China Goes Global

The Chinese Age of Innovation, Part 3

In Simply CSOFT’s continuing look at China’s most innovative companies, we’ve seen a genetics firm at the forefront of the field and an Internet giant connecting everybody and everything, but not all innovation is technological; some of the greatest innovations are organizational. For our final article in The Chinese Age of Innovation series, we’ll look at a company with a surprisingly creative management structure.

Huawei

Huawei – The Biggest Telecom Company You’ve Never Heard of

Founded by a former People’s Liberation Army engineer in 1987, Huawei has now overtaken Ericsson to become the largest telecommunications equipment manufacturer in the world but the company almost didn’t make it off the ground. When its founder, Ren Zhengfei, started the business, he initially lost money on several failed ventures and strongly considered throwing in the towel, thinking the market economy would only allow cheaters to succeed. Instead, he formed a sort of socialist-market hybrid where the employees were the owners and thus had a stake in the future success of the company.

Since then, Huawei has gone from being a fast follower to an industry leader, spending nearly $21 billion on R&D in the past decade. In the past few years, they’ve surprised other industry leaders by upgrading telecom equipment with software rather than hardware, thus creating much faster communication relays on the cheap.

But perhaps Huawei’s greatest innovation is their management structure. Inspired by the flight of migratory birds where the leader at the head of the group moves back and allows another to take his place, their executive management team consists of an 8-member group. Of these eight executives, three rotate in-and-out of the CEO position every six months with the hope that continually fresh yet focused eyes will bring about even greater success. If the past few years are any indication, it looks like this gamble is already paying off.

Related:  The Huawei Experience

Though China has garnered – not undeservedly – a reputation for masterful mimicry over the past several decades, it looks like the sleeping dragon of creativity is awakening from its slumber. If the companies we’ve profiled over the past several weeks are any indication, innovation may be the middle kingdom’s new reputation.

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