Huawei founder and CEO Ren Zhengfei, the man who has set off a hatful of Congressional inquiries, today made his first public appearance in a western forum.
Interviewed at Davos, Ren said his biggest challenge was coping with Huawei’s fast growth and gave a graphic illustration of his demanding management style.
Interviewer Linda Yueh of the BBC introduced Ren as “the most mysterious entrepreneur in China and possibly the world” - yet that is not strictly accurate.
The former PLA officer is well-known at home and his face adorns book covers in every airport bookshop. A search on his name at online bookstore dangdang.com yields 265 results – that is, 265 books on Ren or his management style. That pales compared to the staggering 1316 on Alibaba’s Jack Ma and the 919 on Steve Jobs, but beats out Tencent’s Pony Ma (170) and Xiaomi’s Lei Jun (164). (Yes, I am considering patenting the Electric Speech Chinese Entrepreneur Index of Prominence and Thought Leadership.)
In US terms Ren might be best described as combining Warren Buffett‘s folksy philosophising and Jack Welch’s aggressive management style. In one response he used his favourite watermelon analogy. Huawei just wants one piece of the watermelon, points out Ren, not all eight pieces. He said he had reassured Huawei’s partners, like Microsoft, that Huawei’s interest was in “digital logic” and not search or content.
Ren grew up in poverty in rural Guizhou, southern China, the son of schoolteachers, though by local standards he and his seven siblings were affluent. "We could cook with salt," he said.
Today Ren’s net worth is $1.1 billion and his biggest issue is how to cope with Huawei’s pace of growth.
"My pressure comes from too fast growth of Huawei and too much money we make. How to address this value distribution challenge, I think that’s the biggest challenge both internally and externally."
Ren predicts Huawei will grow another 20% or so this year – well ahead of its rivals - to reach around $56 billion in revenue.
Fake numbers
He revealed that Huawei had over a number of years caught 4,000 managers acting fraudulently – and pardoned them. Managers had created “fake numbers so they could get good business results,” Ren said.
“Of those 4000-plus people many are very senior in the organization, so there are a lot of things we have to work on to improve our corporate governance.”
He did not elaborate on the kinds of fraud or the amounts involved, but conceded “there are challenges around Huawei for corruption.”
Like every CEO, Ren said the secret to his firm’s success was putting the customer’s interest first, but in Huawei’s case it means forcing staff to stay in a disaster zone. When civil war broke out in Libya, and the tsunami and radiation leak hit Japan, Ren told employees to stay put and keep the network running (he didn’t say what the employee response was).
"You won't die"
"In Japan I said ‘no, we stay. Is your life more precious than the Japanese lives?'
"You won't die," he told staff, and so while locals were leaving, Huawei people were going in. “Japanese said ‘this is the company we want to work with. We won lots of orders thereafter.”
Ren said he held no grudge against the US, despite the exclusion of the company from the network gear market.
“I never think the US is not fair to Huawei. I’ve never had the belief. The US has grown into the biggest economy in the world in the last 200 years. One of the most important things for the US is openness. This openness Huawei should learn from the US.”
Ren confirmed earlier statements by the company that its stock is owned solely by 80,000 staff. He is the biggest shareholder, with 1.4%.
The 70-year-old businessman says he's "not mysterious.” As head of company selling network gear he was focused on just 400 companies. Now he is selling handsets to consumers the company needs to build a higher profile.
He described himself as “not capable. I know nothing about technology, business, management, finance. I just sit on top of the sedan and then all the people pull the car ahead.”