Source: Yibo Say (ID: yangyibotcc)
Not long ago, Huawei conducted its first board re-elected since 2012. 73-year-old Ren Zhengfei resigned as vice chairman, and his daughter Meng Wanzhou took over; Ren Zhengfei's position is a director and president of Huawei. In addition, Sun Yafang, who served as chairman for 19 years, took the initiative to give in and did not serve on the board of directors, and Liang Hua became Huawei's new chairman.
What is more striking is that this term change, Huawei continues its past collective management model, but the rotating CEO system that has been implemented for many years will no longer operate and will be replaced by a rotating chairman mechanism. Huawei's board of directors has determined that Vice Chairman Guo Ping, Xu Zhijun and Hu Houkun will serve as the rotating chairman of the company.
has been transformed from a rotating CEO to a rotating chairman, which should be one of the important layouts of Ren Zhengfei's Huawei's succession plan. It is worth mentioning that Zhang Zhongmou, another tech giant on both sides of the Taiwan Strait and founder of TSMC, will retire in June this year. Huawei's "rotating chairman" and TSMC's "double head" mechanisms are both important institutional arrangements for intergenerational alternation. What are the similarities and how many differences are there?
enables "rotating chairman", what is Ren Zhengfei considering?
Huawei's new chairman Liang Hua
Recently, Huawei announced its 2017 financial report, achieving revenue of 603.6 billion yuan and net profit of 47.5 billion yuan. Huawei, which does not engage in finance, does not speculate in real estate, and does not go public, and more than 60% of its businesses come from abroad. What is its impressive performance? It is equivalent to 3 Evergrande, 4 Alibaba, 5 ZTE, 6 Xiaomi, 6 Changhong, 10 Moutai, and 30 Konka.
There is no doubt that Huawei is a great company, and it is one of the successful examples of creating vitality in systems and providing benefits in management. Huawei re-elected the board of directors, with Liang Hua, former chairman of the company's supervisory board, as chairman. His role focuses on the legal level, such as fulfilling the governance responsibilities of the legal representative, including being responsible for the company's public relations and image maintenance to the outside world, and presiding over the operation of the company's shareholding employee representative meeting. The three rotating chairman Guo Ping, Xu Zhijun and Hu Houkun are the core figures of the decision-making level, that is, they are the highest leader of the company during their duty and have the highest power to handle daily work.
Huawei Vice Chairman Meng Wanzhou
It is worth mentioning that Meng Wanzhou, the daughter of Ren Zhengfei, who was elected as vice chairman, also acts as an important role in organization and coordination, that is, the coordinator and manager of Huawei's agency platform operation.
Regarding why the rotating chairman system was chosen, Ren Zhengfei expressed three meanings in an interview:
First, the three rotating chairmans rotated in a circular manner, mainly to avoid "one year of emperor and one year of minister" and to avoid the loss of outstanding cadres and outstanding talents.
In Ren Zhengfei's view, after the new board of directors changes, the company's highest power is placed in the cage of collective leadership, compliance with rules, and behavioral constraints, so as to form a cycle. Although the "rotating chairman" has the highest power to handle daily work, it is collectively assisted and restricted by the Executive Board, and all documents need to be voted and approved by the board of directors; in addition, they are also supervised by the supervisory board.
Secondly, the new board of directors is just iterative replacement, and some fresh blood will be introduced in the future.
Third, is Ren Zhengfei still the actual leader of Huawei? Ren Zhengfei did not respond directly to this question, but said that Huawei is a collective management decision-making mechanism, and all decisions were not made by me; I just have the right to speak.
In the history of Huawei's development, Ren Zhengfei has created the most peculiar phenomenon in business history: that is, Huawei is the company with the most scattered equity, the largest number of employee shareholders, and the single equity structure among the unlisted companies in the world. As Huawei's largest shareholder and main founder, Ren Zhengfei only holds 1.4% of the shares, and the remaining 98.6% of the shares are held by employees. Currently, Huawei has 180,000 employees.
Planning photo of Huawei's new leadership team
Compared with Huawei's old board of directors in 2012, Huawei's collective control model of corporate governance has not undergone many fundamental changes, but it has changed from a "rotating CEO" to a "rotating chairman", and his responsibilities have not changed much.
Since its establishment in 1988, Huawei has only one president, that is Ren Zhengfei himself.In the eyes of the outside world, he has always been the person who is Huawei. In other words, one day Ren Zhengfei becomes president means the beginning of a new era of Huawei's "post-Ren Zhengfei".
"rotating CEO" system is Huawei's first creation and began in 2011. Around 2004, when American consultants helped Huawei design the organizational structure, they thought that Huawei did not have a central organization, which was simply "incredible"!
In the past, "rotating CEO" was Huawei's highest executive chief. The term CEO comes from the modern Western corporate governance model. The Chinese translation version is more concise, namely "CEO". In terms of power structure, Ren Zhengfei's position as president is second to the "rotating CEO". He is Huawei's "second worker" and mainly assists the CEO in managing the company's specific business. Since he is the CEO, literally, there is only one "chief" person, so how can there be many people? The name always makes people feel weird, a bit "unreasonable". Now, the "rotating chairman" mechanism has been changed to the new board of directors, which may be due to considerations at this level. The collective leadership mechanism of
cycle rotation is quite similar to the folk saying "the country takes turns to sit", and it has also attracted the attention of many companies. Vanke, which has the same scattered equity as Huawei, has also emulated the establishment of the "rotating general manager" system. In addition, large industrial group companies such as Haier and Lenovo have also set up rotating presidents. They all have a common phenomenon: the company has a high management level, so they dare to make full use of the group wisdom of the management.
In Chinese family businesses, there are many cases of inheritance of "the country takes turns to sit in". For example, the Xie Guomin family in Thailand, and the four brothers of Xie Shi collectively led the group. After the eldest brother Xie Zhengmin retired and resigned, the fourth brother Xie Guomin took over the chairman of Zhengda.
In addition, the Cai family of Fubon, Taiwan is also a classic case. In October 2016, the two brothers Cai Mingzhong and Cai Mingxing of Fubon not only "take turns to take turns", but also exchanged division of labor and exchanged seals, which was similar to Huawei's "rotary system". The eldest brother Cai Mingzhong retired from the position of chairman of Fubon Financial Holdings and was replaced by his younger brother Cai Mingxing; similarly, Cai Mingxing's previous position of chairman of Fubon Group was replaced by his eldest brother and retired to the vice chairman. This is the famous Fubon brothers "rotate on the throne".
From the perspective of human resources governance, the "rotating leadership system" is like the horse racing mechanism, which can enable enterprises to keep moving forward in entrepreneurship and innovation and maintain vitality. This is also a major factor in Huawei's success. In addition, through "taking turns to do it", succession candidates can be cultivated and trained, and the "awareness of ownership" of corporate executives can be enhanced.
observers believe that decision-making efficiency and decision-making execution continuity are a major flaw of Huawei's "rotary system"; in addition, whether it can become a normalized institutional arrangement for corporate organizational structure remains to be further observed. Ren Zhengfei himself also said: "Huawei really can't find any good solution. Whether the CEO rotation system is a good solution is required or not, it takes time to test."
For family businesses, the rotation system is also a balanced technique of "harmony between the family and everything will prosper", which can reduce internal disputes and enrich family members' practical experience in the business field.
"Double Heads" and TSMC
TSMC Chairman Zhang Zhongmou and his wife Zhang Shufen
TSMC Chairman Zhang Zhongmou is expected to retire in June this year and will no longer serve as any director; TSMC will rename him as the founder of TSMC in the future in order to thank him for his contributions and efforts.
Zhang Zhongmou is known as Taiwan's "godfather of semiconductors", "chip king", the founder of TSMC, and is also a pioneer in the global wafer foundry industry. TSMC was founded in 1987 with revenue of only US$3 million that year. By 2016, it had been US$30 billion, a 1,000-fold increase. TSMC's 31 years are also the result of Zhang Zhongmou's 31 years of corporate governance; in these 31 years, Zhang Zhongmou has made investors 200 times profit and provided 190,000 jobs.
Chairman of Caixin Media Xie Jinhe praised Zhang Zhongmou, saying that "Taiwan can't find a second person!" In 2017, Xie Jinhe pointed out in his article "Salute to Chairman Zhang Zhongmou": "Zhang Zhongmou used 30 years to build TSMC into a giant in the world's semiconductor industry. I'm afraid no one in the business world can surpass his contribution to Taiwan."
"I don't believe that a life with only work will be a happy life!" Last year, we published "TSMC's No Overtime Culture" , which attracted many people's attention. Zhang Zhongmou, born in 1931, has been "joyed to work" all his life. Since he started working in 1955, he has been working for 63 years and has been a manager in 1964 for 54 years. As the founder of TSMC with outstanding achievements, he has also gone through 31 years. He only chose the job he liked throughout his life and did his best.
Last year, Zhang Zhongmou was awarded the Taiwan Enterprise Perpetual Lifetime Achievement Award, sharing the four core values and ten business concepts on the spot; among them, the "four core values" are integrity, two-way commitments (including the company's commitment to employees, employees' commitment to the company, and can also be applied to customers and suppliers), innovation, and customer trust. When talking about the secrets of success, Zhang Zhongmou said: uses the slogan of Google's "do no evil" as the minimum standard for TSMC.
Nowadays, the outside world is more concerned about the fact that there will be no TSMC in the future. "The Economist" wrote an article predicting that in the month when Zhang Zhongmou retired in June, TSMC will "kill" Intel, ship the most advanced semiconductors, and seize the throne of the world's strongest chip manufacturing.
According to foreign media reports, Apple Mac computers intend to use their own ARM architecture chips and abandon Intel processors. As soon as the news came out, Intel's stock price fell by 6%; many people believe that Apple Mac "brokes" Intel and will "favor" TSMC! Because Apple's ARM chips are all manufactured by TSMC. In fact, TSMC has left its competitor Intel behind, which also comes from its technological advantages. Currently, Intel chip technology is mainly 10 nanometers, while TSMC is ahead of the curve to 7 nanometers. Compared with Intel's strengths being computer chips and Samsung is good at smart phone chips, TSMC is "taken both ends" and has a market share of 90% of mining machine chips.
Currently, TSMC general manager and co-executive Liu Deyin
"double head" mechanism is the core governance mechanism of "TSMC without Zhang Zhongmou", also known as TSMC's "dual core system". After Zhang Zhongmou retires, he will hand over the baton to Liu Deyin and Wei Zhejia. TSMC will enter the parallel leadership system of two leaders in the future.
Compared with Huawei's rotating collective control model, what are the characteristics of TSMC's "double chief" mechanism?
First of all, TSMC's "double heads" have been part of TSMC's inheritance plan. Looking back at Ren Zhengfei, Huawei has not yet clarified its successor plan to the outside world.
On October 2, 2017, TSMC announced two major news: First, after the shareholders' meeting in early June 2018, Zhang Zhongmou retired and will not continue to serve as the next director, nor will he participate in any business management department work. 2. TSMC will adopt a parallel leadership system for two leaders, Liu Deyin will serve as chairman, and Wei Zhejia will serve as president.
Zhang Zhongmou said in TSMC's "press release": "The establishment and dedication of TSMC over the past 30 years has been a very exciting and pleasant period in my life. Now, I want to keep my remaining years for myself and my family. De Yin and Zhejia have served as co-executive directors since 2013 and performed well."
TSMC General Manager and Co-executive Director Wei Zhejia
Secondly, similar to Huawei, Zhang Zhongmou also has a step-by-step transition period when setting up the organizational structure.
In November 2013, Zhang Zhongmou, who was 82 years old at the time, began to plan for TSMC's sustainable development and inheritance plans, officially resigned as CEO, and Liu Deyin and Wei Zhejia took over as general manager and co-executive director, taking the first step of intergenerational inheritance. On June 8, 2017, at the TSMC shareholders' meeting, Zhang Zhongmou arranged for Liu and Wei to join the board of directors and elected them as directors, entering the "passing and helping" stage, mainly learning the decision-making process of the board of directors.
Liu and Wei have worked together for TSMC for 17 years, following Zhang Zhongmou left and right; although they were responsible for different businesses in the past, after being promoted to co-executive, the two of them were like "twins", singing together and collaborating endlessly. They led TSMC to create more impressive results, and their revenue has hit new highs. Similar to Huawei's "rotary system", tacit understanding is the first priority. Liu and Wei not only need to do what they are doing, but also need to understand each other's things.
From left to right: Wei Zhejia, Zhang Zhongmou, Liu Deyin
Many people are worried that Zhang Zhongmou will introduce the "two-person co-governance" inheritance model to TSMC. Will "two suns" appear?
From the perspective of company law, the chairman holds substantive power, and the president is the executor, so of course there will be no "two suns"; but TSMC's dual-track chief system is another parallel leadership model for two leaders, and Zhang Zhongmou is retreating completely. If there is conflict in the future, who will coordinate?
Zhang Zhongmou once explained this: If the two have different opinions, there will be an outstanding board of directors in the center to coordinate.
The board of directors is the highest authority for company decision-making, but the board of directors does not hold it every day. A company has to make many decisions every day. As the chairman, Liu Deyin will be the last gatekeeper for the substantive decision-making of TSMC in the future; and President Wei Zhejia, in terms of succession allocation, mainly under the guidance of the board of directors, will lead the operation of TSMC, and there will be no "two suns" for the time being.
Wei Zhejia is one year older than Liu Deyin and is 66 years old this year. Like Zhang Zhongmou, both of them have gone from engineers to managers. Regarding TSMC's management, Zhang Zhongmou has always been strict. Once, Wei Zhejia was asked to review, and he said in a hurry, "Chairman, you can question my intelligence, but please don't question my loyalty to TSMC!" As a result, a humorous sentence immediately eased the tension.
TSMC Games
Zhang Zhongmou created a miracle. When the news of his retirement came out, the employees were both shocked and reluctant to leave when they heard it, "This time they may have really retired." After the 2008 financial crisis, Zhang Zhongmou, who had handed over Cai Lixing and retreated behind the scenes, returned to the front line and regained the military talisman.
In short, whether it is Huawei's "rotating chairman" or TSMC's "double heads", it is still impossible to judge whether it is a long-term system or a temporary transitional arrangement, and there are also variables. Ren Zhengfei is a strong man in the technology industry, and so is Zhang Zhongmou. They all founded a great company. For TSMC's double successors Liu Deyin and Wei Zhejia, taking over is just the beginning, and there are still challenges in the future.
In Zhang Zhongmou's eyes, work, life and commitment are the three parts of a happy life. The three must be allocated well. But for Liu and Wei, how to learn the decisiveness, centripetal force, especially the trust of the founder Zhang Zhongmou, and transform it into actual strategies, will be the primary challenge for them to succeed together.
This article comes from the official account Yiboshu (ID: yangyibotcc). Yibo said, let’s pass on the excellence with you. The first platform for the inheritance of family-owned enterprises in China. A wealth story every day can make you understand the past and present of the capital market and make you understand the financial circle better.
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