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? One key OQ competency is sending messages that reinforce the strategy. Steve Jobs and Tim Cook have managed to turn Apple to an iconic brand. 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. and pay only $8.50 each, Buy 50 - 499 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. But unfortuetely he fails to, achieve military rank, due to which he was not allowed to join communist party of China for, continuing his career in Military field as, Ren Zhengfei family belongs to social background and, Ren Zhengfei was accountable for many, technological achievements. We will also increase our sales revenue, which is now more than 100 billion US dollars, to around 250 billion US dollars. He took. To stay one step ahead of your competition, sign up today to our exclusive newsletters to receive exciting insights and vital know-how that you can apply today to drastically accelerate your performance. Information that flows through the networks also belongs to our customers, not to us. We have limited resources and technologies. Arjun Kharpal: Mr. Ren, I want to move onto a bigger picture of the world of technology. What's next for Meng Wanzhou in her life, in her career? Or do you feel sometimes they are intimidated by that style of leadership? Many will say that the blueprint of Huaweis success has been laid out by Zhengfei and even though Huawei nowadays makes use of a rotating leadership system in which every six months another board member is the acting CEO, its founder still has a significant impact on the pace and direction of the company. We endorse unified global standards that make installing backdoors a crime. For the rest, let the organization keep doing what it does well. The company is growing rapidly and Forbes has estimated Zhengfei's wealth at $2.1 billion. We will also push the Chinese government to sign a cyber security agreement with the German government. 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). Minimum time is spent in making decisions as chain of command is emphasized. We are supportive of this. He has maintained the company as private and his management style has been extremely This is an idea that scares people, but right now, it is not yet anywhere near reality. What did she speak about? Our relationship with the Chinese government is primarily defined by these two points. As I said, this is because we have no real presence in the US market. Zhengfei has a strong interest and passion for learning about historic events. Will Europe understand us when they see how much effort we are putting into this? For such a powerful country to be scared of a small company like us, some other countries are saying, "Your products are so good that the US government is scared. Ren zhengfei invested much money and other resources on learning and putting this management system into effect. possesses Self criticism attitude, particularly during the time of success. His ability to critically reflect on past successes and at the same time to identify the future challenges in the next decade makes Zhengfei an impactful business leader in the eyes of many Chinese. He has maintained the company as private and his management style has been extremely . Take machine translation as an example. These cities were moving away from the previous planned economy. 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. This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether he needed to adapt his style in light of new challenges at the company. Mr. Ren: I don't know. Technology has moved on so rapidly in the past few years that a lot of people are talking about the impact of technology on society. Whether or not we can get back to business in the US depends on whether our customers want to buy from us. This practice allowed managers to become more active and creative, but also created chaos. Mr. Ren: Huawei is based in China. 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%). Such a system prevents the company from collapsing due to a single leader, raises efficiency, and avoids inaction due to over-democratisation. When he passed away, I was on a vacation in the mountains with my family. 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. Ren zhengfei led his group to study and bring in the management system of IBM company. Terry Leahy steadily worked his way up to become the CEO of UK-based Tesco, one of the worlds largest supermarket companies. 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. Is that useful to the company, or do you find that a distraction? Early life. High-OQ leaders use action strategy rather than consensus building to pursue strategic goals. There's a lot of disagreement, of course, on what the right course of action is in Europe. They will be able to produce more quality products than the whole world can consume. First, we want to provide the best connectivity in the world, and 5G is part of connectivity. At that time, Zhengfei clearly used a competitive mindset as the driving force to grow as a company. This meant we were left behind for many years in this area. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Mark your calendar for these stimulating events and prepare to be inspired. But even if it did happen, it would be at least 30 years from now. In particular, the emergence of AI has accelerated social progress. We did not know that these small things were designed to connect the whole city or even the whole world. We chose a tough road. Therefore, Zhengfei acted more like a catfish in the high-level decision-making process, who has constantly created imbalance to inspire passion across the organisation. In the early years, Huawei, as a private company, had to battle primarily the State Owned Enterprise (SOE) dominated market. Tanks can cross a swamp, but needles can pierce hard things through. None. Necessary cookies are absolutely essential for the website to function properly. Despite this controversy, Huawei received support from both Ericsson and Nokia, stating that in their view Huawei was not dumping its products. However, there was no way back. The number of Chinese companies investing and engaging in acquisitions in Europe has seen a steep growth curve. He is frequently quoted as saying that the most important thing to value is the power to think. There is nothing else that I want to share with him. We will not distribute any extra profit to our employees. Is this a battle for you? 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. So we've decided that our. In fact, we have too many. 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. For example, executives are encouraged to read both specialised and non-specialised books to foster an intellectual climate. There was no chance for us to step back and start another business. The leadership of Ren Zhengfei, however, does differ from this rather controlling only style in important ways. In 1963, he studied at the Chongqing Institute of Civil Engineering and Architecture. The country wanted to reform and open its doors. This is fundamental to solving problems. We can give you a copy if you want. We live in a very connected world. A good theatrical moment reverberates as stories about (and, more recently, videos of) the event are passed along. When we first entered the telecom industry, we started by reselling products from another company. This proves our equipment is secure. So it would be impossible for us to provide customer information to any third party. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. 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. Huaweis competitors assumed that they only had to provide the technology to the customer. As far as I know, Huawei has never been mentioned in any of the China-US talks or in any official news releases. They had thought that disbanding was to weed out unnecessary troops and strengthen the remaining units. Do you see that Huawei is a pawn in the broader US-China trade war that's going on at the moment? As a result, we set our prices at a relatively low level, which made it hard for Western companies to compete with us. Moving forward, we will invest more in this direction. Second, Huawei is being stuck in an extremely difficult situation the US is launching intense attacks against us. Most of us also didn't understand that move. This way, we will be able to make world-leading products. although employees even management employees were not used to it, since it need a thorough change. In the early years of Huawei, Zhengfei was very much aware that their products did not meet the standards of those of its competitors. And you've said that you want to be number one in smartphones. Arjun Kharpal: Let's talk a little bit about the US for a moment. Arjun Kharpal: But you created the world's largest telecom company. In China, leadership has traditionally been grounded in a hierarchical top-down management system. 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You often use military imagery and images of battles in your speeches and communications with the employees at the company. Strong leaders usually have strong views about how things should be done, which can lead them to take on too many fights too early in their careers. Arjun Kharpal: I want to switch topic a little bit to talk about your daughter, Meng Wanzhou. November 12, 2015. What did you learn at the time that helped you start Huawei and guide your philosophy? An interesting consequence was that because of this purpose-driven strategy they acquired much experience in developing robust equipments and materials, which helped them later on to win several big business accounts in the Middle-East. 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. So I think Trump is a great president, but he didn't consider all the angles when it came to attracting foreign investment. Contact: customerservice@harvardbusiness.org, Below are the available bulk discount rates for each individual item when you purchase a certain amount. Our scientists spotted it and spent 10 years turning his theories into the 5G standards of today. Second, we strive to become the world's best in edge computing. So I'll let her face what she is facing. The railway and machinery troops were let go along with us. We will not be affected by increased tariffs, either. These cookies will be stored in your browser only with your consent. 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. If you'd like to share this PDF, you can purchase copyright permissions by increasing the quantity. Enterprises can now transfer their funds in other countries back to the US because of a low tax rate of 12%. He also. It was all about hard work to bring the company up to the level that it was able to provide higher-quality service. 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. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. Mr. Ren: I don't know what the US is after and have no idea how they are going to resolve the trade disputes. The US is a strong economy and offers many high-quality products. Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. 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. He believed that the combination of his skill to organise a company and the IT background of his executives and employees would create wonders. His company reflects these traits. If we spread things too thin, there is no way we will be successful. We obviously couldn't control our customers, so we had to get hold of the products. The major form of analog control was a proportional-integral-derivative control. For example, if AI is applied to tractors, they will be able to work 24 hours a day. However, most of us. And care must be taken that they dont conflict with the desired ethos. 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) 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 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. In 1960, there was a serious famine in Guizhou Province. I would like to express my own opinions instead of as a Huawei representative. One Chinese company that is increasingly becoming active in Europe is the Chinese telecom giant Huawei. So firstly, we must abide by Chinese laws and regulations. It emphasized clear-cut goals, hard-and-fast rules, employee dedication and absolute obedience. Leahy succeeded with both dramatic changes in part because he maintained a modest demeanor throughout. You are less known internationally. The second is the maturity tonotengage in unimportant issues. The US hasn't been scared of anyone or anything though. By taking a set of coordinated actions that add up to a strategic change, a leader can kickstart the process without creating organized opposition. In that case, billions of dollars would be stuck in the US. Turning to personnel, George replaced the people likely to generate the most opposition and appointed a new, supportive vice dean from among the existing department chairs. So I don't think there will be a significant impact on Huawei's business. Media Contact:Clarence ChenCommunications Manager APAC, CNBC InternationalD: +65 6326 1123M: +65 9852 8630clarence.chen@cnbc.com. Back home in Shenzhen, Zhengfei told everyone that the passion that he felt for that lab was equal to love. Arjun Kharpal: Do you have a succession plan in place when you eventually do retire? Interesting in this journey so far is that each phase is characterised by a specific focus and strategy. Earn badges to share on LinkedIn and your resume. It's a wealthy country, so it has a lot to lose. On October 25, 1944,Ren Zhengfei was born in Zhenning County, Guizhou Province.He spent his primary and junior high school in the mountain village near his home. Executives may want to develop these OQ competencies on the way up the ladder and theyll certainly need them if they are to succeed at the most senior levels. The government would find it hard to address its deficit. 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 is a big fan of the practice of story telling and makes extensive use of it as a vehicle to deliver his ideas to employees in a passionate manner. By submitting your email, you agree to our Terms & Conditions and Privacy Policy. Mr. Ren: I would like to comment on President Trump without considering his administration's treatment of Huawei. He said recently that could potentially wipe out humanity. Why do you think that is? Mr. Ren: She will continue to do what she has been doing. Do people know what type of leader you are and what to expect when they interact with you? 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. That creates a kind of balance. They need to recognize what aspects of the status quo need to be challenged and they need the discipline to avoid wasting time rebelling in ways that are not strategic and wont move the organization forward. Ren Zhengfei, founder and CEO of Huawei, speaking at the company's headquarters in Shenzhen on May 24, 2019. 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). For example, In the UK, Huawei has put much effort into convincing the British government and general public that they and their procedures can be trusted, by (a) Setting up the Cyber Security Evaluation Centre in Banbury to ensure the quality of their equipment, and (b) Cooperating with the GCHQ, the UKs signals-intelligence agency, to ensure that the, The European Business Review uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Saying that he was great is an understatement. As CEO, he introduced Tescos distinctive online model, based not on the classic centralized warehouse but on existing stores, where Tesco.com employees picked and packed online orders during off-peak periods. That requires stepping out of the normal flow of organizational life. Although he has introduced a strong focus within Huawei on continuously learning and reflecting, he leads his company with the passion of a true founder. Nothing we've achieved would give us the right to neglect any laws or overlook the technologies of any country. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Your email address will not be published. Interestingly, such a strategy suggests that a power of thinking attitude aligns with a shared learning orientation. One story that stayed with Zhengfei was the overthrow of King James II of England by a union led by William of Orange in 1688, which was called the Glorious Revolution. The country paid little attention to technology and knowledge, but we were working on a project that required technology and knowledge. In fact, the recent and growing success of Huawei in Europe can also be attributed partly in addition to their service-oriented focus (see again the point of purpose-driven ambition) to their philosophy of explicitly incorporating a strategy to develop cooperative relationships with competitors in the market. Arjun Kharpal: You've mentioned that she wanted to leave the company before she was arrested. This does mean though that many translators and stock analysts and the like will lose their jobs. Some top military officers didn't understand it, either. It is great in that it has always pushed to make the market bigger, not smaller. 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. Struggling a bit can be good for them. Why do I like to use military terms? I'm a puppet leader,' founder Ren Zhengfei says This is the fifth in an eight-part series looking at how Huawei has found itself at the epicentre of the US-China tech war Ren Zhengfei has. 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 across three phases, each lasting about a decade. You survived some hardships like famine. Some people asked me what the world would be like in 20 or 30 years. If a technology is just five kilometers away, we will invest heavily (a business version of a Van Fleet Load). Our costs were low for two reasons. Ren is the son of school teachers and grew up in a mountainous. The customer to over-democratisation years turning his theories into the 5G standards of.! With both dramatic changes in part because he maintained a modest demeanor throughout our customers want to buy from.... 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