Huawei: leadership, culture, and connectivity
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