Hou Weigui, Chairman of ZTE Corporation: Success is not a mistake on the node.

From the engineers to the helm of the multinational corporations, Hou Weigui completed his transformation in 26 years.

Founded in 1985 at the beginning, ZTE is only an unknown manufacturer of communication equipment. Today, ZTE has become the world’s leading integrated communications solution provider and provides technical and product solutions to telecommunications operators in more than 140 countries and regions. Program.

For more than 20 years of corporate life, Hou Weigui, who knows the market, is generally keen on eagles. In the course of several industrial transformations, his eyes can always focus on the combination of technology and market. From CDMA, PHS to TD-SCDMA, his "early tracking, flexible investment" principle allows the company to wait and see market changes and advance and retreat freely.

After working in the telecommunications industry for several decades, Hou Weigui can accurately predict the future trend of the development of the industry. However, he does not take risks. Once he makes a judgment, he will make a full argument and if it is feasible, no one can control. he.

With keenness and perseverance, Hou Weigui led ZTE from going domestic to overseas, but this is not the end. In recent years, the low-cost model has hindered the company's development. Fortunately, Hou Weigui has already seen this.

Avoid making mistakes on the node

The rapid development of communication technology has caused companies in the industry to face the problem of industrial transformation from time to time. A reference data released by McKinsey is not optimistic: 70% of the transformation projects in the global telecommunications industry are not as expected, and even ended in failure. How to grasp the pulse of the market and control risks has become a difficult problem that business leaders have to face.

"Financial National Weekly": The rapid development of communications technology, so that companies often face the problem of transformation, how should companies respond to this rapid development of communication letter technology changes?

Hou Weigui: In the past 20 years, the communications industry has been in a process of rapid change. It can be said that the communications industry is changing every year. The transformation of communications companies is also a continuous process, not a sudden change. This rapid and continuous change is a fair challenge to all companies in the industry. It is also a double-edged sword. If it can handle it well, it will run ahead. Otherwise, it will fall behind.

If an enterprise wants to go forward and not leave the team, the most important thing is not sudden success, but there should be no mistakes at important points. If there is not a lot of mistakes in each important node, the company can go up; or do not have problems in several nodes, the company will not be a big problem, or it will be eliminated.

“Financial National Weekly”: ZTE’s financial report in the third quarter shows that the profit margin has declined. Does this mean that changes in the industrial environment have brought new challenges to the company’s operations?

Hou Weigui: This quarterly report is a matter of concern. Our growth is still relatively good. The growth rate of 26% is also relatively high in the industry. However, the profit rate has declined. Some of our growth is due to our relatively large investment in overseas markets, and we naturally have to pay more market share. Some price.

The fact that our revenue growth and profits have slipped shows that the company has not done a good enough job in innovation, and some have increased its income through price competition. How to optimize the business model, make management more refined, and increase profits are problems we will face in the fourth quarter of this year and next year.

“Financial National Weekly”: At present, what is ZTE’s most urgent need for optimization?

Hou Weigui: The immediate problem is that we have more than 100 representative offices overseas. Some managers still have some deficiencies in their business skills. Some still think that they are only doing international sales. How to improve the team operating efficiency in the country as a unit in terms of operations is also facing relatively big challenges, which is also our current operating difficulties.

The operating capabilities of first-line teams are also different in different countries. In addition to training and storing talents that are suitable for local people, they must also pay attention to some new issues. For example, during the quarter, our exchange rate losses were relatively high. In some countries, the currency depreciation rate was very large. This caused us a loss in business. All this needs attention and evasion. All these problems must be solved by the local team. Only the local team has certain experience and ability to reduce some risks and losses. Therefore, we must optimize the operation, especially the optimization of the basic management.

Balance short-term and long-term interests

The pursuit of short-term benefits or long-term benefits is another difficult problem for business leaders. In general, European companies are not guided by their interests, but emphasize quality and customers. For this reason, European companies are more profitable; while US companies tend to pursue short-term benefits, this does not mean that they do not pursue long-term profits. It is one of the paths for the company to achieve long-term goals. How to balance the short-term and long-term interests of the company has always tested the wisdom of business leaders.

“Financial National Weekly”: You mentioned that ZTE’s goal is to become an outstanding company. What standards do you think superior companies should use?

Hou Weigui: I think the first thing should be employee recognition. It is important for employees to agree that there are great development prospects in the company. If employees do not recognize it, then how to recognize it outside is also false.

The recognition of customers and the stickiness of user groups are also important. In this respect, we still have gaps. For example, the brand awareness of our end products is not so high. This is not to say that we must do high-end products to have brand awareness, and ordinary products can also have good brand awareness. The key to the ability to become a great company is how sticky the customer base of the product is.

In addition, there are shareholders and investors who have confidence in you, and whether they agree with your profitability and growth rate. If these aspects are done well and they are recognized globally, they can become an outstanding company.

The overall performance of an outstanding company is to grasp the balance between profitability and speed of development. ZTE has some distance from excellent companies, but we will work hard in this direction. Investors and investors hope that the company's performance will increase every month, but they will still see more short-term benefits. As the company's policy makers and managers, they cannot ignore the current profits and ignore long-term development.

"Financial National Weekly": How does ZTE have a balance between profitability and development speed?

Hou Weigui: The current period of time is a concentrated investment phase. There are several quarters of profit decline. I think this strategy is correct. Although we have a one- or two-quarter profit drop, it is still profitable. Of course, our profits cannot always decrease. After the profits have risen steadily, we will make new investments.

If a leader only thinks about how he will go after five years, he will have to pay for it for five years now. This will certainly not work. If companies do business this way, shareholders must vote for their feet. In my opinion, from the input to the output, we can accept it in three years. If it is more than five years, it is usually difficult for the company to bear. If this kind of thing is done more, the company will not be able to live. It will be a relatively good operator to have a good grasp of the long-term strategic development of the company and the balance of the current operation.

We are also constantly seeking balance, of course, this is the balance in the general trend. In addition, there must be daily operations and team management skills. The leader of a company is only a strategy and only masters the general trend. It must implement every grass-roots unit, increase the operational capacity of the grass-roots units, and let the company's strategy land. This workload is very large. For the implementation team, we must first set clear goals for them, including the requirements of the strategy, financial indicators, etc., must be implemented at the grassroots level, and there must be appropriate candidates to implement, if people can not quickly change.

Succession criteria

Like Liu Chuanzhi and Ren Zhengfei, Hou Weigui, the 70th corporate spiritual leader, also faces the problem of successors. What kind of successor can the company really achieve sustainable development? In each leader’s mind, the answer will be different.

"Financial National Weekly": Will ZTE's ranking among global telecommunications equipment vendors rise soon?

Hou Weigui: After more than 20 years of hard work, we are able to have our current position in the world and have always insisted on independent innovation. Now that the company has more than half of its R&D personnel, such large research and development technology is rare among more than 2,000 listed companies in the country.

We rely on the constant accumulation of technology to achieve our global status today. At present, we are ranked fifth in the world, and the rankings are constantly rising. The third and fourth fronts may soon decline. Our technology upgrades are faster than Alcatel (Alcatel-Lucent) and Nokia Siemens (NokiaSiemens). This is recognized by operators. European operators now have some lack of confidence in them, and they do It is more difficult to operate and we must definitely surpass them. Of course, we will take the initiative to control the rate of increase. If the market share grows too fast, companies will not be able to afford it. We must maintain a proper increase in profits and achieve a balance.

"Financial National Weekly": Now that the company is at your helm, the company's performance will rise steadily. Have you ever wondered if your successor will also allow the company's performance to rise steadily? In your mind, what conditions should a successor have?

Hou Weigui: ZTE has always followed the rules of listed companies. It is not a single person.

I personally do not approve of finding a successor in an airborne manner. If a person does not understand the company, suddenly taking control of the company is too risky. Or should someone who has spent 10 or 20 years in this company have a certain stake in the company, which is relatively stable.