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. Huawei is to a large extent no stranger to this system. Microsoft focuses on Windows and its Office Suite. Arjun Kharpal: Let's talk a little bit about the US for a moment. But I still had to find a job to feed my family. That approach may not be an option at the top. How do you respond to some of these very, very strong criticisms from governments around the world? Ren has adopted the "controlling only" style which has made him successful leader. Do you think that companies like yours are too powerful and need to be regulated? Huawei is now the world's largest telecoms equipment maker. 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. And I don't really care about all that. Dong Mingzhu, Chinas most successful businesswoman and the head of Gree Electric, has a persona that says, Where Sister Dong walks, no grass grows meaning she is really, really tough. As Ren was dissatisfied with his job, he planned to, Despite of his low profile, Ren has managed to transform small business into a successful. This practice differed from the ones used by Western companies, which had advanced technologies and equipment, but ignored their services sector. He created a new position, director of external relations, and placed that director and the director of marketing on the management committee. And care must be taken that they dont conflict with the desired ethos. At Huawei, we often talk about the term of "Van Fleet Load", which was invented by a general of the US army. Get your Culture in Good Shape, Not Lost in Translation: Making the Data Make Sense. They are out of the ordinary and unexpected. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It was all about hard work to bring the company up to the level that it was able to provide higher-quality service. I'm not the one responsible for these achievements, and I shouldn't be the one receiving honors. We will not distribute the extra profit to shareholders, either. Summary. China Europe International Business School. We live in a very connected world. Executives may want to develop these OQ competencies on the way up the ladder and theyll certainly need them if they are to succeed at the most senior levels. So firstly, we must abide by Chinese laws and regulations. Ren Zhengfei, founder and CEO of Huawei, speaking at the company's headquarters in Shenzhen on May 24, 2019. Huawei, one of the biggest company focusing on making communication tools like cellphones, is famous all over the world. The factory's equipment was from France, and at the time, it was some of the world's most advanced equipment with a high level of automated controls. 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 past, no one spoke up for us. Arjun Kharpal: You said Huawei should not be used as leverage between the US and China, and Donald Trump, President of the United States, said that he could intervene in the Meng Wanzhou case as part of a bigger trade deal between the US and China. 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) Some governments have criticized the relationship between Huawei and the Chinese government. We have raised our prices and now many people think Huawei is expensive. 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. Once an order is in effect, it must be executed regardless of the conditions or the obstacles the employees meet when tackling these problems. We just wanted to produce some small things that could easily be sold. Before moving to UK, he was a Professor of Management at China Europe International Business School in Shanghai. 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. At the same time, the company acknowledged the contributions of dedicated employees by remunerating them generously. Twenty or thirty years from now, outstanding talent may be able to combine genes with electronics technology to create new "people". Do you feel that technology has been a force for good or a force for evil? We set prices based on our costs, which were relatively low. For such a powerful country to be scared of a small company like us, some other countries are saying, "Your products are so good that the US government is scared. Many companies' financial statements last year weren't great because they needed to pay income tax arrears. I said this as an outsider without considering his treatment of Huawei. The country wanted to reform and open its doors. Huawei is to a large extent no stranger to this system. In fact, the recent and growing success of Huawei in Europe can also be attributed partly in addition to their service-oriented focus (see again the point of purpose-driven ambition) to their philosophy of explicitly incorporating a strategy to develop cooperative relationships with competitors in the market. On April 12, at the "16+1 Summit" in Croatia, Premier Li repeatedly told all our employees not to install backdoors on networks. Ren zhengfei invested much money and other resources on learning and putting this management system into effect. We are supportive of this. One of the consistent qualities that have been attributed to Ren Zhengfei is his ability to inspire others. As a matter of fact, one of the strengths that people usually refer to when talking about Huaweis founder is that he is always thinking about the kind of company he wants Huawei to be in the next 10 years. As the dean of Rotterdam School of Management (RSM), one of us, George, set the strategic objective of persuading faculty members to publish in practitioner journals like HBR and MIT Sloan Management Reviewin addition to academic journals. You've often looked up to Apple as a role model. Whether or not we can get back to business in the US depends on whether our customers want to buy from us. Nevertheless, Zhengfei remained persistent in talking about his ambitions at all kind of occasions. The European Business Review is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. 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. In a newly published speech originally given in June 2020, Ren called for decentralised . Mr. Ren: First, it's understandable that government leaders would take pride in the great companies of their country. He is recognized as a leader who motivates to facilitate innovation at all levels. There are various types of leadership styles (Fiaz et al., 2017) 1. I think that is how this story is likely to end. Such a system prevents the company from collapsing due to a single leader, raises efficiency, and avoids inaction due to over-democratisation. High-OQ leaders use action strategy rather than consensus building to pursue strategic goals. The leadership of Ren Zhengfei, however, does differ from this rather controlling only style in important ways. As a leader he was used to delivering a vision and as a mentor he was guiding his employees towards their goal. Earn badges to share on LinkedIn and your resume. But by 2003 Sainsburys had followed suit by which time Tesco had a five-year head start and an expanding user base. Ren Zhengfei (Mr Ren): When I had just started Huawei, we still did not understand China's reform and opening-up policy. Another strategic objective was better cooperation between faculty and staff. Otherwise, they will become overweight and won't be able to move fast. Investor and consumer confidence will increase, and the US economy may take a turn for the better. Not really, we think. I lived through the great famine that hit China, and the economic recovery that followed. Arjun Kharpal: If you say that Meng Wanzhou is maybe a hostage in this US-China trade battle, does that mean some of the allegations, from a legal point of view, you don't believe in? We have become what we are today with our own strength. So AI will make the world better, not worse. Arjun Kharpal: What guarantees can you give to customers that their data is safe? After I was discharged from the army, I ran into a big trouble at work. Its this kind of spirit in Ren zhengfei that propels his company to become one of the best in China even the world. Mr. Ren: When I was a kid, I didn't have many hobbies mainly because my family was poor. He relentlessly convinces his employees through stories and actions. His ability to critically reflect on past successes and at the same time to identify the future challenges in the next decade makes Zhengfei an impactful business leader in the eyes of many Chinese. Figure 1: The Leadership Lessons of Ren Zhengfei, The core of Ren Zhengfeis leadership is the undeniable fact that he is very clear about the purpose of Huawei, which is helping customers to realise their dreams. I think he was super great. Many Chinese believe the blueprint for Huawei's success was created by its founder and long-time CEO, Ren Zhengfei. Nothing but life. I can share some numbers with you. We endorse unified global standards that make installing backdoors a crime. Indeed, EU officials initially wanted to investigate the anti-dumping act in relationship to Huaweis products. Mr. Ren: Huawei's future iterative succession system is clearly defined in our Articles of Governance. Instead, we will use it to fund universities and scientists for their research and explorations into the future. Fuelled by his passion, Ren Zhengfei works hard to translate the purpose of the company into a vision aimed at Huawei achieving a world leading status. Our strategy for investment is like this: If a technology is still two billion light years away, we may invest just a little money, like a sesame seed. It has grown the market, enabling many other companies to survive. Our company was very small then and almost had no capital or technology. 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. By David De Cremer and Tian Tao. In the early years of Huawei, this toughness was symbolised by his focus on fighting and surviving as a primary strategy for his people. 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