Fang Xingdong: Yang Yuanqing is the most qualified non-founder CEO of China's IT industry

Fang Xingdong, founder of Internet Lab

The recent negative reports on Lenovo have become a big landscape. The rise of Huawei's millet reflects the downturn of Lenovo's mobile phone business; Lenovo's R&D and profit margins compared with Huawei's gradual improvement; until recently, it was questioned whether Yang Yuanqing was a qualified CEO. Torture. Especially the latter, let many people who are familiar with the industry begin to worry about it. Is Lenovo still wanting to brew explosive news?

For the development of Lenovo, I am a long-time critics, almost for 20 years. Of course, the purpose of criticism is to hope that Lenovo can be better. However, in such a situation of quite a group and attack, I still want to say more objectively the length of Lenovo and Yang Yuanqing. For more than 30 years, Lenovo’s development path has indeed been distorted by long-term deification. In-depth review and analysis of Lenovo's development process can be the most valuable Chinese IT enterprise specimen, worth writing a big book. At least in today's China's high-tech field, Huawei has taken the lead in advancing into the global high-tech first camp. It also has Internet giants such as Tencent, Alibaba and Baidu, which are still strong, and there is a sudden rise in the field of smart phones like Xiaomi. Successful role models, as well as Jingdong, Xunfei and LeTV, have begun to emerge in the new field. Lenovo, which has been sticking to the PC as its core business, has been stunned by the fact that smartphones have not broken through so far. We must know that in the eyes of the Chinese public, Lenovo has always been the first banner of the Chinese IT industry. Today, Lenovo Group has a market value of only about 10 billion US dollars. It is really necessary to follow the market value rankings. It is not only less than 10, but even the top 20 are difficult to protect.

Therefore, compared with the image in the minds of Chinese people, Lenovo’s development today is clearly unqualified. So, changing to Yang Yuanqing is not a qualified CEO, but it needs another perspective.

If you analyze Lenovo and don't have a deep understanding of the history and background of the IT industry, then based on a large amount of data and charts, the conclusion is likely to be worth a hundred thousand miles. Founded in 1984, Lenovo has been in existence for more than 30 years and is basically the only established IT company in China. The biggest difference between the IT companies that were born in that era and today's Internet startups is the system and mechanism. Lenovo's various stories and major twists and turns can be said to be largely related to the congenital deficiency of the system of that era. The legendary godfather Liu Chuanzhi, who is well known today, was actually a deputy general manager at the beginning of Lenovo's founding. In strict sense, he was not the true founder. What's more, the starting price of 200,000 yuan is also the fund of the Institute of Computing Technology of the Chinese Academy of Sciences. At that time, the core backbone of the company was still the person in charge of the calculation, not the person who started the business in the usual sense. Therefore, unlike Ren Zhengfei, which was purely private entrepreneurship from the beginning, Lenovo’s birth from birth to development is purely state-owned. Under the historical conditions, the lack of the normal mechanism of high-tech enterprises has produced many events that shocked the industry in the history of Lenovo, and it is also the most important source of success today.

It can be said that Lenovo has two people who have made the unique contribution of the founder but did not enjoy the founder's interests. This is Ni Guangnan and Yang Yuanqing. Because the contributions of these two are irreplaceable, that is to say, without these two individuals, it is likely that there will be no associations today. Before 1994, the key products that made Lenovo's first 10 years of success were Lenovo Hanka and Lenovo Microcomputer. The real hero behind these two products, Ni Guangnan, was finally wiped out, deprived of all equity and returns, and became a global high-tech. The most unfair record in history. In 1994, if Lenovo did not have Yang Yuanqing, Lenovo was the second in the world today. At that time, Lenovo experienced the most serious crisis in history. Some people worried about how long Lenovo can last? 》. At the time of crisis, Yang Yuanqing became the general manager of the Microcomputer Division. In fact, Lenovo has been saved. A deeper understanding of the insiders of Lenovo said that Yang Yuanqing was never the favorite person of Liu Chuanzhi, and he was not even the most optimistic successor. Moreover, there have been several dangers of being killed. Especially in 2008, almost all of them were already fait accompli. In the end, the decision was changed in time. The decision to replace Yang Yuanqing did not become the final fact.

The CEO who evaluates Yang Yuanqing's qualifications cannot forget Yang Yuanqing's identity and shares in Lenovo. In fact, Yang Yuanqing is a professional manager in the strict sense of Lenovo. This is his real situation. A big reason for the media to criticize Yang Yuanqing is his high salary in these years and the sale of Lenovo stocks. The root cause of this incident is that Yang Yuanqing does not have the same company shares as most founders of high-tech startups, and does not have the share of the company. Yang Yuanqing ranks among the major shareholders of Lenovo through borrowing. The only way to gradually digest borrowing is the high wages and the difference between the stock price and the low price. This is actually Yang Yuanqing's true fate with the company.

The most inescapable of Lenovo is that there is a god-like reference --- Huawei. In fact, Lenovo and Huawei are not unusual except for Ren Zhengfei. First of all, everyone's track is different, just like Tencent. In the PC field, Yang Yuanqing is definitely the best performing CEO in the world in the past 20 years. I think about the other domestic brands such as Great Wall, Founder, Tongfang, etc., which competed with Yang Yuanqing that year, and Taiwan’s Acer computer, which was far more successful than Lenovo at the time, has been far away from Lenovo today. And the long-time PC global boss Compaq, as well as DEC, Gateway, Packard Bell, etc., have disappeared. Even the most popular Evergreen Hewlett-Packard Company in Silicon Valley (excluding the spin-off Hewlett-Packard Enterprise) has a market capitalization of about $20 billion today, and the fabulous Dell was privatized for $25 billion in 2013. It can be said that under the absolute leadership of Microsoft and Intel, the important players of the global PC track today are all disabled! Yang Yuanqing is the best in the world, no one.

Of course, just playing PC well is not enough. If the PC field is not transformed in time, it will be useless because the life cycle of an industry is irresistible. Just like the aging of people, the glory of the PC industry is definitely going. Therefore, Yang Yuanqing did not have a timely transition to keep up with the smart phone, it is responsible for this, it depends on how the performance in the next few years.

Lenovo's true glory is actually very short-lived, that is, from 1999 to the beginning of 2000, this year, Lenovo stocks have rocket-like rise, the increase rate is 4-5 times, the stock market value from one to two billion Hong Kong dollars, quickly It has risen to around HK$100 billion. Of course, Lenovo at the time mainly borrowed the light of the Internet bubble at the time. It created Liu Chuanzhi's most glorious moment in the capital market, and it was also the time when he first went abroad and gained an international reputation. Because it is important to judge a company internationally, it is the performance of the company's stock. It was with Lenovo’s "Internet bubble" that Lenovo and Liu Chuanzhi reached their peak in the international market in early 2000: in January 2000, they were selected as "Asia's Best Business People" by Fortune Magazine, and were selected in June 2000. Business Weekly was named "Asian Star".

Subsequently, Lenovo stocks continued to decline. Lenovo's market value has been declining by "tens of billions of Hong Kong dollars", and many individuals and institutional investors have suffered heavy losses. However, the stock's decline is still difficult to suppress, analysts have been bearish on Lenovo, and expressed pessimism about its future. In 2000, Lenovo's stock had peaked at around HK$15, and even touched it to HK$20. It quickly shrank by about 80%. The market value loss is about HK$80 billion. When Lenovo’s stock crashed in 2000, the only hope that could really save Lenovo was Yang Yuanqing. Therefore, at the beginning of 2001, there was an unexpected accident and Liu Chuanzhi’s original plan, but in line with the real needs of the situation, Liu Chuanzhi had no choice but to sell, making Yang Yuanqing officially the symbol of Lenovo’s “leader” for the first time. For Liu Chuanzhi, this is the best time for concession, so the domestic media that never care about the performance of Lenovo's stock at this time is about to smash Liu Chuanzhi to the peak. For Yang Yuanqing, this is the worst time, because the task of recovering the huge losses of investors has fallen to his shoulders. The glory of the past success belongs to Liu Chuanzhi, and the risk of future failure falls on Yang Yuanqing. Of course, it may be the best time, otherwise Yang Yuanqing does not know that he will wait until the Year of the Monkey.

The acquisition of IBM PC in 2004 is a strategic choice for Lenovo. For this merger, Yang Yuanqing experienced a thousand difficulties, and ultimately there was no worse result. It should be a relatively successful acquisition. It laid the basic pattern of Lenovo's globalization today. Today, China's truly high-tech brands with global appeal are mainly Huawei and Lenovo. Even today's BAT, today is basically a complete domestic company.

It can be said that for more than 30 years, there are good opportunities for Lenovo's transformation. When Academician Ni Guangnan led the research and development, if the communication equipment industry was transformed in time; the Internet transformation around 2000; or after Lenovo Music Phone appeared in 2010, it was firm and strategic, and the situation of Lenovo today may be very different. Three major transformation opportunities. Two misses, one delay. The first two times should be said to be the mistake of Liu Chuanzhi. The third time, Liu and Yang "played 50 boards each." To tell the truth, the root cause of Lenovo's downhill road is that Liu Chuanzhi lacks the true industrial strategy of teaching the father. Today, Yang Yuanqing at least kept the hills of Lenovo's flagpole. Although today's hills are no longer the scenery, today's Lenovo is even more terrible. Liu Chuanzhi did not end up "abolishing" Yang Yuanqing, probably the most wise decision he made in his life. Although he is often very upset. However, whether it can maintain its first name in the world, Yang Yuanqing will be seen in the future. Yang Yuanqing is really playing, and the myth of Laoliu is left with only a chicken feather, and there is no commanding height.

Throughout Yang Yuanqing's share price trend since the Lenovo PC business, Lenovo collapsed below HK$4 after the Internet bubble burst in 2000, and even fell below HK$2 after 2009. Since then, a steady rise has begun. In 2015, there was a trend that surpassed the 2000 historical record. With the strategic mistakes of Lenovo's smartphones and the digestive problems of the acquisition of Motorola, the stock price fell to a range of 6-8 Hong Kong dollars, forming a trough.

It can be said that the test that Yang Yuanqing faced this time is indeed huge, and there is no room for manoeuvre in addition to the edge. We must know that this time Yang Yuanqing is not only facing the life cycle of the PC industry, but the eve of the collapse of the entire traditional IT industry. Not only HP, Dell, and Acer, which are operating PCs, are facing breakthroughs, including IBM, Oracle, Microsoft, SAP, and even Cisco, Intel, etc. All traditional hardware, software, and equipment vendors will face changes in the two sides of smartphones and cloud computing. The stock prices of these companies are almost far below the highs of 2000, and the greater probability is that their stock prices will continue all the way down, going indefinitely to the lower bottom. In contrast, Lenovo's performance over the past 10 years is not bad. Of course, the immediate danger is that the two major decline channels of PC and IT industry are superimposed together, and the challenge is undoubtedly even greater.


On January 29, 2016, at the Lenovo New Year party, Liu Chuanzhi analyzed and commented on the current industry environment and the status quo of Lenovo. He said: "Yuan Qing is a person who does not admit defeat, has pursuit, has resilience, knows how to build a team. In any case, our industry is still a big industry and has enough room for manoeuvre. In addition, Lenovo Group is an international company, with more than 70% of its business overseas, and there is enough room for development. I firmly believe that there is the tenacity of Yuanqing, the culture of Lenovo today, and the great team that you can’t fight. Our associations will be able to make great achievements and fly again!” Laoliu’s words are correct and real. ! As long as Lenovo is no longer tossing, there is still enough room: based on the global market, the PC business, as the old foundation of Lenovo, can still support for many years. In the field of smartphones that need the most breakthrough, although the domestic market is saturated, Lenovo still has more opportunities and conditions than other domestic companies other than Huawei in the new market of the next 3 billion netizens. Of course, Yang Yuanqing's biggest challenge is how to get rid of Lenovo's "PC path dependence" in the past 30 years. So far, this problem has only been overcome by Jobs, and almost none of the others have succeeded. To succeed, Yang Yuanqing, with a time window of up to 2-3 years, must have an insight into the correct strategy for the next 10 years of global industry megatrends, as well as a team that has successfully completed this strategy. It’s not so good to sing the association at the moment.

Therefore, Lenovo's today is not satisfactory, but Yang Yuanqing is definitely the most qualified non-founder CEO of China's IT industry. There is no one. Of course, there is still a long way to go from the height of God.

Lenovo, because of the joint, so think! Beyond the PC, reshaping Lenovo requires Yang Yuanqing's new thinking and new horizons, as well as the new Yang Yuanqing. Backed by the Chinese market, boldly self-revolution, winning in chaos, Lenovo can still become the main force in the cyberspace era! The only direction is: Come on, Yuan Qing! Of course, the most fundamental premise is that Lenovo does not toss inside itself.