Weekend丨 20 Years of Huawei's Management Innovation: A Silent Hymn Forged by Hardships!

Source | Id: world ofboss

Author | Dai boss

Data support | Tokawa Research

In 1997, Ren Zhengfei felt that Huawei was a bit out of control. This year, Huawei's sales revenue was RMB4.1 billion, ranking among the top 100 of China's Top 100 Electronics Companies, with more than 5,600 employees.

Although six associate professors helped Ren Zhengfei draft the Huawei Basic Law, this "management outline" could not play the role of rules and processes, and in this company that has been in business for ten years, research and development and the market are heavily dependent on "technical heroes" and "fire captains", which makes Ren Zhengfei feel stretched and overwhelmed.

In terms of research and development, although cattle people like Zheng Baoyong and Li Yinan emerge in an endless stream, Huawei's research and development is still at the primary combat level of "big brothers and brothers rushing to fight", there is no mature research and development process and decision-making mechanism, which leads to the market department to arbitrarily respond to customer needs, the research and development department is busy and tired of coping, the products made are repeatedly tossed and modified, and the company's product version number is once as many as more than 1,000, the management is chaotic, and the efficiency is extremely low.

Manufacturing and selling is also a mess. After the front-end sales got the order, they returned to the company dumbfounded, and found that the factory could not produce at all, which led to Huawei's timely delivery rate of only 50%, while foreign competitors were as high as 94% in the same period. Li Yinan, who is in charge of the research department, is tired of dealing with the new needs and complaints of customers every day, and the research and development director of a product line is even more exaggerated, and he has to beat the customer and marketing department every day, and the telephone bill can cost more than 6,000 yuan a month [3].

After the cancellation of the "package distribution" in the 1990s, countless graduates flocked to the southeast coast, and a large number of technicians from state-owned scientific research institutes also jumped out of the system. In several huawei office buildings in Nanshan, young people from the south and north of the south and the north come to interview and report every day, some of them dragging simple bags, some with a childish spirit, holding border defense permits in their hands, through the squares and streets pasted with the propaganda poster of "the basic route will not be shaken for a hundred years", to the hot land of Shenzhen.

How to make this increasingly large contingent of talents refined into a scientific and technological force capable of large-scale collective combat is a difficult problem for Ren Zhengfei. A week before Christmas in 1997, he decided to take a turn in the United States.

This is not his first trip to the United States. In 1992, Ren Zhengfei, Zheng Baoyong and others went abroad for the first time, and it was the United States. At that time, he wore a rustic suit, stuffed $50,000 in his bulging pocket, and walked from New York to Silicon Valley, from Boston to Dallas, and stayed in the United States for more than ten days. After feeling the strength of capitalism in all aspects, this former "pacesetter" deeply realized that the United States has too much to learn.

At the end of 1997, I went to the United States for a clear purpose: to learn from the best companies. Ren and his party visited four high-tech companies: Hughes Electronics, Lucent Technologies, Hewlett-Packard and IBM. The biggest gain came from IBM, CEO Gerstner gave up the Christmas holiday, led the high-level reception of Ren Zhengfei and his party, and spent a whole day to introduce IBM's management system to Huawei in an all-round way.

Louis Gerstner, who is only two years older than Ren, has just rescued the huge and ossified IBM from the quagmire through drastic management reforms, which is simply a tailor-made story for Ren Zhengfei. Ren Zhengfei, who was worried that Huawei could not break through the management bottleneck, was impressed by the IPD (integrated product development) R&D management model demonstrated by IBM executives, and made up his mind at that time: no matter how much it costs, Huawei must learn this set of things.

IBM's offer is also unceremonious: send 70 consultants to Huawei, each with an hourly fee ranging from $300 to $680, stationed for 5 years, teach by hand, and the total account is calculated that Huawei will have to pay at least 2 billion yuan! Spending 2 billion yuan on a set of R & D management system undoubtedly subverted the cognition of Chinese enterprises at that time, but Ren Zhengfei was unusually insistent, and even saved the price [7], and asked his colleagues who advised him to pay back: You bargained the price, can you be responsible for the risk of the project?

On August 29, 1998, Ren Zhengfei held a mobilization oath meeting, more than 50 IBM consultants in suits and shoes entered Huawei, and more than 300 business backbones were drawn from R&D, marketing, production, finance and other departments, just to cooperate with the work of foreign consultants. At the conference, Ren Zhengfei announced that Huawei would focus on 8 management change projects such as IPD (integrated product development) and ISC (integrated supply chain) in 3 to 5 years, and he slapped the table and shouted: If anyone resists the change, he must leave Huawei!

The conference was filled with tragedy. Most of the backbone cadres who have been transferred have been interrupted in their promotion and development routes, and even their posts have been replaced, and their hearts are buried with dissatisfaction; most executives are not accustomed to the pointing and pointing of foreigners, thinking that they will only talk on paper; and a large number of grass-roots employees also have resentment, and their assessment and workload have increased a lot. The company, which has been in business for ten years, already has circles and hills, which are like a wall of air, blocking any change.

At that point in time in 1998, no one could have predicted the outcome of this war.

1. Revolution

During the ten years of turmoil, Ren Zhengfei was implicated because of his father, basically isolated from the meritorious service award, and among the few honors he received was called "Pacesetter in Studying Chairman Mao's Writings."

This honor, which is full of historical dust, is rarely mentioned by Ren himself, but it can be found in almost all of his speeches, and even the titles of many speeches, such as "How Long Can Huawei's Red Flag Be Played", have a strong Maoist style. In his various articles, there is also a strong sense of mixing and matching: there are English terms such as IPD, ISC, LTE, 4G/5G, etc., as well as revolutionary words such as "attacking the mountain", "rear of the front line" and "going to the countryside".

Therefore, he knows how to use the No. 3 figure to balance the No. 2 figure, how to use self-criticism to suppress the ambitions of cadres, how to use the rotation system to disintegrate localism, and how to use the "five horses into Beijing" method to prevent the princes from becoming bigger... These means are not difficult for Ren Zhengfei, who is familiar with the four volumes of "Mao Xuan", to understand. Many entrepreneurs born in the 40s and 60s, Mao's writings are their enlightenment textbooks for external strategy and internal power, from Zong Qinghou to Shi Yuzhu, Ren Zhengfei is not the only one.

However, after perceiving Huawei's crisis, Ren Zhengfei abandoned the traditional Chinese entrepreneur's method of gradual improvement and foot-fixing, and decided to directly attack the system and take the most advanced management company as a teacher, so that Huawei would become a modern company completely. Of course, before he can accomplish this goal, he needs to use his supremacy as a founder and an authoritarian iron fist to push Huawei to the track of modernization. It may seem divisive, but it's all pitched throughout history.

Huawei's R&D management system at that time was a "troika" structure designed by Zheng Baoyong, the elder: the Strategic Planning Office was responsible for deciding "what products to make", the Research Department was responsible for "making the products", and the Pilot Department was responsible for testing feedback "whether the product is good or not". This system is very efficient in the early stage, as long as the strategic direction is successful, it can quickly produce products to the market, Huawei's early rise of "doubling every year" relies on this simple and crude system.

But around 1997, Huawei's failures in CT2 (commonly known as "second brother") and DECT (a kind of internal communication network) made Ren Realize that there was something wrong with the system. This kind of acumen is not for everyone, and an analogous thing is that when Huawei has decided to launch IPD, ZTE has just built the R&D system into a "troika" structure in January 1998, and the huge gap between the future of the two companies has been buried at this time.

The introduction of IBM's IPD management system almost overturned the original system. From 1998 to 2003, Huawei entered a period of intensive institutional reform: first "emancipating the mind", setting off a "discussion of truth", establishing a prestige by removing cadres, then delineating the "special zone pilot", and finally spreading it to the whole company. The book "Huawei R&D" once described [3]: Huawei's R&D system reform path is completely in accordance with Deng Xiaoping's model of China's reform and opening up.

The specifics are roughly so basic that they can almost be used as a textbook for Chinese enterprises to promote internal process reform:

Emancipating the mind: In response to the incomprehension of a group of old cadres and the wait-and-see of grass-roots employees, Ren Zhengfei has become the biggest "drummer", constantly emphasizing the importance of IPD on various occasions, and even using politicized sentences to expound: "Determined to wear a pair of American shoes, then we cannot swing, if we swing today like tomorrow, we will achieve nothing." So we must unswervingly learn from IBM, concentrate on learning from IBM, and not waver. ”

Opening up to the outside world: Huawei from 1998 to 2003 was an extremely open Huawei, which completely opened its doors to consultant IBM. In order to gain the attention of IBM headquarters, Ren Zhengfei did not hesitate to replace all the servers and business software purchased by Huawei with IBM's; he even vacated a half-story office building and decorated it into an American style, with coffee machines, refrigerators, microwave ovens, and even toilets changed from squatting to toilets[9], ensuring that foreign consultants could feel at home when eating and drinking Lasa.

Reform Liwei: Ren Zhengfei is well aware of the principle that "after the political line is determined, cadres are the decisive factor", so he consciously uses thunderous means to establish wei. There is a chief engineer of the product department, after joining the IPD project team found that the workload is very large, afraid of affecting their own performance and promotion and proposed to leave, IBM consultants sued the above, the company immediately demoted the chief engineer to set an example. In the future, even those who passively cooperate with the IPD reform will be deducted points in the assessment.

Special Zone Pilot: IPD full name Integrated Product Development (Integrated Product Development), is a cross-departmental cooperation system, in the product establishment stage will be R & D, marketing, procurement, manufacturing, finance and other departments glued together, to avoid the R & D department alone situation, is very important to understand "why Huawei is awesome". Interested readers can refer to Chapter 3 of Huawei Management Change and Chapter 13 of Huawei R&D, which will not be repeated here.

Under the guidance of IBM consultants, Huawei selected three product lines to do the pilot, and on May 17, 2000, Huawei's wireless business department's large-capacity mobile switch VMSC6.0 product was the first pilot of IPD, which took a 10-month cycle to run through the whole process, and the other two products also completed the pilot. Huawei employees were surprised to find that IBM's approach worked, and despite the cumbersome process, the total cycle of product development was reduced by about 50%.

Comprehensive replication: The pilot of the wireless business unit was successful, just like the "Shenzhen experience", and began to replicate inside Huawei like wildfire. At the beginning of 2001, Huawei summed up the pilot experience and launched the IPD system version 1.0, by 2002, 50% of the projects were included in the IPD system, and then Huawei launched the 2.0 and 3.0 versions, and by the end of 2003, almost 100% of the projects had adopted the IPD system. After 5 years of self-revolution, the entire company's research and development system has been reborn.

The motivation for this change was compiled into a paragraph by Huawei's old employees: At the end of 1997, Ren Zhengfei changed a BMW 730, drove to a ride, met IBM boss Guo Shina on the road, Ren Zhengfei shouted at him: "Have you ever driven a BMW?" Gerstner ignored it. After walking around, he met Gerstner again and shouted, "Have you ever driven a BMW?" The third time he met and shouted, Gerstner asked, "Are you a fart?" Ren Zhengfei said anxiously: "No, no, no, I just want to ask, where is the brakes of this BMW?" ”

This paragraph is purely fabricated, but it reflects a truth: the IPD system and subsequent supply chain, manpower, finance and other systems have enabled Ren Zhengfei to master the ability to drive a giant chariot, and also allowed Huawei to have an institutional framework that can grow into a global enterprise. These little-known institutional reforms after 1998 are the key to Huawei's invincibility, rather than the technical heroism, overtime culture, and the wayward simplicity of queuing up late at night to take a taxi.

But from 1998 to 2003, the benefits of institutional reform remained in the PPT of foreign consultants, and the communications outside the company had long been surrounded by wolves. During this time, Huawei and Ren Zhengfei himself are surviving the most difficult winter.

2. Cold Wave

In 2003, Fan Siyong, a Huawei employee, flew to Burundi, an African country, was shocked to find that the airport customs were empty, and only when he came out did he realize that the country had just started a civil war. That night, he hid in the hotel's toilet and slept with the rumbling of cannons outside the window.

Fan Siyong's experience was a microcosm of the thousands of Huawei overseas employees at that time. In addition to their troublesome local customers and powerful Western counterparts, these Chinese adversaries include the humid rainforests of South America, the rugged mountain roads of Africa, the dry windswept sands of the Middle East, the daggers of mob robbers and the bombs of terrorists. At the same time that China joined the WTO in 2001 and became the world's factory, Huawei sent a large number of engineers and sales representatives to the world to develop business.

The reason why Huawei went to sea at this time to find opportunities is not unrelated to the continuous failure of the domestic market.

From 1998 to 2002, it was the most competitive period in China's communications market. China Mobile was investing heavily in 2G (GSM route) at the time, releasing huge investments every year, but these investments were basically taken in by foreign companies such as Ericsson, Motorola, and Nokia. Huawei has developed GSM products in 1998, but it is not mature enough to enter key markets.

More critically, Western rivals have begun to comprehensively encircle and suppress Huawei, they have learned the lesson of the fixed-line telephone market being defeated by the "huge China", as long as Huawei and ZTE develop a product, they will jointly carry out a substantial price reduction (if there is no domestic equipment, continue to sell high prices) to prevent the two companies from taking orders. At that time, Guangdong Mobile's GSM expansion, orders were as high as tens of billions, Huawei could not grab a dime.

The leak of the house was rained overnight, and during this time, Ren Zhengfei made three wrong judgments:

First of all, cdma (Unicom 2G route) was abandoned prematurely, and the GSM (mobile 2G route) has been bet on. As a result, GSM could not break through the siege of Companies such as Ericsson, only got some orders in some marginal provinces, and had little domestic income, so it could only be forced to go overseas to find markets. It was too late to hear that China Unicom was going to invest in CDMA, and it failed in 2001-2002 when Unicom bid for phase I and II.

Second, miss the "PHS" market of tens of billions. Ren Zhengfei has always despised "PHS technology", ignored China Telecom's eagerness to enter the mobile market through PHS technology at that time, and personally rejected the "PHS" project, resulting in UTStarcom's sudden rise and unlimited scenery, which is a major mistake of Ren Zhengfei, who has always pursued "customer-centric".

Finally, refuse to do the phone. Now Huawei mobile phones such as the sun in the sky, P series, Mate series, glory series sell well at home and abroad, but few people know that Ren Zhengfei was once the strongest opponent of Huawei to make mobile phones. Once an executive carefully suggested that Ren Zhengfei was furious, slammed the table and said[3]: "Huawei does not do this thing of mobile phones, it has long been decided, who talks nonsense, who lays off!" ”

These three mistakes made Huawei, which has been soaring in the past years, experience its first negative growth in 2002. The huge investment in wireless product lines (GSM and WCDMA) cannot get orders in China and can only expand overseas. In 2001, Huawei held the "Overseas Expedition Oath Ceremony" at the Wuzhou Hotel in Shenzhen, and Ren Zhengfei shouted: Majestic and energetic, across the Pacific Ocean. The venue was a windy and cold atmosphere.

Compared with the crisis of the company's business, the bigger blow comes from the people around him: in 2000, Li Yinan, a subordinate who had been relied on for many years, left Huawei and quickly became Huawei's opponent; in 2001, Ren Zhengfei's mother suffered a car accident in Kunming, and Ren Zhengfei, who rushed back to China, only saw the last side; in 2002, Zheng Bao fainted at work and was diagnosed with brain cancer, and Ren Zhengfei personally sent his brother to the plane to the United States for treatment, crying bitterly when he left.

During this period, Ren Zhengfei himself also underwent two cancer surgeries. Relatives, brothers, lovers, bodies and the company's business have suffered major changes one after another, and the cold wave has soaked Ren Zhengfei.

The changes, new policies, and reforms of the past and the present, from Wang Anshi to Zhang Juzheng, from the Qingli New Deal to the Foreign Affairs Movement, are basically "moving the standard and not moving the script." Internal change is so difficult because it means redistributing benefits, and entrenched hills and circles are unwilling to give up vested interests and will do everything in their power to obstruct them. When encountering cold snaps and setbacks, these reforms often stop and eventually end up in a downfall.

But Huawei's reform has not stopped, but is gradually accelerating. While the reform of the R&D system is in full swing, Huawei's supply chain system, under the leadership of Elder Guo Ping, implemented IBM's advanced ISC (Integrated Supply Chain) system, reconstructing a series of processes such as order, procurement, manufacturing, logistics, and delivery. After the completion of the change, Huawei's inventory turnover rate has increased significantly, and the order fulfillment cycle has been shortened by nearly 50%.

Ren Zhengfei, who made successive decision-making mistakes, also realized that his dictatorship had become an obstacle to management. In 2003, at the age of 59, he decided not to love power anymore, and with the help of Mercer Consulting, he introduced the Management Team (EMT) system, which changed from monopoly to collective decision-making by 8 executives. Ren Zhengfei insisted on improper chairmanship, and 8 members took turns to serve. By 2011, Huawei had gone a step further, implementing a rotating CEO system to further decentralize power.

The last snow of this cold wave arrived as promised in early 2003. On January 22, just nine days before the Spring Festival, Cisco filed a lawsuit against Huawei for infringing its intellectual property rights in the marshall township of eastern Texas, accusing huawei of 21 counts including patents, copyrights, unfair competition, and trade secrets, and the first encounter of Huawei's overseas expedition.

Years later, people will find that when this encounter suddenly broke out, Huawei, which was firmly reformed in the cold wave, had long been reborn, and the large-scale counterattack on all fronts was already on the string.

3. Fight back

On January 30, 2003, Guo Ping arrived in the United States as the commander-in-chief of the front line in the encounter with Cisco, and their Chinese New Year's Eve meal was a takeaway ordered in the hotel.

When Guo Ping was a graduate student at Huazhong University of Science and Technology, he met Ren Zhengfei, the owner of Shenzhen, for the first time in his mentor's office. At that time, Ren Zhengfei was carrying a switchboard alone and traveled thousands of miles to visit Guo Ping's mentor. After joining Huawei in 1988, he pulled his classmate Zheng Baoyong to Huawei, and Zheng Baoyong pulled his disciple Li Yinan into Huawei, under this demonstration effect, Huazhong Polytechnic became Huawei's largest talent base.

When Guo Ping led the team to face Cisco in the United States, Zheng Baoyong was undergoing cancer surgery, and Li Yinan became Huawei's most feared local enemy. Li Yinan left in 2000 and initially engaged in the agency business in The Harbor, but the technical genius Li Yinan was obviously not ambitious here, and soon recruited, invaded China as the core product field, and dug up a large number of Employees of Huawei and ZTE, and launched a confrontation with the old owner.

Ren Zhengfei was angry about this. He later told Li Yinan and former Huawei employees at Harbor[10]: "From 2001 to 2002, Huawei was on the verge of collapse due to internal and external difficulties. When you leave, Huawei is very weak... Many people inside, following your example in driving the division of the company... Driven by risky speculation, in droves, they joined hands to steal the company's technical secrets and trade secrets, like a very honorable one..."

In 2004, Huawei's famous "Hong Kong Office" was established to deal with the harbor. Beyond Cisco and Harbor, Huawei has turned its guns on a third enemy, UTStarcom.

As mentioned above, Huawei made strategic mistakes in the field of PHS, allowing UTStarcom to take advantage of the rise, peak revenue of more than 21.3 billion yuan in 2004, and invested heavily in research and development of 3G, posing a powerful threat to Huawei. After 2003, Huawei's management corrected Ren Zhengfei's mistakes, the decision entered the field of PHS and mobile phones, and the wireless and terminal departments that were unlocked were smashed, and the unfortunate UTStarcom became the first to be sacrificed.

After the internal management revolution, Huawei has played a terrifying combat power at this time: it only took 6 months to break through the PHS technology, and with the help of a powerful integrated supply chain system, the shipment price of the PHS mobile phone was pulled to a staggering 300 yuan (previously as high as 2000 yuan). So UTStarcom was quickly beaten into a loss, with a loss of 530 million US dollars in 2005, and had to cut down the 3G product line and completely fell into the last stream.

After packing up UTStarcom in 2005, the next turn was the harbor, and the strategy was simple and the process was tragic. After the establishment of the "Hong Kong Office", it was given the power to bypass the IPD management system, as long as it is a port project, Huawei adopted a strategy of almost free delivery, the knife is deadly, and it costs up to 400 million yuan a year to hit Hong Kong [10]. Under this attack, Harbor was forced to surrender and was acquired by Huawei in 2006.

In July 2006, China Entrepreneur published a cover article titled "Farewell, Harbor," in which Li Yinan was silent and tragic, and every Chinese tech company that witnessed all this was terrified.

If Huawei's process of dealing with UTStarcom and Harbor is somewhat "Chinese characteristics", then in the process of dealing with Cisco, it shows a mature image of fully abiding by and using international rules. Before Guo Ping went to the United States, Ren Zhengfei said: "Learning Han Xin can endure the humiliation of crotch, as long as we can stand up." After Guo Ping went to the United States, every time he went to a law firm, he asked: "If we lose, how much money will we lose?" ”

In various unfavorable circumstances, Huawei has taken it step by step. Guo Ping hired the well-known American law firms Shearman & Sterling and Heller Ehrman[1] to deal with litigation and negotiation matters, and hired Edelman PR Worldwide to formulate a plan to guide public opinion, slowly reversing the situation in the early days of the Cisco litigation that was overwhelmingly negative about Huawei, and walked out of passivity.

In response to the lawsuit, on the one hand, Huawei actively sent the source code of the disputed product to the United States for inspection, and the final inspector concluded that no infringement of Huawei against Cisco was found; on the other hand, Huawei established a joint venture with the well-known 3Com, persuaded 3Com President Bruce Claflin to testify for Huawei, and personally told the court: He had been to Huawei's headquarters and inspected Huawei for 8 months, which is a trustworthy company.

With this "very American" response, Huawei won a settlement with Cisco. On July 28, 2004, the U.S. court terminated the lawsuit against Huawei.

After 2003, Huawei slowly came out of the winter, and at the same time, the Jedi counterattack on all fronts has trained a large number of core backbones, and Huawei's R&D, finance, manpower, supply chain and other systems have also been strengthened in the practice of playing. After a stagnant capital increase from 2000 to 2003, Huawei accelerated again in 2004, with revenue exceeding 46.2 billion yuan and exceeding 66.7 billion yuan in 2005.

As Huawei fights back, a policy of far-reaching significance for China is bearing its first fruits: in 2002, the first class of college students graduated after the 1999 university enrollment expansion. Since then, a large number of highly educated young people have continued to flock to society. At that time, the media and public opinion were busy criticizing the decline in quality and difficulty in finding jobs brought about by the expansion of enrollment, and few people had heard the term "engineer dividend".

Engineers are Ren Zhengfei's beloved, and Huawei even has a wild history of lending usurious loans to employees to pay wages. In 1999, Ren Zhengfei went to Huawei's North Research Institute to inspect and asked Liu Ping, then director of the institute: "Why do you have such a small number of people here? Liu Ping explained that he was afraid that there were too many people to do. Ren Zhengfei said angrily, "I told you to recruit you." There is nothing to do, and it is okay to recruit people to wash the sand. ”

For Huawei, which has built a management structure for a giant company, these cheap and easy-to-use science and engineering graduates are precious resources and treasures, and their footprints will spread to almost every corner of the world with the rise of overseas business.

4. Rise

Yu Chengdong, a native of Anhui, has three major characteristics: straight, large mouth, and thick skin. When he was an ordinary employee with an unknown name, he dared to call Ren Zhengfei with someone else's landline [8]: Boss, boss, I found a good thing, called CDMA! The next day, the president's office called back and asked: Who was that kid yesterday?

Yu Chengdong joined Huawei in 1993, almost invisible in the mass media before 2011, and after becoming the head of Huawei's mobile phone in 2011, Yu Chengdong used social media such as Weibo to spray all kinds of friends, including Lei Jun, and became the Internet celebrity "Yu Dazui" jokingly called by the media. This ostensibly high-profile and crazy Huawei person actually has an important resume that few people know: leading Huawei's wireless division to conquer Europe.

The history of Huawei's wireless division is the most important story of the rise of the empire, and the source needs to be traced back to 1998.

As mentioned above, Huawei's wireless division made 2G GSM equipment in 1998 and invested 1.6 billion yuan in research and development, but it has been unable to break through the market and has been forced to go overseas. The same thing also happened to the 3G WCDMA equipment, Yu Chengdong pulled the team in 98 to engage in 3G pre-research, invested more than 4 billion yuan, in 2001 the product was made, but due to the delay in issuing 3G licenses in China, Huawei's wireless product line suffered serious losses.

When Ren Zhengfei saw the person in charge of wireless products, he often asked: "When can you get 6 billion back for me?" "Xu Zhijun, president of wireless products, and Yu Chengdong, director of 3G products, are under great pressure. In this context, overseas markets have become a lifesaver for the wireless sector. The first stop of 3G products going to sea was selected in Hong Kong, in order to win the first battle, Huawei simply made a surprising move: spend money to buy an order!

Although Hong Kong belongs to the land of bullets, its influence is huge, and the significance of benchmarking is self-evident. An operator called Sunday has a scarce WCDMA license in hand, and in order to get the company's 3G order, Huawei has done the following three things: 1. Lent Sunday HK$500 million to repay the debt; Lent Sunday HK$859 million to buy Huawei equipment; 3. Invested heavily to become a second shareholder of Sunday.

In this way, Huawei got the list of Sunday and successfully made it into a benchmark case to promote to customers around the world. Soon Huawei got the second order: Etisalat's WCDMA-3G network, followed by the third and fourth orders. By 2005, Huawei's overseas revenue exceeded $5 billion, and although the gap with Ericsson was still huge, it was already in the same order of magnitude.

What really transformed Huawei is a product called Single-RAN, which is a legendary work in the entire history of Huawei's research and development.

In 2007, Vodafone hoped to achieve a "smooth evolution from GSM to 3G", a high-pressure sentence explained in big vernacular: how to use the cheapest method to retain the 2G network and provide 3G services. The "multi-carrier technology" involved in this is very difficult to achieve, but in the end, Yu Chengdong resisted the pressure to make a decision: pouring all the strength of the wireless department to meet the requirements of customers.

Huawei's R&D management system once again exerted its power, calling on global resources including algorithm experts from Huawei's Russian Research Institute, and finally conquered multi-carrier technology in more than a year, making SingleRAN products come out of nowhere. This product is a revolutionary and innovative product that can help users save a lot of money, sweep almost all operators in Europe, and make wireless product revenue second in the world, approaching Ericsson.

With the help of the rapid development of the wireless division, Huawei's total revenue exceeded 200 billion yuan in 2011, which is a figure that everyone admires.

Behind this is Huawei's strong institutional guarantee. After Huawei's IPD and ISC systems, which cost 2 billion yuan, were gradually used and matured, Ren Zhengfei did not stop and continued to introduce various advanced management systems: in 2005, all overseas branches were promoted to engage in ERP systems, and all of them were implemented by the end of 2007; in 2007, with the help of IBM, integrated financial services (IFS) were implemented, led by Meng Wanzhou.

It is difficult for the average person to appreciate the importance of the system: in Brazil,[5] if a piece of equipment is transferred from a warehouse in Rio de Janeiro to a warehouse in São Paulo, an invoice must be issued even if there is no sale, and the difference in tax rates in different regions of Brazil leads to countless cumbersome things to go through from import to sale of equipment. Huawei's Brazil project team spent five years to complete the Brazilian version of the ERP system, ensuring that the cost of each project can be strictly controlled.

In addition to the system, Huawei's strong talent echelon is also very important, here is a small story to refer to:

Motorola gave up its own GSM research and development and oem production of Huawei products. After the two companies finished talking and drinking together, the chief engineer of Motorola GSM research and development, a white-haired old scientist, asked How old Wang Haijie, director of Huawei's GSM, was this year, and Wang Haijie said he was 32 years old. The other party was gloomy: You were not born when I entered Motorola, I have been engaged in wireless research and development for more than 30 years, but I have been defeated by you... After saying that, he lay down on the wine table and cried.

Behind this is the blood and sweat of countless people who rushed to Huawei. In 2002, egyptair plane crashed in Tunis, and a Huawei employee on board escaped; in 2005, Nigeria crashed, 3 Huawei employees were killed; in 2007, Kenya Airways was killed, a Huawei employee was killed; in the 2009 French Airlines crash, 1 of the 9 Chinese on board were Huawei employees; in 2014, Malaysia Airlines MH370 was missing, and 2 Huawei employees were on board...

Ren Zhengfei once said: Every time a plane drops in the world, I am very anxious because I am worried that there are Huawei employees on it. That is the price of globalization

With the management system and talent echelon, Huawei is working step by step, the bankruptcy of western telecom giants, the merger of mergers, the decline of decline, and the remaining few are also tired of coping, and many times need to move out political resources to block Huawei. In contrast, Huawei's sales in 2017 exceeded 600 billion yuan, and the global realization of China's engineer dividend was finally given by a private enterprise.

Yu Chengdong, who has made great contributions to the global rise of wireless products, was transferred to Huawei's terminal department in 2011 and is currently the CEO of consumer BG, which is another miraculous counterattack story, and people can't help but ask: Why. From the perspective of elongating history, since Ren Zhengfei misjudged "PHS", Huawei has not made a major strategic mistake for 14 consecutive years. Why?

The answer to these questions can be answered by Wu Chunbo, the formulator of the Huawei Basic Law and a teacher who has long been tracking and researching Huawei: I think Huawei's most successful is Huawei's management.

5. Epilogue

A British telecommunications company, in its evaluation of Huawei,[13] told a fact that everyone vaguely knew but did not like to believe: Huawei was a Chinese American company.

If you comb along our article, you will find some very simple facts: Huawei's product development system was designed with the help of IBM, the human resources system was designed with the help of Hay Group, the organizational structure was designed with the help of Mercer Consulting, the financial system was designed with the help of PwC, the sales system was designed with the help of Accenture, and the supply chain system was designed with the help of IBM...

This is a company that is extremely jealous of the United States, but it is also a company that has grown up learning from the United States.

In 2014, Ren Zhengfei delivered a speech in which he said: In the past 20 years, we have spent billions of dollars to import management from the West... Since the scientific management movement, the modern enterprise management system tempered by Western companies after a hundred years has condensed the lessons of countless enterprise prosperity and decline, is the crystallization of human wisdom, and is the precious wealth of mankind. We should make great efforts to learn it systematically with humility.

It has been learning the most advanced and outstanding things from the West, which is the most fundamental reason why Huawei remains calm and restrained while being surrounded: learning from you, surpassing you, is the real win.

A boss of a technology company once lamented [7]: Huawei's 100 R&D personnel can create an output value of 1.6 billion yuan, while the 100 R&D personnel in their company may create less than 100 million yuan of output value a year! In fact, the technical level of the personnel gap is not large, many engineers are still the same school of the same disciple brothers, but why is the result so far worse? The gap is in management.

But if you take apart Huawei's Western management framework, you will find that the most fundamental background of this company is still the diligence and wisdom of the Chinese nation.

These days, some people wonder: Why do people love, support and support Huawei so much? The reason is simple: ordinary people may not understand GSM or what IPD is, but they know that Huawei's achievements are one of the best things for our nation, representing the hard work, sweat and wisdom of Chinese. If someone points to his nose and says: You developed through theft to this day. This is undoubtedly an insult to each and every one of us.

Huawei tells us with practice that China's huge team of engineers, under the guarantee of advanced management system, can radiate strong vitality, which will erase all fallacies about racial, ethnic and cultural gaps, so that China's industry can truly stand in the forest of the strong. Huawei has used thirty years of practice to take the lead in handing over the Chinese whether it will work or not. It is a silent hymn.

Treat every struggling individual generously, release their vitality with a scientific system, and Chinese will continue to create miracles. This is true for a company, and it is true for a country!

Resources:

[1]. Annihilation Ambush: Apocalypse of Huawei's Battle of Cisco, Fang Xingdong, Guo Kaisen

[2]. Huawei thirty years, Cheng Dongsheng, Liu Lili

[3]. Huawei R&D, Zhang Lihua, 2017

[4]. Huawei Past, Liu Ping, 2000

[5]. Huawei Management Change, Wu Xiaobo, 2017

[6]. IPD Reconstruction Product Development, Liu Jinsong, Hu Bigang, 2016

[7]. Huawei: 4 Billion Tuition Under IBM, Yang Shaolong, 2018

[8]. Huawei's Long March, Dai Hui, 2017

[9]. Will the next fall be Huawei, Tian Tao, and Wu Chunbo, 2012

[10]. Farewell, Harbor, Chinese Entrepreneur, 2006

[11]. The Story Behind Huawei's Cisco Settlement, Min Li, 2006

[12]. Ren Zhengfei's speech at the "Blue Blood Ten Masters" commendation meeting, 2014

[13]. The beginning and end of Huawei's Westernization, Zhang Peng, 2004