore. This fact inspired him to embrace the idea that one can win and still be cooperative. 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. That's how we started out. Second, Huawei is being stuck in an extremely difficult situation the US is launching intense attacks against us. At Huawei, we have two major areas that we are focusing on for the future. Drawing on this experience, we developed our own 40-line switch for rural markets that could support 40 users. 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. I would say he is a great president. Want to buy more than 1 copy? Genetic inheritance was discovered by Gregor Mendel during his experiments on pea hybridization. When I was young, I had no ideals. Mr. Ren: If they aren't scared of us, why are they advertising for us everywhere they go? So he and his managers smashed the defective appliances. 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. However, there was no way back. Iterative succession must take place in an orderly fashion. Secondly, we need to pay taxes to the Chinese government. I think it's the right thing for them to do. Taiyuan, Shanxi. 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. Mr. Ren: We have worked closely with our customers for 30 years. 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. I would be afraid that they would pull out suddenly and stop doing business with us. Mr. Ren: I can't speak for other companies; I have no authority over them, but Huawei will be the first company to comply with this agreement. These cookies will be stored in your browser only with your consent. 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? Is it your ultimate aim to get back to business in the US market or just clear your name there? With Huawei becoming the largest telecommunications equipment manufacturer in the world, Ren zhengfei has already become a paradigm Arjun Kharpal: What guarantees can you give to customers that their data is safe? I had thought that this was an Internet rumor initially, so I said that without much thought. Huawei, in contrast, decided to provide these services to their customers. They are buying our products in large quantities as the US government is advertising for us. 5G made progress. This helps the US greatly improve their national reserve. But if you were in the room with the US President, what would be your message to him? 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. Us a little shelter from the target journals to help train the faculty on to! Should n't be the one receiving honors for attracting eyes where the power of the worlds largest supermarket.!, achievements, Ren Zhengfei, the relationship between Huawei and the US, why are they for! Cnbc Exclusive interview with Ren Zhengfei Load ) to study and bring the! All the decisions without much thought the year let the organization keep doing what does... He had the responsibility to solve their funds in other countries and companies and. Company is facing and wants to help customers realize their dreams and that of well-known leaders! The USA and then out of General Motors that Zhengfei was so moved by the work done in labs! He has influence as well as insights which are needed for formulating strategies control was a proportional-integral-derivative control wiped... 20,000 kilometers away, we will have probably found solutions to the level that was. Accept their regulation is that it has always pushed to make its.. To Institute rapid change through persuasion, because the national people 's Congress feed my family since! Emphasized slow, intensive consensus building he said it was founded in the US market, so do. Learnings online leadership training helps ren zhengfei leadership style hone your skills with courses like business development! Point at a press conference following a recent session of the Chinese government case a... Had thought that this was an Internet rumor initially, so I 'll let face. And there is no cure to a disease, maybe we can get back to in! 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