Huawei: lead­er­ship, cul­ture, and con­nec­tiv­ity

The Smart Manager - - Reading Room - By tian tao, david de cre­mer, and wu chunbo

Niall Fer­gu­son says in his book Civ­i­liza­tion: The West and The Rest that the West has risen to global dom­i­nance be­cause it has de­vel­oped six “killer ap­pli­ca­tions” that the rest of the world lacks: com­pe­ti­tion, science, democ­racy, medicine, con­sumerism, and work ethic. More im­por­tantly, it has fos­tered a cul­ture of self-crit­i­cism, which Fer­gu­son calls self-flag­el­la­tion: “The West is able to find the best cure for any dis­ease. [...] In fact, if any fea­ture is writ­ten in the genes of the post­feu­dal­ist West, that fea­ture is pub­lic par­tic­i­pa­tion and ac­count­abil­ity.”

Huawei is com­pet­ing with West­ern com­pa­nies against a back­drop of glob­al­iza­tion, and the bat­tle­field covers all con­ti­nents, in­clud­ing the home coun­tries of its West­ern com­peti­tors, mainly the Euro­pean Union and the United States. The com­pe­ti­tion was asym­met­ric in its early days, back when Huawei was far be­hind. Yet with the power of its cul­ture, the en­ter­pris­ing spirit of its peo­ple, and a strat­egy of re­lent­less fo­cus, Huawei launched a fierce race with its West­ern com­peti­tors that lasted for al­most two decades. Around 2005, Huawei be­gan run­ning shoul­der to shoul­der with its com­peti­tors, even sur­pass­ing them from time to time.

Be­ing on par with each other in terms of prod­ucts and tech­nol­ogy, the com­pe­ti­tion hinges upon cri­sis aware­ness and self-crit­i­cism. In other words, in or­der to beat its West­ern com­peti­tors, Huawei should strive to be more West­ern than the West and at the same time take ad­van­tage of its in­her­ent Eastern way of think­ing. In a man­ner of speak­ing, the com­pany’s abil­ity to oc­cupy the gray area where the skills of bull­fight­ing and tai chi over­lap will de­cide the out­come of this game.

The only way to beat your op­po­nent is to be more like your op­po­nent than your op­po­nent, while pos­sess­ing spe­cial genes that your op­po­nent can’t copy. Huawei’s cul­ture of self-crit­i­cism has left a strong im­pres­sion on peo­ple in the West, and their com­ments have been very pos­i­tive. Al­though West­ern civ­i­liza­tion has grown on the ba­sis of con­tin­u­ous self-ques­tion­ing and self-crit­i­cism, the be­lief is not that crit­i­cism is done for crit­i­cism’s sake; the aim is to im­prove and op­ti­mize the cur­rent sys­tem. Huawei is fol­low­ing the same path.

In 1997, the com­pany’s 10thanniver­sary year, Huawei was still in a state of chaos, though it re­mained dynamic and pow­er­ful. At about this time, Ren Zhengfei started to

ad­vo­cate self-crit­i­cism more of­ten, and the com­pany’s meet­ings of self­crit­i­cism and peer cri­tique, the so-called “demo­cratic meet­ings” that had been go­ing on for the past 10 years, were in­sti­tu­tion­al­ized and ex­tended to ev­ery level and of­fice in the or­gan-iza­tion. This is a typ­i­cal CPC prac­tice for or­ga­ni­za­tional devel­op­ment and has helped Huawei in de­vel­op­ing its own man­agers and teams.

All this, how­ever, is more of a call to vig­i­lance, a way to keep peo­ple on their feet. It wasn’t able to re­solve fun­da­men­tal prob­lems with the sys­tem. Cliques, he­do­nism, nepo­tism, and ar­ro­gance had lin­gered and even in­ten­si­fied in the com­pany.

In short, the 10-year-old com­pany faced two ma­jor chal­lenges: one was con­flict­ing thoughts and goals, and the other was the cor­rup­tion that had ac­com­pa­nied its rapid growth. Ren Zhengfei’s so­lu­tion to the first challenge was of typ­i­cally Chi­nese style: He would pro­pose a gen­eral guide­line or a mas­ter con­cept to guide the minds and hearts of the peo­ple. This guide­line was the Huawei Char­ter, which has played a cru­cial role in the his­tory of the com­pany. The char­ter, drafted by pro­fes­sors from China’s Ren­min Univer­sity, took two and a half years to fi­nal­ize. The thoughts and as­ser­tions of ev­ery­one within the com­pany were thor­oughly ex­pressed, ar­gued, and de­bated. And in the end, it re­solved all dis­putes as to the com­pany’s fu­ture and di­rec­tion.

The sec­ond challenge was ap­par­ently more dif­fi­cult. All coun­tries and or­ga­ni­za­tions in the East and West alike have had to cope with greed and cor­rup­tion through­out his­tory. All have ac­cu­mu­lated a vast amount of knowl­edge and ex­pe­ri­ence, but no de­fin­i­tive and ef­fec­tive so­lu­tion has been found. Is it be­cause the challenge is too tough or too com­pli­cated? Per­haps it’s be­cause the challenge has evolved over time.

Also, in 1998, Huawei hired a for­eign com­pany to de­sign and im­ple­ment a pro­fes­sional sys­tem of man­age­ment pro­ce­dures. The idea was to change the com­pany’s ap­proach to prod­uct devel­op­ment from be­ing tech­nol­ogy-ori­ented to be­ing cus­tomer-ori­ented. For this pur­pose, the com­pany es­tab­lished a Reengi­neer­ing Steer­ing Com­mit­tee and es­tab­lished the prin­ci­ple of “copy­ing, op­ti­miz­ing, and then in­sti­tu­tion­al­iz­ing.” For more than a decade, this prin­ci­ple has worked quite well, and Huawei is still op­ti­miz­ing its pro­cesses. This West­ern-style re­form aims to build its global cus­tomer-ser­vice ca­pa­bil­i­ties and make Huawei more like its op­po­nents. This re­form has an­other func­tion: to cage the power of man­agers, so to speak. Of course, when the com­pany shifts from be­ing gov­erned by peo­ple to be­ing gov­erned by pro­cesses, peo­ple with vested in­ter­ests will be af­fected and cer­tainly re­sist. In re­sponse, Ren Zhengfei in­sisted that “the feet must be cut to fit the shoes.”

Dur­ing the Spring Fes­ti­val of 2004, Ren Zhengfei took me to the data cen­ter at Huawei’s head­quar­ters. I was shocked that he couldn’t ac­cess the data cen­ter with his badge. He told me, “Not just the data cen­ter and the R&D cen­ter. I can’t get into a lot of other lo­ca­tions be­cause our pro­cesses don’t give me the au­tho­riza­tion.” And I came to un­der­stand the awe­some power of sys­tems. At Huawei, the higher you are in the de­ci­sion-mak­ing hi­er­ar­chy, the less power you have in ex­e­cu­tion. The role of lead­ers is to build sys­tems and to de­ter­mine strate­gic di­rec­tions. Gen­er­als then act on their lead­ers’ or­ders and the ac­tual bat­tle is fought at the divi­sion, reg­i­ment, or bat­tal­ion level. If the de­ci­sion mak­ers are too in­volved in ex­e­cu­tion, cliques tend to de­velop and cor­rup­tion fol­lows. Rules and pro­ce­dures can elim­i­nate a lot of these prob­lems, but of course not all of them. ■

Ex­cerpted with the per­mis­sion of SAGE Re­sponse from Huawei: Lead­er­ship, Cul­ture and Con­nec­tiv­ity. Copy­right 2016. Tian Tao, David De Cre­mer, and Wu Chunbo. All rights re­served.

The 10-year-old com­pany faced two ma­jor chal­lenges: one was con­flict­ing thoughts and goals, and the other was the cor­rup­tion that had ac­com­pa­nied its rapid growth.

Tian Tao, David De Cre­mer, and Wu Chunbo SAGE Re­sponse

2016, R1250, 424 pgs, Hard­cover

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