Five days after the release of Huawei's 2021 annual report, Guo Ping and Meng Wanzhou, who attended the annual report activities, both ushered in job adjustments: Meng Wanzhou was promoted to the position of rotating chairman of Huawei, entered the company's highest decision-making level, and continued to serve as vice chairman and CFO of the company; Guo Ping stepped down as rotating chairman and transferred to the chairman of the company's supervisory board.
Huawei's rotating chairman system, which began in 2018, is a representative product of Huawei's collective leadership system, with Guo Ping, Xu Zhijun, and Hu Houkun serving as rotating chairmen in the early stage, each on duty for 6 months. All three are veterans of Huawei, with an average of nearly 30 years of experience at Huawei.
The Rotating Chairman is the supreme leader of the Company during his current duties and presides over the affairs of the Company's Board of Directors and the Standing Committee of the Board of Directors. Hu Houkun, who currently rotates as chairman of the company, will serve from April 1, 2022 to September 30, 2022. If according to the previous rotation order of Guo, Xu and Hu, Meng Wanzhou, who replaced Guo Ping, will usher in his first rotation on April 1, 2023.
This is Huawei's first personnel change since the implementation of the rotation system. Although Ren Zhengfei has repeatedly stated to the outside world that "Huawei will never let her family succeed" and "Meng Wanzhou will never be a successor", the news of her promotion to rotating chairman still makes the outside world speculate a lot.
As for whether Meng Wanzhou has the possibility of succeeding Huawei, Huawei officials did not respond positively to the alphabet list, only saying that the company is committed to optimizing and improving the internal governance structure so that the company's foundation will be evergreen.
Huawei is one of the few companies in the world to implement the rotating chairman system, which is based on the fact that Ren Zhengfei is still the backbone of China. To some extent, rotation is also a compromise between Ren Zhengfei and the inability to determine a successor – Huawei's first rotation of CEO was in 2011, when Huawei was attracting much attention because of the succession issue.
Meng Wanzhou is currently the youngest of the three rotating chairmen. Regardless of who Huawei's ultimate successor is, Meng Wanzhou has already taken a big step forward. At the very least, her promotion to rotating chairman puts her on the same starting line as her potential successor.
A
It has been 35 years since Huawei was founded, and the company has created many unique cultures and governance systems, such as Ren Zhengfei's insistence on not listing Huawei, but adopting a plan of full shareholding. Its proud rotational leadership system is often praised by the outside world, but this system was not determined by Huawei at the beginning of its establishment, it is the product of the company's continuous trial and error and compromise in its long development.
Before that, Ren Zhengfei, as the founder, was the company's top decision-maker, both chairman and CEO. Some reports describe Ren's management as highly centralized, one of which is that the Huawei Basic Law, launched in 1998, proposes that the company's decision-making principle is to follow the crowd. In this highest document on Huawei's corporate governance, the policy of collective leadership of Huawei is expressed as liberalizing high-level democracy and strengthening grass-roots implementation.
The question of Huawei's successor was brought to the fore at the beginning of this century, which may also have something to do with the fact that Ren Zhengfei was over 40 years old when he founded Huawei. At that time, it was Li Yinan, who was widely regarded as Huawei's successor, a "technical genius" who served as Huawei's vice president at the age of 27, the youngest vice president in Huawei's history. But Li Yinan has since fled Huawei, and even set up a self-reliant portal to compete with Huawei, and is called Huawei's "traitor" by the outside world.
In 2002, Huawei's misjudgment of PHS led to negative revenue growth for the first time in the company's history, and Ren Zhengfei described it as "the company almost collapsed" at that time, after which Huawei's management system began to change.
Ren
The EXECUTIVE Management Team (Management Team), formed in 2004, is regarded as the beginning of Huawei's collective leadership. Ren Zhengfei mentioned in his 2012 article "A River of Spring Water Flows Eastward" that EMT was proposed by an American consulting firm to help them set up the company's organizational structure, because Huawei did not have a central structure at that time, and "the top level was only empty appointments, and it did not operate."
Before that, Ren's physical condition had deteriorated, and he said that he had undergone two cancer surgeries in the first few years of 2003 and that he had "a number of diseases in his body."
Ren Zhengfei was reluctant to serve as the chairman of the EMT, so he proposed a system of rotating chairmen, with eight members of the EMT taking turns to serve as chairmen, and each serving for half a year. Ren Zhengfei believes that such a rotation system can balance the contradictions of all aspects of the company, and there will be no situation of mountains, which can make the company grow in a balanced way.
After two cycles, in 2011, this system evolved into a rotating CEO, and Ren Zhengfei gradually faded out of the company's daily operations, which was regarded by the outside world as Huawei's "post-Ren Zhengfei era". Ji Yongqing, author of "Huawei's World", said in an interview with Reuters that Huawei hopes to achieve a smooth transition of power from the first generation of entrepreneurs to the second generation of managers through this mechanism.
This system had triggered a wide range of discussions at that time, and Ren Zhengfei wrote an article for this purpose, "Identification of the CEO Rotation System Under the Leadership of the Board of Directors", to discuss this issue, he felt that the rotating CEO was better than the previous system of granting power to one person, because if the fate of the company was tied to one person, it would be "success and failure", and the rotating CEO could also avoid the situation of a son of heaven and a courtier.
In 2018, the rotating CEO was upgraded to the rotating chairman system, and the members were composed of Guo Ping, Xu Zhijun and Hu Houkun, which has been implemented so far.
B
It must be clear that Huawei is one of the few companies that has successfully implemented the top management rotation system, but this is also based on the fact that Ren Zhengfei is still the backbone of Huawei. In some crisis moments in Huawei's history, ren Zhengfei still needs to coordinate the situation.
The latest example is that after the arrival of the wave of new energy vehicles, in the face of constant internal and external debates about whether to build a car, Ren Zhengfei made a final decision in November 2020, making it clear that "who will propose to build a car in the future, interfere with the company, can be transferred from the post, and find another post", and delineated the validity period of this appointment for 3 years.
Previously, after Huawei was included in the ban list by the United States, Ren Zhengfei also came forward to intensively accept interviews with Chinese and foreign media to show his attitude. At that time, Ren Zhengfei's statement on "the United States does not supply, Huawei is no problem" greatly stabilized the panic in the market.
Many domestic companies have learned from Huawei's rotation system. In 2017, Alibaba implemented a rotating president system in its large cultural and entertainment sector, and Yang Weidong and Fan Luyuan have held this position successively, but there has been no new rotation since Fan Luyuan took over. Yang Weidong, the first rotating president, was sentenced to seven years in prison in 2020 for accepting bribes from non-state personnel.
JD.com's rotating CEO system has never really been implemented, and Xu Lei is the first and only rotating CEO of JD Mall. In 2018, JD.com implemented the rotating CEO system of JD Mall, which was held by Xu Lei, then CMO of JD Group, and before that, the CEO position of JD Mall had been vacant for two years.
A year later, Jingdong Mall was upgraded to Jingdong Retail Group, and Xu Lei continued to serve as CEO. In 2021, Xu Lei was promoted to president of Jingdong Group, and Xin Lijun, CEO of Jingdong Health, took over, but there was no longer a "rotating CEO" in the appointment notice, which also meant that Jingdong's rotating CEO system existed in name only.
Some criticisms of the rotation system point out that frequent changes in top decision makers reduce the efficiency of decision-making and the continuity of strategy execution. Among domestic companies, Kuaishou once implemented the dual leadership system of the two founders of Su Hua and Cheng Yixiao, but has been criticized for its low decision-making efficiency and insignificant distinction between rights and responsibilities. In October last year, Kuaishou announced that Su Hua would resign as CEO and replace it with Cheng Yixiao, and Su Hua would continue to serve as chairman.
"In the face of a rapidly changing society, Huawei really can't find any good way, and can only choose the CEO rotation system." But whether the CEO rotation system is a good method or not, it will take time to test," Ren Zhengfei said in the above-mentioned "Ceo Rotation System Under the Leadership of the Board of Directors".
Some speculation suggests that the rotation is actually Ren Zhengfei's inspection of the successor. Because in 2011, when the rotating chairman became the rotating CEO system, the number of people was reduced from 8 to 3, and Guo Ping, Xu Zhijun and Hu Houkun, who were selected at the highest decision-making level, were all heroes in the company's initial period, and this three-person group continued until the subsequent rotating chairman system.
Before Meng Wanzhou joined, it was widely believed that a successor would be selected from these three people. Ren Zhengfei has also previously stated to the outside world, "Huawei's successor is too many, not too few."
Meng Wanzhou
Regardless of age or seniority, Meng Wanzhou has the possibility of succession. She joined Huawei in 1993, at the same time as Xu Zhijun. Within Huawei, she is a contributor to the company's financial reform, leading the establishment of a globally unified Huawei financial organizational structure, process, system, and IT platform. In 2009, Ren Zhengfei praised Huawei's financial system during a discussion with the company's financial system, saying that "carrying a Hanyang gun and shooting down the cruise missile, this is Huawei's finance."
Since then, Meng Wanzhou has also led Huawei's data reform and established the company's perfect data management system. Huawei commented on its official website, "Under her leadership, Huawei Finance has become the world's leading digital and intelligent financial organization, creating a solid and reliable business foundation for Huawei and helping the company achieve its strategy in the new era." ”
Meng Wanzhou became the company's managing director and CFO in 2011 and became the company's vice chairman in 2018. Her last public appearance was at the Launch of Huawei's annual report on March 28, her first public appearance since her return. At that time, she sighed: "One day in the cave, the world has been a thousand years."