I said I couldn't even imagine what it would look in two or three years. What makes Huawei interesting is its rate of growth and . A great opportunity arose when one senior professor complained that the teaching program staffers acted as if the faculty worked for them, rather than the other way around. This hurts no one. 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. In this article David De Cremer and Tian Tao discuss the seven important leadership lessons that have made Huawei the company it is today. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. Even if we were ordered to, Huawei would still not install backdoors. As society moved forward, AI was made possible. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. HBR Learnings online leadership training helps you hone your skills with courses like Business Plan Development. 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. These cities were moving away from the previous planned economy. The Opportunities and Challenges of Global Teams. He does not only consider this kind of power to be an important personal characteristic but sees it as an essential part of the Huawei culture. How do you respond to some of these very, very strong criticisms from governments around the world? Our subsidiaries in other countries also have this relationship with local governments. If we get caught in the middle, we will be crushed like a watermelon when these two powers clash. It will greatly increase productivity. As of February 2019, he had an estimated net worth of US$3.3 billion. When designers showed the first iPod prototype to Steve Jobs, he said it was too big. There is nothing else that I want to share with him. When he reduces taxes, he must be hoping to attract more investment. High-OQ leaders use action strategy rather than consensus building to pursue strategic goals. We set prices based on our costs, which were relatively low. 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). 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!. Ren Zhengfei leads Huawei Technologies, one of the world's largest manufacturer of telecommunication hardware and mobile phones. For example, in 2014, the company made a decision on bonuses, which received over 70,000 negative comments, leading to a modification of that decision. An organization offers telephone exchange equipment. The leadership of Ren Zhengfei, however, does differ from this rather controlling only style in important ways. If the Chinese government or any other government ask you to hand over data, how would you react? Do you think that companies like yours are too powerful and need to be regulated? In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. The US government must present evidence to substantiate their charges against Huawei as this lawsuit proceeds. In our early days, we relied on only two multi-meters and one oscilloscope to develop the product. In 1963, he studied at the Chongqing Institute of Civil Engineering and Architecture. They had thought that disbanding was to weed out unnecessary troops and strengthen the remaining units. 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. If they have too much money, they would be obsessed with capital gains. In the Qingdao headquarters of the Chinese company Haier stands a display case containing a sledgehammer. 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. 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. But Meng Wanzhou will definitely not be the successor. People don't object to the editing of plant genes. 5. Ren Zhengfei's Media Interview After the Opening Ceremony of the Intelligent Mining Innovation Lab in Taiyuan. This approach transformed Huawei into a company of strivers and fueled rapid business growth. We were living in an adobe house that only provided us a little shelter from the wind. 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. Our financial statements are audited by KPMG, which can clearly show whether or not we are supported by the Chinese government. By the time I got my business license, I didn't have a single penny left. So George revamped the universitys advisory board meetings. Mr. Ren: I don't know. I would be afraid that they would pull out suddenly and stop doing business with us. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. Secondly, hes full of enthusiasm and ambition. What if we could identify and change the genes that cause the condition? Zhengfei has a strong interest and passion for learning about historic events. You've often looked up to Apple as a role model. They are out of the ordinary and unexpected. However, there was no way back. February 9, 2021. (This is where EQ can support OQ. ) Ren innovation skills and technical knowledge. His company reflects these traits. This company philosophy was inspired by the heroic tales of the Glorious Revolution that took place in England in 1688. Mr. Ren: When I was a kid, I didn't have many hobbies mainly because my family was poor. Data Analysis Methods Every Business Needs To Know How To Perform, Are You Ready to Lead in a Digital World? Are you starting to think about how your own intellectual property like chips could be used and sold to third parties like Apple? 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). 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. The multinationals that were present in China at that time did not consider this to be their problem, but rather that of the customer. I want to use a case analogy here. We are not that important in the bilateral relations between the two countries. What we have is not some kind of nuclear bomb or weapon. 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. Arjun Kharpal: But you created the world's largest telecom company. Let's look at an example. It is clear that although very ambitious and action-driven he also cares about the value of being humble. These experiences taught me to endure hardships. 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? In 1960, there was a serious famine in Guizhou Province. 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. 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. This does mean though that many translators and stock analysts and the like will lose their jobs. He has maintained the company as private and his management style has been extremely . Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. We want to sign such an agreement because we think it's the right thing to do. Register as a Premium Educator at hbsp.harvard.edu, plan a course, and save your students up to 50% with your academic discount. Another strategic objective was better cooperation between faculty and staff. Particularly the Silk Road Economic Belt and the 21, 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. Mr. Ren: I don't know about technology, management, or finance. Leading Huawei: Seven Leadership Lessons of Ren Zhengfei, The relationship between China and the European continent carries much history with it. That's why we told the German government that we are willing to accept their regulation. Directive Style. His tax cuts are helping revitalize enterprises. Mr. Ren: If they aren't scared of us, why are they advertising for us everywhere they go? Insights from Riversoft CEO, Alex Kuo, The Power of Big Tech Platforms Has Gone Too Far, A Vision of the future: Building a Smart Nation in Brunei, Machine Learning Quantization: What Is It and How Is It Important for AI Projects, Why Presentation Design Is Important for Business Reports, Frontiers in the Neurobiology of Values: New Challenges for Mental Health Professionals in the New Landscape of Work, Selecting the Right Digital Influencer in B2B Markets: Guidelines for Managers, Best Advice for Designing Commercial Buildings, Salesforce Volunteer Software: 8 Common Volunteer Management Challenges (& How to Navigate Them), Best Online eCommerce Marketplace Solutions 2023, The Impact of Remote Work on Field Service Management, 7 Questions to Ask Before Hiring an IT Company for Your Business, Tips for Effective Direct Mail Design & Production, Hawex: How AML and KYC Ensure Security in the Fintech Industry, 6 Tips to Optimize the Cash Flow of Your Business, 7 Tips That Will Help You Master Instagram Live. Elon Musk, for example, has continuously warned about the impacts on jobs and actually, artificial intelligence getting more intelligent than humans. Rebelling from the top means taking on the biggest challenges only when you have the most firepower. We are actually learning from US companies. The US doesn't need to conquer the world through violence. 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. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. Mr. Ren: First, Mr. Yang Jiechi, a member of the Political Bureau of the Communist Party of China (CPC) Central Committee, made a statement at the Munich Security Conference that the Chinese government always requires Chinese firms to abide by international rules and laws and regulations of the country where they operate, and that China has no law requiring companies to install backdoors or collect foreign intelligence. Technologies are advancing. That's the shortcoming of Trump's approach. But what we've seen publicly is senior officials in the government talking at times on Huawei's behalf. We cannot deny the role that enthusiasm plays in the procedure. This can help us address the problem of how we distribute our increasing profit. This is surprising because Huawei has been very active in 2014 and 2015 in securing many partnerships with European firms, ranging from a focus on cloud storage and cell phone applications in security areas. As a result, we set our prices at a relatively low level, which made it hard for Western companies to compete with us. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. AI will benefit our society. They can transfer to other industries though, and take on new roles. The ethos needs to be summarized in an evocative statement pointing to the behaviors desired in the organizations members. He brought in editors from the target journals to help train the faculty on how to write more effectively for them. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Mark your calendar for these stimulating events and prepare to be inspired. Want to buy more than 1 copy? When he passed away, I was on a vacation in the mountains with my family. Arjun Kharpal: I want to switch topic a little bit to talk about your daughter, Meng Wanzhou. The collaboration between these two countries would create two "trains" that can tow the global economy out of trouble. That's why some deep-pocketed countries with rich oil reserves are buying from us. They replied that they could not make it smaller. We will not distribute the extra profit to shareholders, either. They are buying our products in large quantities as the US government is advertising for us. Our costs were low for two reasons. What Industries are the Best Teachers for International Managers? It's not up to me to designate a successor. Living in such extremely harsh conditions and working on such a highly modernized project was really a good experience for me. Does China feel under pressure from President Trump's tactics in the negotiations? Important in this whole management process is that his use of an adaptive vision never compromises the purpose and values of the company. The law governs what's in between the transaction. Ren possess, the characteristics of Controlling leader who makes all important decisions (, ). One defining feature of the Huawei culture is that it is able to bring together opposing forces and tendencies. The criticism was scathing, including from McKinsey and other top consulting firms. 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? Publication Date: Wearing nice clothes or seeking further education was not what I wanted. And he was on a four-year contract and had limited time. Arjun Kharpal: Have you spoken to her recently? I also participated in a large project that brought equipment in from France. CNBC.com is the preeminent financial news source on the web, featuring an unprecedented amount of video, real-time market analysis, web-exclusive live video and analytical financial tools. Fostering an ethos requires taking two important steps. Smartphone was badly hit. Arjun Kharpal: You mentioned you abide by the local laws here in China. Moving forward, we will invest more in this direction. Secondly, we need to pay taxes to the Chinese government. However, it kills employees creativity and . Its this kind of spirit in Ren zhengfei that propels his company to become one of the best in China even the world. According to him, Huawei should be focused on building a company where peoples minds are the main asset and resource to rely on. Arjun Kharpal: Do you feel that your military-style speeches empower the employees here? For example, Huawei plans the development of the company by decade, whereas most of their competitors such as Ericsson and Motorola plan it by financial quarter or year. CNBC is a division of NBCUniversal. We will comply with European cyber security standards and the GDPR. Mr. Ren: I think the most essential factors to judge guilt are facts and evidence. When I look back on how Huawei developed in the telecom market, we actually made some missteps. All Rights Reserved. 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. Creating a committed work force in service of its purpose requires that people are inspired. After all these upheavals, she has changed her mind and doesn't want to leave. They don't choose certain goods just because a politician says so. We earned a bit of money this way. But opting out of some of these cookies may have an effect on your browsing experience. The differences of leader skill in America and China. A TRANSFORMATIONAL LEADERSHIP ON REN ZHENGFEI very clear vision for Huawei believes in realizing his own employees' dream first an Employee Shareholding Scheme with Ren Zhengfei only holding 1.4% Employees express their views and share knowledge on Xinsheng Community 2018,ren zhengfei published a document criticizing the company's leaders for mismanagement and fined himself 1 million yuan Mr. Ren: Huawei's future iterative succession system is clearly defined in our Articles of Governance. Ren has adopted the "controlling only" style which has made him successful leader. Ren Zhengfei, a founder of Huawei, conducts the personal communication style inspiring employees to achieve high results. But he also has shortcomings. If a single backdoor was found in even one of the countries where we operate, our sales would shrink in all of them. So AI will make the world better, not worse. All rights reserved. I am just taking as a bucket of "glue". We don't talk about anything else, because we know that our communication is being monitored. She has understood the difficulties that the company is facing and wants to help us see this through. This idea of adopting a cooperative mindset in a competitive market can be illustrated by Huaweis efforts in the UK. It makes that he is characterised by his employees as someone who leads with his heart and moves with his mind. 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. As a result, I went back to where I started and jumped into the market economy. I would say he is a great president. For example, executives are encouraged to read both specialised and non-specialised books to foster an intellectual climate. So firstly, we must abide by Chinese laws and regulations. If we didn't abide by those laws and regulations, we wouldn't survive even a day. The European Business Review is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. I felt very uncomfortable with the transition from the military to Shenzhen which was becoming at forefront of the reform and opening-up. In Europe, we will face some difficulties in the short term, but there will be no impact on our business. This is thanks to Trump. 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. Photos/ Taddeo Bwambale . And it needs to be communicated widely. Or do you feel sometimes they are intimidated by that style of leadership? By David De Cremer and Tian Tao. This switch was used by hotels and small organizations. And I don't really care about all that. 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. Get your Culture in Good Shape, Not Lost in Translation: Making the Data Make Sense. 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. No reviews should be taken at face value, always conduct your research before making financial commitments. At the time, the market economy was beginning to take shape in China, at least in coastal cities. Arjun Kharpal: Mr. Ren, I want to move onto a bigger picture of the world of technology. If we didn't pay taxes or follow the laws and regulations in the over 170 countries where we operate, we wouldn't have survived in those countries. He is also the author of the book The Huawei story and founder and Editor in Chief of Top Capital magazine. and pay only $8.25 each, Buy 500 or above In the first decade of the developing of the company, Huawei is needy for all kinds of human resources. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Your email address will not be published. His message resonated throughout the Chinese corporate world; one of the sledgehammers now sits in the National Museum of China. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. On this forum, ideas are communicated frequently by senior executives and Zhengfei and feedback from all 170,000 employees is encouraged. Arjun Kharpal: One of the concerns is that these powerful technologies like artificial intelligence are being developed by a small group of very, very big technology companies. 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. 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. Save my name, email, and website in this browser for the next time I comment. For example, if AI is applied to tractors, they will be able to work 24 hours a day. As a leader he was used to delivering a vision and as a mentor he was guiding his employees towards their goal. At the same time, the company acknowledged the contributions of dedicated employees by remunerating them generously. Since China has become the second largest economy in the world, this relationship has taken new forms in the shape of several business initiatives. This is because technology is lifeless and can be widely applied. Create a free website or blog at WordPress.com. These great people are going to great lengths to find fault with a little rabbit or mouse like us. It's now just a scientific fantasy, and wouldn't necessarily ever happen. 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. Obviously this has required a strict control of information, which attaches a flavor of secrecy and even mystery to the behavior of Mr. Ren Zhengfei. Huawei was not mentioned in any of the negotiation meeting minutes published by the US and China. Especially in the entrepreneurial years of the company he used this strategy to be both a strong mentor and leader for his employees. How can I live a life like that? In the early years Huawei had the tradition to regularly invite scholars from the East and the West to talk about the histories of their countries. CEO's are the driving force behind any for-profit organisation. We just provide the equipment used to build these networks. Around 2008, Professor Arikan published a mathematics paper. Harshal Pawar Huawei is to a large extent no stranger to this system. The country wanted to reform and open its doors. 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. We live in a very connected world. I don't know what the government officials have said, what concessions they have made, or what opportunities or benefits they've received. 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. Why cannot we edit human genes? I would like to express my own opinions instead of as a Huawei representative. 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? In the words of Zhengfei: Chaos was removed and structure entered Huawei. Although he is a billionaire, Zhengfei prefers a low profile lifestyle and even travels on the public transport. I liked reading books, doing homework, and solving math equations on scrap newspaper. 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. And its founder Ren zhengfei is thought be be one of the best leader in the business world. We can give you a copy if you want. This proves our equipment is secure. There was no chance for us to step back and start another business. Huawei is now China's most prominent multinational company and a leader in 5G mobile telephone technology, which will be rolled out across the world in the next few years. None of the information on this website is investment or financial advice. The US stock market may witness a significant rise this July. We won't test your products. Typically, they've been used in Huawei's products. 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. So what is her role at this company if she is eventually released? More and more companies are harnessing new technologies more quickly. A Division of NBCUniversal. You are less known internationally. 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 . So the standards the US finds so compelling are actually all built on a single mathematics article. As I said, this is because we have no real presence in the US market. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. If no one dares to invest in the US, then how can they make up for lost tax revenue? There was nothing much wrong with them just a few scratches and other minor defects. And care must be taken that they dont conflict with the desired ethos. Arjun Kharpal: I want to go back a little bit to talk about the US-China trade war because Meng Wanzhou was arrested in Canada on behalf of the US authorities. For that reason he looked for alternative ways to attract customers. Essential in his idea to compete, however, is that it should be done with respect for its opponents. Mr. Ren: Collaboration and shared success. 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? Huawei is now the world's largest telecoms equipment maker. Tian Tao is codirector of Ruihua Innovative Management Research Institute at Zehjiang University. The story goes that Zhengfei was so moved by the work done in those labs that he cried.