I had a vague feeling at the time though, that the communications industry was about to explode and so I started looking for opportunities in this market with tremendous potential. That's how we started out. He is the author of the book Pro-active Leadership: How to overcome procrastination and be a bold decision-maker. They have great technologies, skilled labor, and economic strength. And its founder Ren zhengfei is thought be be one of the best leader in the business world. Our financial statements are audited by KPMG, which can clearly show whether or not we are supported by the Chinese government. Our relationship with the Chinese government is primarily defined by these two points. At that time, Zhengfei clearly used a competitive mindset as the driving force to grow as a company. Zhengfei was very clear about this ambition and demanded that all Huawei employees would adopt the US-based way of looking at business as introduced by IBM. Early life. The differences of leader skill in America and China. Twenty or thirty years from now, outstanding talent may be able to combine genes with electronics technology to create new "people". Back then, China was still going through the Cultural Revolution. As can be expected of a man with an army background he served in the Peoples Liberation Army he is known to be intense and tough and never loses control. At that time, China didn't accept Mendel's theories; instead, we followed Ivan Michurin's theories. High-OQ leaders use action strategy rather than consensus building to pursue strategic goals. Obviously this has required a strict control of information, which attaches a flavor of secrecy and even mystery to the behavior of Mr. Ren Zhengfei. Especially in the entrepreneurial years of the company he used this strategy to be both a strong mentor and leader for his employees. In Huaweis early years, Zhengfei retained authority on major decisions such as corporate development strategies and culture building, but fully empowered employees when it comes to R&D, manager appointment, compensation & benefit allocation, and other areas. As he spent decades building one of the biggest tech companies on the planet, Ren Zhengfei kept a low public profile. Huawei was founded by Ren Zhengfei when he was in the mid-age crisis. We will also push the Chinese government to sign a cyber security agreement with the German government. If you'd like to share this PDF, you can purchase copyright permissions by increasing the quantity. He does not only consider this kind of power to be an important personal characteristic but sees it as an essential part of the Huawei culture. We did not know that these small things were designed to connect the whole city or even the whole world. Again, he ties this in part back to their ownership structure:. Do you think she's a hostage in this broader US-China trade battle? Mr. Ren Zhengfei has been capable of pioneering the development of technology while growing in the world. Mr. Ren: They are more than welcome to come visit us in Shenzhen. By the time I left the military, 186, 286, and 386 had dominated the computer world. He also. We always focus all of our energy on this same single point. Arjun Kharpal: In terms of the way he's negotiated with China, some people would say that actually he's managed to get concessions for the US. We also sued the US government in Dallas. So we would never follow anyone's instructions to install backdoors. An organization offers telephone exchange equipment. Around 2008, Professor Arikan published a mathematics paper. For example, in the desert and rural areas in China, rats were a plague for the telecom connections to customers. You have entered an incorrect email address! Indeed, EU officials initially wanted to investigate the anti-dumping act in relationship to Huaweis products. That requires stepping out of the normal flow of organizational life. I stuck our 180,000 employees together, and encouraged them to forge ahead. What Is Blockchain Technology and Its Types? Twenty years later, the then CEO of Ericsson asked me where I got the courage to enter the communications industry despite its high entry barriers. Apple is also a great company. The TV channel is available in more than 415 million homes worldwide. So there is no need to worry too much about some comments posted on the Internet. He said, Those are air bubbles. I believe China and the US should stress collaboration and shared success. For example, as the products of Huawei in their pioneering years were not yet well developed he visited many R&D offices abroad. Minimum time is spent in making decisions as chain of command is emphasized. He has indeed has proven that he has influence as well as insights which are needed for formulating strategies. Mr. Ren: When Ericsson was already really big, Huawei was still a "caterpillar". This message has been reiterated by many senior officials of the Chinese government, including Yang Jiechi, who stated his position at the Munich Security Conference, and Premier Li Keqiang, who made similar statement at a press conference shortly after a recent session of the National People's Congress. Zhengfei made this very clear when he said: I do not know anything about technology, but I can bring people together to work for the collective. He is praised for his desire to hire better people in the areas he is weak in, with the ultimate goal to improve the quality of Huawei products and services. Although this multinational company surpassed Ericsson in 2012 as the world leader in terms of sales revenue and net profit, the company is still relatively unknown to the European business audience. In the third phase, after 2007, the strategy was to simplify management and be creative with top talents to turn Huawei into an efficient and creative creator of customers dreams. Underlying these beliefs is clearly an idea of sharing responsibility but also sharing the rewards that are earned because of these collective successes. Bill Gates changed his mind though during his later speeches, suggesting that AI could greatly boost social progress. They carry a clear message. I happened to have this invention, and the value of my invention was exaggerated by the country, which led to a promotion for me. What they lack and what successful leaders embody, down to their marrow is organizational intelligence. (Academic publishing, he believed, was a necessary but not a sufficient condition for RSM to be recognized as a top business school.) We have reflected on this a lot. They viewed the rat problem as one the company had the responsibility to solve. If so, what did she say to you? There was no chance for us to step back and start another business. At that time, China was just beginning with its reform and open-up policy, and was paying more attention to technology, talent, and knowledge. The US doesn't need to conquer the world through violence. So AI will make the world better, not worse. Turning to personnel, George replaced the people likely to generate the most opposition and appointed a new, supportive vice dean from among the existing department chairs. Everyone at GE knew what to expect from Neutron Jack Welch. Secondly, hes full of enthusiasm and ambition. In the past, no one spoke up for us. What makes Huawei interesting is its rate of growth and . All references must be sourced to a "CNBC Interview'. We only focus on edge computing. Its success stems in no small part from its ethos, the wolf spirit of Huawei, created by founder and chairman Ren Zhengfei at the start. Is this a battle for you? Ren: First of all, we want to delegate the decision-making power to our experts. Make it smaller.[1] That moment of theater became part of Apples folklore, epitomizing Jobss relentless pursuit of perfection. In the early years of Huawei, Zhengfei was very much aware that their products did not meet the standards of those of its competitors. This company philosophy was inspired by the heroic tales of the Glorious Revolution that took place in England in 1688. I liked reading books, doing homework, and solving math equations on scrap newspaper. Instead of issuing an EQ response to mollify the professor, George sent an OQ response: We all work for RSM.. Second, customers have the right to make their own choices. Huawei has kept a low profile, ever since it was founded. High-OQ leaders rebel from the top. So it would be impossible for us to provide customer information to any third party. KPMG wouldn't hide anything for us. With higher prices, we have started earning more. The company is growing rapidly and Forbes has estimated Zhengfei's wealth at $2.1 billion. If a technology is 20,000 kilometers away, we can invest a little more, like an apple. We set prices based on our costs, which were relatively low. Mr. Ren: I would like to comment on President Trump without considering his administration's treatment of Huawei. Ren Zhengfei, a founder of Huawei, conducts the personal communication style inspiring employees to achieve high results. Amazon, Google, and many others all have their own focus areas. Huawei has indeed invested considerably in creating a learning driven culture where the power of the mind is visible. For midlevel leaders, strategy is generally about persuading others of the need to change. We invest heavily in our focus area. None. They wouldn't need to rest, just to refuel. To rebel from the top, leaders must strike a difficult balance. Our costs were low for two reasons. 5. Ren is the son of school teachers and grew up in a mountainous. This way, we will be able to make world-leading products. The hiring of IBM also made it possible for Huawei to learn from the West to allow introducing a more global vision. One of the consistent qualities that have been attributed to Ren Zhengfei is his ability to inspire others. When two nations or companies meet, they must collaborate to achieve shared success. Arjun Kharpal: But what was the personal effect of her arrest on you as a father? But Zhang wanted to send the message that even minor defects are unacceptable and that Haier intended to match the quality of any competitor worldwide. But he also has shortcomings. In a way obsessed by doing good for the customer, Zhengfei is relentless in communicating this purpose by means of stories to his employees and convincing them that they all should be dedicated to pursue the mission of the company: To connect people via communication.. Moving forward, we will invest more in this direction. They will be able to produce more quality products than the whole world can consume. Mr. Ren: I often talk about staying focused. After all these upheavals, she has changed her mind and doesn't want to leave. A great opportunity arose when one senior professor complained that the teaching program staffers acted as if the faculty worked for them, rather than the other way around. He relentlessly convinces his employees through stories and actions. From what has been discussed above, we can easily find the relationship between the leadership of Ren zhengfei and the rise of Huawei. I majored in architecture back in school, but I studied electronics technology myself. In order to support his family, Ren Zhengfei implemented a strict system of food distribution in his family. We will comply with European cyber security standards and the GDPR. The industry had high requirements. Below is the transcript of a CNBC Exclusive interview with Ren Zhengfei, Huawei Founder and CEO. I'm a puppet leader,' founder Ren Zhengfei says This is the fifth in an eight-part series looking at how Huawei has found itself at the epicentre of the US-China tech war Ren Zhengfei has. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. This website uses cookies to improve your experience while you navigate through the website. Arjun Kharpal: Would you support similar ideas about no-spy agreements in other countries, including the US? Such a system prevents the company from collapsing due to a single leader, raises efficiency, and avoids inaction due to over-democratisation. CNBC.com is the preeminent financial news source on the web, featuring an unprecedented amount of video, real-time market analysis, web-exclusive live video and analytical financial tools. He belongs to rural family and spent his middle and primary school years in remote mountains, where started his career as civil engineer when China faced turmoil because of cultural, revolution. In Europe, we will face some difficulties in the short term, but there will be no impact on our business. Mr. Ren: In a long run, I can tell you clearly that I will retire as I won't be alive forever but in a short term, it depends on my mental agility as I get older. But there are still more than 180,000 employees working at Huawei. What have been the driving forces behind that? A great increase in material wealth would also help to significantly enrich culture. Smartphone was badly hit. One opposing force is the idea of attack versus compromise or also referred to as the simultaneous tendency to cooperate versus compete. I was later told that she sent me a letter, where she mentioned that she wanted to leave the company. Huawei is now China's most prominent multinational company and a leader in 5G mobile telephone technology, which will be rolled out across the world in the next few years. (Stanford Business Schools Richard Pascale once said, It is easier to act your way into a better way of thinking than to think your way into a better way of acting.) The approach is particularly useful in organizations where the leader has limited hierarchical power. The interview was first broadcast on CNBC's Squawk Box Asia on 15 April 2019 and the full interview will air as a special episode of CNBC Conversation on Friday, 19 April at 9am (SG/HK). Over the past century, which countries and companies have made the US scared? This switch was used by hotels and small organizations. Arjun Kharpal: One of the concerns is that these powerful technologies like artificial intelligence are being developed by a small group of very, very big technology companies. Ren has been described as more of a spiritual leader than a hands-on executive. Important in this whole management process is that his use of an adaptive vision never compromises the purpose and values of the company. OQ, as well call it, consists of five competencies: sending messages that reinforce strategy, fostering an ethos, using action strategy, rebelling from the top, and staging moments of theater. On one hand he possesses the characteristics of a controlling leader who makes all the decisions. But the US is in a different situation. Living in such extremely harsh conditions and working on such a highly modernized project was really a good experience for me. So productivity will be greatly improved. Chinas Huawei rapidly became one of the worlds most successful telecommunications equipment companies, with revenue exceeding $122 billion in 2019. This is a copyrighted PDF. More and more companies are harnessing new technologies more quickly. Huawei responded to customers 24/7. Neither side has mentioned Huawei, which means Huawei does not actually carry much weight. We have set up this joint lab and adopted a co-leadership mechanism, where leaders from the coal industry have a greater say on mining aspects, while Huawei leaders have a greater say on the . When we first entered the telecom industry, we started by reselling products from another company. With Huawei becoming the largest telecommunications equipment manufacturer in the world, Ren zhengfei has already become a paradigm Ren has adopted the "controlling only" style which has made him successful leader. We were living in an adobe house that only provided us a little shelter from the wind. Zhengfei was very clear about this ambition and demanded that all Huawei employees would adopt the US-based way of looking at business as introduced by IBM. Our network equipment sales dropped 1.5% last year, but enjoyed a 15% increase in Q1 of this year. In particular, we will build the simplest networks, ensure cyber security, and protect user privacy. However, after this change, the effiency gradually increases. In a similar vein, Huawei makes use of an internal online forum, Xinsheng Community, which is accessible to all Huawei employees worldwide. For example, In the UK, Huawei has put much effort into convincing the British government and general public that they and their procedures can be trusted, by (a) Setting up the Cyber Security Evaluation Centre in Banbury to ensure the quality of their equipment, and (b) Cooperating with the GCHQ, the UKs signals-intelligence agency, to ensure that the networking equipment and software is reliable and secure. After, completing his school, He attended the university named Chongqing and then Ren Zhengfei, joined Peoples Liberation Army research institute as, he wishes to work as a military technologist, reportedly in the PLA's Information Technology research unit. In the words of Zhengfei: Chaos was removed and structure entered Huawei. Where was I supposed to go from there? CEO's are the driving force behind any for-profit organisation. As society moved forward, AI was made possible. In the words of Zhengfei: Chaos was removed and structure entered Huawei. One Chinese company that is increasingly becoming active in Europe is the Chinese telecom giant Huawei. To give you a simple example. Mr. Ren: First, it's understandable that government leaders would take pride in the great companies of their country. and pay only $8.00 each. Mr. Ren: I think the biggest technological advances will be seen in AI experimentation and applications. Mr. Ren: As technology develops, the future world will become "winner-takes-all". But we will not distribute this extra money to our employees or shareholders. During China's Cultural Revolution, I designed a small instrument using my math skills, and actually received recognition from the government for this device. Are you starting to think about how your own intellectual property like chips could be used and sold to third parties like Apple? After learning from the West for almost 20 years, Huawei has established an increasingly standardized and institutional decision-making system. It commemorates the long-ago day when CEO Zhang Ruimin pulled 76 refrigerators off the production line. In this case study that focus on leadership, leadership is defines as the behaviour of an individual when he or she is directing the activities of a group towards a shared goal. For example, Huawei plans the development of the company by decade, whereas most of their competitors such as Ericsson and Motorola plan it by financial quarter or year. Some top military officers didn't understand it, either. Steve Jobs is known more internationally. However, there was no way back. The Opportunities and Challenges of Global Teams. They don't choose certain goods just because a politician says so. Nothing we've achieved would give us the right to neglect any laws or overlook the technologies of any country. He believed that the combination of his skill to organise a company and the IT background of his executives and employees would create wonders. We endorse unified global standards that make installing backdoors a crime. Never does he try to overly advertise his own company or fabricate some news items just for attracting eyes. So this won't impact us too much. These experiences taught me to endure hardships. Of course, large equipment still relies on an architecture of no other elements but computing, storing and connecting, so we will also work hard to contribute to a cloud world. True to this Chinese saying, Zhengfei has indeed proven that he had the influence and insights needed to design the most effective . So it's impossible for me to enjoy the same prestige as Jobs. Mr. Ren: Collaboration and shared success. Arjun Kharpal: Mr. Ren, as we come to the end of the conversation, I want to focus on your future. Mr. Ren: I don't know. Even if AI poses other threats, we can manage them with laws and rules. But by 2003 Sainsburys had followed suit by which time Tesco had a five-year head start and an expanding user base. Also, he tries to avoid unnecessary interviews from the media and devote his time energy into working. We are going to make this happen. Zhengfei was worried that phase 2 created a kind of decision-making that was less than efficient. We obviously couldn't control our customers, so we had to get hold of the products. Arjun Kharpal: But some of the major figures in the technological world have warned about the dangers of artificial intelligence. In the early years, Huawei, as a private company, had to battle primarily the State Owned Enterprise (SOE) dominated market. I said I couldn't even imagine what it would look in two or three years. Huawei the Ren Zhengfei Way: the "Tough Guy" and His Corporate Philosophy By: Jiing-Lih Larry Farh, Xin Pi This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether he needed Length: 13 page (s) Our subsidiaries in other countries also have this relationship with local governments. A good theatrical moment reverberates as stories about (and, more recently, videos of) the event are passed along. Ren has adopted the controlling only style which has made him successful leader. That future may be closely related to our business, but it also may not be. But if you were in the room with the US President, what would be your message to him? Ren innovation skills and technical knowledge. Ren described it as a blend of three qualities: extreme resilience, a willingness to self-sacrifice, and sharp predator instincts. And I don't really care about all that. Looking at the Fortune Global 500 list, Huawei is the only mainland Chinese company (out of 91 Chinese companies listed) earning more revenue abroad (67%). In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. Many scientists also proposed that genetic technology should be gradually integrated with electronic technology to create "new people". Arjun Kharpal: You mentioned the Ericsson CEO at the time said it was a bold move to jump into this space. And its founder Ren zhengfei is thought be be one of the best leader in the business world. Nevertheless, Zhengfei remained persistent in talking about his ambitions at all kind of occasions. Leahy succeeded with both dramatic changes in part because he maintained a modest demeanor throughout. Earn badges to share on LinkedIn and your resume. Mr. Ren: I don't know what the US is after and have no idea how they are going to resolve the trade disputes. We cannot help solve the China-US trade disputes, because we don't really sell in the US and have no influence on China-US relations. However, Ren zhengfei and Huawei made it in the end. Why do I like to use military terms? 2023 | A2Z Pte.Ltd. According to him, Huawei should be focused on building a company where peoples minds are the main asset and resource to rely on. But our strategy of focused investment never changed as our capital grew. She will be a hero if she makes it back to us. Mr. Ren: I can't speak for other companies; I have no authority over them, but Huawei will be the first company to comply with this agreement. I only wanted to keep my belly full. Since China has become the second largest economy in the world, this relationship has taken new forms in the shape of several business initiatives. This case focuses on the distinctive "paternalistic" leadership and management style of Ren Zhengfei, founder of Huawei Technologies Co., Ltd. (hereinafter "Huawei") and considers whether he needed to adapt his style in light of new challenges at the company. It is great in that it has always pushed to make the market bigger, not smaller. Mr. Ren: There are perhaps some employees who have been intimidated by my military-style speeches, because about 160,000 employees have left Huawei. Today, Huawei has developed a decision-making system with limited democracy and appropriate centralisation. You've often looked up to Apple as a role model. So we won't do that. Therefore, he often uses similar way to manage the company like the military system does. Nevertheless, as the market evolved and employee characteristics shifted, the shortcomings of Ren's management model grew ever apparent. This proves our equipment is secure. So George revamped the universitys advisory board meetings. HBR Learnings online leadership training helps you hone your skills with courses like Business Plan Development. Is it your ultimate aim to get back to business in the US market or just clear your name there? Ren Zhengfei had very clear vision for Huawei, which is to help customers realize their dreams. When we were negotiating with the German government about signing such an agreement, we didn't know top officials from the Chinese government were also discussing the same thing. During the day, we were building a highly modernized factory. At the start of his tenure, only 1% of the 300 faculty publications a year were in managerial journals, and those were not the top journals. Arjun Kharpal: I want to talk a bit about your management style. Some people asked me what the world would be like in 20 or 30 years. Leading Huawei: Seven Leadership Lessons of Ren Zhengfei. His company reflects these traits. Meng is now in a similar situation. They are out of the ordinary and unexpected. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. Ren Zhengfei's Media Interview After the Opening Ceremony of the Intelligent Mining Innovation Lab in Taiyuan. Today, the instrument I made may not be an innovative technology, but at that time, it was a good invention. This meant we were left behind for many years in this area. Arjun Kharpal: Mr. Ren, you said you haven't spoken to Mr. Trump, but what do you think of his leadership style and his tactics? Therefore, Zhengfei acted more like a catfish in the high-level decision-making process, who has constantly created imbalance to inspire passion across the organisation. If no one dares to invest in the US, then how can they make up for lost tax revenue? This hurts no one. If the US opens its telecom industry and its operators say they are going to purchase tens of billions of dollars in equipment from us, I wouldn't believe it and wouldn't be willing to make billions of investments. Now we talk a lot about genetic modification, or gene editing. Leadership styles. To give the new changes time to take effect, he delayed a formal discussion of the new strategy until his third year, by which time both revenue and ranking were higher and attitudes had become more favorable. Difficult as Huawei is, its founder Ren zhengfei still have faith about Huaweis future and its great success in few years later. Saying that he was great is an understatement. Second, develop an organizational persona. Arjun Kharpal: Have you tried to reach out to the president to speak to him about it? And it needs to be communicated widely. But even if it did happen, it would be at least 30 years from now. Copyright 2023 Harvard Business School Publishing. When I look back on how Huawei developed in the telecom market, we actually made some missteps. Data is a real-time snapshot *Data is delayed at least 15 minutes. PIC:A portrait of Ren Zhengfei, the founder of Huawei. They also need to follow local laws and regulations and pay local taxes. Arjun Kharpal: You were in the People's Liberation Army. 3.2 Findings 3.2.1 Huawei's leadership style Many will claim that Zhengfei (the founder) laid the foundation for Huawei's . What if we could identify and change the genes that cause the condition? Ren Zhengfei leads Huawei Technologies, one of the world's largest manufacturer of telecommunication hardware and mobile phones. So I don't think they are intimidated. It's now just a scientific fantasy, and wouldn't necessarily ever happen. It allows a leader to impose expectations and define the outcomes. In China, leadership has traditionally been grounded in a hierarchical top-down management system. The Central Committee had also been disbanding parts of the Chinese military because it was so large. These great people are going to great lengths to find fault with a little rabbit or mouse like us. People don't object to the editing of plant genes. Where does this idea of competing in a cooperative way come from? But what we've seen publicly is senior officials in the government talking at times on Huawei's behalf. When there is no cure to a disease, maybe we can look into gene editing. The secret is to take advantage of opportunities to do something symbolic in a surprising, high-impact way that will capture the attention (and, hopefully, the hearts and minds) of the organizations members. 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Also push the Chinese government becoming active in Europe, we actually made some.... Main asset and resource to rely on its rate of growth and Chaos was removed and structure Huawei... Zhengfei had very clear vision for Huawei to learn from the West allow! Zhengfei still have faith about Huaweis future and its great success in years!