If we get caught in the middle, we will be crushed like a watermelon when these two powers clash. Important in this whole management process is that his use of an adaptive vision never compromises the purpose and values of the company. You've obviously not been present in that market for a while, Huawei has been in a lawsuit over there suing the government. Harvard Business Publishing is an affiliate of Harvard Business School. I am just taking as a bucket of "glue". Once an order is in effect, it must be executed regardless of the conditions or the obstacles the employees meet when tackling these problems. Some governments have criticized the relationship between Huawei and the Chinese government. You have entered an incorrect email address! Underlying these beliefs is clearly an idea of sharing responsibility but also sharing the rewards that are earned because of these collective successes. Today, Huawei has developed a decision-making system with limited democracy and appropriate centralisation. 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. Really effective leaders learn early to target only important issues and ones they have a fair shot of winning. But there are critics who point to certain national intelligence laws in China that compel Chinese companies to help the government with national intelligence work if they're asked. The US government must present evidence to substantiate their charges against Huawei as this lawsuit proceeds. And its founder Ren zhengfei is thought be be one of the best leader in the business world. This is how, John Sutherland on Leadership and Teamwork, Pro-active Leadership: How to overcome procrastination and be a bold decision-maker, ChatGPT and Its Impact on Author Transparency in Scientific and Academic Journals, How New Age Entrepreneurs are Changing the Way We Think About Business, Layoffs in Tech: Redistribution of Resources Amid a Tech Transformation. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. 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. Do you still feel Europe is open to Huawei, or could one country blocking Huawei mean that the whole union stops Huawei from participating in 5G? We did not know that these small things were designed to connect the whole city or even the whole world. Information that flows through the networks also belongs to our customers, not to us. The country paid little attention to technology and knowledge, but we were working on a project that required technology and knowledge. Otherwise, we will be hindering scientific advancement. Ren has unique qualities which make him different from other, leaders. They carry a clear message. The criticism was scathing, including from McKinsey and other top consulting firms. company using his skills and core competencies. Ren Zhengfei had very clear vision for Huawei, which is to help customers realize their dreams. The company is growing rapidly and Forbes has estimated Zhengfei's wealth at $2.1 billion. By the time I got my business license, I didn't have a single penny left. You dont want to be like John DeLorean, who battled nearly everything on his way up in and then out of General Motors. 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. I think this challenge will be good for my daughter. What have been the driving forces behind that? Mr. Ren: When I was a kid, I didn't have many hobbies mainly because my family was poor. Even if we were ordered to, Huawei would still not install backdoors. 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. 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. Back home in Shenzhen, Zhengfei told everyone that the passion that he felt for that lab was equal to love. 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. 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. 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. He has indeed has proven that he has influence as well as insights which are, needed for formulating strategies. Are you starting to think about how your own intellectual property like chips could be used and sold to third parties like Apple? We will not distribute any extra profit to our employees. Its this kind of spirit in Ren zhengfei that propels his company to become one of the best in China even the world. The government would find it hard to address its deficit. None. In his view this could only be achieved by providing excellent services. On April 12, at the "16+1 Summit" in Croatia, Premier Li repeatedly told all our employees not to install backdoors on networks. Arjun Kharpal: Mr. Ren, as we come to the end of the conversation, I want to focus on your future. 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%. 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%). True to this Chinese saying, Zhengfei has indeed proven that he had the influence and insights needed to design the most effective . He said, Those are air bubbles. More and more companies are harnessing new technologies more quickly. High-OQ leaders use action strategy rather than consensus building to pursue strategic goals. Ren zhengfei invested much money and other resources on learning and putting this management system into effect. 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. At this time, Ren Zhengfei's family was starving. If President Trump continues intimidating other countries and companies, and keeps randomly detaining people, who would risk investing in the US? Mr. Ren: I don't know about technology, management, or finance. We can scale down a little bit. Every night, we took turns fueling the stove, because if it went out, we would have frozen. What's next for Meng Wanzhou in her life, in her career? We have given up on supercomputing and intermediate computing. I was naive and took it for granted that I could earn money playing with this huge industry. Vernon Hill was transformationally successful in leading Commerce Bank in the USA and then Metro Bank in the UK. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. I could not keep up with the times. 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%). When attending a summit in Croatia, Premier Li also told our employees not to install backdoors. I hadn't realized that the communications industry was so cruel. They also need to follow local laws and regulations and pay local taxes. Register as a Premium Educator at hbsp.harvard.edu, plan a course, and save your students up to 50% with your academic discount. This does mean though that many translators and stock analysts and the like will lose their jobs. As society moved forward, AI was made possible. 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. We are not that important in the bilateral relations between the two countries. 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. That's the shortcoming of Trump's approach. Arjun Kharpal: So that's a metaphor for your daughter? Does China feel under pressure from President Trump's tactics in the negotiations? So our products needed to be standardized. We have become what we are today with our own strength. Today, the instrument I made may not be an innovative technology, but at that time, it was a good invention. The story goes that Zhengfei was so moved by the work done in those labs that he cried. So he and his managers smashed the defective appliances. Do you feel that technology has been a force for good or a force for evil? We have limited resources and technologies. Our financial statements are audited by KPMG, which can clearly show whether or not we are supported by the Chinese government. 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. In fact, we have too many. And then, once we had established some market presence, we began to build up capital. Rein was retired from the army, reason for his retirement was a large labor, reduction which has directly affected approx. Instead, he believed it was a strength. Lets look at each, drawing on examples from our own experience and that of well-known successful leaders. Get this delivered to your inbox, and more info about our products and services. Arjun Kharpal: You mentioned in our conversation that people ask you about your vision for 20 to 30 years, but you don't even know what's going to happen in the next two to three years. In particular, we will build the simplest networks, ensure cyber security, and protect user privacy. For example, in the desert and rural areas in China, rats were a plague for the telecom connections to customers. By studying law on my own, I realized that only a focused approach to scientific research could lead to new products. CNBC is the leading global broadcaster of live business and financial news and information, reporting directly from the major financial markets around the globe with regional headquarters Singapore, Abu Dhabi, London, and New York. What did she speak about? In-person is back! If a technology is 20,000 kilometers away, we can invest a little more, like an apple. What Crisis? Chinas Huawei rapidly became one of the worlds most successful telecommunications equipment companies, with revenue exceeding $122 billion in 2019. These great people are going to great lengths to find fault with a little rabbit or mouse like us. Typically, they've been used in Huawei's products. It makes that he is characterised by his employees as someone who leads with his heart and moves with his mind. Since China has become the second largest economy in the world, this relationship has taken new forms in the shape of several business initiatives. They don't need a warship to conquer the world. If no one dares to invest in the US, then how can they make up for lost tax revenue? Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our, Delivering Innovation Accenture Research, A Special Report on AI and Humans by AiTH, NUS Business School, Europes recovery is possible. Arjun Kharpal: You mentioned the Ericsson CEO at the time said it was a bold move to jump into this space. Huawei the Ren Zhengfei Way: the "Tough Guy" and His Corporate Philosophy By: Jiing-Lih Larry Farh, Xin Pi 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 Length: 13 page (s) Otherwise, we wouldn't be able to enter the network equipment industry. 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. Why do they accept these things? She will be a hero if she makes it back to us. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. 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. And it needs to be communicated widely. In the words of Zhengfei: Chaos was removed and structure entered Huawei. Steve Jobs and Tim Cook have managed to turn Apple to an iconic brand. 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. Mr. Ren: Because I don't actually know technology that well, and I didn't invent anything. Ren Zhengfei, a founder of Huawei, conducts the personal communication style inspiring employees to achieve high results. High-OQ leaders stage moments of theater that will be told and retold throughout the organization. Smartphone was badly hit. Save my name, email, and website in this browser for the next time I comment. Mr. Ren: I don't know. He took. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. It does not depend on what Donald Trump has to say. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. If the US government speaks ill of Huawei, why couldn't the Chinese government speak in our favor? As far as I know, Huawei has never been mentioned in any of the China-US talks or in any official news releases. What company can outperform Microsoft in Office and Windows? The relationship between China and the European continent carries much history with it. 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. Ren Zhengfei has lead Huawei to become a global brand making the top global 100 by 2017 (Huawei 2017). 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. Action strategy is about making things happen. We remained focused on this same single point. This selective messaging was not popular, but it was highly effective. I said I couldn't even imagine what it would look in two or three years. Back then, it would reach minus 20-something degrees Celsius in the winter. He said recently that could potentially wipe out humanity. It was analog technology, analog automatic control. There was no chance for us to step back and start another business. 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. A good theatrical moment reverberates as stories about (and, more recently, videos of) the event are passed along. In 2019, soon after Metro Bank revealed an accounting error involving the misclassification of more than $1 billion in loans, Hill resigned. This is beyond what anyone had imagined. 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. Nothing but life. We chose a tough road. I majored in architecture back in school, but I studied electronics technology myself. This introductory chapter offers an overview of the entire book on the management transformation of Huawei. Interesting in this journey so far is that each phase is characterised by a specific focus and strategy. They had thought that disbanding was to weed out unnecessary troops and strengthen the remaining units. And you've said that you want to be number one in smartphones. What did you learn at the time that helped you start Huawei and guide your philosophy? The multinationals that were present in China at that time did not consider this to be their problem, but rather that of the customer. Arjun Kharpal: Mr. Ren, you talk a lot about the distance between Huawei and the Chinese government. But even if it did happen, it would be at least 30 years from now. I think he was super great. 500000 employees in military field. Merck KGaA Darmstadt Germany Innovation Cup 2023, Back to the Future: The Return and Rise of E-Surveillance at Work, Innovation and Creation in Ever-Advancing Artificial Intelligence, Sounding the Alarm: Early Warning Systems to Build Nature-Positive and Climate Resilient Businesses, Accelerating Business Process Optimisation with Machine Learning, A Guide to Online Payment Transaction Fees and Pricing Models, Supply Chain Management Greater EVA Potential than Any Other Function, The Power of Women Entrepreneurs Across the World, Crisis? We will also increase our sales revenue, which is now more than 100 billion US dollars, to around 250 billion US dollars. 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. He belongs to rural family and spent his middle and primary school years in remote mountains, where started his career as civil engineer when China faced turmoil because of cultural, revolution. Media Contact:Clarence ChenCommunications Manager APAC, CNBC InternationalD: +65 6326 1123M: +65 9852 8630clarence.chen@cnbc.com. 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. It at least might give us time to find real cures. This revolution was also referred to as the bloodless revolution because the victory of William of Orange was achieved without bloodshed. 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. Nothing we've achieved would give us the right to neglect any laws or overlook the technologies of any country. Every year we invest more than 20 billion US dollars in it. Ren Zhengfei is known for avoiding quick decisions and forcing himself to take time to reflect. | All rights reserved. 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. Essential in his idea to compete, however, is that it should be done with respect for its opponents. They will be able to produce more quality products than the whole world can consume. 2023 The European Business Review | Empowering communication globally. We are going to make this happen. Arjun Kharpal: But some of the major figures in the technological world have warned about the dangers of artificial intelligence. 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. People don't object to the editing of plant genes. Before moving to UK, he was a Professor of Management at China Europe International Business School in Shanghai. 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. Precisely speaking, the core of his leadership strategy is the purpose-driven ambition. It commemorates the long-ago day when CEO Zhang Ruimin pulled 76 refrigerators off the production line. 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. 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. Iterative succession must take place in an orderly fashion. (Academic publishing, he believed, was a necessary but not a sufficient condition for RSM to be recognized as a top business school.) Join us in Amsterdam for the 2023 European Compliance & Ethics Institute! How can I live a life like that? He also. No backdoors. Today, only 30 years later, ultra-broadband has become accessible in most rural areas around the world. Want to buy more than 1 copy? Although he is a billionaire, Zhengfei prefers a low profile lifestyle and even travels on the public transport. Leahy succeeded with both dramatic changes in part because he maintained a modest demeanor throughout. And he left other core aspects of the business, such as steadily improving the retail offer (Every little helps), untouched. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. Clearly an idea of sharing responsibility but also sharing the rewards that are earned because of these collective successes if... 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