Book Review: Tian Tao,David De Cremer and Wu Chunbo,Huawei: Leadership,Culture and Connectivity

Huawei: Leadership, Culture and Connectivity by Tian Tao, Cremer and Chunbo is not a just an eulogy to Ren Zhengfei, the founder of Huawei. Ren founded the company in 1987, at the age of 44, when the conventional wisdom says that it is the end of the career. Huawei, in 2010, became the largest privately owned Chinese firm in Fortune 500 and in 2013, the largest telecom company.

The authors have done well to give us vital insights into the creation and sustenance of this behemoth. First, the structure itself. Huawei’s ownership structure does not resemble any modern-world firm. Ren has only 1.42 per cent of the stake, the rest being with 80,000 of its employees. It is not a widely held organization and nor is it controlled by a few individuals. The authors attribute much of its success to its shareholding pattern which let its focus undiluted by the pressures of quarterly reporting.

The theme of Chapter 1 on customer centricity centres around this unique structure of Huawei. Ren believes that many of the firms dilute customer centricity because of the pressures from the capital markets and staying private is the only way to dominate the world. The authors go the extent of terming customers as the opiate of Huawei’s people.

Chapter 2 delves on the dedication of Huawei’s workers. The unique firm structure leads to what is termed as the ‘sieve culture’—only the people with ideals matching to the organization survive for long. The pressures on the ‘sieved’ workers are enormous with endless travel, 24X7 involvement and a deep sense of a mission. The dedicated workers are the ones which get rewarded by the firm.

Chapter 3 titled ‘Openness: A Matter of Life and Death’. It could have very well been called a short treatise on Darwinian adaptation. Ren stated that the company must keep learning from the outside world to survive. The company learnt from the rise and fall of Wang Labs. It introduced process-driven management of IBM. Huawei studied the ‘advanced things in the US’ to compete and surpass the global organizations. Huawei defined itself as an open organization—willing to learn and adapt in order to survive. In the true Darwinian philosophy, Huawei also believed that ‘visibility attracts danger’ and sought to put a cloak around itself and tried very hard to remain impermeable to the curious gaze of media.

Chapter 4 draws from lessons from history and explicitly compares Huawei’s philosophy of surviving in business to the survival in the Jungle. Huawei is often depicted in Western media as a predatory, autocratic and intolerant company. This perception created roadblocks to its expansion in the international markets. ‘Compromise is golden according to the wisdom of the jungle’. Ren has compromised in his mind with his colleagues, exchanging his interests with the unity and their motivation and ‘sharing the wine and meat’. According to Ren, compromise is the best option available and may not be the best solution. Ren decided to put his power in the cage and the company has become more democratic.

Chapter 5 extends on the theme of compromise and talks about ‘The Philosophy of Grayness: Fueling and Controlling Desire’. According to Ren, human nature is complex and as an organization, comprises of many individuals—it becomes even more complex. Ren calls this complexity as ‘grayness’ and exhorts his leadership to develop policies which have more shades of gray. The grayness is the accommodative stance to be developed by the leadership and that they must surrender their imperial mentality.

Chapter 6 is arguably the core of this book and tries to decipher how Huawei seems to live in dog years and achieve so much in short a short time. The company is hyperactive, unified and tightly controlled. The company’s founder is hyper-conscious that organization failures can result from fatigue and decay. Past factors of success are one of the reasons of organization fatigue and Ren urges that Huawei should forget its history. The organization focuses much of energy on self-criticism to drive improvement.

Chapter 7 focuses on some of the do’s and dont’s in the organization’s philosophy. It lists seven prohibitions—the seven things that company staunchly opposes. It also lists eight major symptoms to watch out for that might be the cause for major organizational change.

Chapter 8 continues the theme of change—a carry forward of the previous chapter. The chapter calls culture as the mother of all the systems of the organization. Huawei charter is a systematic summary and elaboration of the founder’s management philosophy. One of Ren’s insight is that ‘resources will be exhausted, only culture will last forever’. There have been eight revisions of Huawei’s charter and it combines the essence of Western management and the distillation of Huawei’s successful practices. The charter cuts to the founder’s ideals, convictions and articulation of his complete set of management ideas. Ren is also the architect of reform for Huawei. He recognizes that reform comes at a price and self-criticism comes before the reform.

Chapter 9, the last chapter of the book, tries hard to identify the leadership lessons under the title ‘Leadership at Huawei: The Essence and Application of Power and Influence’. Although Huawei is identified as an employee-owned company, it is also very apparent that the DNA of the company is a reflection of its founder. Ren was one of the first true entrepreneurs coming from the reformist policies of Deng Xioping. The leadership is shaped by the struggles faced in the early years of its formation. Fostering wisdom and developing intellectual skills through different initiatives is an essential aspect of Ren’s design of the organization. The leadership is explained as a ‘bucket of paste’ that contains ‘philosophy, culture and values’ of all the employees. The ‘bucket of paste’ is a ‘complex mix of ideas and managed by a collection of systems’. There are three dimensions of leadership—strengths, heart and area of focus.

The book uses Chinese aphorisms extensively and the style can be at time pedantic—but that is the essence of the book’s purpose. The authors had the access to many current and ex-employees of Huawei and have extensively used quotes from the interviews conducted. The book is not without faults—perhaps the biggest one being that there is hardly any attempt of criticism of the company or its founder. To summarize, the book is a distillation of an extraordinary organization and its founder. It also provides a historical narrative to the extraordinary growth of Chinese enterprise. It would remain a highly useful treatise for anyone who wants to get an inside track of how Chinese enterprises have come to be respected and feared globally.