█ Text | Yang Yibo ☛
, the head of the inheritance school with deep internal strength, launched I Phone 7 two months ago, in early September, and coincided with the explosion of NOTE 7. This was an "unexpected joy" for Apple. There was no suspense, and it once again triggered a new wave of sales frenzy. Obviously, this result is what Cook, the head of Apple, most wants to see. Of course, it is also what Terry Gou, the "hero behind" Apple, is happy to see.
In the memory of the public, Terry Gou is an annotation of two keywords - one is " Foxconn jumping case", and the other is "Taiwan's richest man".
However, these two keywords are not positive. Foxconn's famous Thirteen Jumps satirizes the image of a capitalist boss who exploits the working class, is greedy, and is ruthless, while "Taiwan's Richest Man" is an annotation of a romantic and wealthy businessman who is associated with female stars and ambiguous love stories.
In fact, Terry Gou has many sides. He is a successful diaosi entrepreneurial hero and the world-famous OEM king. His Hon Hai empire has already established its own system. Last year's revenue reached 887.2 billion yuan, ranking first in the world. No. 25 in the Fortune 500, from overseas Apple to HP , Sony , Nintendo, Nokia , LG, to domestic Huawei, Xiaomi , etc., they have been his stable customers for many years.
At present, the global economy is in a downturn and the landscape is undergoing major changes. Every link in the business chain is facing a test, even Terry Gou, who has risen to the forefront of the global corporate world and is known as the "King of OEM", is no exception.
Terry Gou, who is 66 years old this year, is facing two major tests:
The first major test: rising labor costs, low profits, and long road to transformation and upgrading.
"Transformation and upgrading" is currently the most popular topic in the corporate world, and it is also the biggest headache for bosses including Terry Gou.
A mobile phone can easily cost several thousand yuan. It looks beautiful, but in fact, the profit margin of OEM is very low. For each iPhone 6 mobile phone, Foxconn can only earn 4 to 4.5 US dollars in OEM profit, which is about 25 yuan in RMB. Last year's financial report of Hon Hai Group showed that the gross profit margin was approximately 5.8%.
In fact, as the world's king of OEM, although it holds more than 60,000 patents, it is closely tied to the OEM brand. As the saying goes, when one is prosperous, both are prosperous, and when one is deprived, both are deprived. When OEM brands sell well, everyone is happy together. However, in the first fiscal quarter of this year, Foxconn’s largest OEM owner, Apple, experienced stagnant year-on-year sales growth for the first time. In the second and third fiscal quarters, Apple’s revenue fell by an average of 15.5% year-on-year. The knock-on effect was that Foxconn had “no overtime” and Hon Hai’s performance also plummeted, showing negative growth.
On the other hand, the increase in labor costs for workers has added fuel to Foxconn's fire. Many years ago, Terry Gou had foreseen the threat to OEM companies caused by the increase in labor costs, but the solution he proposed, the "Robot Plan," had never been implemented. No wonder he wanted to build a factory in India, where labor costs are lower.
On the other hand, Terry Gou tried to use his own advantages to develop a WeChat mall comparable to Jingdong , but the reality was not satisfactory. In less than a year, the "Shell Mountain" project was aborted.
Faced with internal and external troubles, Terry Gou became anxious and took simple and crude actions, with three words: "buy, buy, buy." In May this year,
acquired Nokia’s feature phone business from Microsoft for US$350 million. In August this year,
acquired 66% of Japan's Sharp for RMB 25.3 billion. It hopes to move from downstream assembly in the supply chain to upstream core components and gradually get rid of the life of watching other people's faces when eating.
The transformation and upgrading battle of Mr. Guo is really a long and difficult road!
The second biggest test: Who can take over the Hon Hai Empire?
If Hon Hai’s transformation and upgrading issues can be gradually solved by improving core competitiveness through innovation, mergers and acquisitions, etc., then the second biggest test faced by Terry Gou is no different than the gap between mountains and hills.
The second biggest test facing Terry Gou is his successor.
Many people will ask, why does Terry Gou have this problem? Although he has two sons, there is a 33-year age difference between his eldest son Guo Shouzheng, who is nearly 40 years old, and his younger son Guo Shoushan. There is no suspense about the eldest son taking over.
The reality is that Guo Shouzheng himself has no interest in technology. After graduating from university, the industry he worked in has always been related to his favorite movies and animation art.
In 2013, Guo Shouzheng finally returned to Hon Hai to assist his father and take over Foxconn's channel business development in Taiwan. The outside world unanimously believed that Guo Taiming's successor was already clear by this time.
But unexpectedly, in 2014, Terry Gou made it clear in an interview with the media that although his son Guo Shouzheng was in charge of Hon Hai's Sanchuang store, he and his nephews and nieces would not take up the business. He said that Hon Hai Group will implement the method of decentralization of powers and benefits, and the group will move towards a federal style in the future. Obviously, Guo Taiming is fully aware that Hon Hai is surrounded by mountains and is very complicated. Guo Shouzheng or other nephews are far from capable of controlling it.
So, Terry Gou thought of another method - to imitate Formosa Plastics' "multi-person co-governance" model, where the bosses of each business group will collectively lead and he will retreat to the second line. However, "oranges are oranges when they are born in Huainan, and they are oranges when they are born in Huaibei ." The method used well in Formosa Plastics may not necessarily be suitable for Hon Hai. Soon, the multi-person co-governance model proved to be difficult to operate in Hon Hai. The problem of the "multi-horse carriage" is that the decision-making is not clear enough. The bosses of the business groups all have the final say.
Soon after, Terry Gou came up with the idea of selecting a successor internally. So, among Hon Hai’s internal officials, who is most likely to take over the reins in the future? At first, everyone agreed that Gou would choose from the core iPhone department heads. However, I don’t know whether Gou’s requirements were too high or these people were unlucky. The iPhone department heads who were expected to be the leading ones kept changing. The promising Mesozoic people were abolished one by one soon after they were appointed. It was really confusing.
There are three people with the most power in Hon Hai today. The first is Xu Muji, who is in charge of the lifeblood of Hon Hai and one of the founding members. The second is Dai Zhengwu, a veteran who continues to assist Gou Taiming in opening up new territories. The third is Huang Qiulian, who has followed Gou for decades and controls the economic power. Although these three people hold great power, they all have one characteristic in common: that is, they are all over sixty years old.
Nowadays, Guo Taiming is carrying out the "Youth Recruitment Plan" with great enthusiasm. Is it possible that Guo, the richest man, wants to appoint a new generation as his successor?
Terry Gou said that he would have to work for another ten years before arranging the succession issue. I think so. With the current scale of Hon Hai and the complexity of its business, it may take a long time for Terry Gou to train another person to replace him. The children of the
family are unable to take over, there is no need for multiple people to govern together, and the Mesozoic generation has been wiped out. The founder has to start training successors in his sixties. Not to mention whether the vision is accurate this time, the energy alone has been greatly reduced compared with more than ten or twenty years ago. This is Gou Taiming's tragedy, and it is also the common sorrow of many entrepreneurs who do not pay attention to succession.
Here, I would like to appeal again. Inheritance requires planning and a lot of time to prepare. Inheritance is not a simple handover, nor can it be solved by making a will. Inheritance is a systematic project and a key button that determines whether a company or a family can continue to write a legend. If you think about it a day earlier, you will have a better chance of winning.
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