Meng Wanzhou, 600 days after his return

Tech 2023-07-08 14:44:35 Source: Network

More than 600 days after his return, Meng Wanzhou officially took part in steering the giant ship Huawei. On April 1st this year, she became the rotating chairman of Huawei for the first time

More than 600 days after his return, Meng Wanzhou officially took part in steering the giant ship Huawei. On April 1st this year, she became the rotating chairman of Huawei for the first time. During her six-month tenure, she served as the helm of Huawei and chaired the company's board of directors and executive committee.
In the past, as the daughter of Ren Zhengfei, the founder and CEO of Huawei, Meng Wanzhou was regarded as Huawei's "facade", and she always maintained an elegant, exquisite and professional face in public. Now, she has officially assumed her rotating position as chairman, transitioning from the former "Huawei facade" to the helm with real power. In the eyes of the outside world, this is laying the groundwork for its "succession".
Then, Ren Zhengfei claimed to the outside world more than once that his daughter Meng Wanzhou would not take over because she had "no technical background". The turning point may come from the long experience of foreign detention. Meng Wanzhou's tenacity in the face of hardships has made Ren Zhengfei and even many Huawei people change their view of him. Meng Wanzhou also took this opportunity to tear off the labels of "Huawei Princess" and "Huawei Facade", realizing the transformation of his life.
In March 2022, at Huawei's 2021 Annual Report Conference, Meng Wanzhou made her first public appearance after returning home. She wore a white butterfly brooch, which indicates the good wishes of breaking the cocoon into a butterfly. This seems to be just a declaration. Meng Wanzhou and Huawei under his leadership are showing a different side to the outside world since he took the rotating chairman of Huawei.

At Huawei's 2021 Annual Report Conference, Meng Wanzhou, wearing a butterfly brooch, answered questions from reporters on the spot. Photographed by Zhao Yanxiong, a journalist from Nandu

Succession of the system

From March 27 to 28, 2023, the Board of Directors of Huawei determined that Xu Zhijun, Hu Houkun and Meng Wanzhou, vice chairmen, would serve as the rotating chairmen of Huawei. Meng Wanzhou became the first female rotating chairman of Huawei since its establishment and the youngest rotating chairman. For a moment, there was a lot of talk about Meng Wanzhou's succession.

Although Huawei has not been a family enterprise since its development, its employee shareholding ratio has exceeded 60%. Ren Zhengfei's share capital in the employee shareholding plan is less than 1%. Huawei also claims that the company implements Collective leadership at the governance level, and does not attach the fate of the company to individuals. Collective leadership follows the principles of common values, responsibility focus, democratic centralization, decentralization, checks and balances, and self-criticism.

However, Ren Zhengfei still serves as the director and CEO of Huawei. The key is that he has the veto power that can be inherited. Therefore, the "succession theory" about Huawei or Ren Zhengfei has been going on. However, Ren Zhengfei once said that this power can be inherited, but the successor will not be his family, but will be handed over to the company's leadership team to manage in turn.

3312022Succession of the system

In order to better perform the rotating chairman of the board and other daily work, Meng Wanzhou said that she had carried out many studies in the past year, including going deep into the front line, "deeply understanding customer needs, jointly looking for solutions, and creating digital transformation solutions for customers." She quoted an ancient poem Mingzhi, saying that she would continue to work hard.

Obviously, Meng Wanzhou has a relatively simple business background in Huawei, where there are so many generals. Ren Zhengfei once said when talking about the successor, the leader of a technology company like Huawei must have strong strategic insight. It may be necessary to discern the direction of social or corporate development in the next decade, twenty years, or even further. It is difficult for people without insight to lead this company

At that time, Ren Zhengfei asserted that "Meng Wanzhou could not be the successor forever, because she has no technical background". He returned to continue to work as CFO, of course, this CFO has a stronger will.

There have been some changes in the situation now. After Meng Wanzhou became the rotating chairman, she participated in more and more public activities on behalf of Huawei, such as leading a team to visit Jiangxi University of Finance and Economics, China Building Materials Group, China Huaneng Group, etc., and continued to expand Huawei's "circle of friends".

A turning point in a difficult situation

Looking back, on December 1, 2018, Meng Wanzhou was unjustifiably detained at Vancouver Airport, Canada, until he returned to China on September 25, 2021. In March of the next year, Meng Wanzhou made his first public appearance at Huawei's 2021 annual report conference after returning home. And what lies ahead of her is Huawei's internal and external difficulties.

At that time, Huawei's annual revenue in 2021 was approximately 636.8 billion yuan, a significant decrease of 28.6% year-on-year, accounting for nearly three components. The continuous rounds of sanctions and suppression by the United States have caused significant difficulties for Huawei. Among them, Huawei's mobile phone sales decreased by 68% year-on-year in 2021, and its market share of 47% in China was also largely seized by Apple.

Until 2022, the dilemma remained unchanged. Huawei's revenue in 2022 was 642.3 billion yuan, a year-on-year increase of 0.9%. Although the revenue stopped falling, the net profit was only 35.6 billion yuan, a year-on-year decrease of 68.7%, and the net profit margin was 5.5%, reaching a historical low. Cash flow from operating activities decreased by 70.2% year-on-year to 17.8 billion yuan, while net cash decreased by 26.9% year-on-year to 176.3 billion yuan.

As the CFO of Huawei, Meng Wanzhou knows the financial situation of Huawei well, and also knows the difficulties. In the past few years, Huawei has taken "survival, striving for survival" as its development tone.

In August 2022, Ren Zhengfei's internal article "Cold Weather Theory" precisely pointed out the "internal and external difficulties" faced by Huawei. The continuous blockade and suppression of the United States combined with the downward pressure of the global economy make Huawei not only face the pressure of supply, but also the pressure of the market. Ren Zhengfei asked to reduce marginal business, not to pursue sales figures, but to make profits and blood.

Ren Zhengfei called 2023-2024 the "breathing period of life", and extended the time line for "breakthrough" blockade and dilemma to 2025. When Meng Wanzhou was appointed as the rotating chairman of Huawei, it was the key turning point of the dilemma faced by the giant ship.

At the Huawei 2021 annual report press conference, I was asked by the media, 'Has Huawei passed the most difficult stage?'? Meng Wanzhou said that Huawei might have passed through the "Communications blackout" of this disaster in 2021; At Huawei's 2022 annual report press conference, she also used the phrase 'sparse plum after snow' to convey Huawei's confidence under pressure to the outside world.

And this confidence comes from Huawei's research and development investment and business resilience. Meng Wanzhou said: "The real value of Huawei lies in its long-term accumulated R&D capability, R&D team and R&D platform, which is a core for Huawei to build long-term and sustainable competitiveness."

Xu Zhijun also said that by constantly optimizing its industrial portfolio, Huawei has formed a customer-oriented industrial portfolio consisting of ICT infrastructure, terminals, Huawei Cloud, digital energy and smart car solutions, as well as a technical support platform backed by 2012 Labs and HiSilicon, which has built a strong and resilient industrial portfolio, thus laying a solid foundation for the company's sustainable survival and development.

Peering at Huawei on the Other Side

After more than 1000 days of foreign fetters, the return of Meng Wanzhou has inspired Chinese people. Whether in the folk context or within Huawei, its symbolic significance has become increasingly prominent. When commenting on Meng Wanzhou's return to China, the official media said: "No force can stop China's progress".

On December 19, 2021, Meng Wanzhou arrived at Shenzhen Bao'an International Airport and returned to the motherland. Photo by Xinhua News Agency reporter Jin Liwang

Meng Wanzhou's tenacity through hardships is also a spiritual banner that Huawei needs. In the past few years, Huawei has expressed its determination to overcome difficulties and overcome them on multiple occasions. For example, the widely circulated and scarred fighter poster, with Huawei's caption "Without scars, where can the skin be rough and the flesh be thick? Since ancient times, heroes have suffered many hardships", as well as Huawei's advocacy of the "Populus euphratica spirit". Huawei people say that "the fragrance of plum blossoms comes from bitter cold, and the sword edge comes from sharpening".

As the daughter of Ren Zhengfei, the founder of Huawei, Meng Wanzhou seems to have more sense of mission. In her multiple public speeches, it is not difficult to see that at the critical moment of Huawei, she is trying to raise a banner of Huawei's spirit, such as the heart of benevolence of "living towards death", the hope of "dispersing plum blossoms after snow", the reaffirmation of the "Long March spirit", and so on.

Unlike Xu Zhijun and Hu Houkun, the other two rotating chairmen of Huawei, Meng Wanzhou likes to use poetry in his public speeches, which are metaphorical and declaratory, and more convey the spirit of Huawei to the outside world. Through her public speech, the outside world was also able to glimpse the other side of Huawei.

Meng Wanzhou also has her own style. Unlike Ren Zhengfei, who is accustomed to expounding profound truths in big vernacular, she likes to quote classics and use poems, taking the literary and artistic line.

While working in Huawei for 30 years, Meng Wanzhou mostly worked in Huawei's financial system. She promoted Huawei Finance to become the world's leading digital and intelligent financial organization. In 2014, she also led Huawei's data transformation, established a comprehensive data management system, and achieved "counting out a hole", making data a strategic asset of the company.

In Meng Wanzhou's many public speeches, digitalization is the key word. However, her lack of technical background due to her financial background is also a hindrance on her path to succession.

For example, when it comes to car manufacturing, although Ren Zhengfei has explicitly prohibited it, he emphasized that "Huawei does not build cars, but helps car manufacturers build good cars". However, taking Xu Zhijun and Yu Chengdong as examples, how to balance Huawei's internal battle over the business development route also tests Meng Wanzhou's leadership and strategic vision.

In Meng Wanzhou's many public speeches, the reporter from Nandu Bay Financial Service noticed that she seldom mentioned the dynamics of Huawei's car business, but more talked about Huawei's main business areas such as cloud, 5G and 5.5G, and Digital transformation. As Ren Zhengfei's daughter, she may be able to better understand Ren Zhengfei's strategic layout of Huawei.

From the "Huawei facade" to the helm, the youngest rotating chairman of Huawei since its establishment, behind the halo, whether he can lead Huawei to achieve new development, or even take over the baton of Huawei's spiritual leader from Ren Zhengfei, is still a long way ahead and full of challenges.

Interviewer: Cheng Yang, reporter from Nandu Bay Finance Society

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