Inscription: On January 27, 2024, the 21st Chengze Forum of Peking University Development Institute and the "Sitting on Pins and Felts" Joy Reading Sharing Meeting were held. Ning Gaoning, Distinguished Professor of Practice of Peking University Development Institute, former Chairman and Secretary of the Party Group of Sinochem Holdings Co., Ltd., Professor Huang Weiwei of Business School of Chinese University, and Yang Zhuang, Professor of Management of Peking University Development Institute and former Co-Dean of BiMBA Business School of National Development Institute, were invited to attend the ceremony, respectively, to share the keynote and have a dialogue on the same stage. This article is based on the content of the dialogue between the three guests. The host of the event was Wang Xianqing, director of the Communication Center of Peking University Development Institute.
Why does Immelt feel "on pins and needles"?
Wang Xianqing: The English title of "Sitting on Pins and Needles" indicates that this position is not only hot and hot, but also very uncomfortable to sit on, and it also attracts attention. What is the root cause of Immelt's 16-year tenure as CEO of General Electric, who still thinks that this position is "on pins and needles"?
Ning Gaoning: How can it be that for 16 years it has been "sitting on pins and needles"? This statement is obviously a bit exaggerated. In an enterprise, it is not uncommon for managers to be replaced, and the successor will always take over the enterprise with both advantages and disadvantages, and the manager's responsibility is to transform the bad enterprise into an excellent enterprise, develop a small enterprise into a large enterprise, and determine a clear development strategy for the difficult enterprise.
The job of CEO is indeed difficult to do, but it is not impossible. I think the fundamental reason for Immelt's "sitting on pins and needles" is that he has a problem with his own positioning, he has not taken his due responsibility and has not made his due contribution. The future of a business depends on the attitude of its leaders. If everyone thinks that the company is difficult, it may indeed be difficult to develop, if 70% of the people think that the company is good, then the company will indeed develop well, but even if 60% of the people think that the company is not developing well, there is still a way to improve, and the key to the problem is the attitude of the leader.
This is also a difficult problem faced by almost all types of enterprises such as state-owned enterprises, joint-stock enterprises, and private enterprises.
Yang Zhuang: From 2004 to 2006, when I took students to the United States for study tours, GE was a must-see project for us. During my visit, I found that if Immelt had a vision and pattern, he should have led the company to make timely adjustments in 2002-2004, but he did not. At that time, GE was over-borrowing and the company struggled to breathe, and when the financial crisis hit, the company simply couldn't cope.
Why did Immelt find his job difficult during his tenure? From the perspective of the objective environment, they encountered too many challenges in those years, from his appointment in 2001 to his departure in 2017, GE was almost in crisis.
From a personal point of view, as a professional manager, he may not be able to adapt to the changing situation in the CEO position, and it is precisely because he cannot bear it that he feels "on pins and needles".
Weiwei Huang: Taking over a top-tier company is a daunting task, and it's true for anyone. Immelt's biggest decision-making challenge is whether he has the courage to accept the consequences of changing GE's structure when financial operations account for 40%-50% of GE's revenue. Once he acts, the stock market will react and he may step down as a result. It's a huge challenge, not only for him personally, but also for the company.
When reading this book, I looked at Immelt mainly from a learning perspective. Since I don't have the experience of leading or building a Fortune 500 company myself, I can only understand by thinking.
In the end, I decided to focus on learning his ethics. The problems he faces are world-class, because the problems faced by the world's top companies are also top-notch.
Ning Gaoning: When I read this book, I understood Immelt's corporate strategy and asset layout, and found that his thinking and actions are similar to the companies I have experienced, which are the result of the interaction of multiple factors.
Of the many factors, I think opportunity and team perception are the most important. No one on GE's executive team realized that he was on pins and needles, otherwise he wouldn't have managed the business for 16 years, and Mr. Immelt certainly didn't anticipate that feeling before he took office, or he wouldn't have come to power. In addition, after 16 years, he still said that he was "on pins and needles", which indicates that there is something wrong with his attitude. He said that this seat was not good, and it was probably good to change to someone else.
Regarding GE's capital problem, I think that its capital operation was an advantage at first, but then it became a disadvantage, and then it became a big problem. Wall Street has been asking them to make a change, requiring them to report on the share of their financial business every year, and while their businesses such as aircraft engine leasing, medical equipment leasing and pension account management are healthy, they have come to have some problems when it comes to loan sharks. Coupled with the events of 9/11 and the 2008 Southeast Asian financial crisis, corporate volatility was inevitable. Today, the world's large-scale equipment rental companies are not dead, and GM has not drastically cut business, but the result is that both new investments and old businesses are not doing well. It would be unthinkable if such a company did not have financial difficulties. General-purpose bonds were once rated the highest grade in the United States, almost on par with U.S. Treasuries, but it was only later that things went wrong. It is certainly not easy to solve the difficulties, but that should not be an excuse.
Many people have commented on Welch for doing a good job because the problems he faced during his tenure were not easy to solve. For example, during the financial crisis of 1987 and 1988, when he also faced problems with nuclear power plants and mines, and Welch also invested in investment banks but eventually sold them, both of which failed, and he began to consider turning to the technology field, but he was too old to do so. Of course, I don't want to say who is right and who is wrong in a specific business, but I want to say that the responsibility of the CEO is to turn the company from crisis to safety, from weak to strong, from the trough to the peak, if it is not completed, then it must also accept the facts, and it cannot all be attributed to the problems left by the predecessor, I can't solve it, I can't do it, and I can't have the victim mentality of "sitting on pins and needles" for 16 years.
Wang Xianqing: Continue to ask Mr. Ning, Welch had a total of three successors at that time, why did he finally choose Immelt?
Ning Gaoning: This should be the thing Welch regrets the most in his life. Under the leadership of Immelt, not only did the company's business not go well, but more seriously, the two turned against each other, which is also reflected in a lot in the book. But even now, there is still no better way to choose a successor, which makes people feel helpless.
In fact, Welch began the selection of successors more than ten years before leaving office, and the scope was narrowed down to three in the last two or three years, and all three chose to resign in the last six months, which is equivalent to waiting for the final decision. In such cases, the person's intuition is often very accurate. I think the real problem is that the "first leader" and the "second in command" are not just half a level apart in terms of job level, but they are fundamentally different jobs, and they need to use different thinking. Some people can easily take that crucial half-step, while others may not. I've seen a lot of people who are very good, but once they get promoted, their performance is often greatly reduced, and they get back to where they were and they can get back to good performance. It's like playing with a ball, someone who can control a ball well and once they try to control more balls, they tend to lose control, while someone can play with two balls and someone can play all three balls well. I think it's probably because different people have different minds.
I'm not trying to be a moral judge, but I'm trying to say that some people may just not be fit for a position. Of course, if this selection mistake is traced back to the root cause, it is ultimately Welch himself. But from an individual point of view, if you say regret, Welch must regret it, but there are many factors behind the company's business mistakes, which can be attributed to the bad market, the board of directors does not support, and of course, the selection mistakes must also be admitted. Finding the cause is the only way to solve the problem, although the selection of people is still an unsolvable problem.
How to choose the right "leader" of the enterprise
Wang Xianqing: Since selecting people is not so easy to work, from the perspective of academic research or experience summary, what do the three teachers think is the most critical ability of the "top leader" of the enterprise?
Huang Weiwei: I think that the "number one" of the enterprise needs two important qualities, and the two qualities are indispensable: one is strategic vision and overall view; the other is personal integrity, and it must be linked to "talent", if it does not meet the standard of "talent", no matter how good a person's ethics can not enter the ranks of candidates.
For Welch, "virtue" may be a more important consideration when the list of candidates is narrowed down to three, especially how to unite a group of people and lead them forward. However, I oppose the general emphasis on "morality" in the selection of talents, and if a person's business ability does not meet the standard, he cannot make a choice based on "morality" alone.
There is a "morality with the amount, and the amount with the knowledge", a person's morality, temperament, and experience cannot be separated, because morality will grow with magnanimity, and magnanimity will be more magnanimous due to rich life experience. "Virtue" is not necessarily innate, it is also related to the goal to be achieved, to restrain oneself based on high goals. Not self-restraint according to high standards, just good interpersonal relationships, that is not the "morality" that CEOs need. In addition, to be able to unite a group of capable people, this requires "talent" as the foundation. On top of that, it is also necessary to be able to listen to different opinions, take the initiative to correct mistakes, and at the same time stick to the strategy to win the approval of the people.
Yang Zhuang: I will select three typical CEOs to take a look at the selection criteria for this type of talent.
The first, Jobs. Jobs changed the world through mobile phones, had a profound impact on more than 20 industries, and brought great value to the world. From the perspective of virtue and talent, Jobs's moral character is more prominent.
The second, Elon Musk. His way of thinking is often difficult for ordinary people to understand, but he has a high vision for everything he wants to do, such as Tesla, clean energy, trucks and rockets, and all of them are closely related to his career.
The third, Kazuo Inamori. He put forward what is right to be a person and do things, which is a value. Values are defined as the ordering and prioritization of options. The CEO must have clear values and clear criteria for judging good and evil, good and bad.
Overall, all three of them are not experts in the business domain and rely on the team, but they are all familiar with the business. At the same time, all three of them are from engineering backgrounds, have their own views on things, do not accept empty words, and pay more attention to practical actions. In addition, they all have unique personalities and personality traits that are constantly self-correcting – without these traits it is possible to be a good professional or a good person, but it is difficult to be a good CEO. In reality, some people say that they are a good CEO, but they are not successful CEO. Because a good CEO may have a good relationship with the masses and be highly respected, but due to insufficient vision and pattern, he will still fail in the competition.
Ning Gaoning: Strategic transformation, internal collaboration, and personnel selection at critical moments are all eternal problems that plague business leaders, and they are prone to continue to make mistakes on these issues. Although every enterprise has its own criteria for selecting and employing people, no amount of standards can prevent mistakes, because people themselves are too complex. Through the accumulation of experience and professional research, we can gradually establish some models and explore the rules. Of course, talent selection models are not easy to make.
In response to the problem of talent selection in enterprises, I once proposed a word called "human feeling", that is, for leaders, they should have a sense of people, not just things and business. The "human sense" of a leader is reflected in the ability to quickly identify a person, including what can and cannot be done, which requires the leader to: first, be able to quickly identify the differences between people, and second, be able to accurately judge which position to put the person in to better exert his ability and even potential.
In addition to "human feeling", some colleagues suggested adding "touching", that is, leaders can inspire, inspire, and move people, even if the income is not high and they are a little wronged, everyone is willing to follow. To do this, leaders need to be forward-looking, set ambitious goals that are convincing and fair to everyone, and be passionate about aligning their teams, not only in terms of salary and bonuses, but also in terms of corporate strategy, life orientation and contribution to society, so that people feel that the company is full of energy and enthusiasm and that employees are proud of their work.
Based on personal experience, it is relatively accurate to ask employees who are more familiar with the company to evaluate or vote when the sample is large enough, for example, and the number of employees invited to participate is more than 200. If the sample size is small, it may not be reliable. Or recommending candidates by cadres at or above the middle level with good performance is also an effective way, but it cannot guarantee absolute effectiveness. Another way is to test personal ability through examinations, because we believe that a person who is clear-headed, logical and loves to learn will have relatively good personal ethics, a deeper understanding of the world, and a better judgment of right and wrong. Of course, this may not be 100% accurate. In the end, it is still necessary to consider a person's various factors to make a judgment, although it is still possible to make mistakes, but the probability will be smaller, and the probability of stupid mistakes will also be reduced.
In short, the process of selecting and employing people at this stage of the enterprise is like groping in the dark, we don't know what the result is, we can only keep trying, and repeated attempts will waste time and affect the development of the enterprise, so we need to learn from the lessons.
Huang Weiwei: I still think that having both ability and political integrity is the standard.
First of all, if you fail to meet the standard of talent, you cannot enter the list of candidates, and it is not the right method to select people with more performance from among those with moral character. Leaders should be able to control the complex environment and lead diversified large enterprises, which are talents who not only have outstanding performance in the main business, but also have excellent conduct and ethics, and can unite a group of people, so it is better to have a variety of choices in the selection process. At the same time, it is important to protect dissenting opinions in the process. Taking Huawei as an example, when it comes to major decisions with uncertainty, Huawei's approach is to establish projects or conduct research on different technical solutions and paths in parallel, and then eliminate and select them in the process. It is not recommended to set a standard at the beginning to determine who is selected and who is eliminated, but rather a parallel competition mechanism.
I would also like to emphasize that a leader should set an ambitious goal, self-discipline and unite talented people to fight for it, and he must understand that he cannot achieve it alone. In addition, although the success of things is the result of a team effort, the evaluation of history is often attributed to individuals.
Finally, I believe that there should be a term system, and even if we are re-elected, we should have institutional guarantees, and only if he has enough energy and ability to do it. The tenure system ensures that we replace or eliminate unsuitable candidates when necessary.
The book also details the corporate governance structure in the United States, where the CEO has the right to nominate directors, and the chairman is not responsible for convening and selecting candidates, but is decided by the lead director on the basis of a nominating committee. I have also studied the Roman Catholic pope selection system, in which the pope appoints cardinals and the cardinal conference elects the next pope. This system has been in place for more than a thousand years. Of course, Catholicism is not a religion that competes in the market, but there is still an element of competition in its internal mechanism, because it wants to attract believers.
Mr. Ning proposed to establish a talent selection model, which is really important. However, any model is based on certain assumptions or trade-offs, and the model needs to be adjusted according to the results, but this is undoubtedly more effective and accurate than no model at all, and the mechanism is constantly improved.
Yang Zhuang: Mr. Ning mentioned the construction of a talent selection model, in fact, there are many entrepreneurs in the United States who have a lot of practices in this area, but unfortunately their practice results are not ideal in China's humanistic environment, including Kazuo Inamori's concept and talent selection methods.
In my opinion, thought leadership is critical in selecting senior leaders, regardless of the type of organization. Ideas include mission, vision, values, and mindsets. Thinking patterns can be divided into habits looking forward or backward, developing or solidifying, positive or negative, independent or dependent, and they have a great impact on the individual.
Thought leadership is followed by professional leadership. We need to imagine the horizon and at the same time keep our feet on the ground. Professional leadership is embodied in the decision to innovate and change at critical moments, and the combination of professionalism and thought is the unity of knowledge and action.
In addition to ideological power and professionalism, the third is character. This article is influenced by West Point, an important concept of West Point Military Academy is Be-Know-Do, among them, Be belongs to the philosophical concept, including where people come from (can be understood as the original state of existence, such as the original intention of action), where to go (can be understood as the goal state to be achieved, such as what kind of person to become), Know represents knowledge, and Do represents action. All three are important, but the personal character that Be implies is particularly important. If a person's actions involve selfishness, although he is knowledgeable and actionable, he may be a refined egoist, and it is difficult for him to take on important responsibilities.
Through long-term observation of successful business leaders and politicians in China and abroad, I have found that what they have in common is that they have a high degree of convergence of ideas, professionalism and character, that is, they have a far-sighted vision, a down-to-earth pragmatic spirit and excellent qualities. Moreover, these people are not only recognized by their own people, but also praised by people from other countries, and are able to overcome the barriers to understanding and acceptance that cross-cultural differences can bring. The reason why they can achieve the combination of the three, I concluded that they all performed well in five aspects: self-drive, self-control, insight, concentration, and perseverance, which I summarized and refined into the "Five Forces Model":
First, self-motivation. Self-motivation is not something that can be cultivated in school, and people who are born with leadership are indeed born with self-drive.
Second, self-control. People with self-motivation may not have self-control, and a lack of self-control can lead to self-motivation not functioning, for example, some particularly good people fall into the political or financial abyss because they cannot control themselves in the face of the temptations of power and profit.
Third, insight. This requires independent thinking and a free personality as the foundation, and then we can distinguish between right and wrong, not tell lies, and tell the truth if we want to speak.
Fourth, concentration. Concentration creates personal expertise, enterprise competition barriers, and the success of individuals and organizations is inseparable from concentration.
Fifth, perseverance. Perseverance is especially evident in not giving up easily when setbacks are encountered, and being open to the face of great challenges. Even if there is a huge setback, it can bounce back and make a comeback.
Finishing: Wang Zhiqin |Editor: Wang Xianqing