Business Today

Unravelling An Enigma

Huawei has a relentless focus on consumer centricity and innovation, and at its core is the management style of its founder Ren Zhengfei
D Shivakumar | Print Edition: March 1, 2015
The Huawei Story
is written by Tian Tao with Wu Chunbo

This is a unique book on a unique company. Huawei was established in 1987, one of the youngest global multinationals. It was started by Ren Zhengfei, a young engineer from the Chinese Army. Huawei is owned by its employees and has a passion for consumer centricity. It started with a thousand dollars as an import business in the special economic zone in Shenzhen. Huawei operates in 130 countries, covers a third of the world population and is one of the top three telecom networking equipment makers.

This book is 10 years of research and six years of preparation. Asian economies fall into the middle-income trap - a trap where they end up serving the needs of middle-class as opposed to going up the value and innovation ladder. Japan and Korea did that with local companies who invested in innovation. Huawei is a great example of the same approach from China. Its core value is customer centricity. It is the heart and soul of the company. It is the basis of its survival. Huawei likes its employees to work hard and stay dedicated and would never let dedicated people suffer.

What makes Huawei tick? Consumer centricity and innovation. Huawei has a unique management style, that of humility and curiosity. It has a tradition of self-criticism where every employee is encouraged to challenge anything that seems wrong. This self-criticism made Ren give out more warnings than anyone else about the business. Huawei doesn't want to be a Chinese company or a Western company. It wants to be different and doesn't want to be linked to any set of roots. That's unique in building a global employee and a global citizen.

Huawei is a unique company in the technology space. Technology companies get disrupted and Huawei was no exception. Huawei nearly went under in 2002 and,in fact, was ready to sell out to Motorola for $10 billion. The deal was nearly done as the story goes till the new chairman of Motorola rejected it. This was a rejection that took both companies on different paths. Huawei never looked back after that. It invested in research and development by building more than 20 R&D centres, recruiting more than 50,000 engineers. This focus on R&D moved Huawei up the value chain and they led the 4G installation in the US.

What makes Huawei stand out is balanced development by recognising that absolute balance is a utopian ideal. This means that Huawei does not run after perfection and that helps it live with its Achilles' heel. This is led by the founder CEO Ren Zhengfei himself who has the will of a soldier and the faith of a fervent religious preacher. Huawei is able to strike a balance between order and chaos.

Ren is a different leader, a unique entrepreneur. "Grayness is a normal state. While black and white takes you to extremes. I don't want Huawei to go to extremes, I would like it to possess some systematic thinking. Huawei does not allow empire builders or dogmatic people." In Huawei language "small wins depend on wisdom and big wins depend on virtue". This is a company which wins because it is owned by the employees, it never falters from consumer centricity and is relentless at execution. This is a company that believes that strategy is straight and open while tactics involve tricks. Who has the tricks to beat them this decade?

The author is Chairman & CEO, PepsiCo India, and former Senior Vice President (India, Middle East, Asia) of Nokia

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