Huawei's management model

Author: Wen Liyan
Publisher:
Publish Date: 2006-10-01
Features: A company must keep living and not die. As a natural person, constrained by natural laws, there is a natural end to its life; as a legal entity, although not bound by natural laws, it is equally constrained by social logic. Even the least capable person can live to 60 without accidents, but a company without capabilities may not survive even six days. If a company's development aligns with natural and social laws, its life span can reach 600 years or even longer. The ancient Chinese concept of "Dao Fa Ziran" (the Way follows nature) embodies this principle. What we now advocate—seeking truth from facts—is also based on this idea. Business management must "follow" (adhere to) natural and social laws and continuously seek "truth" (patterns). For Huawei, the long-term focus is on survival—finding reasons and value for its existence. The foundation of survival lies in continuously enhancing core competitiveness, and the inevitable result of improving competitiveness is profit and business growth. This is a closed loop.
For individuals, I don’t have grand ideals. I think about what to do in the next two or three years and how to do it to survive. I place great emphasis on recent management progress rather than long-term strategic goals. Survival is always the hard truth. Recent management progress must have a long-term direction—this is the enhancement of core competitiveness. Huawei’s long-term development direction is to be a supplier of network equipment, which is a key reflection of its core competitiveness. With this orientation, our recent management efforts won’t lose direction. Moving in this direction ensures that our short-term and long-term development are not contradictory, our core competitiveness will be elevated, and we will have reasons and value for survival.
In management, I am not an extremist but an ( c?i thi?n ch? ngh?a). I advocate continuous management progress. We introduced the compensation and performance management system from American Hay because we saw that sticking to old methods, even if we are still alive now, cannot guarantee our survival in the future. Now, we need to take off our straw sandals and put on American shoes, but walking in new shoes on the old path won’t work either. After changing shoes, we must walk the path taken by world-leading companies. These companies have survived for a long time, and the path they’ve walked has been proven as a path to business survival. This is the sole reason we rigidly and mechanistically introduced the Hay system—put simply, because we must survive.
The United States has achieved success in human resource management, allowing its innovative spirit and mechanisms to thrive. This innovation is influenced by many external factors, such as policies and regulations, and internally, the most important factor is compensation. Huawei grew from a branch and developed in China, with fewer external resources than the U.S. Its development was based on intuition, lacking rationality, science, and patterns. Therefore, we need to learn from the U.S. experience and methods, leveraging external expertise. Now, we are buying a pair of "American shoes" (Western shoes) from Hay. These shoes may not fit Chinese people.