--Compare the gap between Founder and HP from the perspective of change strategy
The survival and demise of a company is just like the query cried out by Hamlet: to be or not to beis a question.The Fortune 500 of 1956 could be found in the top 100 by 1992 with only 29 of the top 100 by 1992, and throughout the 1980s some 230 companies (46% of the total) disappeared from the Fortune 500, while only 16 of the 100 largest companies of the 19th century were still in existence by the end of the 20th century.
So the fundamental question of running a business remains: why do some companies thrive, and why do some companies fizzle out? After comparing Lenovo with Dell, Haier with GE, and GrandTech with Walmart and a number of other companies from the point of view of corporate strategy, we turned our attention to entrepreneurs and corporate change, and my basic conclusion is: a company to do well, there must be a good entrepreneur; but a business to last, but depends on its system and culture of innovation.
Why Companies Succeed: A Comparison of Hewlett-Packard's and Founder's Success
- The success of Founder and Hewlett-Packard is the result of a combination of "entrepreneurial innovation" and "luck of the draw," and from a "high-tech" point of view, Founder's success is the result of a combination of "entrepreneurial innovation" and "luck of the draw. From the "high-tech" point of view, there is no essential difference between Founder and HP, the difference lies in the system and corporate culture behind the success.
Hewlett-Packard was founded in 1939 by David Packard DavidPackard and William Hewlett WilliamHewlett, the reason why the partnership was named "Hewlett-Packard", because in the use of a coin toss to The partnership was named "Hewlett-Packard" because in a coin toss to decide the name, Hewlett won.
There are two basic "characteristics" that characterize the "first venture" success of most companies: first, the founder's "innovation" in the market or in the technology; and second, a good "innovation" in the market or in the technology. Second, good "market opportunity" or "luck". These two characteristics in the Hewlett-Packard embodiment is, first of all, although the two founders only invested 538 dollars, the working environment is also very simple is in the back of the Packard house humble garage but they successfully developed a capacitive audio oscillator. This oscillator used an incandescent light bulb as part of the conductor to provide variable resistance, which was a breakthrough in technical design at the time. Secondly, at that time just Walt Disney Company produced the film "Fantasia" in urgent need of this instrument, to the price of $ 54 per unit at once to them ordered eight, so that this small company stood firm. 1940, HP gradually expand the scope of business, the product also increased to eight, after the outbreak of the Second World War, the U.S. Government's orders are like snowflakes flying.
In 1943, Hewlett-Packard began to develop signal generators and radar jammers for the U.S. Naval Research Laboratory and other products, the first to enter the field of microwave equipment manufacturing, signal generator research and manufacturing leader in the field. 1947 Hewlett-Packard was transformed into a joint-stock limited liability company, and became a publicly traded company in 1957, with a market capitalization of 48 million U.S. dollars, which is also from the beginning of the year, Hewlett-Packard began to expand overseas markets. Hewlett-Packard began to expand overseas, establishing offices and manufacturing facilities in Europe.In the 1960s Hewlett-Packard became involved in the computer field.In 1972, Hewlett-Packard introduced their first multifunctional computer, the HP 3000 minicomputer.In 1977, Hewlett-Packard retired.In 1984, Hewlett-Packard became a leader in the field of inkjet and laser printer research and manufacturing. Hewlett-Packard successfully entered the printer market with inkjet and laser printers, and the HPLaserJet became the industry-recognized world standard.In 1994, Hewlett-Packard successfully launched color laser printers.
After 1990, Hewlett-Packard's profit growth rate has been maintained at more than 20%, the company's sales revenue was $13 billion in 1990, reached $25 billion in 1994, and reached $42.8 billion in 1997. 1994 was the peak of Hewlett-Packard's sales and profit growth rate far exceeded that of IBM and its other rivals, and that year Forbes magazine rated Hewlett-Packard as the number one performer of the year, and HP's president, Louise Pratt, was chosen by Business Week as the best CEO of the year.
The same can be said of Founder's success.
Early in 1985, Zhang Yufeng was seconded from the Physics Department of Peking University, and went to the school to start a company, "Beida Technology Service Dept. ". "I didn't know what a company was at that time, and I didn't know how to run a company, Peking University gave us a ten square meter office, a telephone, and 30,000 yuan start-up costs." This is Zhang Yufeng's words at the time, but also at that time a group of intellectuals to the sea of the true picture, because we do not understand, so almost all those years to open the company have earned money, Zhang Yufeng is no exception. And in the Department of Computer Science at Peking University, there is a professor called Wang Xuan from 1974 to 1988, after 14 years of hard work, developed a very great product - laser phototypesetting system.
And therein lies the beginning of Founder. "With money, technology, and some business experience, the timing was right, and Founder developed all of a sudden." The actual situation is that at that time, China's computer market has been launched, a large number of computers from the operating system to the office software are all in English, so not only has independent intellectual property rights of the Founder "hair", even do Chinese language "Giant" and a large number of companies, are in the Chinese market, foreign manufacturers have not yet developed the Chinese market. In 1989, Founder and Hong Kong Kingsoft jointly invested in the development of Founder SUPER HANKA, followed by the establishment of HANKA in 1992, the product occupies more than 50% of the market for similar products.
Over the past decade, Founder has developed into a group of companies with four holding listed companies: Founder Holdings, Founder Digital, Shanghai Founder Yanzhong Technology and Malaysia Founder, 17 wholly-owned and joint ventures, about 5,000 employees, and a total asset of 6 billion yuan, and has set up branches in the United States, Canada, Hong Kong and other countries and regions. Founder's main business is software development, system integration, hardware development and Internet four blocks, the leading product is still Professor Wang Xuan presided over the development of the "Founder Electronic Publishing System".
The success of Founder and Hewlett-Packard is the result of the combination of the so-called "entrepreneurial innovation" and "luck". It's hard to tell if HP would have succeeded without Disney's "timely rain" or the military's demands of World War II. Or would it have succeeded in any other way? Similarly, if computers in China in the early 1990s were not popularized in the form of "half public, half smuggled" at that time, and if there was no Wang Xuan's "typesetting system", would Founder have succeeded? If we look at the history of the so-called high-tech companies, the international famous Apple, Cisco, Microsoft, the domestic famous Lenovo, UFIDA, four companies, are the result of this model.
So, from the so-called "high-tech" point of view, the difference between the Founder and HP is only 50 steps and 100 steps, we can not see any essential difference. Perhaps we can say that the technical level of the Founder is far worse than HP, but the technical level of the same poor Dell is not the same as the HP will be squeezed off the stage of personal computers? Running a company is not exactly a technology game after all. That being the case, the next natural question is, what exactly determines the difference in sustainable development between companies? Why do some companies thrive while others are short-lived?
The genes that sustain a company's success: A comparison of culture, management, and strategy between HP and Founder
- The HP Way constitutes a complete system of motivation for HP's development in three ways: first, the corporate value of being "employee-oriented"; second, the corporate goal of pursuing high quality; and, third, continuous improvement, The third is the business and management style of continuous improvement and striving for excellence.
- Beifang Founder is like a bird flying with gold on its back, always thinking that it is very "rich", not realizing that your real advantage is the ability to fly rather than external wealth, and the current external wealth is probably the reason why it will not be able to fly over the sea in the future.
The management of domestic universities and enterprises is often unsatisfactory, and Bei Fangzheng "just right" is one of the typical. The reason why Lenovo than Tsinghua or Peking University company management level is high, I think a large part of the Lenovo early with the Academy of Sciences, "talk" between the boundaries, which has "Liu Chuanzhi was not accused of falling" story.
The same is the place where intellectuals are piled up, why HP, Cisco and other foreign companies have successfully passed the management barrier? Let's look at the Cisco model. Cisco over the management of the model is the founder of the exit, in 1984, Stanford University, a couple of scientists invented the router, with the help of venture capital, they resigned from the position of university professors, set up the Cisco company. 1990 Cisco went public, no intention of shopping malls, the scientists couple in the hands of all the stock all out of the hand, and left the company. Before that, John Morgride, who had worked at Gridsystem, StrtusComputer, and Honeywell, had become the company's CEO It was the experienced Morgride who helped Cisco build a career and management team In 1991, he poached Chambers (John Chambers) from Wangan Labs, and in 1995, he poached Chambers (John Chambers) from Wangan Labs, and in 1995, he poached Chambers (John Chambers) from Wangan Labs. JohnChambers) from Wangan Labs in 1991, and when he relinquished the CEO position to Chambers in 1995, he told the entire Cisco workforce that Chambers would make Cisco unstoppable.
The Hewlett-Packard model is another classic example of the "evergreen" approach: Hewlett-Packard went public in 1957, and at the beginning of the year, Hewlett and Packard led the company's 20-plus managers to a two-day summit at the Hotel Solomons, just north of San Francisco. The meeting explored the future direction of the company and established a series of corporate purposes. The original tenets*** consisted of six principles: profit, customer, business area, growth, employee and civic duty, with the basic core of "customer first, personal attention, and profit". These purposes were later modified many times, and the development of many specific planning and implementation methods, and ultimately formed by the industry known as the "Hewlett-Packard Way (HPWay)" business management model. It can be said that the HP Way is the source of HP's continued success, but also so many years so that HP can continue to transcend the fundamental reasons for their own.
Today, the HP Way has been a complete composition of the HP development of the power system, this system is fully embodied in three aspects:
First, the enterprise value. Hewlett-Packard from the garage start-up period from the time to make clear their own principles, that is, "teamwork, meet the challenge", which formed the "employee-oriented" HP culture core, HP believes that, as long as the provision of a continuous learning and growth of people's environment, everyone will for the
Secondly, the company's employees are the ones who have the most important role to play.
Second, corporate goals. The instrument labeled with the HP logo represents the precision and durability of the instrument. The HP Way means the pursuit of product and customer value, and HP products are the symbol of high price and high quality.
Third, the way of operation and management. Hewlett-Packard invented walking management, goal-based management and open management, ten-step business planning, comprehensive quality management and short-term goal-setting, and so on, Hewlett-Packard garage has become the United States of America California government listed as a preserved historical monuments, Hewlett-Packard culture has become a representative of the U.S. corporate culture is synonymous with continuous improvement, excellence.
On the other hand, Founder has been wandering around the product level and how to realize the "Beida sign". This effort may be able to help Founder get temporary benefits, but it will accumulate advantages behind the "external resources" and "internal capacity (core competitiveness)" between the contradiction: behind the product and technology advantage is Wang Xuan's personal authority and Founder's business strategy (Founder's business strategy). The contradiction between Wang's personal authority and Beifang's business strategy (Wei Xin, Beifang's chairman, has repeatedly stated that it is inaccurate to say that Founder has entered the era of "post-Wang Xuan", and that Wang Xuan's "position and role as the soul of Founder have not changed much"), and that the advantage of "Beida Signature" is the contradiction between "external resources" and "internal capabilities (core competitiveness)". Behind the advantage of "Beida Signature" are the contradictions between the school board, the company's management and the market trend. We can project that these contradictions are basically insoluble, because if there is no clear corporate vision and core values, no strategic arrangements based on the market and competitive situation, no core competitiveness based on the company's organizational capacity to construct, then, someone's technical authority, product technology and branding advantages, and even the advantages of government support, are worthless. This is like a bird flying with gold on its back, thinking that it is very "rich", not realizing that your real advantage is the ability to fly rather than what the external wealth, and the current external wealth is likely to be the reason why you can't fly across the sea.
More fundamentally, due to the ambiguity of property rights and personnel system, Founder can not get the power source of change and institutional support, so that this "product or technology-oriented" company in the new competitive environment, it is difficult to get the unity of the direction of strategic thinking and organizational change. Beifang's board of directors and company management have not been able to realize the most basic business logic (e.g., what is the best way to unite the minds of employees? What is used to arrange the business lines for continuous growth? What is used to drive organizational competition? What is the power source of the company's sustainable growth?) The most important thing is to get the most basic "organizational" buy-in.
Why do I repeatedly emphasize "basic"? Because I believe that all business activities must follow some kind of bottom line, otherwise it is not a company, and there is not much invention or creation within the bottom line. On the contrary, to make the company in the new competitive situation to obtain a new competitive advantage, to make the company to obtain continuous power support, what you have to do is to change themselves, in the basic bottom line on the reinvention of the company's system, culture and strategy, and in this regard, Founder can learn more from HP.
The logic of company growth and change: there is no eternal success, only eternal failure
- To do well, a company must have a good entrepreneur; but to be sustained, an enterprise depends on its system and cultural innovation, HP is facing a crisis when it really works is its system and culture.
- If you want to get out of the death zone brought about by various crises, you have to create a new logic of growth. Beifang has not really defined clearly what kind of company it is, and where its strategy and future lie.
In June 1998, Hewlett-Packard announced a surprising figure: the growth rate was only 3% that year, while two years earlier it had reached 30%, and the company also announced that 2,400 senior managers would temporarily reduce their salaries by 5%, which was one of the saddest pages in the history of Hewlett-Packard.
Why is this happening? From the macro environment, the basic reason is the Asian financial crisis and the price war in the personal computer industry, but Wall Street analysts do not see it that way, they questioned why, in the same situation, Dell, IBM and other companies have not declined to such a low, why HP's resilience than the rest of the competitors delayed?
And there are experts in the industry that HP has encountered the so-called "40 billion dollars against the wall crisis": according to McKinsey's statistical survey, many large-scale multinational enterprises, revenue of more than 40 billion dollars, began to face the so-called "wall crisis! ": growth slowdown, reduced efficiency, shrinking profits and even losses, must undergo a major restructuring or layoffs will turn to safety, this phenomenon may not have anything to do with the industry or leadership, but when the business organization reaches a scale, it will naturally appear. When the IBM in GuoShiNa (Louis V. GerstnerJr.) before taking office is also faced with this kind of "hit the wall crisis". In the face of this situation, Hewlett-Packard CEO Pratt called for HP to change itself to go beyond this crisis.
Regardless of which angle of analysis, HP's crisis is clearly from the internal system, organizational culture and the competitive environment of the contradiction, and HP management in front of the results are not enough to recognize that this crisis is coming. For example, in the success of HP's divisions play a big role in this decentralized culture can make the business units have the autonomy of power and resources to respond quickly to customers and market demand. But the over-expansion of the division will evolve into a "profit center" with no strategic direction, so when the industrial environment changes and the profit center is no longer profitable, the problem arises. Like the main business sector as HP instrumentation sector, in the late 1990s growth began to slow down, in 1998, the instrumentation sector revenue accounted for only $ 47 billion in HP's annual revenue of 7.6 billion, about 16%, the next question is, how to save the division?
The answer is, basically impossible, because in this system HP CEO can not really become a strategist, and became a firefighter. Hewlett-Packard CEO Pratt lamented that he spends a lot of time a week in dealing with the problems of the various divisions, and can not really think about the future strategy of HP, so that the network missed the best time to grow. When HP came up with its "e-service" strategy on an emergency basis, its business units didn't know where to really start, and its customers didn't know where HP's strengths lay. The end result is that, before 1997, HP is IBM in large and medium-sized computing systems, the most important competitor, and now, IBM's rivals changed to Sun, and no longer HP.
In studying strategies for sustained corporate growth, I have come to the conclusion that for a company to do well, it must have a good entrepreneur; but for a business to be sustained, it relies on innovation in its systems and culture. What we found was that when HP faced a major crisis, what really made the difference was its culture (CEO Pratt announcing his retirement to follow the tacit agreement that HP CEOs don't go over 60) and its institutions (HP announcing the spinoff and its merger with Compaq, institutionalizing the selection of CEOs).
In 1999, HP announced a spin-off, split in two: the divisions of medical, scientific, engineering and other instruments and components became independent as Agilent Technologies; the original HP became a four-business group including enterprise computer services, computer products, inkjet, and laser imaging business, with the aim of maintaining HP's professional The goal is to maintain HP's professional and high-quality image.
CEO Platt announced that he would retire within a year, and although he was responsible for HP's lagging behind in the Internet era, he was widely praised for his outstanding qualities and abilities in a time of crisis, and Fortune Magazine pointed out that it would be very difficult to find a leader with Platt's drive among the nation's 500 largest corporations.
Announced that HP needs a new CEO to lead HP to a new era for this HP set up a CEO selection committee, and formulated the conditions for the selection of a new CEO: 1 The successor must be able to combine with the HP culture; 2 Have the ability to form a new vision for HP, and be able to implement the vision out; 3 Have the ability to conceptualize the goal into concrete action; 4 To have a successful experience in the technology industry, have experience in large companies. experience in a large company. It was under these conditions that HP announced in 1999 that it had hired Carly S. Fiorina, president of Lucent's Global Telecommunications Supply Division, to be CEO of the company.
Carly Fiorina lived up to the expectations of her predecessor by reorganizing HP in four ways: first, by emphasizing the company's branding and bringing all its products under the HP brand; second, by integrating its business units; and third, by restructuring its corporate evaluation process. Third, adjusting the corporate evaluation guidelines from internal orientation (such as growth rate or profitability) to external orientation (market share); and fourth, emphasizing the importance of speed first. Her most important move, however, was undoubtedly facilitating the merger of HP with Compaq and advocating the new HP Way of fast action: "The key to transforming these business strategies lies in the need to adhere to the principle that they must always be aligned with corporate goals and fully reflect the company's core values."
Now let's look at Beifang. From the financial data to see the decline of Beifang Founder and HP's crisis is almost almost the same. 1998 Hong Kong-listed Founder Holdings annual report showed a loss of 168 million Hong Kong dollars, to 1999, Beifang Founder all downhill, the total profit and tax from the 1998 330 million yuan RMB fell to 240 million yuan. In the face of this decline, "Beida up and down for the shock". But by this pattern of "shock" I am afraid that the people of Beida, industry insiders are not surprised at this end, as early as a number of years ago, there are people on the positive judgment: "the product technology advantage to cover up the lack of Founder's management and system".
In fact, there is no need for industry insiders, almost anyone can see that the Founder from the beginning of the establishment of the management in the frequent changes in the basic "every three years a big move". 1992, the general manager of the Lou Binlong stepped down; 1995, one of the founders of the Yann Mao Xun out of the Chief Engineer Song Zeng Zai was withdrawn; 1997, Zhang Zhaodong replaced He Wen became president. Zhang Zhaodong replaced He Wen became president, Zhang Yufeng as chairman; in September 1999, Zhang Yufeng Wang elected to appear on stage, in June 2000, Zhang Yufeng quit Founder.
For this change, the media have commented: "equity storms, personnel oscillations, these are just an appearance, Founder's fundamental problem lies in the system, property rights are not clearly defined, the modern corporate governance structure has not been established. However, if we attribute all the problems of Founder to institutional problems, undoubtedly exaggerated the role of the "premise". In fact, comparing HP's response before and after the crisis, it is not difficult to see that among the problems of Founder, there is some kind of "confusion" of the board of directors and the management in front of the basic business logic:
First of all, there is the problem of the company's positioning. Founder has never really defined what kind of company it is. The monopoly of the Founder typesetting system in the market made Founder basically a company without a strategy at least until 1998. When Hansen Li proposed "e-media" in Founder, this strategy was even more attractive than Hewlett-Packard's "e-service". When Hansheng Li proposed "e-media" in Founder, this strategy was even more confusing than HP's "e-service" to the people below. Therefore, when the crisis came, it was difficult for Zhengfeng to get a unified direction, and the lack of strategy resulted in a huge waste of resources. Why do all companies adopt "business contraction and layoffs" when responding to a crisis? The fundamental purpose is to unswervingly highlight the main strategic lines and core business, rather than reform for the sake of reform.
The second is the business strategy and related management control system. Fangzheng once said not to chase Lenovo, want to do GE, to the high-tech market of high profits and high risk, and the stability of the traditional industry combined, relying on the traditional industry to increase the enterprise's ability to resist risk. But the problem is that GE's diversification is linked to the supra-business nature of its strategy (globalization, services, Six Sigma, e-commerce), and its superior business management system. Beifang has so far been essentially a product-technology oriented company, and the prospect of such a company going for diversification in the face of a crisis is worrying.
Finally, there is the issue of corporate culture. Li Hansheng led the Founder had put forward a "three-step plan": the first step is to establish excellent operation and management mode; the second step, the establishment of the company's strategy and profit model; the third step, the establishment of the concept of corporate culture and values of the characteristics of the Oriental culture. In these three steps, Hanson Li said the most central is the corporate culture. So what is corporate culture? Li Hansheng is y aware of this, and he proposes that corporate culture is the values recognized by most of the company's management and employees in discussing the company's development. In this regard, the management and staff of the Founder over the years to support the development of the value of the same understanding of the ****? If not, it is difficult to imagine that the organization can produce the cohesion to fight against the crisis in the "surface harmony, secret fight".
On a longer cycle of a century or even a millennium, all business successes are temporary, and all business failures are permanent. Why do most companies fail at change? Why do only a few companies win in the change? The fundamental logic is that companies have a life cycle, for example, small companies will have management difficulties when their turnover exceeds 10 million dollars, and large companies will have a "crisis against the wall" when they reach 40 billion dollars. If you want to get out of the death zone of various crises, you must create a new logic of growth, like GE through cultural and institutional innovation beyond the "diversity trap" logic, HP through the HP Way of innovation to go beyond the "40 billion wall crisis" logic, otherwise, it will not be able to overcome the crisis. The logic, otherwise, can not overcome the challenge of the crisis.
When a year ago, Carly Fiorina and Hanson Li were in charge of HP and Founder's power, most of the employees of HP must have seen that the strong woman for HP to create a new logic of growth, and therefore did not let her "out of office" when HP's stock price plummeted in 2001. Similarly, in the case of the merger with Compaq, Carly Fiorina was able to persuade other shareholders to support the merger when family shareholders on the board opposed it. In contrast, Lee Hansen from HP but it is difficult to transplant HP's logic in the Founder, so that the Founder to obtain the power to transcend the reality of the logic, the result is only by Lee Hansen left to avoid the contradiction of logic.
Contradictions can be temporarily avoided, but can not be avoided forever, for the leadership of the Founder, tobe or not to be is still aquestion how to make the Founder to get a new logic of growth, is still a problem, although all of us are full of hope for it.