Chen crosses cultures to make Lenovo global
Company man leads push to build 'century-old name'
Chen Shaopeng's career path has tracked the rise of his employer of 15 years - the mainland computer giant Lenovo Group.
The 38-year-old joined the company shortly after graduating from university in 1992 and has watched it grow into a global force in the technology industry.
Rising from the ranks to president of Lenovo Greater China and vice-president of the group, he is a self-confessed company man through and through.
While some say there is some downside to staying with one company in one's entire career, Mr Chen, who received an executive MBA from Tsinghua University in 2004, prefers to stress the advantages.
In his case, these advantages are being equipped with a thorough knowledge of the personal computer industry and growing with the company and its evolving culture.
He said the consolidation of Lenovo with IBM's PC business - a deal that invited international scrutiny from the day it was announced in 2004 - had 'exceeded our initial goals and expectations'. But he is quick to add that Lenovo is capable of more and is leading a push to globalise the company. Lenovo's Hong Kong-listed stock has fallen more than 15 per cent this year.
You've had a lengthy career with Lenovo. How does that affect your work trying to globalise the firm? What are the pros and cons of being a Lenovo man through and through?
Most of my career has been spent in Lenovo, except for seven months after my graduation from university. All my experience has come from Lenovo and the things I have learnt are still very helpful in the globalisation work of the current Lenovo. Firstly, it is personal computer industry experience. I started in frontline sales, then moved on to national sales and then to the business units. Previously, our business units were varied - research and development, supply chain, quality, after-sales service, etc. It provided me with comprehensive training. I went through the whole value chain, which gave me a greater understanding of the PC industry. This is the most important thing to my current work as it is our core business.
Secondly, it is leadership. In an internationalised company, most senior leaders are well-versed with the industry. At Lenovo, those who have experienced the consolidation with IBM have an average work experience here of 15 to 18 years. We have an especially brave team. In the old Lenovo's development period, we met many challenges such as the problem of how Chinese brands could survive when foreign PC makers were entering the market in 1993. In 1995, we had a problem with our Hong Kong business. But throughout these challenges, our team never gave up. We are a team with ideals and this gives us huge motivation. We are not satisfied with what we have achieved or the current situation. We want to do better and grow faster.
Thirdly, it is learning ability. Our team is young and most of us, even today, are in our 40s. We started from not knowing everything but we were eager to learn and adopt good things in our work.
These three aspects have affected us deeply and helped us overcome such a big challenge - a US$3 billion company acquiring and merging with a US$9 billion company and successfully consolidating them.
You said your young team is very willing to absorb new ideas. But in a large organisation, isn't that process lengthy?
Each leader has an open mind and a mentality of accepting new things. The management system within the corporate culture also encourages this. For relatively small things, each individual can decide by himself whether to implement something, while for those that involve change in the overall company policy, the top management team will study the issues. We then brainstorm and size up what Lenovo should do.
What are the disadvantages of staying long-term in one company from the globalisation context?
There a quite a few. Let's start with the simple ones, such as language skills. We in the mainland learnt English in school from high school and therefore have some accumulated skills. But in the first 10 years of my working life, I hardly used it, even in meetings with Intel or Microsoft. There were interpreters to ensure accuracy.
Then suddenly in December 2004, we announced that we had acquired IBM and our official language would be English. Can you imagine how for each one of us it was such a big challenge. Indeed, in the beginning we were very stiff [in using English] and in meetings we did not understand very well or express ourselves accurately.
Then there were the cultural differences as well as the difference in business cultures. Because we had always done business on the mainland and our customers were all Chinese, most of us had lived in the same culture for so many years. Suddenly, after the merger we had so much contact with foreigners, foreign things, and were discussing strategies and foreign markets and how to expand the global business. At this stage, you need to be able to cross cultures to co-operate. We were basically lacking in this aspect. In addition, we didn't really understand the foreign market; if you wanted to expand into the foreign market and manage it, the challenge was actually big. What helped us was our courage and ideals and our ability to catch up quickly.
How do you define globalisation?
Globalisation has two aspects. One is letting our business develop in many countries and regions. We are striving to consolidate our worldwide competitiveness and resources. This is the first aspect. Why do I say that? Because if we don't expand to many regions, we can't really experience global market differences and demands. If we are just banking on China's low-cost advantage, I don't believe this is real globalisation.
The second aspect is leadership. We feel the core of an enterprise's competence is its leadership. You must have a top core team, regardless of which country they come from. Their leadership can transcend continents, countries, ethnicities and cultures ... we think this is another important aspect of globalisation.
What are the challenges of globalisation, particularly in changing management tactics?
I'd use this example. When I was assigned the Greater China job in 2005, my first task was to consolidate the team and businesses from IBM and the 'old' Lenovo. How were we to do that? A simple way would be to bring over the IBM business and operate it as we had been running things before. But in reality we didn't. We analysed what we took over and learnt that IBM's business was dealing with big clients, while our former Lenovo business was more on the consumer and small and medium enterprises. We kept relative independence between IBM and Lenovo, and our teams didn't change much.
In the consolidation process, there were some changes and we had some compromise and what finally emerged was a dual-brand strategy.
Then there was cultural and team consolidation. You know in China, it is the usual practice that the most senior leader speaks last and no one else dares to oppose him after that. After our team [from IBM] came over, I changed [the practice]. Everyone speaks first, then me, and the IBM leader will be the last to speak. I wanted everyone to be open and speak out about their concerns. Then I also make my comments. Finally, I let him make the decision. The team feels there is a lot respect and trust.
Will the dual-brand development strategy undergo further adjustment?
Our future structure will be Lenovo as a corporate brand and under it we will have subsidiaries or business brands - ThinkPad or ThinkCenter mainly for corporates and IdeaPad or IdeaCenter for consumers and small customers. ThinkPad and ThinkCenter already are brand assets. IdeaPad and IdeaCenter with the Lenovo brand above them will enjoy a higher profile. It will still be a dual-brand structure and a dual-business model.
How do you face a rapidly changing global market environment? What strategies and measures do you have?
There are a few aspects to this. One is, we are aware that the global economy is changing, especially with the volatility sparked by the US subprime crisis. We are monitoring this closely. Secondly, our fundamental strategies are very stable and our momentum shouldn't be affected much by this volatility. Our strategy is to replicate some of our successful strategies on the mainland and this has achieved success in India, Southeast Asia and Germany - the business with medium to small-sized enterprises. Another is how to improve our supply chain and allow it to respond to market demands quicker.
We also need to improve our desktop business. You know the desktop business worldwide was losing money during the IBM era and our goal is to make it profitable. In reality, our desktop business has been profitable in the past few quarters, especially our overseas business. Finally, our next strategy is to expand our consumer business worldwide.
You say you want to improve the global value chain. Can you provide specifics?
Previously, IBM's global supply chain had its own management and IT systems. Lenovo previously was mainly in China. Our improvement is to build a system that's suitable for the current PC market, that allows swift response to market demands, maintains high quality, and where the cost structure will improve. One aspect is to look at our infrastructure and facilities, review which region is suitable for production and which is more suitable for planning. We need to build plants overseas. The second is to build an advanced management system for the supply chain. Our IT system is being built and scheduled for completion in 2009.
What is the next stage of globalisation?
We have quickly expanded our consumer business worldwide. Now we have started in the US and in Russia, too. In addition, we have made acquisitions one of our main expansion strategies.
What drives you personally?
Firstly, I am inspired by Lenovo's goal to build a 'century-old name'. I hope to grow into a global manager, to transcend cultures and expand business. I think these two aspects give me the motivation to grow.
How do you feel about being named 'Man of the Year' by CCTV? What does it mean to you?
Firstly, I feel the honour was for the Lenovo company; the development of our enterprise and our promotion of the Chinese economy and an approval of our globalisation success. To me personally, it's a big encouragement to be [working] in a globalised Chinese company, to be a pioneer.