Huawei Technologies Co (華為) pledged to overhaul its culture and rethink the way it conducts business, expecting global uncertainty to mount next year after sales growth slowed.
China’s largest telecommunications equipment maker expects a 32 percent rise in revenue to 520 billion yuan (US$75 billion) this year, rotating chief executive officer Eric Xu (徐直軍) said.
That is down from 37 percent growth last year. The company now needs to retool its management approach to hone in on customers’ needs, while staunching costs and avoiding “blind optimism and rhetoric.”
Huawei, which debuted its first Android device in 2009 and is now the largest smartphone maker after Apple Inc and Samsung Electronics Co, has made significant inroads into markets from the US to Europe, but Chinese rivals from Oppo Mobile Telecommunications Corp (歐珀移動) to Vivo Communication Technology Co Ltd (維沃移動通信) have taken the lead back home and its business of selling networking gear to wireless carriers is vulnerable to political swings.
Huawei’s consumer business, which includes mainly smartphones, probably grew sales 42 percent to 178 billion yuan this year, divisional chief executive officer Richard Yu (余承東) said in a separate memo.
“The year 2016 has seen a flock of black swans — both political and economic — sweep across the globe,” Xu said in a memo to staff that was posted on the company Web site. “In 2017, we will face even greater global political and economic uncertainties.”
Those include a rise in costs that outpaced revenue and gross margin growth this year. Xu outlined a laundry list of time and money-wasting activities to root out, including “empty talks in offices that are far removed from actual business” and “fancy” internal promotional videos and slides.
He wants more independent thinking and visits to key operations from base stations to stores.
More fundamentally, Xu — one of several executives that rotate in and out of the top position — urged a shift in attitude and mindset from merely responding to customers to actively evolving into a technology leader.
He wants to build research and innovation centers around the world. And he warned of internal disruption as employees are trained and reassigned to the field.
“Our human resource policy should help reduce entropy in our workforce,” he said.
Huawei posted a 37 percent jump in overall revenue to 395 billion yuan last year and shipped about 100 million smartphones globally.
Smartphone sales are expected to grow a single-digit percentage this year for the first time, according to Gartner Inc.
Huawei’s consumer mobile division, riding the strong reception for its marquee phones, far outpaced that: it probably expanded shipments by 29 percent to 139 million units this year, Yu said.
The goal is to become one of two to three few surviving players after a global industry shake-out over the coming three to five years, Yu added.
To get there, Huawei must continue to evolve into a true premium brand and adapt to a rapidly shifting market, Xu said.
“To cure an illness, you have to treat the root cause,” Xu said. “Past success is not a reliable indicator of the future, and a long list of accomplishments might end up nothing more than an epitaph.”
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