Recently, Ren Zhengfei announced the abolition of the Strategy Department at a symposium with the Secretariat of the Expert Committee, causing shock in the industry. Talking about the reasons, Ren Zhengfei said that Huawei's strategy cannot be determined by a few people, but should be determined by the collision of thousands or tens of thousands of experts to study the future direction and path to the future. Therefore, the Strategy Department must be abolished.
Huawei This move has had a big impact. People in the strategy department are like lost dogs, and people are panicked. The bosses are also confused: Is strategy not important anymore? How will we develop strategies in the future? More people are speculating. Maybe the reason is not as simple as it seems on the surface, and there are even conspiracy theories. This article collates information from all parties and attempts to provide a systematic answer. Enjoy below.
01
Background: Huawei's strategic system and strategy department
1, Huawei's strategic system
Before the strategy department was abolished, Huawei's strategic system structure was as follows:
- Strategy and Development Committee (SDC) : It is affiliated with the standing board of directors and is composed of the company's senior executives. Xu Zhijunperennial Serves as the committee director and only makes major strategic decisions and does not participate in daily affairs;
- Strategy Research Institute: was established in 2019 to coordinate the implementation of Huawei's Innovation 2.0. Focusing on the research of cutting-edge technologies for more than 5 years, it is responsible for Huawei's clear roadmap in the technology field in the next 5-10 years, and assumes the important task of ensuring that Huawei does not lose its way and miss opportunities. By investing X billion US dollars into universities every year, we support the academic community to carry out innovative research in basic sciences, basic technologies, etc. At the same time, we will create technologies and business models that subvert the main channel to ensure the sustainable competitiveness of Huawei's main channel. Director Xu Wenwei served as the first dean and has now resigned.
- Corporate Strategy Department: functions similar to the strategy department of most companies, focusing on industry business opportunity research and execution management. The head of the department is at the vice president level of the company, lower than the Strategic Research Institute. This is the department that Ren Zhengfei abolished this time.
- 's two major business management committees, Strategy and MKT: ICT Strategy and Marketing Department and Consumer Strategy and Marketing Department, manage the strategies of the 2B and 2C business groups respectively, supporting the commercial success of the two major businesses. Strategy and Business Development Department of
- BG/BU/Business Unit/Product Line: belongs to the product or business level. In order to support the success of business units or products and solutions, strategic research and management work are carried out. The strategy and marketing department of the
- regional department/representative office: grassroots organization, based on insights into local market segments, mainly makes accurate and rapid decisions on market segments.
In the above system, the Strategy and Development Committee (SDC) is the core authority. The Strategy Research Institute and the Corporate Strategy Department form support for . One is responsible for the technical direction, and the other is responsible for the industry business direction. The division of labor between the two is a bit like preliminaries. Research and development, the Strategic Research Institute looks further and more forward, while the Corporate Strategy Department is closer and focuses more on business opportunities. In contrast, the Strategic Research Institute has a higher configuration. Many top experts are in the Strategy Research Institute, while the Strategy Department is mainly composed of MBAs. Their main job is not to provide strategic insights, but to do organizational and management work, such as strategic intelligence collection. Analysis, organization of strategy meetings, drawing PPT and monitoring the implementation process, etc. In other words, the strategy is not formulated by people in the strategy department, they are just midwives or even secretaries.
The experts at the Strategic Research Institute can truly provide strategic insights and become the source of strategy. But the Strategic Research Institute is not the only gathering place for top experts. The Scientist Committee, the Scientist Advisory Committee , and the Company Advisory Committee also gather a variety of experts both internally and externally. These committees generally have secretariats, which are responsible for summarizing and reporting the opinions of technical experts to the SDC for decision-making and forming the final strategy. In general, it is similar to the fact that there were two think tanks in the original core authority. Now one business department will be abolished, the work scope of the other technical department will be expanded, and several secretariats will be established as new think tanks. Manage more cutting-edge and open strategic frontier work. If ranked in terms of advancement, the Secretariat is first, the Strategic Research Institute is second, and the Strategy Department is last.Abolition of the corporate strategy department does not mean that the entire strategy is eliminated, but only one of the consulting organizations is eliminated.
2. The past and present life of Huawei’s Strategy Department
Huawei’s Strategy Department has also experienced some evolution. In the early days, Huawei did not have a strategy department. Strategy was all in Ren Zhengfei’s mind. Wherever he pointed, the following would follow without thinking. Ren Zhengfei's strategy is only a general direction, with visions such as "the future communications market will be divided into three parts, and Huawei will be one of them."
html In 2097, after Huawei and IBM launched the IPD project, a "Strategic Planning Office" was established under the R&D Department to be responsible for strategy. This "strategy" is not a company strategy, but a product strategy. It only studies product direction. Due to the lack of methods and capabilities, the strategic planning office was once called the " strategic nonsense office " by insiders. Later, IBM and Mercer pointed out that the company lacked a marketing function, so they combined it with strategy, established a strategy and marketing department, and introduced excellent methodologies, but it still did not operate satisfactorily and could not function as it should. The then president of Europe, Yu Chengdong, once criticized the department as useless. Ren Zhengfei said: OK, then you can become the president of strategy and marketing and make it useful. Yu Chengdong worked hard for two years and found that mobile phones had great potential, so he asked Ren Zhengfei for help. Later, he created the myth of the God Terminal.However, as the company grew larger and its businesses became more diversified, the marketing function became increasingly inadequate, so it was decentralized to various BGs and regional departments. The strategy and marketing departments were downsized into the corporate strategy department and differentiated in 2019. Out of the Strategic Research Institute, the current structure was formed.
02
Motivation: Changes in Huawei's strategic management
The strategy department has not been suddenly abolished today. On the one hand, it has its own incompetence and outdated factors. On the other hand, it is more due to the great changes in Huawei's strategic management. Gradually marginalized, it can no longer play its due role.
1. The Strategy Department has fallen behind.
Huawei has had an extremely difficult time in the past few years. The international environment has suddenly become unprecedentedly bad, which has directly affected the country. Wanzhou was trapped, chips were blocked, the international market was suppressed in an unprecedented and concentrated manner, and the company encountered sudden changes in performance caused by changes in external conditions. Is this mutation completely unforeseeable? Not completely. It has been a high probability event at least since the beginning of the Trump campaign. As a forward-looking department, the Strategy Department does have an unshirkable responsibility, and the serious consequences it caused are enough Become a reason to abolish this department. Some people on the Internet are aggrieved, saying that the Strategy Department is just a staff agency and should not bear all the responsibilities. Taking action on the Strategy Department is like Cao Cao borrowing the head of the grain officer Wang He. However, the Strategy Department has not only been like this in the past few years. Looking back at every trend in the past, Huawei has always been a latecomer, and its strategies have always been one step ahead. Fortunately, its research and development is so fierce and its organizational capabilities are so strong that it can be a latecomer and a first comer. Coming from behind. But after learning from the experience, the Strategy Department still has a great responsibility. Maybe it was an accident once, but if it happens again and again, it means that there is really something wrong with the Strategy Department, maybe it's the ability, maybe it's the organizational structure.
Not only that, the strategy department also broke the news. The president of the department was revealed to have cheated on him and gave birth to a child. Not only did he refuse to raise the child, he also teamed up with his original wife to sue a third party. I bet it's because the president is too busy and the strategy department's workload is too small, right? Therefore, being laid off is not unjust.
2. Changes in strategic management: going deep into the endless frontier
In the new historical context where Huawei has stood on the top of the world and advanced into no man's land, the main task of the strategy is no longer the immediate complacency, but poetry and the distant future. Huawei's technology leadership is getting stronger and stronger. In the past, it always emphasized customer-centeredness. In recent years, there have been more and more technology-centered arguments.Ren Zhengfei once mentioned Huawei's strategic standards: is two billion light years away from our target, invest an " sesame "; 20,000 kilometers away from the target, invest an " apple "; Thousands of kilometers away, throw a "watermelon"; five kilometers away from the target, we throw " Van Fleet ammunition amount ", pounces on, tears the hole, develops vertically, expands horizontally, and the product will take the lead. world. Huawei must improve its strategic visibility when advancing into no-man's land. It is not enough to only be able to see five kilometers. It must be able to see 20,000 kilometers or even two billion light-years.
Science is an endless frontier. Only scientists can see so far. It is impossible for MBAs. By the time they see it clearly, daylilies and will be cold, and the enemies will touch them under their eyes and noses. Therefore, the protagonists of strategic insights naturally become scientists. Ren Zhengfei emphasized that communication with scientists must be strengthened. Through the communication and collision of all scientists and experts on the online platform, the Secretariat is responsible for guiding, summarizing, igniting, and summarizing . The wisdom of thousands of people provides strategic input to the company's future. The scientist committee allows "nonsense", and the bell mouth must be large. The expert committee can "talk nonsense", and the bell mouth is slightly narrower in . The insights gained after layer-by-layer induction and verification become the input of strategy, greatly improving foresight.
Who will handle these input information? Of course it is the Secretariat, not the Strategy Department. As an open, semi-official, semi-association committee, the Secretariat hangs out with experts all day long, just like running a WeChat group. It is naturally the first to get scientists' ideas, and they are not just a secretary. It is also necessary to guide, summarize, and rekindle these ideas, stimulate collisions of ideas, and guide the truth to become clearer and clearer. This process is not only about technology, but also includes the demonstration of the business direction of the industry. It is easy to be compatible with business from technology, but it is difficult to be compatible with technology from business. Can MBAs in the strategy department do this? Even if they were allowed to enter the Secretariat, they would not be able to do the job, because the Secretariat basically requires technical experts to be able to talk to scientists. Therefore, the strategy department has gradually been marginalized. First, you cannot access first-hand information and you cannot process it. Second, your work has been taken over by others. Third, you do not have the authority and ability to make strategic decisions. , so it is logical that it will be eventually cancelled.
Some people may say that if the first half is gone, doesn’t someone still have to do the execution and management of the second half of the strategy? Yes, someone has to do it, but this is transactional work , and the Institute of Strategic Studies can be compatible with it without having to set up a department. Moreover, Huawei is currently decentralizing its power. Planning, budgeting, resources, etc. have all been delegated to regional departments and BGs, and there is nothing left at the headquarters to coordinate.
03
Enlightenment: Strategic management changes due to needs
Maybe the first reaction of some bosses is to follow up, but I advise you to calm down first. Your situation is different from Huawei's. cannot blindly follow the trend of . Huawei is in no man’s land, where are you? Sing whatever song you sing on the mountain, strategic management must match the strategy itself. Huawei's strategy determines that the strategy department will be withdrawn, and your strategy determines that the strategy department may still be retained or even need to be strengthened. Many companies have not laid a solid foundation for strategic management , and the strategic process has not been established yet, so don't even think about learning from other people's endless frontiers.
But no matter what, Huawei still enlightens us that strategic management must continue to upgrade in order to bring out the value of the strategy. The front end of strategy must be opened up to form a larger and more open trumpet; the reach of strategic insight must be moved further forward, if five kilometers is not enough, then it must be moved forward several thousand kilometers; the technical content of strategy must be increased, not just in the MBA classroom. The strategy should be eclectic, whether business or technology, internal or external, everyone should be involved, not just a few people's self-entertainment.
and above.
