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The enterprise of the future | Huawei's strategic goal for the next five years: to survive with quality

[Editor's Note] "Future" is based on time and the unknown. Take miracles as footnotes, and dare as a step.

As the first year of the 14th Five-Year Plan, in 2021 China will embark on a new journey of comprehensively building a modern socialist country and march towards the second centenary goal.

The "14th Five-Year Plan" plan and the outline of long-term goals put forward that we must adhere to the core position of innovation in the overall situation of modernization. It is necessary to strengthen the status of enterprise innovation as the main body and promote the agglomeration of various innovation elements to enterprises. It is foreseeable that the innovation drive in the next five years will be the main tone and power source of economic development.

In 2021, how will innovation drive development? At a time when new Internet technologies and various industries are rapidly integrating and changing, we focus on areas with deep influence such as manufacturing, life, energy, finance, space and oceans, and through mining the story of enterprise innovation, we look for the source of China's economic growth and give inspiration to the future.

Zhongxin Jingwei, December 14 (Zhang Yanzheng) In 2021, huawei's most mentioned internal sentence is "survive with quality.".

How to survive with quality? In August 2021, Ren Zhengfei, founder, director, and CEO of Huawei Technologies Co., Ltd., answered this question at the Huawei Academia Sinica Innovation Pioneer Symposium: "Our company now has two funnels: one is the basic theoretical research of the 2012 laboratory; the other is the development team, making products and creating more commercial value. Based on this research and development system, we not only want to lead the world in 5G, but more importantly, we want to lead the world on a sectoral surface. ”

The enterprise of the future | Huawei's strategic goal for the next five years: to survive with quality

Ren Zhengfei, founder, director and CEO of Huawei Source: Huawei

From selling switches to the world's top 50

More than 30 years ago, Huawei was just a communications equipment supplier that sold switches. In 1987, Ren Zhengfei raised 21,000 yuan to found Huawei in Shenzhen, and earned his first pot of gold by acting as a program-controlled switch of a Hong Kong company. With the continuous expansion of business lines, Huawei's products and services are not only sold to operators, governments, and enterprises, but also terminal products have begun to enter thousands of households.

Nowadays, when it comes to Huawei, many people first think of Huawei mobile phones, notebooks, tablets, Hongmeng systems, etc. In fact, these only belong to Huawei's consumer business, Huawei is also engaged in operator business and enterprise business, including carrier network, enterprise wireless, HUAWEI CLOUD, data storage, machine vision, etc.

According to Huawei's official website, the company is a leading global provider of ICT (information and communication) infrastructure and smart terminals. By the end of 2020, Huawei has about 197,000 employees, operates in more than 170 countries and regions, and serves more than 3 billion people worldwide. According to the 2021 Fortune Global 500 list released by the world's leading financial magazine Fortune, Huawei's ranking has risen from 49th in the previous year to 44th, and it has entered the world's top 50 for the second time.

It is worth mentioning that as a technology company, Huawei is the only company in the list of the world's top 500 companies that has not been listed. From the perspective of equity relations, Huawei is a private enterprise that is 100% owned by employees. Huawei implements an employee stock ownership plan through the trade union, with more than 120,000 participants, all of whom are employees of the company, and no government department or agency holds Huawei shares.

In order to manage such a large company, it is natural to need the corresponding organizational structure and system. It is understood that huawei's board of directors is the highest responsible body for the company's strategy, operation management, and customer satisfaction, with a total of 17 board members, elected by the shareholding employee representative meeting and voted by the shareholders' meeting. Among them, Huawei's board of directors and the standing committee of the board of directors are presided over by the rotating chairman, who is the top leader of the company during the current period, and the rotation period is six months.

Forming five "legions"

In fact, since 2018, in order to cope with external crackdowns and sanctions, Huawei has carried out a series of adjustments at the strategic, operational and financial levels. However, it is still difficult to avoid significant negative impacts. On October 29, 2021, Huawei released its performance report for the first three quarters of 2021, showing that Huawei achieved sales revenue of 455.8 billion yuan and a net profit margin of 10.2% in the first three quarters. Among them, C-end services have been greatly affected, and B-end services have performed stably.

In this regard, Guo Ping, rotating chairman of Huawei, said: "We will continue to strengthen technological innovation, R&D investment, talent attraction, and continuously improve operational efficiency, and we are confident that we can continue to create value for customers and society." ”

Xu Zhijun, Huawei's rotating chairman, also said at the 2021 interim results conference: "We have clearly defined the company's strategic goal for the next five years, that is, to survive and survive with quality by creating value for customers and partners. ”

Different from military warfare in the traditional sense, in order to "survive" today's commercial war, all parties need to invest heavily in the "battlefield" of technological innovation.

Ren Zhengfei formed five "legions" to seek ways to "break the wall". On October 29, Huawei held the inaugural meeting of the legion in Songshan Lake Park, and Ren Zhengfei and Chairman Liang Hua, rotating chairmen Guo Ping, Xu Zhijun, and Hu Houkun, Huawei's managing director, consumer business CEO, and CEO of Smart Vehicle Solutions BU Yu Chengdong, managing director and operator BG President Ding Yun and other executives attended the conference.

They presented flags to the Coal Mine Corps, the Smart Highway Corps, the Customs and Port Corps, the Smart Photovoltaic Corps and the Data Center Energy Corps, and marched for more than 300 soldiers from these five corps. Ren Zhengfei said at the conference, "I believe that peace is fought, and we must use hard struggle and heroic sacrifice to create a peaceful environment for the next 30 years." ”

The enterprise of the future | Huawei's strategic goal for the next five years: to survive with quality

Huawei Songshan Lake Park Source: Huawei

Zhongxin Jingwei noted that the Coal Mine Corps was formed in April 2021; on October 11, Huawei issued a document officially establishing four other corps. It is understood that Huawei hopes to gather internal industry experts to maximize the potential of each business, and the current legion is an independent organization in terms of organizational structure, which is personally formulated and supervised by Ren Zhengfei.

Ren Zhengfei said, "Through legionnaire combat, break the boundaries of existing organizations, quickly gather resources, intersperse operations, improve efficiency, do a deep and thorough job in a field, be responsible for commercial success, and produce more grain for the company." That is to say, in the current critical period of Huawei's development, the five legions will shoulder the heavy responsibility of charging and breaking through.

Researching 6G is a precaution

The five major legions have been established, so what areas will Huawei's internal industry experts conquer? In August 2021, at the innovation pioneer symposium of the company's Academia Sinica, Ren Zhengfei revealed his ideas in a speech with some scientists, experts and interns.

At the meeting, an advanced wireless technology laboratory personnel proposed that there is a risk of splitting the potential research and standardization of 6G, and asked Ren Zhengfei whether he had any guidance and suggestions in this regard. Ren Zhengfei responded that from a realistic business point of view, Huawei should focus on the industry application of 5G+AI, and form a team of ports, airports, inverters, data center energy, coal mines, etc., ready to charge.

"So why are we still desperately studying 6G?" Science, endless frontiers. "Ren Zhengfei said that each generation of wireless communication has developed new capabilities, 4G is a data capability, 5G is the ability to face the interconnection of all things, will 6G play a new role, will there be unlimited imagination space?" Radio waves have two functions: one is communication, and the other is detection. In the past, we only used communication capabilities, not detection and perception capabilities, which may be a new direction in the future. ”

In Ren Zhengfei's view, the future growth space of 6G may not only be large-bandwidth communication, but also detection perception ability, communication perception integration, which is a larger scenario than communication, is a new network capability, can better support the expansion of business operations. "Our research on 6G is to take precautions and seize the patent position, don't wait until one day when 6G is really useful, we are subject to people because we don't have patents."

The enterprise of the future | Huawei's strategic goal for the next five years: to survive with quality

Euler Donation Ceremony Source: Huawei

There must be ambitious long-term goals, but how to "survive" at present is also a problem. Ren Zhengfei said that after the UNITED States decoupling China's science and technology, as well as the spread of the new crown pneumonia epidemic, it will make us more respectful of intellectuals and more respectful of science. He pointed out that in the face of future basic research, it may take decades or centuries before people see you contribute. But the paper may be like Van Gogh's painting, which has been unpopular for more than a hundred years, but now it is worth a lot.

"For people who have been studying for a long time, I don't think they need to bear the direct responsibility for producing grain, so they should do basic theoretical research." Ren Zhengfei stressed that if you worry while studying, it is not okay to suffer from gains and losses, and different paths have different evaluation mechanisms. "We allowed Hayes to continue climbing the Himalayas, and most of us planted potatoes under the mountain, grazed cattle, and gave dry food to the climbers, because there was no rice on Mount Everest, and that was the company's mechanism."

Huawei pays attention to basic research and development, not empty talk, but smashes hundreds of billions of "real money and silver". According to Huawei's official website, Huawei insists on investing more than 10% of its sales revenue in research and development every year. According to the disclosure, in 2020, Huawei engaged in research and development of about 105,000 people, accounting for about 53.4% of the company's total number of people; in the past decade, the cumulative investment in research and development expenses exceeded 720 billion yuan, of which the research and development expenditure in 2020 was 141.893 billion yuan, accounting for about 15.9% of the annual revenue.

Today, Huawei is one of the world's largest patent holders. By the end of 2020, Huawei has more than 40,000 valid authorized patents worldwide (more than 100,000), and more than 90% of patents are invention patents. (Zhongxin Jingwei APP)

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