Huawei founder cites survival as a long-term objective
Editor's note:
Ren Zhengfei, the founder and CEO of Chinese tech giant Huawei Technologies, recently delivered an internal speech in which he stated that, based on his assessment of the global economic situation, the guiding concept for Huawei should change from size to profitability and cash flow.
We translated passages from the talk that we thought would be of interest to our readers.
Ren Zhengfei
We should see the difficulties confronting the company now and in the future and – considering the worsening global recession – the next decade will be a particularly painful historical period.
Given the impact of the war and the American blockade, there is no hope of the global economy looking up in the next three to five years. Then take into account the pandemic, and it could be safely concluded that there is no bright spot anywhere on this planet. Considering the significant decline in consumption, we would feel pressure not only from the supply side but also from the market.
In this context, as far as Huawei is concerned, the excessively optimistic sentiments about the future are unwarranted. Until 2023, or even up to 2025, the guiding principle is to survive and survive well. This is a good slogan that all departments should heed well and put into practice.
If according to the projection, there is a gleam of hope for us in 2025, then we should try to tide over the difficulties in the next three years, with the focus now shifted to cash flow and real profits, rather than sales.
We should enjoy a brief respite in 2023 and 2024, and it is uncertain if we could hope to break out of the encirclement during this period. That's why all operational departments should stop telling stories and focus on reality, especially in business negotiations. Stop having any illusions, and if you dare come up with a fictitious tale, be prepared to foot the bill yourself. The priority is to survive, and only with survival can there be a future.
The budget for 2023 should be well-paced, and blind expansion or investment should be curtailed or outright stopped.
Except for the dominant goal of continual investment deemed necessary for survival and profitable businesses, all operations that do not create real value or profits for the next few years should be curtailed or shut down. Our resources and manpower should be funneled into the main channel. Face the reality, and stop entertaining loftier aspirations. Cut the Gordian knot by first putting the redundant personnel into the strategic reserves, and then posting them to where they could feed themselves.
We will give up the markets of some countries so that we can concentrate more on markets with good margins. Some countries and regions known to be harsh will be used as the testing ground for promising young cadres groomed for promotion in the future.
Meanwhile, employees with overseas work experience would be prioritized in professional training and employment.
Drive home the sense of responsibility, and link remuneration and promotion to operational achievement. Let everyone feel the pinch.
(Wan Lixin translated the story.)
