Transformation Strategy 276: In order to survive, Huawei transforms, Huawei transforms and implements three times

Every business and product is looking for new ways and shortcuts, hoping to create unique features and customer experiences that win customer recognition.

Strategic strategy says that transformation is a systematic approach, not a one-trick approach.

In just a few years, Huawei has risen at an astonishing pace to become the world's leading provider of information and communication solutions. What is the secret of Huawei's success?

Huawei's three successful transformation experience in this era of urgent change in the context of the new era of new inspiration and reference, she from the beginning of the establishment of only 20,000 yuan of start-up funds, all the way through the thorns, soaring, 2017 revenue of 603.6 billion yuan to become the global communications industry hegemon, in the 31 years of vicissitudes, Huawei has undergone great changes, hard from a step by step difficult to survive the great.

Huawei's three strategic transformations

In Huawei's previous strategic formulation and adjustment, "staying alive" is the highest goal that Huawei has always adhered to, and it is also the minimum standard for Huawei's strategic goals.

Only by surviving can enterprises have the opportunity to seek better development. Otherwise it's all talk. Huawei's three changes, there are active changes, there are also passive responses, but after each change, it is a new life.

The First Revolution: The Integrated Product Development (IPD) Revolution – R&D is moving from technology-centric to customer-centric

Huawei's first transformation began in 1998, when the development was very good, and various product innovations were booming.

One year, Huawei held a 10,000-person conference at the Shenzhen Gymnasium to award the R&D department with unsellable slow-selling products with beautiful frames. This "award" is a very big touch for R & D personnel. "Product innovation" should not be blind innovation, but to innovate according to customer needs.

At the same time, in the early years, Huawei has been unable to defeat Ericsson in the Chinese mobile market, and after the survey, it was found that Ericsson sent several solution experts to be stationed in China for a long time to help China Mobile formulate business plans and network construction plans. It is not that the product is inferior, but that it can solve the customer's problem, which is what the customer really wants.

In the past, Huawei was once a strong person in the era of product-oriented, and since then, Huawei has been a new life in the era of market and customer orientation. After this road of change was opened, Huawei's industry-level market space has been greatly expanded.

The second revolution: the transformation of globalization – from the domestic to the global market

Huawei experienced a historical negative growth in 2002, and Huawei made a second passive transformation at this critical time. From the perspective of the general economic situation, the first Internet bubble burst, investment shrank, the government delayed issuing 3G licenses, and Huawei's share of the Chinese market at that time had reached about 40%.

For the case of not letting one supplier dominate when choosing a supplier, 40% of the share means that Huawei's growth in China has encountered a bottleneck.

Ericsson, the old rival, puts profits from around the world where income taxes are lowest and financing in the regions with the lowest loan rates.

In order to have the ability to compete, Huawei must achieve global operations. Later, Huawei built dozens of competence centers around the world, including a wireless communication technology center in Sweden, an engineering technology center in Japan, a software engineering center in India, and an Internet innovation center in Silicon Valley, so that it is eligible to compete with others.

External troubles are still there, internal worries are not stopped, when Huawei executives ran away and took away a large number of R & D backbones brought many new problems. Ren Zhengfei wrote a passionate article "Majestic and Energetic, Crossing the Pacific", but for the second transformation, this time there was some passive change, laying a solid foundation for the transformation of Huawei's business development and management.

The third revolution: the business model goes from big B (operator) to small B (industry customers) and finally to C (end consumer).

Why go from B to C? Because of the weak growth of the operator market, Ericsson and Alcatel are struggling, and the consumer business has great potential.

But this is not everything, Huawei believes that if there is no terminal business, from the perspective of the ecological chain, you have no way to get close to the end user. Because everyone ends up going to the cloud, if you don't have a terminal — an experience of the user's nerve endings , and only a pipeline, it's more difficult to go to the cloud. Companies such as BAT and Xiaomi are well aware of the great value of the "entrance".

In 2012, Huawei officially established the Consumer Business Group (Terminal) and Enterprise Network Business Group, which is an active change based on a deep insight into the changes in the industrial value chain.

Three changes have made Huawei what it is today, and actively embracing change has prompted Huawei to grow and expand rapidly from a weak, private enterprise with no background to a leader in the global communications industry. The core values of always customer-centricity have become the source of motivation for Huawei's successive changes, and it can also correct deviations in a timely manner when encountering problems.

Transformation and change, the inevitable law of enterprise growth

Welch has a book called The Nature of Business, which has a saying: Growth is king. That is to say, enterprises must continue to grow and not stagnate. How many centuries-old shop sadly ended, in fact, it took a few years for others to grow and he stagnated, and others changed the time he stuck to.

However, in the process of growth, enterprises will inevitably encounter a variety of ceilings, and only by making breakthroughs in change and breaking through thorns and thorns can they break the ceiling. Just as an eggshell breaking through from the inside out is growth, breaking from the outside in is destruction.

In the 21 years since its establishment, Eternal Asia has also experienced three stages of development from industry service enterprises to platform enterprises to ecological enterprises. From scratch to create and lead an industry in the domestic market, to a large number of peers imitating and following up the fierce and disorderly Red Sea competition, less than ten years of effort, such an emerging industry has undergone several reshuffles, but also promoted the transformation and transformation of Yiyatong from traditional supply chain services to in-depth distribution services, built the largest and most perfect ground distribution service network in China, and laid a solid foundation for leading the transformation of the circulation business field and building a healthy and orderly business ecosystem.

Continuous innovation and change is the driving force for the development of Eternal Asia to maintain its vitality and continue to lead the development of China's supply chain industry: it was successfully listed in the first decade, becoming the first listed supply chain enterprise in China, and in the second decade, the business volume reached 100 billion, becoming the largest enterprise in the circulation industry.

In the next ten years, in the process of advancing from 100 billion to trillion yuan, in the process of continuously promoting the transformation of China's circulation industry, Eternal Asia will continue to enhance its competitiveness and drive innovation and development:

On the basis of the original distribution platform, accelerate the new circulation reform, promote procurement sharing, marketing sharing, and service sharing, and change the current situation of the distribution industry being scattered and poor;

Vigorously develop comprehensive business services in the supply chain, establish a comprehensive business service platform with the cooperation of "state-owned enterprises + private enterprises", lay out in various provinces, integrate local governments and socio-economic resources to complement each other's advantages, and help enterprises achieve non-core business outsourcing and inclusive development through supply chain capabilities, resources and system output;

Provide brand marketing strategies, channel marketing planning, and terminal implementation for Chinese brands, and boost the incubation and cultivation of Chinese brands in the future, and help Chinese brands strengthen their markets and establish the world.

Establish a powerful sharing economy platform for China's circulation industry, create a personal cloud, store cloud, enterprise cloud, and marketing cloud with "integration + link", open up and share the commodity resources, marketing resources, financial resources, technical resources, and service resources of the sharing cloud platform for partners, and fully empower the innovation and transformation of the circulation industry.

Manage change and ensure the success of transformation

Huawei's three transformations, any one of them may face a catastrophe, why can it repeatedly break through?

In addition to successful business changes, Huawei has also implemented continuous management changes, organizational changes, process changes, and many other reform measures.

If the strategy changes, the business operation model will change with it.

The mode of operation has changed, the organizational function must also change, and what is more critical is that people must also change, people's thinking must change, and their abilities must also be improved. In order to realize the dream of a world-class enterprise and survive for a long time, Huawei must solve the management problems in the process of transformation and development. As a result, Huawei initiated a decade of management and organizational changes.

During this period, Huawei explored the "Iron Triangle Model", "Front-line Elite Combat Supported by Large Platforms", and "Let Those Who Can Hear the Artillery Fire Call for Artillery Fire", which not only made Huawei take an important step on the road of exploring the innovation of management organizations, but also promoted the complete transformation of Huawei's organizational structure, operation mechanism and process, and each chain can operate quickly and flexibly, and the key interactive nodes can be controlled.

Similarly, in the next decade, while doing a good job in business strategy change and layout, Eternal Asia is also inseparable from continuous leadership thought change, management change, organizational system change and process change. On the basis of continuously promoting refined management, through the implementation of the management reform of "control + authorization, empowerment + activation", the establishment of an organizational system of "headquarters background integration, regional implementation of regional regionalization, and provincial and regional function sharing", and the establishment of a talent training and development system and a high-performance incentive system that matches strategy, business and organization.

The only constant in the world is change, to survive in a world of rapid change, only constant change, survival in innovation, and development in change. I hope that in the new wave of global change, everyone who deeply embraces change can seize the opportunity, focus on the future, and win in change.

The transformation strategy is not to plan a design, not to plan a symbol, but to find the market, find advantages, find methods, find models, and design and customize the whole set of growth methods for strong landing.

Huawei can and is suitable for other products, and more suitable for all other industries.