The Full Text is Here! Ren Zhengfei: The Global Economy is In a Long-Term Recession, and Huawei Should Make Survival Its Main Program

Huawei founder Ren Zhengfei judged that for the global economy, the next ten years should be a very painful historical period, and the global economy will continue to decline. This will bring market pressure on Huawei.

On the afternoon of the 22nd, Huawei's internal forum launched an article on "The entire company's business policy should shift from the pursuit of scale to the pursuit of profit and cash flow". Ren Zhengfei mentioned in the article that Huawei should change its thinking and business policy, from the pursuit of scale to the pursuit of profit and cash flow, to ensure that it will survive the crisis in the next three years.

"Take surviving as the main program, shrink and close edge businesses across the board, and pass the cold air to everyone." The article mentioned that Huawei cloud computing must be steadfast to support Huawei's business development, and take the road of supporting the industrial Internet. Digital Energy has increased investment in the strategic opportunity window and strengthened the combat team. Smart car solutions cannot roll out a complete front. It is necessary to reduce the research budget and strengthen the business closed loop.

Ren Zhengfei mentioned that Huawei will completely give up the market in some countries. "We also have a fat meat market, and we will transfer the people who used to eat bones to eat fat meat."

The following are the main views of Ren Zhengfei compiled by the first financial reporter:

1. Live with quality in the next three years

We have to see the difficulties faced by the company and the difficulties in the future. The next ten years should be a very painful historical period, and the global economy will continue to decline. Now, due to the impact of the war and the continued blockade and suppression by the United States, the world's economy is unlikely to improve in the next 3 to 5 years. In addition to the impact of the epidemic, there should be no region in the world that is a bright spot. Then the consumption power will be greatly reduced, which will not only put pressure on the supply but also pressure on the market.

Under such circumstances, Huawei's overly optimistic expectations about the future should be lowered. In 2023 or even 2025, we must take survival as the main program. Every business must be carried out carefully.

If we have a little bit of hope in 2025 as planned, then we must first find a way to get through these three difficult years, and the basis of survival must be adjusted to focus on cash flow and real profits, and can no longer only target sales revenue. Our life respite period is 2023 and 2024. We are not sure whether we can break through in these two years. So every mouth should not tell stories but must talk about realization, especially in business forecasting Don't have any illusions, tell stories to deceive the company, the loss will be deducted from your food package, The first thing to do is to survive, and if you survive, you will have a future.

2. Shrink the business of blind investment

The 2023 budget should maintain a reasonable pace, blind expansion, and blind investment in businesses should shrink or close.

The entire company must use the budget effectively. We cannot blindly close all projects, and the manpower saved will go to the front line. Continue to optimize the organization's business, and rationally staff the ICT infrastructure, and it is still our black land granary. It must be reduced When it comes to a competitive complex hardware platform and complex software platform, the projects that hang on it for a ride must be picked out. The legion is to build a basic information platform, It is better to sell ICT, and the infrastructure is not to be ecology. The terminal is the basis for our future breakthroughs, but we cannot be blind. Now it is necessary to narrow the front line, concentrate troops to fight the war of annihilation, and increase profits.

Huawei cloud computing should focus on supporting Huawei's business development in a down-to-earth manner, and take the road of supporting the industrial Internet. Digital Energy will increase investment in strategic opportunity windows, create greater value, shrink institutions, and strengthen combat teams. Smart car solutions cannot be rolled out on a complete front. It is necessary to reduce the scientific research budget, strengthen the commercial closed loop, and take the road of modularization in research and development. Focus on a few key components to be competitive, and the remaining parts can be connected with others.

In addition to the main goal of continuous investment for survival and profitability, businesses that cannot generate value and profits in the next few years should be scaled down or closed, and human and material resources should be concentrated on the main channel. The ideals that are too far away are too great to cut through the mess quickly, and the surplus personnel will be adjusted to the strategic reserve team, and then they will be combined into reasonable positions to grab food.

The peripheral business must be taken out of the strategic core. After the marginal business is drawn out, we will first evaluate whether it can be done well, and how many resources are needed to do it well. If it is not possible to do a business that consumes huge resources, it is better to open it up and let others do it after it is closed. In the strategic pipeline, we must do it, and if we do not do well enough, we will reorganize the combat team and change cadres. If there are some windows of opportunity, we have expanded the strategic resource pool of strategic reserve teams and cadres and experts and formed commandos to attack in the window of opportunity.

Adhere to seeking truth from facts, and shrinking in the market must be firm. We used to embrace the idea of globalization and aspire to serve all mankind, but what is our ideal now? Survive and earn a little wherever you have money. From this perspective, we need to adjust the market structure and study what can be done and what should be abandoned.

3. Give up part of the market

First, focusing on value market value customers, the main force was used in the middle of the normal distribution curve, and some countries we gave them up completely at the market level. We also have a fat meat market, and the original bone gnawing personnel are transferred to eat fat meat.

Second, for countries and regions with hardships, as an assessment and training base for new cadres who will be promoted in the future, some countries have low output. Although we still have to do it, should we no longer send soldiers to guard the top of the snow, because he will still be a soldier after he comes down, Xueshan Mountain is a test of people, and potential new cadres will have the opportunity to be promoted to military commander because small countries are easy to integrate, He calculated from the estimated budget, contract, tender delivery, working hour quota, and the solution was done together. . On the cadre resume, I passed 5 and 6 when I was promoted to a general with 11 thresholds a day. Of course, some employees have been guarding the frontier for a long time, and their income has decreased after returning to China, and it also involves the issue of children going to school.

Third, employees returning from overseas should have priority in obtaining skills training and job opportunities. An employee returning from overseas must have a period of protection to protect him from taking up his post, and ensure that he obtains certain training. The skills of personnel in difficult countries may be worse than those in China because they do not have a realistic combat environment, how can they improve? Like a soldier on the plateau, although he stood very high, he did not absorb any cosmic energy. They paid the price. You can't take the exam as soon as you return to China, and then you are eliminated. No one wants to go to such a difficult area. Therefore, we must ensure that returning employees have job arrangements and have a relaxed study time. As for his ability to catch up during this time, it is another matter.

Finances need to plan for cash flow. In times of crisis, the main purpose is to make blood. Although we say that it will be better in 2025, what if there are no shells by then? So that's a wonderful plan, we have safe food measures.

The company has two major expenditures to pay dividends to its employees, including stable wages. This is to enhance internal confidence and cohesion and to repay loans to the bank. This is to enhance the trust of society in us. The projects with obvious potential risks should not be under any illusion but should be exposed as soon as possible so that the audit can make a conclusion and quantify the risks. At the same time, we can still continue to manage these assets that have been eliminated. Through management, we can turn the risk into an appropriate income. We should not have a foam illusion in our hearts. Once we look at the statements, we are very determined. However, we will not actually make any money at that time.

4. Make everyone aware of the crisis

Consolidate responsibility, bonus promotion and promotion are linked to business results, so everyone has a sense of crisis.

First, in this year’s and next year’s assessment, the weight of cash flow and profit should be increased. It is better for sales revenue to decline a little, but for profit and cash flow to increase. The bonus for operating profit growth should be a little more, which encourages everyone to compete for profits.

Second, each responsibility center signs an assessment responsibility letter, The company should focus on the KPI-based reciprocal reward mechanism, and the normal promotion and upgrade will remain unchanged next year, but it should strengthen the link with the equivalence of responsibility, which makes people feel that every year The weather is cold, but we need to be patient and enthusiastic in our transition. I once told the executive board that the basic salary framework should not be changed. This is a rigid indicator. But if the employees are excellent, they can be promoted and upgraded, and the bonus can be very flexible. Why is it elastic? Encourage everyone to go to the battlefield to grab food, the front line is different from the agency.

Third, the bonuses of various businesses this year must widen the gap. We will never be allowed to force everyone to achieve the short-term goal of grabbing food. In the past, the company's policy was to basically settle things down. Everyone didn't feel the cold in winter. Everyone covered the quilt, just a little thicker and thinner. At the end of this year, businesses with more profit and cash flow will pay more bonuses, and businesses that cannot create value will have very low bonuses. They don’t even force this business to commit suicide and pass on the chill.

At present, we have to survive, not fight for our ideals, The competition of the legion is a bonus at the end of the year because the bonus is not given by the company, but the profit earned by the legion itself, and it is also handed over to the company. If we cannot earn food, we will Dare not to pay bonuses, because the basic income of employees can cover the necessities of life. Of course, some strategic businesses cannot create value in the short term. We can determine them through evaluation. However, many marginal businesses with poor performance must be cut off. This is adjustment, consolidation, enrichment and improvement.

5. Invest at any cost in the point of survival crisis

Quality is the primarily productive force. We must adhere to this line. R&D must be responsible for the quality and performance of products and promise that service experts must have comprehensive capabilities. Poor quality products are a shame for R&D personnel. This sentence should be posted On the wall of the R&D office area of the R&D office, the network failure rate is getting higher and higher all over the world, and one accident may destroy the trust system of the entire market.

100-1=0, for our research and development, the research and development of veneer, the research and development of the single device, and the research and development of the system, we must put quality first. Quality is the best support guarantee for R&D and manufacturing personnel to market service personnel. If the quality of the product is not good, it is equivalent to letting the brothers brave the hail of bullets, snow and ice, hot and sweltering heat, and the new crown virus charging on the front line. So we need to establish a reverse assessment mechanism. The first-line reverse assessment should not only assess the service organization of the agency but also extend to the product line. If the quality is not good in the office, it is necessary to shrink the front line and improve the competitiveness.

We need to improve the status of the service system, and service experts must have a comprehensive ability to judge the network experience of accidents. In the past, we paid more attention to R&D than service, but now we also need to pay attention to the service system. We must pay attention to the fact that our network has no problems and the experience is better.

Reasonably, scientifically and rationally control inventory. We must change from panic self-rescue in the past to quality self-rescue. We must pay attention to reducing inventory reasonably, and not cause insufficient profits and tight cash flow of the company due to excessive inventory. 's crisis. We can invest at all costs on strategic key opportunities and existential crises, but we cannot spend money on non-strategic opportunities.

(The article comes from the Internet, information security is for reference only, if there is any infringement, please contact to delete)