The long-term development of the company cannot depend on a certain product, a change, or an individual.
“After a year, that is, September 10, 2019, Alibaba’s 20th Anniversary, I will no longer serve as Chairman of the Board of Directors of Alibaba Group. The current CEO of Alibaba Group, Zhang Yong, will take over the position of Chairman of the Board of Directors. On the Teacher’s Day in 2018, Ma Yun announced in an open letter with the theme “Happy Teacher’s Day.”
Now, this day is coming.
Being able to retreat and return to education, becoming the first founder of the Chinese Internet company to retreat to the second line, Ma is undoubtedly lucky.
But this luck is not from the sky, but the result of careful planning. “We must develop and accumulate the experience and rules of organizational inheritance when we are young and strong.” In 2015, Ma Yun wrote in his internal letter when Ali accepted Zhang Yong as CEO.
The construction of the inheritance system began 10 years ago. In September 2009, on the 10th anniversary of the establishment of Alibaba, 18 founders including Ma Yun collectively resigned as “the identity of the veteran”. Since then, Alibaba has launched the “Partner System” and officially launched in 2010.
The partnership system has absorbed more young backbones into the decision-making hierarchy, including the leader Zhang Yong.
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The dependence of large companies on founders and CEOs is self-evident. When the news of its departure is announced, it is often the fluctuation of stock prices. Even if Ma Yun mentioned many times, the company should downplay the personal color. On the day of Ma Yun’s announcement of his resignation, Ali’s share price fell by 2%.
Mr. Ma, who teaches students, has the temper to retreat. On the one hand, because Ariliang will be like a cloud, successor, and the successor Zhang Yong’s historical performance is enough to win trust for him; on the other hand, the partnership system, collective decision-making, It also ensures that the company can run smoothly when important personnel changes occur.
When looking back at the heads of various companies, some people carefully arranged and handed over smoothly; some people were bleak and flustered; some people retired after the business was steady, and they came back again when the company was facing a crisis. Li Ka-shing, former Microsoft CEO Steve Ballmer, and former Starbucks CEO Schultz are representatives of these situations.
Li Ka-shing: When the son can do something
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Li Ka-shing admires the “not rushing” in “Book of Changes”. Before and after his retirement, the company was developing steadily.
As early as 2012, Li Ka-shing had a public retirement plan. In May 2018, the eldest son, Li Zezhen, became the new helm. Prior to this, Li Zemin had taken over most of his business from his father.
“This is more certain, there will be no succession problems, and shareholders and colleagues will have confidence. It is also a good thing for the two sons, let them know what their powers and responsibilities are, and plan their own life-oriented development. Li Ka-shing said in an interview with Caixin.
The retirement decision was announced after the closing of the Hong Kong stock market on May 10, 2018. On the same day, the Li family’s Changhe, Changshi, Changjian, and electric energy stock prices all increased slightly.
After 2012, when the retirement preparation was made public, Li Ka-shing’s succession and property distribution matters began to be deployed: the eldest son, Li Zezheng, and the company, and the second son, Li Zezhen, started his business and received his father’s abundant financial support to develop his personal career.
After retiring, Li Ka-shing will put his energy on the Li Ka-shing Foundation to help the medical education industry develop. The foundation was founded in 1980 and Li Ka-shing called it his “third son.”
The 55-year-old Li Zemin has worked in a family business for 34 years. When he was studying at Stanford University in his early years, he followed his father’s wishes, read the civil engineering department closely related to real estate, and then obtained a master’s degree in structural engineering. After graduation, he entered the “Long and Department” work. In 1996, the infrastructure business of Changjiang Industrial was split and listed and handed over to Li Zezhen.
In the first year of succession, LiZe’s transcripts are remarkable: seven real estate projects such as the reconstruction of Hutchison Building, the reconstruction of Tianshuiwei Hotel and the Huangzhukeng subway supercap project; the alliance with Ali and Xiaomi, and cooperation with Tencent and Meitu. From the financial report, as of the end of December 2018, Changjiang Industrial Group’s revenue increased slightly by 1.1% year-on-year to reach 64.48 billion Hong Kong dollars; profit attributable to shareholders increased by 33.2% year-on-year to reach 40.12 billion Hong Kong dollars.
“What I want to tell you is that there has been no change. The tradition of the Yangtze River is still developing and not forgetting to build.” This year’s “Changhe Department” performance meeting, Li Zezhen said.
Bolmer: When Microsoft wants to cool down
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Sales-oriented, R&D out of touch, missed searches, missed browsers, missed the digital music market, missed smartphones, and even Microsoft’s absolute advantage – the operating system, Vista suffered a rout, and Windows 8 was tepid.
“Vanity Fair” will be Steve Ballmer’s thirteen years in charge of Microsoft, called “Microsoft lost ten years.” In 2000, Ballmer took over the responsibility of Microsoft CEO from Bill Gates, at the time of Microsoft’s golden age.
When he resigned in 2014, Microsoft’s market capitalization was half the 1999 high and hovered around $300 billion.
“Old sales” Ballmer is a man who guards the country. Profits are supreme, but they are full of doubts about new things. The Microsoft he led, after the hard work of other companies, is not cool at all.
In 2001, Apple introduced the iPod music player. Five years later, in 2006, Microsoft launched the music player Zune.
In 2007, the iPhone came out and opened the era of mobile internet. Ballmer thinks it is “the most expensive mobile phone in the world”, “Enterprise customers are not interested in buying.”
“The worst job I’ve ever done is from 2001 to 2004,” Ballmer said. “The company paid a price for a bad job. I put the team resources in the Windows operating system ‘Longhorn’ ( LonGhorn), not on the phone or on the browser. “
Apple once again outperformed: In June 2004, Jobs released the “Tiger” operating system, which is exactly what Microsoft “Longhorn” expects. On the other hand, the Longhorns project had to be re-launched and Vista was introduced in 2007 – the worst version of Windows in Microsoft history.
is not in its place, then it does not seek political advice. After Gates retired from the position of the CEO, he basically did not intervene in the company affairs, even if there were many problems in the company during the Ballmer period.
Having said that, Ballmer is not without contribution. He left Microsoft Xbox, Bing searched for two products that he had come up with, and developed a strategy for integrating hardware software. But it’s just a matter of getting it – Xbox and Bing haven’t brought new growth to Microsoft, and even lost money all year round. By the time Ballmer retired, Bing lost about $6 billion.
Furthermore, the Surface market of the iPad is flat, and Ballmer’s stepping down can be attributed to poor performance, causing dissatisfaction on the board.
Ballmer’s departure also made the stock market quite exciting: on the day of the announcement, Microsoft’s share price rose 7.25%.
Microsoft lost 10 years, not Ballmer alone. After all, Gates’ original vision, “Let every family and every desk have a computer,” has been realized. In addition to making money, where should Microsoft go?
This is obviously not an issue that old sales Ballmer can solve. He can’t give up the business of making money, and he can’t fully devote himself to a new round of innovation.
This is why the founder of the US e-commerce giant AmazonJes Bezos thinks that big companies Most of the lifespan is only 30 years.
new term CEO, products division origin Satir · Nadella (Satya Nadella) decisively abandoned Ballmer “to sell Windows system as the core software” model, will be fully operational shift the focus of cloud services, mobile phone services . He is indeed leading Microsoft out of the “middle-age crisis.”
Schultz: When Starbucks no longer needs me
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Strictly speaking, Howard Schultz is not the founder of Starbucks. In 1982, when Starbucks was a small coffee company with four stores, Schultz entered Starbucks as a sales director.
In 1983, Schultz went on a business trip to Italy and was impressed by the country’s cafe culture. He believes that cafes should be the third space for linking people and people. He integrated this concept into the Starbucks store, brought it to the United States, and promoted it to the world. Since 1987, Schultz has been the CEO of Starbucks, and he is also regarded as the true founder of Starbucks.
For more than a decade since Schultz was CEO, Starbucks went public in 1992, with a compound annual growth rate of 49% and a market value of about 150 times. At that time, Starbucks earned at least $2 billion in 2,600 stores in 13 countries.
In 2000, the company operated smoothly and Schultz decided to leave the company’s daily management positions. He retired from the position of the CEO, served as the company’s chairman, no longer involved in day-to-day operations, but turned his attention to its global strategic expansion strategy.
CFO Olin Smith took over as CEO. Ma Yun said a joke: “Don’t be afraid, the land is not afraid, I am afraid that the CFO will be the CEO.” Although this joke can not be taken seriously, it is not unreasonable.
After that, Starbucks triumphed all the way, with more than 9,000 stores, almost three times the previous one. Although the stock price has skyrocketed and the profit has increased, due to excessive pursuit of growth, the company’s operations have been neglected, and the core value is no longer taken seriously.
In 2007, Starbucks began to decline.
“This can’t be attributed to a resolution, a strategy, or someone. The decay happens quietly and gently, just like the off-line trade, starting from the loose stitch, a little off-line.” In the autobiography “All the Way Forward”, Schultz evaluated the situation at the time. The foundation on which Starbucks has always lived is constantly disintegrating.
The external environment was also undergoing unprecedented changes: the financial crisis is coming, and competitors in the same industry are rapidly grabbing the market.
“When it all came to Starbucks, I was walking on thin ice and doing it myself. Starbucks is my life, part of my body, and I can’t watch it go to collapse.”
In January 2008, Schultz again served as CEO.
Yale University TeachingJeffrey Sonffield has pointed out that people who are CEOs again and ultimately succeed have three qualities: 1. They have no intention of threatening the power of the incumbent leader. 2. Although the reputation may be damaged, they are not intended to satisfy some unmet self-requirements. 3. They know that it is not faith that they built the framework for the first time. They acknowledge that change is inevitable.
Jobs is like this, Schultz is also.
“The pursuit of growth is like a carcinogen.” Schultz wrote in his autobiography. After regaining power, he decided to slow down and reshape the brand. In July 2008, Schultz decided to close 600 stores in the United States and abolish 7% of its employees. In the closed stores, 70% were created in the past 3 years. In addition, he led Starbucks to launch a new category that promotes health and incorporates fruit elements.
Schultz also pays special attention to the “experience” of the third space. After all, when people propose to “go a cup of coffee,” the implication is that they want to go to the cafe to chat. As CEO, Schultz said he would go to 25 stores every week to experience. After five years of adjustment, Starbucks returned to growth: In 2013, Starbucks global same-store sales increased by 7%, and same-store sales in China and Asia Pacific increased by 8%.
In April 2016, Schultz resigned as CEO and continued to serve as executive chairman of the board. On the same day, Starbucks shares fell more than 3% in after-hours trading.
In June 2018, 64-year-old Schultz announced the chairman and officially retired: “I plan to travel with my wife, children, and grandchildren. We have many plans.”
But he also said: “I don’t like the word ‘retirement’. I am full of enthusiasm and love for Starbucks.”
Image Source: Pexels
The founder is in the business, just like the river is in the terrain. The founder’s personal temperament has profoundly affected corporate culture, management systems, and operational strategies. We have already bundled companies such as Huawei, Wahaha, Gree, and Jingdong with Ren Zhengfei, Zong Qinghou, Dong Mingzhu, and Liu Qiangdong behind them, and even conflated them.
But a company achieves sustainabilityThe development cannot depend on a certain product, a change, or an individual. The company that is separated from the “parental” founder is like a child of adulthood, waiting for them to be market research, and a wave of competition.
I am afraid that only a full talent pool and a reasonable succession system will allow companies to be more emboldened when the core management changes.
References:
[美] Howard Schultz / [United States] Joanne Gordon: “All the way forward”, Beijing: CITIC Publishing House, 2011 edition.
<Interview with Li Ka-shing: Focus on the future>, < Caixin Weekly>
<Microsoft’s Lost Decade >,