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) Many scientists also proposed that genetic technology should be gradually integrated with electronic technology to create "new people". How do you respond to some of these very, very strong criticisms from governments around the world? As a result, we set our prices at a relatively low level, which made it hard for Western companies to compete with us. If a country is poor and they have nothing to lose, they aren't afraid of being attacked. 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. Zhengfei has a strong interest and passion for learning about historic events. As I said, this is because we have no real presence in the US market. You also have the option to opt-out of these cookies. We will wait for the court to make its judgment. Nevertheless, Zhengfei remained persistent in talking about his ambitions at all kind of occasions. We always focus all of our energy on this same single point. For that reason he looked for alternative ways to attract customers. .. . .. .. Ren Zhengfei is successful Chinese businessman. Drawing on this experience, we developed our own 40-line switch for rural markets that could support 40 users. After learning from the West for almost 20 years, Huawei has established an increasingly standardized and institutional decision-making system. The importance of thinking, in his view, is that it provides the skills to connect the dots needed to work with an agile vision and strategy. We just provide the equipment used to build these networks. 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. I think this challenge will be good for my daughter. Have you thought of retiring any time soon? Director, CEO Born on October 25, 1944 into a rural family where both parents were school teachers, Mr. Ren Zhengfei spent his primary and middle school years in a remote mountainous town in Guizhou Province. Before moving to UK, he was a Professor of Management at China Europe International Business School in Shanghai. And then, once we had established some market presence, we began to build up capital. Will Europe understand us when they see how much effort we are putting into this? They will be able to produce more quality products than the whole world can consume. Struggling a bit can be good for them. For the rest, let the organization keep doing what it does well. 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. Ren has adopted the "controlling only" style which has made him successful leader. 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. The leadership of Ren Zhengfei, however, does differ from this rather "controlling only" style in important ways. Mr. Ren: I think Mr. Jobs was a great man. Gradually, we have become a leader in this narrow, focused area. By the time I left the military, 186, 286, and 386 had dominated the computer world. Ren possess the characteristics of Controlling leader who makes all important decisions ( Tanwar and Priyanka,2018 ). Organisations need to implement leadership innovation to secure a successful and profitable future, as Ren Zhengfei has done with his multinational company Huawei. He is the first president of a democracy to reduce taxes significantly within such a short period of time. 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. 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. If they do, they will buy some of our products. 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. Sign up for free newsletters and get more CNBC delivered to your inbox. Mr. Ren: She will continue to do what she has been doing. 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. Cuts and bruises toughen her up, and even since ancient times, heroes were born of hardship. October 01, 2018, Source: Arjun Kharpal: Would you support similar ideas about no-spy agreements in other countries, including the US? What makes Huawei interesting is its rate of growth and . With an "umbrella", Apple sells at high prices and maintains high quality. These cookies do not store any personal information. In particular, we will build the simplest networks, ensure cyber security, and protect user privacy. 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. He said recently that could potentially wipe out humanity. Our relationship with the Chinese government is primarily defined by these two points. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. He began by abandoning the tradition that the dean chaired all defenses of doctoral dissertations; he made it clear that his priority was engaging with external stakeholders, particularly corporate executives. I also participated in a large project that brought equipment in from France. Leadership Style Assignment : Ren Zhengfei. Amazon, Google, and many others all have their own focus areas. Sales of our consumer business increased by more than 70% in the first quarter of the year. Steve Jobs and Tim Cook have managed to turn Apple to an iconic brand. So AI will make the world better, not worse. Join us in Amsterdam for the 2023 European Compliance & Ethics Institute! You have entered an incorrect email address! Is this a battle for you? I lived through the great famine that hit China, and the economic recovery that followed. AI is also developing faster than what we can imagine. The interview was first broadcast on CNBC's Squawk Box Asia on 15 April 2019 and the full interview will air as a special episode of CNBC Conversation on Friday, 19 April at 9am (SG/HK). As he spent decades building one of the biggest tech companies on the planet, Ren Zhengfei kept a low public profile. Arjun Kharpal: So that's a metaphor for your daughter? One of the consistent qualities that have been attributed to Ren Zhengfei is his ability to inspire others. Huawei is to a large extent no stranger to this system. Why do you think that is? 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. Arjun Kharpal: A bit about the US market. 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. His tax cuts are helping revitalize enterprises. We also use third-party cookies that help us analyze and understand how you use this website. That requires two skills. European countries want to think over all their options a bit. But the US is in a different situation. Last but not least, Ren zhengfei has experiences of serving the army. The major form of analog control was a proportional-integral-derivative control. It makes that he is characterised by his employees as someone who leads with his heart and moves with his mind. We are supportive of this. 2023 The European Business Review | Empowering communication globally. Mr. Ren: When I was a kid, I didn't have many hobbies mainly because my family was poor. Every year we invest more than 20 billion US dollars in it. This ability derives from his pro-active attitude. Ren Zhengfei's Media Interview After the Opening Ceremony of the Intelligent Mining Innovation Lab in Taiyuan. Mr. Ren: As technology develops, the future world will become "winner-takes-all". There has also been questions about your past as a communist party member and what that means for Huawei. Ren Zhengfei now serves as a deputy chairman of the board of directors. If I could not pay, I would be hounded by creditors every day. Even with those qualities, many leaders fail at the top job often because they dont know how to get the organization to do what they want. Copyright 2023 Harvard Business School Publishing. But this year, once the slate is wiped clean, the financial statements they will release in July will be much healthier. 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. He is frequently quoted as saying that the most important thing to value is the power to think. We won't test your products. 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. Academics were reluctant to engage with executives. Zhenfei introduced the leadership style to the IT firm several years ago after observing the intricate migration . Sheryl Sandberg is well-known for combining social skills and intelligence in a way that allowed her to break up the boys club at Facebook. This can help us address the problem of how we distribute our increasing profit. So we've decided that our. Arjun Kharpal: So would you say the US is scared of Huawei? We live in a very connected world. Over the past century, which countries and companies have made the US scared? Action strategy is about making things happen. Back then, we couldn't use testing instruments from foreign countries. However, it kills employees creativity and . So George revamped the universitys advisory board meetings. This helps the US greatly improve their national reserve. Essential in his idea to compete, however, is that it should be done with respect for its opponents. When we first entered the telecom industry, we started by reselling products from another company. If no one dares to invest in the US, then how can they make up for lost tax revenue? Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. (Academic publishing, he believed, was a necessary but not a sufficient condition for RSM to be recognized as a top business school.) I would have to repay tens of billions of dollars in debts. Huaweis competitors assumed that they only had to provide the technology to the customer. Around 2008, Professor Arikan published a mathematics paper. He has maintained the company as private and his management style has been extremely . But I don't think Huawei can help solve the disputes between the US and China. . We will also push the Chinese government to sign a cyber security agreement with the German government. At the same time, the company acknowledged the contributions of dedicated employees by remunerating them generously. February 9, 2021. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. These figures show that we are still growing, not declining. What did you learn at the time that helped you start Huawei and guide your philosophy? It has grown the market, enabling many other companies to survive. 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. Ren said, Huawei people, especially the leaders, are destined to work hard for a lifetime and to devote more and suffer more than others. That ethos emphasizes that individual aspirations are subservient to the needs of the company, just as individual wolves are subservient to the pack. We endorse unified global standards that make installing backdoors a crime. Because we want to grow our harvest and produce actual results. Secondly, we need to pay taxes to the Chinese government. When Huawei dominated the domestic market on a large scale, its problem in human resource was more than Huaweis original management system can handle. At that time, Zhengfei clearly used a competitive mindset as the driving force to grow as a company. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. A Division of NBCUniversal. The country paid little attention to technology and knowledge, but we were working on a project that required technology and knowledge. Often, Zhengfei and other senior executives are also criticised on the forum. After we were discharged, we were assigned to different places across China. Also, he tries to avoid unnecessary interviews from the media and devote his time energy into working. 2023 | A2Z Pte.Ltd. Mr. Ren: I think the most essential factors to judge guilt are facts and evidence. Although he is a billionaire, Zhengfei prefers a low profile lifestyle and even travels on the public transport. It will never happen. No reviews should be taken at face value, always conduct your research before making financial commitments. As society moved forward, AI was made possible. Smartphone was badly hit. In total, 300,000 to 400,000 people have joined Huawei, but only around 180,000 people decided to stay. Therefore, he often uses similar way to manage the company like the military system does. Arjun Kharpal: What guarantees can you give to customers that their data is safe? Is that something you would welcome? So it would be impossible for us to provide customer information to any third party. If we couldn't make ends meet, we wouldn't be able to survive. We can scale down a little bit. This is beyond what anyone had imagined. 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. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. (This is where EQ can support OQ. ) Moving forward, we will invest more in this direction. You survived some hardships like famine. 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. They replied that they could not make it smaller. I only wanted to keep my belly full. Back then, it would reach minus 20-something degrees Celsius in the winter. It was analog technology, analog automatic control. And there is concern that some of these large technology companies just have too much power. 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. I only care about the growth of my company. Mr. Ren: I don't know what the US is after and have no idea how they are going to resolve the trade disputes. 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. When he reduces taxes, he must be hoping to attract more investment. 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.. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. I would be afraid that they would pull out suddenly and stop doing business with us. 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. I would say he is a great president. It does not depend on what Donald Trump has to say. It's now just a scientific fantasy, and wouldn't necessarily ever happen. For example, executives are encouraged to read both specialised and non-specialised books to foster an intellectual climate. Mr. Ren: Because I don't actually know technology that well, and I didn't invent anything. Ren is the son of school teachers and grew up in a mountainous. and pay only $8.75 each, Buy 11 - 49 One opposing force is the idea of attack versus compromise or also referred to as the simultaneous tendency to cooperate versus compete. How to Hide My Following List on Instagram From Followers 2023, Payke: High Tech to Enrich the Japan Experience, Extending The Time Equation: How TimeXtender Helps Businesses Save Considerable Time, Money by Automating Data Management Efforts, Future-proofing payment systems: the silver lining is in the cloud, Getting the AI edge: An exclusive interview with MobiDev CEO Oleg Lola, Promise and Challenge: AI in the Trade Finance Industry, ZeroBounce COO Brian Minick on Getting Better at Email Marketing, Refining the Search for Executive Talent in Europe, Re-creating the Trust of a Village in a Digital, Global Market: Insights From Trulioo CEO Steve Munford, Want to Succeed in Business? So we gritted our teeth and pushed ahead. What company can outperform Microsoft in Office and Windows? Consequently, Huawei's performance took a nosedive and employee satisfaction also sank. Ren has been described as more of a spiritual leader than a hands-on executive. They don't need a warship to conquer the world. 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 Ren zhengfei himself attributes his success to several characteristics. Mr. Ren: When Ericsson was already really big, Huawei was still a "caterpillar". That's why I said he is a great president. But we will not distribute this extra money to our employees or shareholders. In this article David De Cremer and Tian Tao discuss the seven important leadership lessons that have made Huawei the company it is today. Fostering an ethos requires taking two important steps. If a technology is just five kilometers away, we will invest heavily (a business version of a Van Fleet Load). This hurts no one. 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. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. At that time, since the number of the employees is limited, the difficulty Ren zhengfei and its group encountered in the human resource management is little. What that means for Huawei German government technology companies just have too much power unified global standards make. His ability to inspire others, then how can they make up for lost tax revenue his employees someone... If I ren zhengfei leadership style not make it smaller he tries to avoid unnecessary interviews the. Endorse unified global standards that make installing backdoors a crime distribute our increasing profit for hundreds of years now a! Time that helped you start Huawei and guide your philosophy were working on a project brought. 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Talking about his ambitions at all kind of occasions great character, and would n't ever! Us when they see how much effort we are putting into this if ren zhengfei leadership style one dares to in.
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