Chapter 6
Ancient Art of War Style Management at Huawei Technologies Co., Ltd.
6.1
6.1.1 6.1.1
About About Huawei Huawei Technologie echnologiess Co., Ltd.
Sense Sense of Crisis Crisis at Huawe Huaweii
“Now is the spring, but winter lurks on the horizon : : : ” Finished with the work at hand, hand, Mr. Mr. Ren Ren Zhengfei Zhengfei rose rose from his desk desk and pause paused d by his office office windo window w. Gazing Gazing at the sunshine, budding trees and blossoming flowers outside, he mused: “we have become too soft, too complacent. The company has survived 10 years of successful development with few frustrations. Without having overcome major challenges, we do not have the experience to navigate the correct path. Struggle is valuable, and a lack of experience of struggle is our greatest weakness. We are not mentally or technically prepared for market downturns. Crises are imminent, death is eternal, and may well come soon. Philosophically speaking, from the perspective of natural law, we cannot prevent it” [ 1] (Fig. 6.1 (Fig. 6.1)). Since Since its its ince incept ptio ion n in 1988, 1988, Huawe Huaweii has has exper experie ience nced d 18 year yearss of turb turbul ulen entt development. Accustomed to the rise and fall of business cycles, Mr. Ren Z.F. intuitively sensed the arrival of the current crisis. “Too far east is west. The IT industry industry is experienc experiencing ing a long winter – an unbeliev unbelievably ably bitter bitter and unforgivi unforgiving ng cold, as relentless as the summer heat. Without foresight and prevention, we will freeze to death; death; even even with a coat, coat, can we survive survive?” ?” [ 1]. Mr. Ren Z.F. Z.F. gazed out the window, window, pondering pondering Huawei’s Huawei’s dilemma: dilemma: how how could Huawei Huawei find a coat to protect protect it against against the intensifying competition and the arrival of “winter”?
6.1.2 6.1.2
The Past and Presen Presentt “Spr “Spring ing” ”
Ridi Riding ng the the cres crestt of the the IT indus industr try y boom, boom, Huaw Huawei ei carv carved ed out an impre impress ssiive competitive record, creating its own “spring” through sheer force of will.
Y. Su and L.J. Chen, Modern Oriental Corporate Culture: A Case Collection , DOI 10.1007/978-3-642-3 10.1007/978-3-642-35214-0 5214-0 6, © Springer-Verlag Springer-Verlag Berlin Heidelberg 2014 2014
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Fig. 6.1 Sun Tzu
In 1992, Huawei began producing its own switchboards. For the first time, the fledgling company’s sales exceeded CNY 1 million (USD 0.156 million). In 1993, Huawei created a breakthrough in the domestic telecommunications market by exploiting the hidden demand in China’s rural areas, riding a wave of high-speed development, and effectively neutralizing multinational mega brands, such as Alcatel-Lucent, Motorola, and Siemens, who had traditionally dominated the China market. In 1997, Huawei introduced and implemented a top-down systematic practice of world-class management consulting firms and established international standardsbased IT management systems for Integrated Product Development (IPD), Integrated Supply Chain (ISC) Management, Human Resources Management, Financial Management, Quality Control, and a myriad of other operational functions. Huawei initiated a strategy of cooperative partnerships with multinational heavy hitters, such as the Hay Group, PWC, FhG, and others. After 5 years of improvement and change management, customer demand driven development, and implementation of supply chain processes, Huawei achieved a significant competitive advantage, consistent with customer interests, and further consolidated its core competitiveness in the industry. In 1999, Huawei achieved sales of CNY 12 billion (USD 1.88 billion), and by 2000, sales had almost doubled to CNY 22 billion (USD 3.44 billion). In 2003, Huawei implemented the “Going Out” strategy. Including its overseas investments, Huawei now employs over 35,000 people, of whom 85 % have college degrees or higher. About 48 % of Huawei’s employees are engaged in R&D. 10 % of annual sales are re-invested in scientific research with world-class enterprises such
6.2 Value Knowledge, Work Hard, and Insist on Leading Technology
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as TI, Motorola, Intel, AT&T, ALTERA, SUN, Microsoft, and many others, making Huawei an industry leader with broad involvement in technical and marketing cooperation. By the end of 2005, Huawei had accumulated more than 11,000 patent applications and become the single largest holder of domestic Chinese patents. Huawei’s independent R&D products cover switching, access, transmission, mobile communication, intelligent networks, support networks, ATM, access servers, routers, Ethernet switches, televideo conferencing, among others. Major telecommunication equipment and services form the core self-developed technology systems, providing fixed networks, mobile networks, and the full spectrum of data communications network solutions, especially in emerging optical networking, mobile communications and the broadband industry. Huawei has seized a leadership position in the communications markets. Key components of Huawei products use in-house designed integrated circuit chips. Currently, Huawei has established more than 100 worldwide branches, with international research institutes in Dallas, Bangalore, Stockholm, Moscow, as well as domestic locations in Beijing, Shanghai and elsewhere throughout China. Huawei’s products and solutions are in use in Germany, Spain, Brazil, Russia, Egypt, Thailand, Singapore, and South Korea. Altogether, Huawei products are sold in more than 100 countries and used by 28 of the world’s top 50 operators, globally servicing more than 1 billion users. The chronology outlined above shows that Huawei has become and remains a major industry player despite intensifying industry competition, thus creating its own “spring”. However, IT is a cutthroat industry – “without development, enterprises die”. Huawei thus cannot rest on its achievements, and must continuously innovate and develop to survive. Huawei has developed an enviable and sustainable development program that has been operating successfully for over a decade. The key management philosophies of Huawei are presented below.
6.2
Value Knowledge, Work Hard, and Insist on Leading Technology
The first rule of Huawei is “ knowledge is capital”. In its early days, Huawei suffered a perpetual shortage of funds, but Mr. Ren Z.F. still insisted on investing CNY 80 million (USD 15.53 million) annually, and in some years up to CNY 100 million (USD 15.53 million), to fund research for technology development. A significant quantity of human, financial, and material resources were dedicated to independent R&D. Huawei, from its establishment, valued knowledge over traditional capital. Huawei’s world class technology leadership is recognized both at home and abroad. Leading firms from Europe, Japan, and the US contracted Huawei, and unanimously agreed that it is a technology leader in the Chinese communications industry and should not be underestimated.
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Ancient Art of War Style Management at Huawei Technologies Co., Ltd.
Excel at “Going Through the Narrow Door”
Novelist Yu Hua said, “Regardless of the situation, whether in writing or in life, the correct start is to enter the narrow gate. Do not be fooled by the wide door, for that path is short”. World-class entrepreneurs have an ingrained sense of crisis. Bill Gates said, “Microsoft is always only 18 months away from bankruptcy”; Andy Grove insisted on doing business according to the rule of the “survival of the anxious”; and Lee Kun-Hee cautioned that, “Samsung is always only one step away from bankruptcy”. In China, Mr. Ren Z.F. is one of the few entrepreneurs with this urgent sense of crisis. He set an iron rule: never seek to become a telecommunications operator, but remain only a provider of telecommunications equipment and network solutions. He ignored the trepidation of others, and firmly strode through the narrow gate of independent innovation. Huawei chose to follow a risky road in the national high-tech industry based on technical self-reliance and in-house development. Huawei firmly adheres to the strategy of supplying only communications equipment, which also forms the basis for strategic alliances that guard its long-term strategic interests.
6.4
People-Oriented Corporate Culture
Huawei firmly respects the cultural rule – “ never treat Lei Feng badly”. Employees who make contributions to Huawei are considered to be “Lei Fengs”. Lei Feng was a model worker and ordinary hero celebrated by the Chinese Communist Party for his social contributions. Mr. Ren Z.F. demands a culture of high efficiency, high pressure, and high wages – the so called “Three Highs”. This ensures a system of knowledge-based compensation for employees. Huawei is well known for its high wages, generous bonuses, and benefits that even include equity sharing. All general employees may participate in after-tax profit distribution, even those who have not officially taken up their positions. Full wages and benefits are paid to newcomers during the training phase, contrasting sharply with the standard industry practice where new employees still undergoing training receive only reduced wages and benefits. Huawei also follows a policy of recognizing “fair competition and practical skills” over “mere academic degrees”. Huawei does necessarily offer rapid promotions to highly educated professionals or high school students from prestigious schools, but instead focuses on gradually training its engineers through years of work experience. While those who possess academic qualifications as well as practical experience have a distinct advantage, Huawei emphasizes practical skills above all else, and so many opportunities exist for the less-educated. One 19-yearold received the distinction of a promotion to senior engineer on just their seventh day of work at Huawei, providing a classical example of the company’s practice of “prioritizing the value of people” .
6.5 Chinese “Wolf” Culture
6.5
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Chinese “Wolf” Culture
Huawei’s ultimate success, and the reason for its nickname, is deeply intertwined with its Art of War management style – the “Wolf” culture. The Chinese “Wolf” has three characteristics: • a keen sense of smell; • indomitable spirit of selfless ambition; • an intrinsic group mentality. The “Wolf” embodies the relentless desire to expand [ 1].1 Huawei’s “Wolf Culture” is demonstrated in the militarization of management culture espoused in the Art of War (Fig. 6.2).
6.5.1 The Sense of Crisis and Huawei’s Dialectic Perspective on the Art of War “Anything or any organization has a life, death, and process from generation to extinction”. From the beginning, Mr. Ren Z.F. has continuously instilled a sense of crisis throughout the enterprise, continuously setting challenging goals and relentlessly pursuing a culture of continuous improvement. In 1999, Huawei achieved sales CNY 12 billion (USD 1.88 billion), and so the sales target for 2000 was increased to CNY 20 billion (USD 3.13 billion). Huawei maintains an unusually low profile, remaining humble and never blindly optimistic about its growth targets, but sets higher goals as it gradually develops. Sun Tzu’s Art of War clearly shows the
Fig. 6.2 Intrinsic group mentality or indomitable spirit of selfless ambition
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Co., Ltd., Special Economic Zone Gazette, China (Issue No. 10, 2005).
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origin of the dialectics of Huawei’s “sense of crisis” strategy. Chapter Two, Waging War and Chapter Seven, Maneuvering of Sun Tzu’s Art of War , state that: “only one who is thoroughly acquainted with the evils of war can thoroughly understand the profitable ways of waging war” and “maneuvering with an army is advantageous; maneuvering with an undisciplined multitude is dangerous”. This philosophy sees the use of troops as a double-edged sword. Though success can be achieved through glorious military achievements, the path is strewn with hidden enemies and saps national resources. Even allies may suddenly become enemies. Consequently, the country requires a constant sense of crisis where the potential for military action always exists. Such an environment improves the success of military campaigns and increases the likelihood of “Winning a Quick Victory”, thus conserving resources and reducing the likelihood of a real crisis.
6.5.2 Huawei Democratic Life and “Attack by Stratagem” in the Art of War A particularly famous quote from the Art of War , from Chapter III, Attack by Stratagem, states: “know the enemy and know yourself, and you can fight a hundred battles without suffering one defeat”. This culture is deeply entrenched throughout Huawei management, where outstanding performance is considered the norm, and staff members engage in constant criticism and self-criticism to identify strengths and weaknesses and enhance the core competitiveness of the company. As Mr. Ren Z.F. said: “We must make self-criticism the center of organizational transformation and optimization activities. Self-criticism does not mean to criticize for the sake of criticism, though shortcomings must not be denied; rather self-criticism means criticism to optimize and improve performance” .
6.5.3
Huawei Contingency Focus and “Variation in Tactics” in the Art of War
Another famous quote from the Art of War comes from Chapter III, Attack by Stratagem, which describes the general rule in a war of attrition as follows: “If our forces are ten to the enemy’s one, surround him; if five to one, attack him; if two to one, divide our army into two. If equally matched, offer battle; if slightly inferior in numbers, avoid him; if inferior in every way, retreat”. Huawei interprets this to mean: “we should adjust our strategies and tactics to match different conditions and competitors”. In the chapter Variation in Tactics, Sun Tzu further revealed his philosophy of contingency planning, saying: “In war, the general receives his commands from the sovereign, collects his army and concentrates his forces. When in difficult country, do not encamp. In country where high roads intersect, join hands with your allies. Do not linger in dangerously isolated positions. In hemmed-in
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situations, resort to stratagem. In desperate positions, fight. There are roads which must not be followed, armies which must not be attacked, towns which must not be besieged, positions which must not be contested, and commands of the sovereign which must not be obeyed”. It is often argued that only when generals become proficient in the use of all these machinations of war and experienced in adapting their strategy to diverse situations can they truly use troops effectively. Throughout its past 20 years of operations, in accordance with different development stages and situations, Huawei has implemented various management strategies and tactics to overcome internal and industry barriers. Prior to 1995, Huawei barely had a toehold in the industry, and faced a fiercely competitive environment and giant rivals. As a fledgling company in the domestic communications industry, Huawei sought to gain a firm foothold for itself in the face of competition. The main problem Huawei faced was how to develop core products and competitiveness. Huawei thus focused on research and development, and invested heavily in developing internal R&D manpower, materials, and financial resources. From 1995 to 1998, with the gradual opening up of the domestic telecommunications equipment market, Siemens, Sony-Ericsson and other giant multinationals entered the domestic market, and immediately carved out enormous and often monopolistic market positions. To survive, Huawei needed to defeat these international competitors in the domestic market, which it did by focusing on market development, and cultivating its marketing staff. After 1998, riding on its domestic success but also seeking alternatives to competing in the increasingly challenging domestic market, the company shifted its focus abroad, implementing a period of internationalization that saw it enter the international market.
6.5.4 “Guerrilla” Style Marketing Strategy and “Staying Clear of the Enemy’s Main Force and Choosing to Attack Its Vulnerable Spots” Huawei’s implementation of “guerrilla” marketing involved a strategy of “ encircle the cities from the rural areas to gradually occupy them”. In 1992, foreign behemoths such as Alcatel, Lucent, Nortel, and a host of others dominated the domestic Chinese landscape. Huawei surveyed the situation and noted existing market and infrastructure deficiencies. China had a poor national telecommunications infrastructure, profit margins were low, and foreign manufacturers focused on the big domestic players in the cities and neglected the rural market. Huawei seized this opportunity to supply domestic communication equipment to the rural market. Sales staff penetrated deep into China’s numerous counties and townships, creating a powerful base of operations to support firm survival. Leaping rapidly from small to large opportunities and capturing significant market share, Huawei methodically launched offensives in municipal and provincial markets, and ultimately carved out a national market. The cost of communications equipment plummeted.
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From 1998, Huawei applied this same strategy in the global market, focusing on underdeveloped markets before going after more mature markets. Initially, Shenzhen Huawei targeted neighboring Hong Kong. Huawei then focused on developing countries with relatively large untapped markets – primarily Russia and South America. In 2000, Huawei launched operations in other developing regions, including Thailand, Singapore, Malaysia, and other Southeast Asian markets, as well as the Middle East and Africa. Huawei later also targeted markets in socalled developed countries, first France, then the Netherlands, and finally fighting for market share in England. Huawei has now established a firm foothold in the European market. Huawei’s “guerrilla warfare” fully embodies the Art of War tactics of “avoid the main force and attack the vulnerable spot”. Ancient Chinese military tactics are likened to water, which “in its natural course runs downwards from high places”. The Chinese strategy in war thus is to avoid what is strong and strike at what is weak” – i.e., to target “low hanging fruit”. Water mobility and its ubiquitous adaptability are reflected in warfare. In war, combatants should “avoid what is strong and strike at what is weak, act according to circumstances, and give full play to one’s own characteristics as well as seeking to defeat the enemy”. When applied to the battlefield of business, this philosophy requires that companies “avoid competing in saturated markets, focus on market segments ignored by competitors, and create competitive differentiation”.
6.5.5 The United Front and the Wu-Yue Covenant Stratagem Huawei cleverly applied the “united front” stratagem to neutralize and vanquish competitors. The textbook case study occurred in 2002, when Huawei sought to encircle Cisco. Mr. Ren Z.F. commanded this “siege warfare” for a year. Cisco retaliated by suing Huawei for violation of its intellectual property rights. Mr. Ren Z.F. employed the best local lawyers to deal with litigation and settlement negotiations in the United States. Simultaneously, Huawei initiated an alliance with 3COM Corporation, a fierce and powerful rival of Cisco in the United States. Co-operation with various sympathetic stakeholders in the United States enabled Huawei to establish an extensive “united front”. At the most critical moment in the lawsuit, Huawei announced to Cisco that it was cooperating with its rivals, meaning Cisco was under attack from two sides. The battle between Huawei and Cisco eventually ended with reconciliation. Mr. Ren Z.F. notes proudly that this case was particularly special, and the cross-border alliance strategy may never again be successfully deployed. The Huawei-3COM “united front” battle stratagem is identical to the famous “Wu-Yue Covenant” stratagem, described in the Art of War as follows: “The men of Wu and the men of Yue are enemies; yet if they are crossing a river in the same boat and are caught by a storm, they will come to each other’s assistance just as the left hand helps the right. Although they share a mutual hatred : : : when facing
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a common enemy in the same boat, they will also help each other, as united as the left and right hands. The skillful tactician may be likened to the shuai-ran. Now the shuai-ran is a snake found in the Hengshan Mountains. Strike at its head, and you will be attacked by its tail; strike at its tail, and you will be attacked by its head; strike at its middle, and you will be attacked by both head and tail”. With its wide ranging alliances, Huawei was able to lead a sufficient force to neutralize one of its most powerful international competitors. Like the shuai-ran snake of Mt. Hengshan, the head and tail rescued each other, warded off attacks and launched their own powerful counter-attack.
6.5.6
Huawei Human Resource Management and the Art of War
Recruitment and Selection
• External Candidates – When recruiting, Huawei focuses on talent, character, qualifications, and experience with information systems. The company also uses a candidate interview management system whose selection criteria incorporate Art of War philosophy – specifically “The commander epitomizes the virtues of wisdom, sincerity, benevolence, courage and discipline”. The selection criteria also evaluate security principles such as “know your enemy, know yourself”. • Internal Selection – Huawei has never used the “tenure” system. Almost all senior managers are indirectly promoted, and must demonstrate experience of success and failure, as well as flexibility and adaptability to change, before entering the senior management track. Huawei’s management team is very young, so this system tempers them, and inspires and encourages them to mature rapidly. Huawei implements a flexible system of temporary demotions and promotions. It is common for this year’s president to be deployed next year as director of some remote regional office, and afterwards to take up an overseas assignment. Huawei sends groups of senior cadres to regional markets for training, and dispatches its best staff to the most challenging environments to experience, understand, and overcome business hardships, following the principles of “sleeping on woodpiles and tasting hardship” and the story of Shepherd Su Wu – a Han Dynasty diplomat famous for his arduous and successful mission in enemy territory. Mr. Ren Z.F. said that only the best people selected from the grassroots level, who are mature, appreciative, and truly understand grass roots concepts, can be improved through such rigorous training. Additionally, Huawei also enacted a qualification system to ensure the matching of professional competence with employee assignments. These actions demonstrate a staff philosophy intended to identify, cultivate, and use talent, consistent with the Art of War philosophy: “ The clever combatant looks to the effect of combined energy, and does not require too much from individuals. Hence he can pick the right men and use their combined energy”.
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Motivating Staff
Huawei follows the principle, “Never put Lei Feng at a disadvantage”. This means that the company pursues a high-wage, high-benefit compensation system, consistent with Sun Tzu’s “Handsome salary” philosophy of military management, to motivate employees by appealing to their materialism. Article 69 of the “Huawei Basic Law” stipulates that: “Huawei shall ensure during times of economic prosperity and positive development that the per capita income of its staff shall exceed its industry and regional competitors”.
6.6
Huawei’s Dilemma
Huawei, with its Art of War culture, has deployed numerous strategies and tactics to drive its growth from a small factory to a powerful Chinese IT brand, consistently recognized as one of China’s leading domestic businesses. However, as Huawei enters the twenty-first Century, with its new social environment and development opportunities, this military-style of management seems irrational, controversial and indicative of crisis.
6.6.1
The Ubiquitous Compliance Culture [ 2 ]
Mr. Ren Z.F., as an entrepreneur steeped in military thinking, exercises a management philosophy in which “compliance” is a key tenet. This philosophy is implemented throughout Huawei’s systems and management practices. Huawei’s militarized compliance culture has become institutionalized, and was important in the growth of the company. However, Huawei is now a well-established large enterprise with overseas operations, and the weaknesses of its current culture are increasingly apparent. After college recruitment, fresh graduates report to Huawei for 1 month of military training, plus 5 months of stringent closed-door corporate training. The coaches who oversee this training are well-known veterans, and many recruits are eliminated during the training process. Employees who complete the training process, like soldiers who have completed a challenging mission, develop a sense of duty and absolute obedience to their superiors. After their formal appointment, new employees must study selected works of Mao Zedong, sing military songs, learn the Huawei Basic Law, among other requirements. Huawei implants its corporate culture in new recruits to override other learned behaviors, instilling in employees a temperament similar to that of a cohesive military force.
6.6 Huawei’s Dilemma
6.6.2
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The Quick Success of the Incentives
Huawei’s incentives can be summarized as “high-wage, high-pressure, high-efficiency”, a strategy with readily apparent advantages and disadvantages. The advantage is that high wages attract talent and inspire initiative, but the disadvantage is that the company culture becomes focused on quick success, and that Huawei staff sacrifice their personal lives for handsome salaries. When Huawei was immature, this culture may have helped the company adapt to prevailing development conditions, but whether this culture can continue to play a positive role as Huawei grows is uncertain. Additionally, a breeding ground for instability develops as many of the senior and middle leadership of Huawei achieve sufficient wealth to start their own businesses and enjoy the benefits of being their own boss. Of course, not all of these leaders have what it takes to strike out on their own. Huawei is well known for its high pressure environment. Initially, the company had a “Mattress Culture”. In the early days almost every Huawei manager had a mattress under their desk. They would use this mattress to take a nap at noon, and to sleep at night when working overtime. On waking up they would immediately commence working again. The business trips made by marketing staff while building markets in rural China equated to dozens of circumnavigations of the earth. Huawei staff treated user needs like orders, working hard by day and then performing tasks such as maintenance and installation by night. Staff never rested between assignments and there were even regular incidents of death from overwork. Huawei’s continues to have a high-pressure work environment today, and this causes an attrition problem as some employees quit because they cannot take the pressure.
6.6.3
The Sense of Excessive Crisis
The sense of perpetual crisis instilled throughout Huawei has been highly effective during the company’s rapid growth phase, but strategic thinking is also necessary. Constant anxiety, as if constantly negotiating a path over egg shells or thin ice, is a recipe for failure. To quote Mr. Ren Z.F. in his article “Next Year is the Winter for Huawei”: “if a company is always in a state of high anxiety, and lacks strategic thinking, the company culture is not sustainable, and its strategy must eventually fail” .
6.6.4
Successor-Less Individual Hero
Mr. Ren Z.F. is the idol of every Huawei employee, and a strong personality cult surrounds him. It is said that half of Huawei’s success is thanks to Mr. Ren Z.F. He
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is behind every call to action, has a vast breadth of knowledge, is familiar with Mao Zedong thought, and speaks logically and eloquently at meetings. His articles are required reading for employees, and he is the undisputed spiritual leader of Huawei. Mr. Ren Z.F. is the ruler of an empire engaged in a ferocious business war. He shows loyalty and courage, piercing eyes and a stable character, but is not overtly aggressive. He never takes the initiative to provoke a dispute with opponents, nor does he engage in risky business. He is characterized by generosity, kindness, and warmth. “Like founder, like enterprise”, so the saying goes. In China, behind every successful business lies the superior wisdom and ability of a strong leader. Huawei is no exception. Mr. Ren Z.F.’s military-style, vigor, and resolute character created Huawei’s ferocious and resilient “Wolf” culture. Many Chinese corporate cultures strongly reflect the characteristics of their bosses, and Huawei is no exception. Mr. Ren Z.F.’s ideology permeates the history of Huawei. Mr. Ren Z.F. is Huawei and Huawei increasingly resembles Mr. Ren Z.F. This situation inevitably leads to concern about Mr. Ren Z.F.’s successor. Can a suitable successor be found and trained? How will Mr. Ren Z.F.’s successor overcome the obstacles he will face? Can the Huawei culture continue to flourish after Mr. Ren Z.F.’s departure? For how long can Huawei sustain rapid growth? If some day, Mr. Ren Z.F. suddenly departed, what would Huawei be like without him?
6.7
Commentary
To other private enterprises in China, Huawei is a compelling, often controversial company. From the self-professed “Wolf Culture” to the staff “Mattress Culture”; from the “Winter of Huawei” to the “Huawei Basic Law”; from the staff practice of a “Karoshi Culture” to Mr. Ren Z.F.’s article “Hard Work Ensures Great Success!”, and the more recent mass layoffs and staff re-signing of contracts, all these elements have contributed to significant achievements. Huawei’s success is commendable. It has achieved rapid development amidst strong competitors in the IT and foreign high-tech industry with its strategy of “Rushing out of Asia and striding into the world”. Huawei’s success is based on a culture of militarization. This is immediately apparent on entering Huawei. The philosophy of one of the best known works of traditional Chinese culture, the Art of War , affects the management of Huawei at all levels, and significantly influences the company’s rapid development. Huawei can be said to employ a typical oriental style of management. It is often said that “doing business is like waging war”. This phrase describes the present era of fierce business competition and may hold some truth. But in fact the phrase should be considered carefully, and does not necessarily hold true for Huawei. Military and business wars differ in ends and means. The purpose of a military war is to defeat the enemy and win, even using unscrupulous means to achieve this. Meanwhile, a business war emphasizes both competition
References
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and cooperation, and while enterprises are rivals, they may also be cooperative partners. Competition thus should follow the rules of market competition, rather than being a fierce, unscrupulous, life and death ordeal. Although both fierce business competition and a sense of urgency are important, the Art of War also says: “The principle of Kings Wen and Wu was to alternate tension with calm”. Modern management emphasizes “people first”, and human resources are the most important capital of high-tech companies. Excessive emphasis on competition, ignoring the “human harmony” within and outside businesses, will create a sick corporate culture and reduce enterprise competitiveness. Like many high-tech IT companies, Google Inc. has created a relaxed office environment and a battery of user-friendly management practices, including flexible working hours and even allowing employees to bring pets to work. Microsoft and others use similar management styles. These practices, while on the surface appear very Western, may in fact be consistent with OM culture. After all, OM culture stresses: “Favorable weather in heaven is less important than advantageous terrain on earth, and advantageous terrain on earth is less important than human unity” . Only by full consideration of OM and comprehensive study of Eastern thinking can a business achieve good health and sustainable development. In the face of intensifying industry competition and challenges, what is the next step for China’s controversial “wolf”?
References 1. Ren ZF (2001) Huawei’s Winter. Corporate Culture (12):13 2. Sun Yougang (2005) Existence vs. paradox – Huawei’s corporate culture. Enterprise Management (6):22