Leadership Style of Huaiwei
Leadership Theories
Leadership could be viewed as a function of knowledge ourselves, having a vision that is well communicated and take effective actions to realize our potential. In fact, leaders are significantly different from managers. The only job for managers to do is to specify job scope and make sure that employees can finish their respective tasks. Leaders are those who find a way and guide their followers to walk on the correct pathway and direction in order to achieve their final goals. Different leaders may have different leadership traits. Generally speaking, there are three major leadership styles, namely transactional leadership, transformational leadership and charismatic leadership. Transanctional leaders are very much like military leaders(Judge&Piccolo, 2004). They give order and hope their followers to listen and obey their orders. In this way, employees are often organized and regulated by a very simple reward and punish mechanism. Those who can finish the job scopes could receive rewards such as bonuses. If not, they will be punished in terms of salary deduction. However, this type of leadership is getting more and more obsolete as employees are lack of flexibility, freedom and power in making their own decisions during production or business activities(Leithwood, 1992). From the resource-based view (RBV) in strategic human resource management, employees are also considered as a kind of intangible assets of a company (Barney, 2001). If their potentials have not been discovered and fully developed, a company may suffer from profit loss. Transformational leadership, on the other hand, is about inspiring and motivating employees to do a great work though empowerment. It appeals to the higher need of an individual in the Maslow’s hierarchy of needs, which is self-actualizaiton(McLeod, 2007). Charismatic leadership is about using one’s personal charisma to influence followers(Howell&Shamir,2005).
Unique Rotating CEO system
From the Huawei’s case, it is not very difficult to observe that Ren Zhengfei, the CEO of Huawai, is a very successful transformational leader. On one hand, Zheng fei has try his best to inspire and motivate his followers to pursue innovation. On the other hand, Zheng fei has a rather self-criticizing attitude in times of success. From historical and past experiences, Zheng fei has realized that if Huawei is operated within hands of an almighty CEO, this business risks in decision-making process and strategic management is very high. Thus he is afraid of challenging his own leadership by introducing a rotating CEO system(De Cremer, &Tian, 2015). Traditionally many people tend to believe that CEO acting as a heroic leader is the key driving force and embodiment of a company or an organization in its decision-making process of business operations and activities(De Cremer, &Tian, 2015). They should be responsible and vigilant to respond any changes and discover opportunities in the global market. However, as the global market itself is getting more and more competitive, it might not be valid if one CEO is assigned with the task to be responsible for everything good and bad. In this sense, Huawei’s rotating CEO system seems to be a highly innovative leadership management idea. In this system, three deputy chairman will act as rotating CEO for a duration of 6 months. They form an executive board with another four standing committee members who provide a stable pillar to the three rotating CEOs. Zhengfei’s role is relatively different. He is very like a CEO mentor. He guides and coaches CEOs in their decision-making process. The merit of this unique rotating CEO system is that the company’s key decisions will not be put at stake in the hands of one CEO. The associated business risks will be reduced very tremendously. Rotating CEOs will also provide more insights for the managing team of Huawei when competing with other strong brands in the global market.
7 Important lessons from Ren Zhengfei
There are seven leadership lessons which could be learned from Zhengfei’s success in strategic leadership management in Huawei, including purpose-driven ambition, adaption vision, inspiration, human dedication, directive style, winning by cooperating and the power of learning.
First and foremost, all the other six aspects of Zhengfei’s leadership lessons are supporting Huawei’s purpose-driven ambition. It is also the core of Zhengfei’s leadership management because he is extremely clear about Huawei’s purpose, which is to help customers to realize their dreams. In other words, Huawei knows more about customers’ perceived values than customers themselves. Through identifying or helping customers realize their perceived values, customers’ expectations about Huawei’s products and services will be met. As such, higher customer satisfaction is highly predictable(McDougall&Levesque, 2000). Customer satisfaction is the cornerstone of branding strategies to raise customer awareness and loyalty.
Moreover, in the adaptive vision lesson, Zhengfei teaches us that CEO or the managing team as a whole should have a self-criticizing and pro-active attitude when conducting business management strategies. Self-criticizing means that CEO should critically reflect on past success or failures to gain precious experiences and insights, which is relevant and important to guide future direction of the business development. Meanwhile, he should be able to figure out potential challenges, risks and threats within five or ten years in their business. It is true that Huawei has enjoyed tremendous business success in both domestic and global market but it has to be cautious as there are certainly uncertainties and risks as there are vigorous competition in the smart devices market. Being self-criticizing and pro-active are necessary and essential for CEO to avoid misleading his teams to a wrong direction or making ineffective business strategies.
Thirdly, inspiration is another important lesson learned from Zhengfei’s leadership style. As the aforementioned, the concept of inspiration is in accordance with Transformational leadership theory. A transformational leader is to inspire and motivate his followers to jointly move toward a target. Instead of stipulating tasks or giving orders to employees directly, the most important thing is to inspire employees with new ideas. Zhengfei is particularly good at delivering his thoughts and ideas through story-telling in a passionate manner. In this sense, it could be observed that Zhengfei is not only a transformational leader but also a charismatic one, as he is also good at using his personal charm to influence his followers to think more about innovation(Howell&Shamir,2005). Employees’ intelligence could be viewed as an intangible asset of Huawei. The leaders themselves could not design or produce innovative products or services by themselves. They have to help employees to fully discover and develop potential especially in the product development process in a high-tech industry.
The fourth lesson is human dedication. Even though CEO is traditionally viewed a heroic leader who almost is responsible for all business operations and production activities. In fact, Zhengfei points out that there is no almighty CEO. At least, CEO should not portray himself as a know-all leader. As the aforementioned, transactional leaders become more and more unfavorable in current world context. Especially in a high-tech firm like Huawei, it is difficult for CEO to know every details for products development. Most importantly, he has to be dedicated to coach and motivate employees to do their own tasks. They should not be arrogant as employees may know more about their own skills and respective production activities. Besides, without humbleness, CEO could potentially mislead the company to a wrong direction as he tends to be stubborn and less willing to listen to opinions.
In addition, CEO should have a directive style of leadership management. It means that CEO has the capabilities of making key decisions for the company. He is able to identify various strategic resources and capabilities and turn them into sustainable competitive advantages for a company through implementing effective and efficient business management strategies. Meanwhile, he also knows about how to empower employees with flexibility, freedom and power in their decision-making process when accomplishing tasks(Sadati, 2012). Employee employment is actually not a new concept. It is very popular in the West. The uniqueness of Zhengfei’s leadership is to combine the merits of eastern and western leadership styles together to deliver his management in Huawei.
The sixth lesson is about winning by cooperating. It sounds strange as CEO tends to have competitive mindsets. Just as athletes, they have to struggle for success as there is only one winner. It might be only partially true when it comes to the business management context. Even marketers may consider to use a comparative advertising approach to create awareness among potential customers through indirectly belittling other brands (Wang, Y., & Krakover, 2008). Pepsi, for instance, is using this strategy to compete with Coca Cola(Beard, 2010). However, before Huawei starts its business in China or other countries, it is indisputable that the local and global markets tend to be saturated. In China, it has very strong competitors such as Oppo, Vivo, Xiaomi, and so on. Competitive mindset alone could not secure the business success. CEO also needs to show respects for other competitors who previously are doing well in the market. Through learning from their experiences, CEO could gain insights in his business management process.
The last lesson is that the power of learning do exert a significant impact on delivering effective and efficient leadership management. CEO has the ability to reflect, think and act. Through creating a learning-driven culture, it is feasible for a company to develop more sustainable competitive advantages. In fact, knowledge, learning process, learning culture and know practices are all key competitive advantages of a company(Smith, 2001). Knowledge basically has two types, namely explicit knowledge and tacit knowledge(Smith, 2001). Explicit knowledge is something like shared or documented knowledge used by a firm. Tacit knowledge is employee’s ideas or feedback, etc. The capability of Huawai to convert tacit knowledge to explicit knowledge in Huawei’s learning-driven culture is the key driving force to product innovation. Zhengfei has created a unique learning culture where the power of the mind is visible.
Very often, people are messed up the term, “stakeholder” with “shareholder”. In fact, they are two different things. Stakeholder theory provides a conceptual framework for business ethics and organizational management which addresses moral and ethical values in the business management (Freeman,Wicks, & Parmar, 2004). It is true that companies are not managed and operated in the interests of shareholders alone but there are a whole range of stakeholders, also including employees, customers, competitors, communities and government. In fact, Huawei is not owned by one person. The CEO’s shares account only for 1.4%. Employees have the rest shares. In this sense, Huawei is more owned by its employees.
At the employees’ level, Huawei has approximately a total number of 180,000 employees. As the aforementioned, majority of the company’s shares are in the hands of employees. As such, employees are more motivated to contribute their ideas or make their own contribution as the business performance of Huawei do affect their own benefits and interests. Unlike other company, the employers and CEO are taking away a very large portion of profits from sales. Employees who directly participate the production activities are only given limited amount of salary. As such, employees are less motivated to share their thoughts or make additional contribution. They will just do their own tasks as there is no further incentives. Huawei’s strategy is to inter-wine the interests of the firm and its employees together. Employees view themselves as employers and thus will be more committed to their tasks (Kuvaas, 2003).
At the customers’ level, Huawei has developed many different customer segments. It sells goods or provides services to government bodies, financial companies, transportation companies, manufacturing enterprises, and many other industries. The target customers in different market segments certainly have distinctive demand and needs. It requires Huawei to customize their products and services to address the different needs of customers. For instance, for transportation companies, Huawei has to provide app-based smart mobility devices to suit their demand.
At the community level, Huawei has to cooperate with various open-source communities to support its own product development. Open source, by definition, refers to a computer software or app which its source code is open and accessible to the public. Huawei’s products rely heavily on these open-source codes as open-source communities have rich resources for app design. In fact, besides obtaining codes and data from the open-source communities, Huawei also makes its own contribution to open source. For instance, Huawei India makes a great contribution to Open-source world in Apache CarbonData project(Bengaluru， 2018). Apache CarbonData is an indexed columnar data format for fast data processing and analytics. It is accessible to people from all over the world.
At the government Level, as the aforementioned, Huawei is not only dealing with China’s government but also governments of Brazil, Malaysia, European countries, the U.K, etc. Huawei so far has a strong presence in both local and global markets. However, in order to achieve business success, Huawei has to obey and respect both local and global regulations. Different countries may have different legal regulations with respect to smart devices selling. For instance, the U.S is often worried that Huawei is secretly supported by China’s government so the U.S users information may be leaked to China’s government for unauthorized activities or other purposes(Scissors& Bucci, 2012). Huawei has to prove that the users’ data are well protected. Otherwise it is difficult for it to initiate business operations in the U.S.
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