What does a company do when its annual sales fall close to 30 percent?
Either sit back and indulge the company's gradual decline or even death, or you can only achieve business transformation as soon as possible.
However, if the company with a sharp decline in revenue is a large multinational enterprise such as Huawei, then the difficulty of achieving business transformation in the short term is undoubtedly enormous.
Huawei's response is to create a small-scale so-called legion organizational structure in the direction of transformation that it is optimistic about. According to Ren Zhengfei's definition, Huawei's legion is through legionary combat, breaking the boundaries of existing organizations, quickly gathering resources, interspersing operations, improving efficiency, doing a deep job in a field, being responsible for commercial success, and producing more grain for the company.
The advantage of this organizational form is that in the situation of Huawei's ship difficulty, it attacks on all sides, extensive trial and error, which direction of the legion is done, there is improvement, and then invest heavily in resources, and even upgrade it to one of its own main business units.
Legion mode is not the first of Huawei. As a company that never hesitates to learn from advanced American companies, Ren Zhengfei said that the idea of its legion comes from Google: The New York Times on June 6, 2014 reported that Google's special organization is composed of phDs, scientists, engineers and marketing experts, this group is generally about fifty or sixty people, but their goal is to be the world's first (the product they are responsible for) to be the world's first, can not be the world's first, they will never quit this group.
At present, Due to chip supply problems, Huawei, which has seen a decline in consumer business revenue and a contraction in the business of enterprises and operators, seems to be determined to adopt the legion system to fight a backwater war.
Following the establishment and operation of the first coal mine corps, smart road corps, customs and port corps, smart photovoltaic corps, and data center energy corps for half a year, on April 4, Huawei set up a new corps again, and 10 at a time.
The 10 newly formed legions include: The Power Digital Corps, the Government One Netcom Corps, the Airports and Orbits Corps, the Interactive Media Corps, the Sports Health Corps, the Display New Nuclear Corps, the Park Corps, the Wide Area Network Corps, the Data Center Base Corps and the Digital Sites Corps.
Looking at Huawei's 15 legions, it can be seen that Huawei's legions are both oriented to the digital transformation of traditional industries (coal mine legion, smart highway legion, customs and port corps, power digital legion, etc.), as well as those facing the new energy outlet track (smart photovoltaic legion, data center energy), and some legions are even a subdivision of Huawei's existing business (showing the new nuclear legion, the park legion, the wide area network legion, the data center base legion), Others are directly targeted at an industry (Interactive Media Corps, Sports Health Corps).
In short, although they are all named legions, it is clear that between the legions and the legions, there is no division criterion at all (such as vertical industry or technical direction), nor is it an order of magnitude.
For example, the interactive media, sports health, and industrial scale are all larger than a few trillion yuan, and the display driver chip for the new nuclear legion is only tens of billions of domestic market size.
The coal mining corps, which is also doing the digital transformation of traditional industries, faces more than 5,300 coal mines and more than 2,700 metal mines in the country; while the airport corps faces only more than 200 airports in the country.
Therefore, the orientation of the large-scale establishment of huawei's legion is to attack large industries and not to abandon small industries, not only to explore the expansion of their existing business segments, but also to try to integrate ICT that they have not been involved in business areas. To sum up in one sentence, as long as Huawei has the foundation, advantages, and possible business, Huawei now wants to try it.
To put it mildly, doing so may look like rushing to the doctor, and if you stand in Huawei's position, such a large technology giant is forced to this job, which may really mean that Huawei, which is facing difficulties, has indeed no way out.
Flipping through its financial report, in 2020, the consumer business dominated by smartphones will still account for more than half of the total revenue, and in 2021, Huawei's consumer business will contribute to Huawei's revenue to 30% due to the reasons of Honor independence and 5G chip supply.
Its smartphone sales have also plummeted from the third in the world to the ninth place, and as the 5G network has become mainstream, Huawei, which has been unable to solve the problem of 5G chips for a long time, is likely to have a more serious decline in the smartphone business.
The consumer business is not the only main business affected by Huawei. Due to the impact of chip supply cuts, Huawei also sold the x86 server business in its own enterprise business in 21 years.
Although the operator's business involves base stations and other equipment chips are still in stock, there are also greater supply risks with technological changes and competitor product upgrades.
Therefore, the current Huawei, if it can't solve the problem of chips, then to do software, to do ICT solutions, to do hardware that does not require high-end chips, is the best business transformation direction under the compulsion.
In fact, the 15 legions established by Huawei, in addition to pure industrial digital transformation, the hard technology field is indeed decoupled from high-end chips or the direction of the domestic industrial chain is relatively complete.
Taking the smart photovoltaic as an example, the top three global photovoltaic panel shipments are all Chinese enterprises, chinese companies account for nearly 80% of the total global photovoltaic panel shipments, and the Chinese photovoltaic industry represented by LONGi shares almost does not have any technical problems in the international neck.
In the photovoltaic field with large plates, broad development prospects, and independent and controllable technology, Huawei has not only achieved the world's first market segment of core components photovoltaic inverters, but also, because there is no risk of being necked by Western countries, Huawei can confidently and boldly extend in the upstream and downstream of the industrial chain, and make more attempts around intelligence and informatization, without worries.
Take the only chip-oriented legion in the 15 legions - the display driver chip oriented to the new (core) nuclear legion as an example, although it is also a chip, but the display driver chip for OLED display panel control only needs a mature process of 40nm or 28nm to produce and manufacture, and the mainland chip foundry SMIC has full manufacturing capabilities.
Moreover, although Chinese mainland manufacturers occupy the world's largest share of display panel manufacturing - In 2021, Chinese companies produced 40% of the global display panels, the self-sufficiency rate of driver chips in domestic display panels is extremely low, and Chinese mainland display panel companies purchase more than 30 billion yuan of high-end display chips every year, of which more than 95% come from Korean and Taiwanese companies.
That is to say, although it is also a chip, it is clear that Huawei does not intend to directly dry processor chips and RF chips that are unrealistic, but chooses display driver chips that can be controlled in the upstream and downstream of the industrial chain, with low domestic self-sufficiency rate and can also be made by mainland semiconductor companies.
In the most difficult environment, the most critical thing for Huawei is not to solve the problem of the card neck unrealistically, but to do capable business, to do a business with a high probability, to make money, to do a business that is not cut off by the card neck, to achieve stable cash income, so that the company can continue to live, while providing financial support for research and development, which is the real goal of the Huawei Legion.