As a listed company, in recent years, Aucma's data is not good, and its volume and Haier and Hisense compared to the gap is now also orders of magnitude. However, Aucma's experience in the transition process is a more typical case of enterprise transformation, it is still worth to study and understand.
First, the first curve of glory - Aucma's highlights
Aucma's predecessor, Qingdao Redstar Electric Group was on the verge of closure of the Huanghai Freezer Factory, due to long-term mismanagement of the plant in 1990, burdened with huge debts and on the verge of bankruptcy. 1990, 35-year-old Lu Qunsheng In 1990, 35-year-old Lu Qunsheng took the initiative to help, in March of that year to become the plant was built in three years, the 11th factory director, and since then the Aucma all the way to the heyday.
The beginning of the story, and Zhang Ruimin's Haier is a bit like, although after the two went to a completely different path. From Lu Qunsheng took office in 2001, Aucma freezer production and sales ranked first in the country, its "king of the refrigerator" image is from then on gradually deepened into people's hearts.
That is Aucma's highlights. The then chairman of the company Lu Qunsheng once with Haier Zhang Ruimin, Hisense Zhou Houjian and other famous entrepreneurs.
In 2000, the company went public; in 2005, Lu Qunsheng was elected CCTV China's economic man of the year, evaluated as: "Comprehensively rewrite the ultra-low-temperature refrigeration products in the field of Japan and the United States to hold the situation; take the lead in advocating the 'value of the war' for the sustainable development of China's home appliance industry. sustainable development of China's home appliance industry shouted the loudest voice."
Second, the difficult exploration of the second curve - Aucma's diversification
Because the domestic home appliance industry has been very competitive, the industry growth rate has begun to slow down. In order to do a good job in the industry limit point before the layout, Lu Qunsheng in 2000 to start, start diversification development strategy.
The company has embarked on electric vehicles, solar energy, lithium batteries, marine biology, real estate and other projects, unrelated diversification exploration, but the results are not ideal, and can even be said to drag the Group's development.
In hindsight, the failure of this non-related diversification expansion seems obvious.
First of all, these are relatively large investment and long lead time projects, which require a large amount of capital to be continuously invested. Secondly, because of the non-related diversification, the original enterprise resources can not be reused, you must start a new stall, technology, talent, market are from scratch. Once again, the direction of these choices looks promising, but the timing of the intervention is not necessarily appropriate, such as electric vehicles.
The result is this: five years after the start of the diversification strategy, the company invested nearly 250 million yuan in the lithium battery project, with a loss of more than 17 million yuan; invested more than 60 million yuan in the vending machine project, with a loss of more than 1.5 million yuan; proposed to invest 30 million yuan in the MP3 project, but actually invested 1.5 million yuan in the business terminated.
In addition to the direct losses of these projects, these high-tech industries that require a continuous supply of funds, and then also led to the company's main business of blood supply, the most difficult time, as the company's main business pillar of the air conditioning plant once into production.
To try to get out of the diversification quagmire, Aucma Group from the listed company Aucma shares of the cumulative misappropriation of 1.947 billion yuan of funds. 2006 March, the scandal came to light; April, the Qingdao Municipal Government held a press conference, the helm of the enterprise for 16 years of the patriarchal figure of the Lu Qunsheng sadly curtains.
Third, how to find the second curve? -- Fractal Innovation
Like Aucma, Haier and Hisense, among others, are equally engaged in the search for the second curve, but both started with related diversification.
On how to find the second curve, we introduce a thinking model here: fractal innovation.
By fractal, we mean that things are self-similar at different scales. For example, the common snowflake, and the coastline, are all manifestations of nature's fractals.
Similarly, if we zoom in on the first curve, we will find that at different sizes, such as companies, products, and components, we can find the existence of many small S-curves. One of these S-curves has the potential to grow into a second curve.
In the development of the main business, the first curve, through continuous micro-innovation and iteration, it is possible to generate multiple fractals, and one of these fractals, after a change in the market environment, may grow into the second curve of the company in the future.
For example, Apple rushed the iphone phone, remove the call function, fractal ipod, and ipod after iteration, became ipad.
So, in the first curve to find a fractal, to grow into the second curve, and go to the outside world to find a project, for non-related diversification like auqoma compared to the transformation of a more economical and more effective method. .
Why? Because the fractal is in the first curve through micro-innovation and iteration naturally, if you think it is good, you can take it out in the market a small range of validation, go through the closed loop, then you can invest in resources for the second curve to try. In this way, no matter from the risk, or cost point of view, are far better than the market to go to mergers and acquisitions, or blindly looking for new projects to expand.
Fourth, focus on the whole cold chain - Li Wei's transformation
After Lu Qunsheng quit Aucma, Li Wei, a 37-year-old Tsinghua master of business administration, took over.
Li Wei came to power, used three actions to pull the company from the crisis back on track.
The first move was to stop the bleeding. In 2007, Li Wei will account for nearly one-third of the total assets of the company's cumbersome industry was cut. The company gave up more than 500 million of receivables, completely abandoned such as lithium batteries, LED, real estate and other burdensome projects. After the thinning of Aucma through the dangerous period, in the changes rebuilt to refrigeration, small appliances, electric cars as the core of the development of the foundation.
The second action is blood transfusion. The company completed its own second venture at the end of 2009, after the reorganization of the company's return to the main business of refrigeration, and at the same time gradually from the C side to the B side of the transformation of the business center of gravity from the household appliances to the commercial and medical field offset. It is in this period, Aucma is no longer satisfied with the general level of household refrigeration, they continue to refresh the low-temperature record, minus 150 ℃ ultra-low temperature commercial refrigeration equipment began to be put on the agenda. From the external environment, although Aucma was in the urban market is stuck in the lack of power, but in time they took the east wind of the policy of home appliances to the countryside to sink into the rural market, for their own sake, to fight for a rare opportunity for respite.
The third action is reengineering. Li Wei tried to reengineer the organization and management culture of the company. He began to tightly control the company's financial access, through the way the chief financial officer stationed, the financial function from the former high-speed development period of financing-oriented to supervision-oriented. He formulated a more stringent target management assessment system, forming a set of no personal relationships, fair and impartial to take the iron law of performance. "It's as simple as that, I have no friends in the business." He said, "It's not that I let you get out of class, it's the performance that makes you get out of class." This unforgiving, uncompromising management style gradually led to a fundamental change in the company's operational processes.
Let's focus primarily on his operational transformation.
In 2015, Aucma adjusted its corporate positioning, and Li Wei proposed "Internet + full cold chain", from providing a single refrigeration product to providing a total temperature solution. The domestic refrigeration, commercial refrigeration, biomedical refrigeration, ultra-low temperature equipment, cold chain logistics equipment and other product divisions within the enterprise, through the cold chain platform for the integration of information technology, to provide a common full cold chain management system.
And the listed company in the year raised more than 700 million yuan of funds, all invested in its intelligent cold chain factory, R & D center, cold chain logistics trucks and O2O marketing management system to build.
The benefit of doing so is to improve the generality and modularity of the product level, reducing the complexity and product cost. At the same time, the synergistic effect is also out, the whole cold chain on the transformation and upgrading of Aucma play a role in promoting.
At present, the company this transformation has begun to show results, cold chain service comprehensive revenue growth rate has been higher than home appliances.
Fifth, Aucma's fractal innovation
After determining the strategy of the whole cold chain, Aucma has done a lot of fractal innovation within the main business.
For example, temperature-controlled tea cabinet, frozen human or frozen embryo sample library, ARKTEK vaccine storage box manufactured in cooperation with the Gates Foundation's institutions, the development of yuan refrigerator for Africa are good examples. At present, the highest cooling capacity of Aucma terminal equipment has reached minus 150 ℃, ranking at the forefront of the world.
Because African countries often power outages (many countries to power outages more than 20 times a day), even in South Africa, the government can only try to maintain industrial power, for this reason, Aucma developed for the African market "meta refrigerator" (Metafridge).
After field tests, meta refrigerator in the sudden encounter of temporary power outages, can still be in the sub-Saharan 43 ℃ high temperature environment, to provide 2 ℃ to 8 ℃ of stable heat preservation. In the event of an operational failure, it is able to automatically seek human intervention and transmit self-diagnostic data via the built-in remote control hardware, sounding an alarm through sound and light.
At the end of 2018, Aucma partnered with Huada Genetics to build the first automated ultra-low-temperature biological sample library at minus 86°C in China. In a cold storage of a few dozen square meters, nearly 400,000 test tubes with human samples can be arranged and they can be stably preserved for 30 years.
Moreover, according to the market and customer needs, Aucma has continued fractal innovation in more segments.
VI. Summarization
In any industry, there is a limit point due to the irrepressible complexity, scale limitation, and entropy increase effect. And if a company wants to sustain its business, it must explore and try the second curve before its main business reaches the limit point.
For the exploration of the second curve, fractal innovation is a good method. Through continuous micro-innovation and iteration of the main business, many fractals will emerge at the company, product and business unit level. These fractals, when the market environment changes, combined with technology and the market, have the potential to grow into the second curve of the enterprise.
Li Wei is through the fractal innovation to seek a second curve for Aucma, although it is too early to say that the transformation of Aucma is still successful, but compared to the era of Lu Qunsheng, Li Wei's strategy has a greater chance of success, obviously.