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Ruihua Forum | Review of 2017 Ruihua Spring Forum: “Sideline Perspectives on Huawei” from Former Huawei Executives, Renowned Scholars and Entrepreneurs
Date:2017-04-10 Readed:783 【Print

“The only way to live on is to transcend the past, while the first subject of transcendence is ourselves. It is essential to eliminate all mistakes to realize our transcendences, while the eliminating mistakes start with the brave self-criticism.” Said Ren Zhengfei in Why Self-criticism.

Huawei, as the leading enterprise of “Made-in-China”, enjoys a household name of success. However, the most desired perspectives of Huaweiers come from the sideline. To this end, in the morning of March 3, the 2017 Ruihua Spring Forum in Zhejiang University: “Sideline Perspectives on Huawei” held by the Ruihua Institute for Innovation Management at Zhejiang University (hereinafter referred as Ruihua Institute) was successfully completed in Hangzhou.

It was a three-day grand gathering where various insiders of Huawei’s development, researchers from the academic circle and practitioners from the enterprises assembled together, to carry out profound exchanges and collisions of insights on multiple topics regarding Huawei, such as the self-criticism and reforms, the growth and alarms.

 

On March 21, Mr. Tian Tao, the senior member of Huawei International Advisory Council and Co-Director of Ruihua Innovative Research Institute at Zhejiang University, began the forum with his report, “The Laws of Rise and Fall in Organizations: A Formula about Organizations”. He proposed that, the time and space remained for enterprises indicated not only opportunities of transcendences, but also possibilities of corruptions and declines. Therefore it was of strategic significance to transform resources into energy, namely vitality of organizations, with high efficiency. Huawei had went through plenty of difficulties including resource shortage under age of asymmetric competition and three black holes under age of symmetric competition, namely corruption, slackness, and factions with different vested interests, and had always been subjected to the core values of customers first, dedication and continuous improvement to overcome internal and external challenges through self-criticism and reforms.

 

Professor Zhang Gang from the School of Management at Zhejiang University hosted the forum in the afternoon of March 21. Professor Huang Can, the director of the Department of Innovation, Entrepreneurship and Strategy in the School of Management, shared the contents and ideas of Huawei: Reforms of Management with present guests. Dean and Professor Wu Xiaobo and Professor Huang Can from the School of Management at Zhejiang University, Professor Guo Bin, and Professor Peter Murmann from UNSW Australia Business School jointly contributed the general editorship to this book, which included a large amount of researches and interviews about Huawei to analyze in details, standing on the longitudinal timeline, the backgrounds, processes, and changes of conditions occurring in the reforms of Huawei. The book also concluded some characteristics of Huawei’s reforms, i.e. the highly participation and leadership of CEO into the reforms, modeling the best practices as standards, employing eminent western consulting firms, and reproducing the best practices and rules across industry inside of the company in strict accordance.

As Professor Huang Can pointed out, there was a close connection between Huawei’s success and its systemized ability to manage reforms. Even though all enterprises would introduce reforms due to the ever-changing political, market and other external environments, many of them only realize the implementation when in crisis. Huawei, reversely, conducted reforms out of its system rather than stress reactions. Furthermore, Professor Huang stressed that, Huawei’s endogenous driving force and dynamic flexibility of self-reforms could be revealed in the “self-criticism” of its overall core values, the rest of which were namely customers first, dedication, and continuous improvement.

In addition, Professor Huang also thoroughly introduced Huawei’s reforms in its Integrated Supply Chain (ISC) and Integrated Financial Service (IFS). He believed that, since Huawei had the long-term, open-to-world reforming system with enduring adoption by executives, Chinese enterprises hoping to learn from Huawei’s reforms should not apply its experiences mechanically, but understand the principles resulting in the successful reforms and draw the common rules of business operation to settle real problems in their running processes.

Afterwards, Mr. Wang Xingyuan, former Executive Deputy Editor-in-Chief of We Huaweiers and Managerial Optimization, gave a speech on the topic of “Self-criticism and Future Challenges”. He quoted a letter of complaint from CEO of Telekom Malaysia in October, 2010, to explain the dilemma Huawei encountered in overseas market of Malaysia. Back then, as the dominant equipment supplier of Telekom Malaysia, Huawei was struggling against the disadvantages of insufficient collaborations and communications between departments, which resulted in the incapacity to provide a comprehensive solution of lateral openness for customers. The Telekom Malaysia incident introduced a major self-criticism practice across Huawei, demonstrating the outstanding learning ability of the collective organization.

As Mr. Wang said, Huawei had always been learning from customers, partners, and friends of the business. It learned the quality management of the terminal equipment business from Apple, the industrial design from Samsung, the on-line marketing from Xiaomi, the layout and focus of off-line channels from Vivo and OPPO, and the concentration of enterprise businesses from Cisco. In the future, Huawei would also learn to include the customer evaluations into the performance appraisal system of sales personnel from service enterprises to overturn the current defects of self-evaluation and long appraisal period.

On the other hand, Mr. Wang Xingyuan also stressed that Huawei had learned a lot from failures of some foreign enterprises. It learned the damage that could be caused by arrogance towards customers from the mistake of Nortel Networks made in Turkey, the importance of long-term perspectives regarding technology and market from the decline of NEC, the Japanese telecom equipment manufacturer, and the unnecessary connection between fine quality and success from the fading status of Nokia. He brought up four challenges as to the current environment: Firstly, to prevent processes becoming excuses; secondly, to reform the brand promotion when transforming from B2B to B2C; thirdly, to embrace the open innovation and iterative development to resist the impacts from Internet industry; and last but not least, to establish and maintain the business ecosystem according to the new era.

 

In the evening of March 21, the Peer Advisory Board witnessed participants raising various questions based on the information and thinking acquired during the daytime and the actual practices of enterprises, to serve useful purposes. The questions were mainly surrounding the brand management of enterprises, the implementation of the mission, vision and values, the contradiction of the corporate culture and strategy against the demands for collaborative control and efficient response, the definition and function of corporate universities, etc. Many participants attended the board and carried out thoughtful discussion, including Professor Wu Xiaobo, Professor Huang Can and Associate Professor Wu Dong from the School of Management at Zhejiang University, and multiple business professionals such as Mr. Song Yixin, Mr. Wang Xingyuan and Mr. Zhang Hui.

Associate Dean and Professor Zhou Weihua from the School of Management at Zhejiang University was in charge of leading the forum in the morning of March 22. This day began with a keynote report by Professor Xie Xiaoyun, Director of Department of Leadership and Organization Management from the School of Management at ZJU, talking about “The Transformation from Following to Leading: Challenges of Reform and Culture Faced by Mega Organizations”. He believed that since the vastly changed paradigm of customer first required completely different movements, it would be necessary to decide whether to establish a pluralistic organizational paradigm or not when the terminal businesses were contributing larger profit among the increasingly diversified service types.

According to his report, the construction of Costa Rica Ecosystem proposed in last year by Guo Ping, Acting Chief Executive of Huawei, headed to a status of openness, vitality, diversity, co-existence and common prosperity, which indicated the challenge of transformation that Huawei was facing since such a status was opposed to Huawei’s usual mode of highly centralization featuring unified aspiration and collective actions. However, transformation was the only choice, because the competence generation was deviating from the traditional mode basing on internal core competences towards the ecosystem mode emphasizing the external links of the value chain.

In addition, Professor Xie Xiaoyun further employed the case of declining Nokia and his coding on the online community of Huawei Xinsheng to illustrate that “Competitive barriers usually get broken through from interior” and “Big company diseases result in unsuccessful transformation of mega organizations”. Finally, he concluded the report with the epilogue of “The only one who can beat Huawei is Huawei itself” to explain that scholars critically analyzed Huawei in the intention of seeing greater development of the enterprise.

 

Subsequently, Associate Professor Wu Dong from the School of Management at Zhejiang University gave a speech titled “The Catch-up and Learning of Huawei”. He believed that there could exist three types of traps in the technical catch-up, namely capacity traps, investment traps and path traps. As a pursuer, Huawei had to accelerate the organizational learning to escape from these traps, while accelerated learning would in turn cause the paradox of diseconomy under time compression. For years, Huawei had established the human resource system of dedication, encouragement and option to ensure the punctual delivery of functions under the compressed time. But the effect was maintained under time compression in the price of compromised efficiency.

He pointed out that Huawei, as the industrial leader embarking into the “no man's land”, should be relived of time pressure. Therefore, it needed to focus on unlearning to ensure both effect and efficiency in the same time to achieve further development in the ever-changing environment. Not only that, he also illustrated detailed preconditions, dimensions and categories of unlearning in order to suggest Huawei to break the balance formed by outdated system and transform the corporate belief as the requirements of opening-up competitive environment in the future.

Mr. Zhang Hui, former Deputy Director of Department of Marketing, Head of Department of Strategy Communication and Department of Propaganda Strategy for Huawei Asia-Pacific, talked about the topic of “The Formulation and Practice of Huawei Brand Strategy”. He pointed out that enterprises had to focus on three specific issues when reaching certain scale, including how to elevate the competition from the level of product function to that of brand, how to forge the brand to establish comprehensive competences and gain customers’ favorite, and how to raise the industrial leadership. As far as he was concerned, the brand construction should be oriented to customer value instead of competitors, therefore it was supposed to search for value-add methods of base product/service to cultivate customers’ favorite and loyalty towards the brand.

Meanwhile, he further analyzed the brand positioning of a dozen enterprises like Alibaba, Nike, Nokia, Xiaomi, Starbucks and SINOPEC to illustrate the characteristics of successful brand strategies in detail, and summarized Huawei’s persistency in the pursuit of customer success from the perspective of its brand strategy formulation in different phases. He believed that brand establishment relied on not only communication but also primarily implementation that leaded to the integration of words with actions, as “Brand is integrity” that should be forged by the entire company—emphasized by CEO Ren Zhengfei. To this end, he introduced detailed challenges in the implementation of Huawei brand, and cited several examples about corresponding brand-experiencing strategies against these challenges.

Dean and Professor Wu Xiaobo from the School of Management at Zhejiang University made comments in the following discussion sector. He believed that the contingency of Huawei’s success was from effects of rather both internal and external factors than simply internal ones. He also stressed that we should not measure the failures of enterprises only by profit rate and other financial indicators, which were consistently fluctuating. The growth under dynamic environment provides the ability of achieving balance between the stability and the break of stability, which would support the competences in the long run.

Other participants also conducted in-depth discussion regarding topics such as the contents of unlearning, relation between brand and culture, brand strategies under different stages and performance appraisal.

In the end, the entire forum was successfully completed with the conclusion given by Dean and Professor Wu Xiaobo from the School of Management at Zhejiang University. He celebrated the depth and height of the speeches given by all young scholars and business professionals while also expecting more lively Huawei forums that “study Huawei without Huawei" with more profound connotation in the future.

The Ruihua Institute for Innovation Management at Zhejiang University will continue to host season forums that focus on different management topics. Distinguished from simple academic seminars or entrepreneur clubs, the forums are dedicated to providing communicating platforms of academic studies and practices on which scholars and entrepreneurs can learn from each other and help promote each other. Combined with the management experiences of Huawei, the forums are going to facilitate the rise, development and having global influence of more Chinese enterprises. We appreciate your further attention!

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