CEO Tips丨To achieve continuous victories, enterprises should do the following.
In this era full of challenges and opportunities, how enterprises can go against the tide and continuously achieve victories is the unwavering goal of business managers. What are the elements that can enable an enterprise to survive and thrive in adversity? What should be the core strategies of an enterprise in different cycles? How to avoid the situation of "having a beautiful strategic plan, but ruining it when implementing the strategy"?
With these questions, the 36Kr "CEO Tips" live stream invited Wu Wenguang, a senior private board president coach and the founder of Polytalent Rongxiu Hui Management Consulting, and Guo Liangliang, the chairman and CEO of Yaoxinwei, to join us in discussing: How can enterprises achieve continuous victories.
In this live stream, the two guests mainly discussed the following issues
1. When it comes to achieving victories, the first step is to complete the set goals. What situations encountered in the business operation process may affect the completion of the goals?
2. Achieving victories definitely cannot be separated from people. When promoting talents within the enterprise, what common characteristics do the promoted people usually possess?
3. For the continuous development of an enterprise, it will face the stages from 1 to 10, and then to 100. Are there any commonalities or points that need special attention in different stages?
4. Resources are all limited. As an enterprise leader, how to effectively coordinate and allocate resources to ensure the good development of different business lines?
5. One of the most feared situations is that the strategy cannot be implemented. When formulating the strategy, as the top leader of the enterprise, what basic common sense or misunderstandings are easily overlooked?
6. What are the three things that an enterprise must do right to achieve continuous victories?
The following is the conversation between the two guests and 36Kr, and some of the content has been sorted and edited:
36Kr: When it comes to achieving victories, the first step is to complete the set goals. What situations encountered in the business operation process may affect the completion of the goals?
Wu Wenguang: If a company has a culture of achieving victories, then the boss does not need to focus on specific indicators at the end of the year. I think there are several key points: First, whether it is market and customer-oriented. When we make decisions, whether we really take the customer as the center is very important. Second, whether the decomposition of internal goals is objective and practical. Sometimes the goals we set may be too idealistic. If the goal itself is not realistic, then it is naturally difficult to achieve.
It is just the time to make the budget at the end of the year, and I would like to give you some suggestions. When making the budget, we should view the market objectively and rationally, especially to analyze our organizational capabilities, and refine, decompose, and quantify these. We should not just shout slogans or make statements, but do math problems and speak with data.
Whether we really take the customer as the center in our daily work, whether we use a quantitative way to express our results or processes, and whether our decisions are really based on data, these are all very important. At the same time, whether our organizational structure and resources match our goals and can adapt to market changes are also points that need to be considered.
In addition, whether our processes can adapt to external uncertainties and at the same time adapt to external changes in certainty is the key that requires several interactions up and down in the budget process. In this process, we need to continuously adjust and optimize, but this adjustment and optimization is not simple. It needs to be verified with results and continuously adjusted.
Guo Liangliang: When evaluating the achievability of the goal, I think it should be considered from two main aspects.
First, it is the geopolitical and economic factors at the macro level, including the tariff issue in the Sino-US trade war. This has a particularly significant impact on our company because we are mainly engaged in chip manufacturing. Before 2017, the market was very free, and the competition was completely based on price and performance. Whether it is products from the United States, Europe, or the local ones, as long as they are competitive, they can circulate in the global market. However, after the trade war broke out, the market appeared barriers and fragmentation, and the tax policy also changed. These rapid changes in the macro environment have had a directional impact on our industry. For example, if Trump further raises tariffs on China after taking office, we may need to correct and optimize certain directions of the chip. If this really happens, we may need to re-examine the annual goal. Another example is that we may have originally focused more on chips for the automotive industry, but if the automotive exports are subject to trade restrictions, we cannot rely too much on this field and must make adjustments. Otherwise, once a black swan event occurs, the impact on the company may be disastrous. Secondly, it is the micro-level data analysis. We need to digitize the business indicators, R & D indicators, and operational indicators of each department, and then analyze the fluctuations of these data and the reasons behind them. Through the digital way, we can more accurately reflect whether the company's goals are feasible. If problems are found, we need to quickly correct and optimize.
In general, I mainly focus on these two points: One is the changes in the political and economic environment at the macro level, and the other is the micro-level data analysis and indicator monitoring. Through these two dimensions, we can more comprehensively evaluate the achievability of the goal and make necessary adjustments in a timely manner.
The goal itself is unchanged, but in the process of achieving the goal, we may need to adjust the components of the goal. For example, suppose our goal this year is to achieve a performance of 1 billion. The original plan may be: The vehicle-mounted business accounts for 30%, the industrial business accounts for 30%, the consumer business accounts for 30%, and the remaining 10% may be in other fields. However, if the policy changes and we find that continuing to invest a lot of resources in the vehicle-mounted business may bring risks, then we need to use other businesses to make up for this potential loss. We may consider increasing the proportion of the consumer business because the consumer market trend this year is very good. In this case, we may adjust the composition ratio of the goal, such as increasing the proportion of the consumer business to 50% and reducing the proportion of the vehicle-mounted business to 20%. Although the proportion of each part has been adjusted, the overall goal is still 1 billion. Such adjustments help us better adapt to market changes, reduce risks, and at the same time ensure that we can achieve the set performance goals.
36Kr: Achieving victories definitely cannot be separated from people. When promoting talents within the enterprise, what common characteristics do the promoted people usually possess?
Wu Wenguang: In my many years of work, I always believe that organization and talent management account for 40% of my energy. We have a series of evaluation methods, including orientation evaluation and 360-degree evaluation. Before deciding to use someone, we first evaluate to avoid biases in employing people. After the evaluation, we also involve training. After evaluating an individual's potential and characteristics, we will decide how to train them according to the company's strategic development direction.
When selecting talents, I think we should look at their fundamentals. First, loyalty and integrity are the most basic. If someone uses the banner of the public to seek personal gain, such a person must not be used. Secondly, I look at whether a person has an open mind and a learning state. An excellent person is always sensitive to the outside world, does not reject new things, including the advantages of competitors, and maintains a learning state. Learning ability and adaptability are closely related. People with strong learning ability must have strong adaptability.
For people in different positions, our requirements are also different. Grassroots managers need execution ability, middle-level managers need creativity, and top-level managers need strategic ability and decisiveness. The innovation of an enterprise, especially organizational innovation, often starts from the middle level. First, see what the job requirements are, and then select the suitable people. When employing people, there is no need to pursue perfection. We do not need a person to fully meet the 100% standard. A person with a score of 60-70 can be used, and then we can supplement and match people for him. For a main leadership position, there cannot be a perfect person. We need teamwork. For a person with strong decision-making ability, we can match him with a person with strong execution ability. We should select the suitable people according to the job requirements, and then use teamwork to make up for the individual's deficiencies.
Guo Liangliang: When promoting employees in our company, we mainly consider three dimensions: performance contribution, organizational contribution, and development potential. The weights of these three dimensions in employees at different levels are different.
For front-line employees, we attach more importance to performance contribution, that is, whether they can complete the KPI, and whether the R & D and execution work is excellent. Organizational contribution also accounts for a certain proportion. For example, whether employees are willing to do some public work for the organization, such as sharing experience to improve team efficiency. As for development potential, we mainly look at their problem-solving ability, learning ability, positive attitude, and communication and coordination ability.
For middle-level managers, the weight of organizational contribution will be greater. We will examine whether they can establish an effective system and process, and whether they can cultivate excellent employees to enable employees to better play their roles. As for development potential, we will pay more attention to whether they have the future system view and macro ability, and see if they have the potential in this aspect.
For top-level managers, the weight of performance contribution will be very low because the success of the top level more depends on the success of the team rather than individual performance. We mainly focus on their performance in organizational contribution, such as their overall view, cross-departmental collaboration ability, and the ability to allocate and mobilize external resources. These abilities are crucial for top-level managers.
In general, we evaluate employees through these three dimensions, but we will adjust the weights of each dimension according to different levels to determine whether employees at different levels are suitable for promotion.
36Kr: For the continuous development of an enterprise, it will face the stages from 1 to 10, and then to 100. Are there any commonalities or points that need special attention in different stages?
Guo Liangliang: Our current work can be divided into three stages: 0 to 1, 1 to 10, and 10 to 100. The 0 to 1 stage is the most challenging because it involves the process from theoretical research to technical realization. In our chip field, it usually takes 15 to 20 years for a new technology to be introduced from its emergence to the market. These technologies often originate from basic research in research institutes and universities. For example, the sensor technology and the third-generation semiconductor technology currently adopted by our company were started to be researched by American companies and universities in 1994 or 1995, and it was not until 2007 or 2008 that they were gradually commercialized, completing the transformation from 0 to 1.
Our company is a latecomer in this field, so our current focus is on the 1 to 10 stage. The core of this stage is to improve the commercial maturity of the technology, including price rationality, mass production capacity, yield, and localization ability. In addition, because the market's understanding of new products is relatively weak, we need to educate the market through application demonstrations and breakthroughs in benchmark customers to show the advantages of our products.
Finally, the 10 to 100 stage is about large-scale production and application expansion. This means that the product needs to further reduce costs to adapt to a wider range of markets and application scenarios. This includes improving the expansion capacity of the production line, yield control, quality management, and achieving breakthroughs in more application scenarios to continuously reduce costs and expand market share.
I think Huawei has done an excellent job in educating users and cultivating user mentality, and our company is also learning from them. Huawei did not initially start with communication and base station business. When they tried to enter the European market, they faced a prejudice environment where the European market generally believed that the technology of mainland Chinese companies was backward. At that time, the European market was more inclined to trust brands such as Ericsson and Cisco in the United States, and did not believe that Chinese companies could provide high-end communication technology. Huawei adopted several strategies to change this situation: 1. Holding exhibitions: First, they introduced their brand and products to the public through exhibitions to improve brand awareness. 2. Striving for benchmark customers: Huawei strives to cooperate with the top customers in the industry to prove its technical and service capabilities. 3. Inviting customers and partners to visit the headquarters: Through this way, Huawei shows its strength and professional image.
Our company is also adopting similar strategies. Whether in the automotive, mobile phone or industrial fields, we first break through the top customers. For example, in the automotive field, we cooperate with Tesla; in the mobile phone field, our initial major customer was Samsung, and now Huawei, Xiaomi, OPPO, vivo, etc. are our customers. In the industrial field, we also cooperate with the leading enterprises in the photovoltaic industry.
By winning these benchmark customers, other customers in the market will think that our products are trustworthy. In this way, when promoting to other customers, they are more likely to accept our products. Our goal is not only to educate customers, but more importantly to let customers know us better, thereby establishing trust and recognition.
Wu Wenguang: In the 0 to 1 stage, the most critical is the investment, including capital and human resources, especially the talents carrying the technology. This is a long-term behavior. In the 1 to 10 stage, I very much agree with Mr. Guo's point of view. This stage is actually an opportunity-oriented and credibility-building process. To build credibility, the first step is to establish contact points, that is, to convey information to customers. At this stage, we cannot rely on large-scale market strategies, but need to find various opportunities, such as seizing key decision-makers and establishing model customers. These are all achieved through opportunities. The most difficult part is to build trust, that is, to make customers believe in us. This involves how to link customers, show strength, gain trust, and make customers willing to endorse us. This is a complete strategy. But in general, this stage is still opportunity-oriented.
From 1 to 10, and then to 10 to 100, there are many theories to support this stage, such as low cost and differentiation, which are the two key points of the competition theory. Low cost means that we can provide products at a lower price than others, and differentiation means that we can do things that others cannot do. In addition, some are achieved through means such as administrative barriers, but this is not the main. From 10 to 100, the challenge we face is how to establish scale advantages and competitiveness. Whether it is low cost or differentiation, we need to have a strong innovation ability. In the manufacturing industry, this involves supply chain management and cost control; in the service industry, it may be more dependent on talents. In the entire process, the organization's resource integration ability is the key. Different stages have different requirements for capabilities: From 0 to 1, it is the key technology leader; from 1 to 10, it is the business leader; and from 10 to 100, it is the organizational leader.
36Kr: Resources are all limited. As an enterprise leader, how to effectively coordinate and allocate resources to ensure the good development of different business lines?
Wu Wenguang: Resource allocation is the core process of enterprise management, involving various aspects such as organizational structure, incentive mechanism, and organizational process. In this process, the most critical is whether it can maintain openness to cope with changes in the market and the external environment. An enterprise is not isolated; it needs to interact with the outside world in terms of information, funds, services, and products. Therefore, the top management of an enterprise needs to face external uncertainties while providing certainty to the inside.
I have summarized several points: The responsibility of top management is to guard the unchanged while promoting changes, and the grassroots should focus on speed and efficiency, and at the same time be caring to take into account people's feelings. For small and medium-sized enterprises, it is particularly necessary to learn how to adapt to these changes, including following changes in customer needs, the macro environment, industrial policies, industry trends, and competitors, and maintaining sensitivity.
Technical entrepreneurs often think that as long as the product is good, they can succeed, but in fact, this is not the case. I often joke that first you have to be capable, then someone has to say you are capable, and the key is that the person who says you are capable has to be capable. This means that there must be good customers who recognize your product. In response to changes in the external market, enterprises need to organize internal resources, maintain openness, to meet customer needs. Huawei is an example. According to the needs of different customers, they have adopted the "land, sea and air" strategy, that is, the army, navy, and air force must all connect with customers. The organizational structure and resource allocation need to be closely related to the characteristics of the product or service and match the technical process. For example, a pure manufacturing industry may adopt a hierarchical system, the electronic and electrical industry may adopt a matrix system, and in the era of software dominance, a distributed system is more likely to be adopted. The internal organizational structure should match the technological development, and at the same time, the outside should connect with customers.
My own experience in the enterprise also proves this point. For example, during my 10 years as the general manager of a company, I adjusted the organizational structure every six months according to changes in customers and products. This adjustment is an important way of resource allocation and needs to be implemented