A Division of NBCUniversal. I think it's the right thing for them to do. In the next two or three decades, technology will advance even faster. So our products needed to be standardized. I only care about the growth of my company. 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. And its founder Ren zhengfei is thought be be one of the best leader in the business world. "Every generation produces its own great character, and each exerts impact for hundreds of years.". As a result, I read a lot of books on law and learned that the market was about two things: the product and the customer. It makes that he is characterised by his employees as someone who leads with his heart and moves with his mind. In Europe, we will face some difficulties in the short term, but there will be no impact on our business. Germany proposed the establishment of a unified global convention that would bar all equipment vendors from installing backdoors, and require them to sign a no-spy agreement. No backdoors. Photos/ Taddeo Bwambale . Before moving to UK, he was a Professor of Management at China Europe International Business School in Shanghai. 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.. Our company was very small then and almost had no capital or technology. Is only slower computing good for us? The cost of using a warship is high. For example, if AI is applied to tractors, they will be able to work 24 hours a day. Collective decision-making ensured that Huawei made fewer mistakes and absorbed collective wisdom, but it also caused rigidity. So there is no need to worry too much about some comments posted on the Internet. People back then thought his discovery was useless and ignored it for 100 years. Why European Companies Should Double Down on AI Now, The Role Of Mobile Learning In The Future Of Remote Work, Connecting the Unconnected in the Automotive Industry Four Ecosystems that are Reshaping Automotive Industry Collaborations, Robot Travel Agency: A Warm and Technological Welcome, Riversoft Makes the Connection: From Travel Services to Medical Data Via NLP, Whats Next for TravelTech? 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). document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Your email address will not be published. Gradually, we have become a leader in this narrow, focused area. We will not distribute any extra profit to our employees. Ren Zhengfei now serves as a deputy chairman of the board of directors. Ren Zhengfei leads Huawei Technologies, one of the world's largest manufacturer of telecommunication hardware and mobile phones. Instead, he believed it was a strength. Arjun Kharpal: But you created the world's largest telecom company. 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. Elon Musk, for example, has continuously warned about the impacts on jobs and actually, artificial intelligence getting more intelligent than humans. 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. Arjun Kharpal: Let's talk a little bit about the US for a moment. 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. One Chinese company that is increasingly becoming active in Europe is the Chinese telecom giant Huawei. Investor and consumer confidence will increase, and the US economy may take a turn for the better. Ren described it as a blend of three qualities: extreme resilience, a willingness to self-sacrifice, and sharp predator instincts. He made this persuasively clear by literally saying that it is necessary To cut off your feet to wear the shoe (xue zue shi lu). At Huawei, we often talk about the term of "Van Fleet Load", which was invented by a general of the US army. The railway and machinery troops were let go along with us. These cookies do not store any personal information. When designers showed the first iPod prototype to Steve Jobs, he said it was too big. However, most of us didn't really understand how important this decision made by the CPC's Central Committee was. 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. 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. It is a well-known fact that Zhengfei truly lives this purpose and pursues it with unlimited energy, making Huawei his natural born mission. China has a population of 1.3 billion consumers. To reinforce the message, he sent congratulatory emails when faculty had acceptances in such journals (but not for acceptances in academic publications). We did not know that these small things were designed to connect the whole city or even the whole world. Copyright 2023 Harvard Business School Publishing. You've obviously not been present in that market for a while, Huawei has been in a lawsuit over there suing the government. What we have is not some kind of nuclear bomb or weapon. It's now just a scientific fantasy, and wouldn't necessarily ever happen. As I said, this is because we have no real presence in the US market. The ethos needs to be summarized in an evocative statement pointing to the behaviors desired in the organizations members. He has maintained the company as private and his management style has been extremely . We will wait for the court to make its judgment. Ren said, "Huawei people, especially the leaders . Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. Many of them thought at that time that he was crazy. By studying law on my own, I realized that only a focused approach to scientific research could lead to new products. With Huawei becoming the largest telecommunications equipment manufacturer in the world, Ren zhengfei has already become a paradigm We were living in an adobe house that only provided us a little shelter from the wind. If that happens, we will just sell our products to other countries that do accept us. Second, thanks to the Western management approaches we brought in, our operational costs were also kept low. Don't worry that Huawei would end up having no successor. What makes Huawei interesting is its rate of growth and . Huaweis competitors assumed that they only had to provide the technology to the customer. We will put more money into research in new frontiers. Second, develop an organizational persona. 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. Figure 1: The Leadership Lessons of Ren Zhengfei 1. Have you thought of retiring any time soon? 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. Is this a battle for you? Decisions were taken much slower than in the first more chaotic years of the company and fear existed that the bravery and courage underlying the companys striving for innovation would disappear. Because they are simple and easy to understand. Secondly, we need to pay taxes to the Chinese government. AI can help translate text into 70 different languages simultaneously. Indeed, as the Chinese say: Every generation produces its own great character (Jiang shan dai you ren cai chu) and each exerts impact for hundreds of years (Ge ling feng sao shu bai nian). Ren is the son of school teachers and grew up in a mountainous. I would have to repay tens of billions of dollars in debts. Arjun Kharpal: Have you tried to reach out to the president to speak to him about it? Mr. Ren: I think the most essential factors to judge guilt are facts and evidence. Zhengfei was worried that phase 2 created a kind of decision-making that was less than efficient. Given these achievements combined with a certain myth of a Chinese emperor rising to the global stage, it begs the question what the philosophy and driving force behind this business success is. Google is now helping blind people see the world with nerve sensors, although they are not as good as human eyes. Do you see that Huawei is a pawn in the broader US-China trade war that's going on at the moment? At first, we had several hundred employees focus on this point, then we had several thousand, tens of thousands, and now we have hundreds of thousands. CEO's are the driving force behind any for-profit organisation. Beset by internal and external challenges, Huawei needed to completely rethink its approach to business, corporate culture and company management. Arjun Kharpal: Mr. Ren, as we come to the end of the conversation, I want to focus on your future. (Academic publishing, he believed, was a necessary but not a sufficient condition for RSM to be recognized as a top business school.) It emphasized clear-cut goals, hard-and-fast rules, employee dedication and absolute obedience. Mr. Ren: I think Mr. Jobs was a great man. Mr. Ren: If they aren't scared of us, why are they advertising for us everywhere they go? Amazon, Google, and many others all have their own focus areas. There is nothing else that I want to share with him. I stuck our 180,000 employees together, and encouraged them to forge ahead. 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? We obviously couldn't control our customers, so we had to get hold of the products. As a result, I went back to where I started and jumped into the market economy. I happened to have this invention, and the value of my invention was exaggerated by the country, which led to a promotion for me. I think he was super great. At the same time, the company acknowledged the contributions of dedicated employees by remunerating them generously. 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. He is the first president of a democracy to reduce taxes significantly within such a short period of time. Arjun Kharpal: Mr. Ren, you started Huawei over 30 years ago with 5,000 US dollars. Ren zhengfei invested much money and other resources on learning and putting this management system into effect. These difficulties will make her stronger and prepare her for even greater things ahead. Ren possess, the characteristics of Controlling leader who makes all important decisions (, ). Second, customers have the right to make their own choices. After I was discharged from the army, I ran into a big trouble at work. Arjun Kharpal: Mr. Ren, I want to move onto a bigger picture of the world of technology. It will greatly increase productivity. Intel only makes chipsets. We need to make our value distribution reasonable. Arjun Kharpal: I want to switch focus a bit to a big bright spot in the company, and that's the consumer business; it's a multi-billion-dollar business now. Huawei was not mentioned in any of the negotiation meeting minutes published by the US and China. These cities were moving away from the previous planned economy. 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Summary. 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. Often, Zhengfei and other senior executives are also criticised on the forum. 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. Arjun Kharpal: Have you spoken to her recently? We'll buy them directly." From what has been discussed above, we can easily find the relationship between the leadership of Ren zhengfei and the rise of Huawei. Cuts and bruises toughen her up, and even since ancient times, heroes were born of hardship. Chinas Huawei rapidly became one of the worlds most successful telecommunications equipment companies, with revenue exceeding $122 billion in 2019. 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. 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!. 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. When attending a summit in Croatia, Premier Li also told our employees not to install backdoors. Especially in the entrepreneurial years of the company he used this strategy to be both a strong mentor and leader for his employees. 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. If I could not pay, I would be hounded by creditors every day. The second is the maturity tonotengage in unimportant issues. There are various types of leadership styles (Fiaz et al., 2017) 1. Arjun Kharpal: And part of that R&D budget has gone into 5G, into chips, you've got your own 5G chip. Arjun Kharpal: Mr. Ren, we spoke about Apple and Steve Jobs. Founder of Chinese tech giant Huawei Technologies Ren Zhengfei has called on the company's staff to "dare to lead the world" in software as the company seeks growth beyond the hardware. This selective messaging was not popular, but it was highly effective. Mr. Ren: I don't know about technology, management, or finance. The leadership of Ren Zhengfei, however, does differ from this rather "controlling only" style in important ways. Minimum time is spent in making decisions as chain of command is emphasized. Use the strengths of your organization to achieve your goals. 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. 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. After learning from the West for almost 20 years, Huawei has established an increasingly standardized and institutional decision-making system. Leadership Style Assignment : Ren Zhengfei. In a similar vein, since the beginning of Huawei, it is a known fact that Zhengfei is not a technical expert, but he never saw that as a weakness. It was all about hard work to bring the company up to the level that it was able to provide higher-quality service. Indeed, EU officials initially wanted to investigate the anti-dumping act in relationship to Huaweis products. 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. Nevertheless, as the market evolved and employee characteristics shifted, the shortcomings of Ren's management model grew ever apparent. Arjun Kharpal: Mr. Ren, you've said in the past that the US government hasn't seen Huawei's technology and source code. 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. After getting the retirement from the army, Ren then worked with, ). The road to success for Huawei started in 1987 where it was founded in the economic testing zone of Shenzhen. Why cannot we edit human genes? It will never happen. They have great technologies, skilled labor, and economic strength. I was later told that she sent me a letter, where she mentioned that she wanted to leave the company. Particularly the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiatives, which include a patchwork of diplomacy and free trade zones, have received their share of attention. It at least might give us time to find real cures. Back then, it would reach minus 20-something degrees Celsius in the winter. As society moved forward, AI was made possible. 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. Arjun Kharpal: So would you say the US is scared of Huawei? We earned a bit of money this way. You've often looked up to Apple as a role model. The billionaire founder of Chinese telecoms equipment giant Huawei rarely. Ren: First of all, we want to delegate the decision-making power to our experts. So AI will make the world better, not worse. 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. A good theatrical moment reverberates as stories about (and, more recently, videos of) the event are passed along. 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. | All rights reserved. The story goes that Zhengfei was so moved by the work done in those labs that he cried. Huawei's achievements were not created by me alone, but by our 180,000 employees. You've grown the company over 30 years to the size of it now. October 01, 2018, Source: By David De Cremer and Tian Tao. I also participated in a large project that brought equipment in from France. This idea of adopting a cooperative mindset in a competitive market can be illustrated by Huaweis efforts in the UK. Arjun Kharpal: Do you feel that your military-style speeches empower the employees here? As mentioned earlier, the first two decades of Huaweis existence were dominated by the force of attack in order to survive and gradually become a better service provider. 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. A great increase in material wealth would also help to significantly enrich culture. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. So the standards the US finds so compelling are actually all built on a single mathematics article. So George revamped the universitys advisory board meetings. Ren zhengfei himself attributes his success to several characteristics. 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. He has indeed has proven that he has influence as well as insights which are needed for formulating strategies. I liked reading books, doing homework, and solving math equations on scrap newspaper. She has understood the difficulties that the company is facing and wants to help us see this through. Do people know what type of leader you are and what to expect when they interact with you? Ren Zhengfei, founder and CEO of Huawei, speaking at the company's headquarters in Shenzhen on May 24, 2019. I told him that I didn't actually know that the barriers were so high, and once we had entered the industry, there was no turning back. 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. 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. So I don't think there will be a significant impact on Huawei's business. We live in a very connected world. Where does this idea of competing in a cooperative way come from? It helps reduce many people's workloads. Accelerate your career with Harvard ManageMentor. Then a large number of our employees would resign, but I cannot leave. Some governments have criticized the relationship between Huawei and the Chinese government. In China, leadership has traditionally been grounded in a hierarchical top-down management system. We cannot deny the role that enthusiasm plays in the procedure. Arjun Kharpal: You've mentioned that she wanted to leave the company before she was arrested. This was because we were never intended to engage in military operations. 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. In a similar vein, Huawei makes use of an internal online forum, Xinsheng Community, which is accessible to all Huawei employees worldwide. It's not up to me to designate a successor. So he emphasized action. He relentlessly convinces his employees through stories and actions. The number of Chinese companies investing and engaging in acquisitions in Europe has seen a steep growth curve. 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