Made of the smallest companies to the largest
Made the world&#39;s largest enterprise world&#39;s smallest
November 2008 I went to Boston, and former GE CEO Jack Welch for a special
meeting. I asked the first question is: how can Welch, the GE to do the
world&#39;s largest, but they did it the world&#39;s smallest? Mean, he
did the company in the world, but every company has to fully play and realize their
value. In fact, this is not simple, and in China is difficult to do this.
Welch said that China&#39;s corporate culture and the United States has a very
big difference, in many ways the U.S. can be decentralized, as the U.S. financial
system is perfect, perfect to not know his own, which are very complex, very detailed
contents, However, he can help the enterprise in a systematic manner. He made
employees more creative, because in this system but will come under a lot of
restrictions. GE in China, there are many enterprises in China, employees are willing
to tamper with something. China does not have some very sound system, which is in
the management of the two countries is very big difference.
In fact, we own a factory or abroad and foreign companies after the deal, but also feel
the Chinese enterprise culture and the United States, Japan has a very big difference.
For instance, we in the United States, South Carolina set up a factory, we tell the
American people in the past the production line workers should be how to operate, but
after a few days, in accordance with the terms of the United States can then change
what, American workers did not. He said two days ago you told me so dry, so dry
today, told me, in the end what is right. It is not easily changed.
This reflects a &quot;law&quot; concept, but the concept of Chinese
workers is not very strong. For example, let them wipe 5 times table, but the Chinese
may wipe 5 times today, tomorrow, wiping 3 times over.
We deal over a factory in Japan, developed a very good product, sold very well in the
world, we give the development team a special award, the results they do not agree.
Why? They feel that they are to develop a good product, if not let them dry, so that
other people will develop dry good products. This is our decision, rather than their
ability, can they not have a separate award. The money or the average of the last.
Japan and China, this team is not the same.
Greatest impact the Internet is to eliminate the distance
Now enter the Internet age, age of the Internet on the business challenges raised on
two words: speed. Who can more quickly meet the needs of users. Some people say
that the agricultural age to address hunger, the industrial age to conquer space, the
information age is the time of conquest. Therefore, the enterprise, time is crucial to
victory, the first time to meet customer needs. Peter - Peter Drucker have a word, the
Internet eliminates distance, which is its greatest impact. For enterprises, and users
can only be the zero, zero distance if and users you win.
First to do enterprise information, and then improve enterprise information. As
Chinese enterprises in terms of enterprise information there is still a long way to go.
Chinese companies are now media reports can not be successful ERP 93%, that can be
done only 7% of ERP, which is 7% will not necessarily be successful. The media can
see a lot of business and ERP consulting firm to do a lawsuit, saying that you gave me
ERP, for I am committed to what extent, do not do it, I ask you to compensation.
This illustrates a big problem, information of Chinese enterprises do have a very big
misunderstanding, but also failed to do user-centered to meet the needs of users, and
then asked to do information technology, in fact, can not be done.
No one puts new wine into old skins go on
Now the Chinese are doing information is the &quot;oil-water
separation,&quot; would have business as &quot;water&quot; as the
information now overtaken like &quot;oil&quot; as on
&quot;water&quot; above. &quot;Bible&quot; in that:
&quot;No one puts new wine into old skins go on, if the old bottle of wine on the
go the old skins will burst, the new wine will burst, we can only put the new wine new
bottles. &quot;The original business process the same as the old leather bag, now
the same information as the new wine into new wine into old skins in the not to sure.
Na Haier, the do have spent a lot of information trouble, now is better to do up. Such
as inventory problem, we do process information, the stock has not been resolved.
Now we present information under zero inventory, I do not have inventory, but the
user should immediately if I can give you, the user will not will not form a stock is in
fact the whole process of recycling. Such as research and development,
today&#39;s R &amp; D products must be 6 months after the needs of users.
Marketers should also understand the needs of users, this product will not form a
stock. Now the problem we had done relatively better.
This is also a large Chinese enterprises are facing the problem of household electrical
appliance enterprises in China in 2008 days in inventory was 64 days, we had 32 days,
is almost half the average number of working days. Today, this figure had fallen to 3
days, but this process is very painful. Our sales in the process has also been greatly
affected, grinding his teeth done, the information to the whole process done again.
Many Chinese companies basically sell stock, we have been able to start selling
services, and the user needs to do.
Our just-do now, also be produced in the production line is the user wants to. But not
as many Chinese enterprises warehouse purchase, the Cangkuxiaoshou, this is a very
big challenge, our corporate information from Zhe Li is to cut into the centers as a
user. To do next beyond it is the &quot;information business&quot;, how
we are exploring to do.
Long Tail Theory Inspiration
Every enterprise in the information age should be a low cost high quality products and
high quality to help users find it.
&quot;Corporate Information&quot; of the equivalent of business-focused
to meet the needs of users, and &quot;information technology
enterprise&quot; is equivalent to the needs of enterprise customers around the
world into the chain to go, you&#39;re just a part of this chain should be faster
conducted in this chain of operation. Haier is how to do our business from
manufacturing transformed into service-oriented enterprises.
Anderson in the &quot;long tail&quot; in these two words, very good
interpretation of this. If the cost to provide all of the products is not large-scale
Chinese companies are now manufacturing, but rather mass customization. Because
low-cost mass production will be able to do so. Like a long tail that is not the 80/20
principle, but all types of products the user may have to use. At that time, in mass
customization, though a large scale, but to customize many types of products, which
is a very large Chinese enterprises, the challenge.
Quality to help users find the products he needs now is not your user facing a business,
but many companies worldwide to help users find high-quality products that he needs
for your products in very competitive global . This is for the Chinese enterprises
concerned, from now on, through the financial crisis to transformation is a very big
We are now exploring is the actual situation of specific network integration, the
so-called &quot;virtual network&quot; is the Internet, the so-called
&quot;real network&quot; is the last mile, that is the &quot;mouse +
timely service.&quot; Users on the Internet after the mouse is the first time that I
should be served, which requires networks with the real - the logistics, marketing
Now, after entering the cloud computing era, no one to buy a server, and certainly
only buy services on the line.
Now in the &quot;real network&quot; aspect we are trying to push ahead,
because China&#39;s market is too big. China has 2,812 counties, 35,000
townships and 640,000 villages. But deep down this network is very difficult, so we
from the county, township and village shop a little bit down.
This is very important, and now after entering the cloud computing era, no one to buy
a server, and certainly only buy services on the line. Like no one unit that I bought a
generator to his own generation on the line. But what kind of service you buy is a big
challenge. This service must be and the market are closely linked.
&quot;Real network&quot; and &quot;virtual network&quot; -
the Internet should be integrated with the customer point of the mouse, how do you
like after the service. Many large foreign logistics companies to China to hope and
Haier to cooperate. They in many ways stronger than me, but on almost that last mile.
For example, the United States, Europe, Japan, electrical appliances brand are my
competitors, but sales in rural areas now entrusted to me. Why? Because it is no way
to distribution, there is no way to service, to every village, every county is very
In any case the so-called business model is one, can not create customer value. We
own the process of doing now, how can a unified goal to create customer value?
Faster development of enterprises in the development process, many things have not
managed to keep up, eventually they have a disease of large enterprises. The so-called
disease is big business among internal staff and departments of the game. As Nash
received the Nobel Prize in 1994, said everyone from the start to maximize their own
interests, and finally form a game. I might harm for their own benefit the company,
other people&#39;s interests, it is also in our group slowly formed: Department
each other to make a firewall, thus forming a very big problem. Now what we have
done to make our goals are focused to create user value, how can collaborate together.
We all organizational structure upside down. In accordance with the functions of
management principles, organizational structure should be pyramid shaped, the
maximum lead at the top and then a secondary lead, then a level leading down to the
most below must be employees. But that is customer facing staff. Reflect the
problems the customer staff to reflect the up level by level, do the leadership
decision-making down, there is in addition to internal consumption but also have a big
problem is not very good to face the market, make decisions quickly. Now put this
triangle upside down, into a reverse triangle. Customers at the top, then line managers,
employees face the customer, and finally a level down into the bottom of the top
leadership. That the top leadership of enterprises from the original orders into the
bottom of the first-line managers in the provision of resources. Among all the
departments that have to line managers and clients to provide resources, provision of
resources from those who give orders into one.
Because of the various departments within the Group to face customers, so to break
the barriers between departments, we are called independent management body,
common to achieve customer value.
April 2009 I went to Florida to visit Gerstner, he wrote &quot;Who says
Elephants Can not Dance&quot;, we conducted the exchange, I drew a picture,
from the Triangle to the inverted triangle, I asked him: &quot;We now do you
He said: &quot;I do head when IBM wanted to, but I did not do.&quot; He
said, is definitely in this direction, the approach is certainly good, but there was no
reason to do what? There are two points: First, if you called first-line managers in the
above into a body of one&#39;s business, management team will have some
problems, the market some new opportunities to Bukuaiguanzhu a, Zhihui his concern
on the customers, so Hui lost a lot of new opportunities. Second, the line manager,
team facing customers, fail to provide the resources behind him, he turned and came
to resources and attention to customers down. Because these two factors were not
used this method in IBM.
We also take into account these two problems, now taking steps to address. An
enterprise can be significant, but further large, then small business is the three forms:
profit and loss account, balance sheet and cash flow statement. Now I make a profit
and loss account team, inverted triangle in the leadership of the most sophisticated
personal profit and loss account is to pay attention to the enterprise&#39;s
strategic direction in the market and strategic objectives, of course, new opportunities
for corporate profit and loss account is his task. In order to prevent line managers and
customer commitments also concerned about the underlying resources are not shared,
all these people behind, say human, financial, etc. have their own profit and loss
account, the profit and loss account and the team&#39;s commitment to
customers inside to form a contract. We also conducted some experiments, results
were pretty good.
This completely subverts the idea of the past, you go to business in the past to dry,
depending on your position, ability, work give you a salary or bonus. You are now
fully into the company to dry, you get the company&#39;s assets, you must get
the value of assets, if not, then the loss of value. After you get the assets I will give
you the time designated, the number is guaranteed to do, how much the company
earned profits. One is the market the industry average profit, a market benchmark for
the highest corporate profits, the first step to achieve the average rate, the second
highest, after leaving this profit to the cost of used removed, and the rest were
Market, many companies are doing now doing would cut prices. Haier sent to Beijing
in the past to do a manager, he said the product sold well, the price cuts, and we
approved this and it was his no matter. It is bought out, lower prices will certainly
losses, losses not pay you, you can no longer create value. This is a bit like the
Chinese rural reform and opening up began, also 就是 &quot;first Guo Jia, after
the collective, and the rest is their own.&quot; I&#39;ll give you such a
platform, for example, say you sell one million yuan, assets of the company Zhi Qian
is the complete preservation then increased to 10 million or 200 thousand yuan,
value-added part is you.
Subvert the structure of the three benefits:
1, can adapt to changing information age, rapid market. Changes in the market too
fast now, wait until the market changes and feedback back to making sure you do not
do. Give a small example of our products are popular in rural areas, refrigerators,
washing machines have a rodent control board. But our front-line staff quickly found
rodent board regardless of use, rats evolution, and 4 cm of small mice can breed the
next generation, the original rodent board simply Fangbu Zhu mice. They are at the
scene immediately to take measures to solve this problem, things like this very much.
2, to solve the problem within the game is one single unity of culture. Who is the staff
alone is not a narrowly defined order, but the target market. Everyone has their own
marketing objectives, goals and market synergies up to become a win-win situation.
He can create value for customers, value can be obtained from this new value. This
very simple, you take all the assets of the company, and now I plan to your name into
your. This asset to you, for you to operate. If you have to operate value-added benefits,
if there is no loss of wages, and many problems will not be pushed to the top come.
British philosopher Francis Bacon said a word, self-seeking people who tend to burn
down the house to cook their own eggs. In fact, more such things go.
3, the traditional management accounting for a new advance and exploration. We have
implemented these things, American Accounting Association and we explored several
times, he felt very interesting. Now the United States, management accounting has
topped out, and difficult to break, and Haier has done all this provides a breakthrough
new ideas for the existing management accounting.
(From &quot;Business Review&quot; on: Zhang)
quot; on: Zhang)