CFIC Guide
◆ To create a "world-class enterprise", Li Shufu's latest speech gave the answer!
The vision of the global village described in "The Earth is Flat" is gradually becoming an illusion.
The question now is, in this era of tearing, what is the way out for global enterprises?
As a typical leader of a "global enterprise", Li Shufu gave his answer in the latest sharing of Geely Lecture Hall on March 14.
World-class enterprise
Innovation capacity building is a protracted battle
In August 2018, Apple's market value exceeded $1 trillion, which is unique in the world.
But to everyone's surprise, this seems to be just the beginning.
Two years later, in August 2020, Apple's market value stood at the $2 trillion mark.
At the beginning of this year, Apple's market value once exceeded $3 trillion, almost becoming the world's fifth-largest economy, and its current market value has declined, but it still exceeds $2.5 trillion.
Apple is the kind of "world-class enterprise" model that the world is looking for, including China and Chinese entrepreneurs.
From the perspective of automobiles, China, as the world's largest automobile market and the world's largest new energy vehicle market, especially at the forefront of technological change, the industry calls for the birth of world-class enterprises in China's automotive industry.
In the view of Li Shufu, chairman of Geely Holdings, at the 24th meeting of the Central Committee for Comprehensively Deepening Reform held on February 28, "building a high-quality talent system and building a world-class enterprise" as the core content has become a concentrated embodiment of China's reform will and direction of reform.
The conference also put forward a number of characteristics related to the "world-class enterprise" - product excellence, brand excellence, innovation leadership, modern governance.
Li Shufu also quickly instructed the implementation - to combine the actual conditions of enterprises and follow the spiritual guidance of the central conference to do a better job. The talent group should combine the spirit of the meeting to study a new talent training plan as soon as possible, and other business enterprises should also seize the opportunity to formulate a more stable business plan according to the spirit of the meeting.
The core content of this conference constitutes Li Shufu's latest insight into the current situation, and also makes Geely Automobile the best player of "world-class enterprise".
Since the acquisition of Volvo Cars in 2010 shocked the world, Geely under Li Shufu's merger and acquisition of Proton and Lotus, its stake in Daimler, and the acquisition of The American Taili Flying Car, etc., has become the most international car company in China's automotive industry.
At the beginning of his entry into the automotive industry, he was determined to "let Chinese cars run all over the world" dream is being realized.
So far, Geely Holdings' Lynk & Co has established itself in mainstream markets, including Europe, with Proton playing a leading role in Southeast Asia, and Volvo Cars successfully achieving a renaissance.
In addition, Geely launched the "Talent Forest" program very early, with the aim of building a high-quality talent training system.
▲ Geely's talent forest
Image source: "Li Shufu: Shouzheng Surprise"
In Li Shufu's view, all this is inseparable from innovation.
Li Shufu has always raised innovation to the strategic height and entrepreneurial spirit, and believes that if there is no independent innovation ability, no core technology, independent brands can not talk about, "I even sleep thinking about independent innovation, otherwise I will be eliminated."
But he also stressed that independent innovation is not arrogance, but to make friends and engage in open cooperation.
After so many years of innovative development, he believes that in terms of innovation, enterprises should abandon some unrealistic illusions, because innovation ability cannot be bought with money, "truly competitive technology, no one sells you."
In addition, innovation is an ongoing process. "Innovation capacity building is a protracted war, not a war of annihilation, let alone a take-ism, a buy-ism, and a short-term doctrine."
He stressed that for enterprises, strengthening and expanding enterprises and improving their innovation ability is the first priority and the first responsibility.
To sum up, Li Shufu's innovation dialectic is not only to improve self-innovation ability, but also to respond to the century-old changes in the automotive industry with an open mind, and not to build a car behind closed doors.
In other words, innovation also requires collaboration.
He believes that if the car companies adopt the individual combat mode, it will be difficult to win the war.
This means that we must change our mindset and occupy the commanding heights of technological innovation through the synergies brought about by the form of cooperation.
In fact, Geely, whose leadership he leads, also benefits from this open-mindedness.
The world cannot do without China
China cannot do without the world
Li Shufu said that history is a mirror, and he believes that Chinese is full of wisdom and will be able to firmly grasp his own destiny.
The world cannot do without China, and China cannot do without the world.
In fact, the most powerful era in the 5,000-year history of Chinese civilization is often the most open and eclectic era.
For Geely, the reason why it can become a car company that operates globally is because it has continuously grown itself through an open cooperation strategy. Successful brands such as Volvo and Lynk & Co are living examples of open cooperation.
In this regard, many of Li Shufu's thinking and judgments are "god prophecies" that transcend the industry level.
About 20 years ago, Li Shufu said at a forum that because of the rise of Chinese cars, the global automotive industry will usher in a "reshuffle", and established car companies like General Motors will go bankrupt.
This remark stunned everyone present.
A GM executive joked, "It looks like I'm going to have to hurry up and get a new job."
But to the surprise of the industry, GM did file for bankruptcy protection in the financial crisis a few years later.
In terms of foreign cooperation, Li Shufu also showed his incredible forward-looking judgment - in 2003, at a high-level meeting at Geely, he suddenly said that he might buy Volvo - at this time, only two years after Geely obtained the official car manufacturing qualification, and only four years after Ford bought Volvo.
In the face of the surprised Geely executives, the reason he gave was that Volvo would become a burden for Ford at some point, and Geely wanted to become bigger and stronger, and the acquisition of Volvo was a fast track.
I don't know how many people really believed that Geely could buy Volvo, but in 2010, 7 years later, Geely did buy Volvo.
Later, Geely invested in Daimler, which once again shook the entire industry.
This reflects Li Shufu's understanding of "cooperation" – which is especially important in the professional, globalized automotive industry – and Geely has been able to achieve the scale it has today, and it is precisely because of this friendly cooperation model.
Ning Gaoning, secretary of the party committee and chairman of China Sinochem Group Co., Ltd., said in 2018 that Li Shufu led Geely to take a stake in Daimler that it was unimaginable five years ago. "It feels like a lot of things that can't be done in the past, Chinese have done it, and it's done well."
But for the status quo, Li Shufu's latest judgment is that the world economy has changed, the era of globalization has stalled, and the era of anti-globalization has begun.
Worse still, the global economy in the age of de-globalization may be divided into two camps, East and West, and two major economic systems.
Therefore, for the automobile industry, which pays attention to the global division of labor, how to achieve cross-cultural and cross-system operation, and promote the development of global enterprises in the era of anti-globalization, is a big but must be solved technical problem.
In his view, enterprises must adjust their business plans accordingly and adapt to changes in the global economy in order to survive and develop.
For example, throughout the whole year last year, and until now is still raging in the automotive industry chip shortage, Geely also has a breakthrough, successfully developed "China's first 7-nanometer vehicle standard SOC chip".
Li Shufu said that for cars to achieve intelligence, chips must be based on their own research and development. "The use of standardized (chip) products does not bring differentiated product power."
From the perspective of innovation in the supply chain of Apple, Tesla, Amazon, etc., which have become "world-class enterprises", Geely is also using its own way to solve the supply chain problems in the era of anti-globalization, and it seems that the effect is still good.
However, from Li Shufu's point of view, the "world-class enterprise" he has created is not limited to continuous innovation and maintaining a high level of open cooperation, but also corporate governance and common prosperity.
Enterprises rely on only one person unscientific
It is also necessary to realize that "everyone is a shareholder"
Unlike the increasing number of leading company leaders and titles in some industries, Li Shufu has gradually stepped down from some positions in recent years, which has aroused a lot of attention and discussion.
Some of the discussion focused on "Li Shufu faded out of Geely's management", and some people were puzzled from the perspective of "the founder is the spokesperson for the company's culture and development".
However, in Li Shufu's view, the gradual withdrawal from the management and board of directors level is his own active arrangement for corporate governance, with the purpose of promoting modern corporate governance in a more compliant manner, and better exerting the initiative and enthusiasm of professional professionals to improve the competitiveness and anti-risk ability of enterprises.
He believes that enterprises rely on only one person, which is unscientific and irresponsible for the development of enterprises.
Even more than a decade ago, Li Shufu began to gradually "step down" from some of Geely's core positions – he resigned as the "chief executive" of Geely Automobile in 2006.
Later, he stepped down as the legal representative of Geely and the chairman of Geely New Energy.
Li Shufu pointed out that only by gradually withdrawing can the management have the right and responsibility, and can it truly reflect the three-tier governance structure and the Geely corporate governance concept of "full authorization, legal compliance, clear assessment, fairness and transparency".
For example, he said he governed businesses not just in China, but in other countries around the world, "like the London electric car company in the UK, I'm not a director either."
This proactive arrangement is also reflected in responding to the relevant calls of the state for "solidly promoting common prosperity".
Li Shufu also explained in detail the expression of common prosperity at the "two sessions" - relying on common struggle, solidly promoting common prosperity, and constantly realizing the people's yearning for a better life.
He believes that this sentence expresses three meanings - first of all, relying on common struggle, making a bigger cake, making the economic aggregate bigger, and at the same time solidly promoting common prosperity. Regarding "solid progress", it is sustainable development, scientific and orderly institutional arrangements, to help more people start a business, employment, increase income, help each other, help each other, help the rich first, help the rich later, everyone works together, embarks on a solid path of sustainable development of individuals or enterprises, and the ultimate goal is to continuously realize the people's yearning for a better life.
Geely actually started to act a long time ago. Li Shufu once said that he was bored with the so-called rich list, believing that it was not conducive to the harmonious development of society.
In the middle of last year, Geely released the Action Plan for Common Prosperity. This program includes the full income growth plan, the full family health insurance plan, the full staff career improvement plan, etc., with the purpose of achieving industrial common prosperity.
According to Li Shufu's latest speech, Geely is also ready to take out a part of the equity and set up a special struggle fund to realize that everyone is a shareholder and everyone is the master, so as to dock the common prosperity plan at the national level.
More than 30 years ago, not many people could imagine that Li Shufu, who first entered the automotive industry, could lead Geely Automobile out of such a magnificent development picture, and no one dared to imagine that Chinese automobiles could obtain historic opportunities in the century-old changes and achieve innovative leadership of the global automotive industry - but Li Shufu always knew clearly that he could lead Geely to grow into a global automotive leader and undertake the mission in corporate governance and common prosperity, which also allowed him and his leader Geely. We are accelerating on the road to achieving a world-class enterprise.
Source of this article: Huashang Taoluo
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