grow, hurt and be happy

During the rapid growth of sales, many old employees who started a business together became obstacles to development. This was the biggest worry of Huang Song, President of Anheng Company last year. This year he had new troubles: After growing at a high rate of 150% for three consecutive years, sales in 2002 turned negative, the first time since the network technology company was founded in 1993.

Tasly and UT Starcom are much fortunate, and they still maintain the momentum of rapid growth.

During its 9-year development, Tianjin Tasly has maintained a high rate of 186.5% annual average annual sales growth. The newly listed traditional Chinese medicine manufacturer has resisted the temptation to move into other fields for many years, focusing on the market development of one product; it is currently working hard to promote the ability of the company's 2,400 employees, and hopes to break through the project team system The limitations of the rigid organizational system of the past.

The rapid growth of UTStarcom, which is listed in the United States, has attracted international attention. The 2002 sales of 1 billion US dollars of communication equipment manufacturers, 8 years with an average annual sales growth rate of doubling. At present, UT Starcom's expansion is not only reflected in the global scope, but also in its attempt to get rid of the limitation of a single product and move towards high-tech products. To this end, the Chinese company listed on the US Nasdaq urgently needs to establish a unique corporate culture that can absorb all kinds of talents like a sponge.

Growing up is joyful, but if you don't successfully deal with the challenges posed by rapid growth (see "The Enemy of a Fast-Growing Company" on page ?), rapid growth will be a bitter pill to swallow. Anheng has already tasted the bitter taste, while Tasly and UT Starcom have made more and earlier efforts to avoid rapid growth becoming a stumbling block for enterprise development.

Anheng: Unsustainable Growth

Anheng President Huang Song just finished talking with an old employee who left not long ago. Five years of senior technical experts have to leave in a hurry at a critical moment when the company has just completed a comprehensive management reform.

Anheng is a small network maintenance and diagnosis professional company. Its main business is to distribute professional network testing and analysis equipment and provide corresponding solutions. In 2002, the business was nearly 60 million RMB. Regarding the stagnation of business growth in 2002, Huang Song believes that in addition to the slump in the IT industry in 2002, which hindered the rapid pace of growth in the past, the main problem is still within the enterprise, and now Anheng's senior management must answer such a question: Anheng this Can a company founded by 3 people with 50,000 yuan continue to grow again today in the face of adversity and become a mature small business?

Anheng's entrepreneurship has all aspects of the company's success at the start-up period, such as timing, location, and people. The company has grown continuously since its establishment in 1993, and has entered a period of rapid growth since 1999. However, when the company grew to around 50 people in 2002, communication between departments gradually appeared poor, and the efficiency and morale of ordinary employees were low. Is this a common problem for small businesses?

No, it's a growing pain (see ? page "How to get past the four barriers"). The warm scene of entrepreneurs working together in the initial period has passed, and the company has not established a complete set of management structure and system in time.

Older employees hold key positions, and they have been refusing to change. These people like to recall the joy of eating together every day and working until 10 o'clock in the evening when they started a business in the past; they are not willing to listen to or explain to their subordinates the company's new decision-making changes and Huang Song's explanations at the conference. listen. The direct consequence of this situation is that the effectiveness of information communication within the company decreases, which directly leads to the failure of internal coordination within the company.

For Huang Song, there are several things that he particularly regrets: First, he ignored the establishment of the basic system of the company. Anheng basically lacks the system of salary, reward, assessment, promotion and so on. The second is to ignore the communication with ordinary employees. "I felt that I couldn't take care of it for a long time, so I left all the specific operations to the general manager." Gradually, he found that Anheng's employees were not clear about the company's development strategy, and people complained that the company's development direction was always changing. Once the company's sales lose its previous high growth momentum, suspicion begins to form a countercurrent that is not conducive to the company's development and destroys the morale of employees. The third is to ignore the control of recruiting new people.

Huang Song is too busy. In the past, he was busy with business, and the high sales have masked many problems. Now, it seems that all the problems have come out at once: the company's long-term goals, how to improve the efficiency of top management, how to improve the assessment system, how to give full play to the ability of the company's talents... In the face of these sudden problems, Huang Song calmed down. , determined to solve the key problems that make Anheng sustainable development from the foundation. After a comprehensive reflection, Huang Song and Anheng's other two core leaders formulated a concise and systematic business management system, and based on this, Anheng formulated three core strategies:

First , and let all Anheng people clarify the company's development strategy - "continue to take the road of specialization in the field of wireless networks and optical fiber systems." This strategic development direction makes the company's employees excited, and they still clearly remember how Anheng quickly Starting from the network cabling test standard, it has become the leader in the domestic test market. "Whoever has the same desires from top to bottom wins", Anheng has conducted internal comprehensive training and promotion for the strange phenomenon that employees have complained that they are not clear about the company's development strategy for a period of time. Employees become the supporters of the company's development strategy.

Second, the goals and tasks of management should be more clearly defined, and the key business must have special personnel responsible. After reflection, Anheng's leaders found that there is no key person in charge of the company's most critical business! Now, everyone on the team has a clear idea of what goals each key business has and who is responsible for it.

Third, employees must win with the company. Long-term and systematic employee training and the establishment of a friendly company culture will improve the problem of both employees and the company that Anheng is currently facing.

Tasly: Innovation in Organization and Process

Tianjin Tasly Pharmaceutical Co., Ltd. is a private pharmaceutical company with a net asset of 1 billion yuan, 2,400 employees, and its sales in 2002 exceeded 1 billion yuan Yuan Renminbi. Its characteristics are modern Chinese medicine, and its main product is Compound Danshen Dripping Pills for the treatment of coronary heart disease. In 2002, it was the most sold Chinese medicine in China.

In 2001, in China's traditional Chinese medicine industry, Tasly ranked fifth in sales and second in profit [according to the State Economic and Trade Commission "2001 China Pharmaceutical Statistical Annual Report (Traditional Chinese Medicine)", founder Yan Xijun, Like Zhao Xinxian, the founder of Sanjiu Group, both were born pharmacists in military hospitals, and both started businesses by inventing a traditional Chinese medicine (Zhao’s invention was Sanjiu Weitai, and Yan’s was Compound Danshen Dripping Pills). Although the scale of Tasly is smaller than that of Sanjiu, their ambitions are exactly the same: to be a pioneer enterprise in the modernization of Chinese traditional medicine.

In August 2002, Tasly was listed on China's A-share market, which solved the capital problem of this private enterprise controlled by President Yan Xijun and his wife. The 35-year-old general manager Li Wen graduated from an MBA from a famous British school and served in a famous foreign pharmaceutical company. At the end of 1999, Yan Xijun was hired to manage the daily operations of Tasly.

Li Wen believes that, as a successful fast-growing enterprise in the field of traditional Chinese medicine, Tasly's uniqueness lies in focusing on one product, making it deep and thorough, and making it the first in the country in terms of market share. Different from other listed pharmaceutical companies in China, Tasly did not increase its market share by merging other companies in the past. Therefore, according to Li Wen, Tasly's growth is completely based on natural and organic vertical growth, and its health is much higher than the horizontal growth achieved through mergers and acquisitions.

The challenges Tasly faced as it grew were still largely internal. Li Wen concluded that the main problem that Tasly has faced in the past three years is whether the company's original capabilities and management structure can be matched with the company's new strategy in the process of continuous growth, that is, "can the pony continue to pull the big cart?" The problem. In 1999, the annual sales of Tasly was only 290 million yuan. Last year, the sales reached 1.08 billion yuan. The company's technical level, management ability and staff quality have gradually become the bottleneck of the company's development.

Li Wen has a deep understanding of the matching of Tasly's management structure and growth. He said that after Tasly listed its shareholding structure and governance structure, the deep defects of organizational functions in the management process still existed, and the contradiction between corporate strategy and organizational structure was the main enemy of the company's continued rapid growth. In traditional enterprises, the bureaucratic system divided according to business functions is suitable for imperative information transmission. Each department forms business modules and implements their own strategies, and there is no coordination between departments. The middle-level managers in the small world were unable to obtain the overall information, so the organization began to bloat, and there was a phenomenon of buck-passing among various departments. In this case, Li Wen believes that managers have two choices: one is to merge relevant functional departments and establish business divisions; the other is to adopt new management methods, such as setting up project-based temporary agencies, to be active and flexible beyond the original agencies Complete project tasks.

Li Wen is one of the first four individuals in my country to obtain the international project management (IPMP) professional qualification A-level certification, and is also an active advocate of MBP (Management By Project Enterprise Project Management). A person who proposes and practices enterprise project management. In the past two years, Tasly has divided projects into enterprise level, department level and group level according to the complexity of the project, and divided into innovation level, improvement level and maintenance level according to the innovation level of the project. For innovative projects, whether it is an enterprise project or a group project, priority will be given to resources. In order to ensure that the project activities in the functional structure can achieve the goals better, faster and more economically than the conventional method, the organizational structure breaks through the original business organization and adopts a matrix structure. The matrix organizational structure solves the phenomenon of "one person, two bosses" in the previous enterprise project management. This structural form is innovation-oriented, emphasizing what can be changed, not constraint-oriented, emphasizing what cannot be changed, and cultivates team and communication. , collaborative, active learning culture.

Li Wen is someone who likes to institutionalize innovative content. In order to cooperate with project management, he fully implemented another management tool-TPM (Total Progressive Movement) plan. As an idea of continuous improvement of organizational innovation, TPM originated from the idea of productivity improvement in the United States. In the 1960s, Japan introduced this idea from the United States and was first used and proposed by Toyota's affiliated company (the former NEC company). The purpose is to continuously improve through TPM proposals in each link, accumulate small goodness into great goodness, and finally achieve an overall innovation leap; at the same time, through standardization activities, the achievements of innovation will be maintained for a long time and solidified into a daily code of conduct.

Tasly Pharmaceuticals designed the TPM proposal form into three categories: management, technology and others, which were divided into three colors: green, blue, and pink. The proposal was placed at the entrance of the staff restaurant so that employees could take it at any time. The proposal management procedure was designed, and the scoring criteria, 6-level reward criteria and excellent proposal report meeting system were formulated according to the innovation and implementability of the proposals. Since Tasly Pharma systematically implemented the TPM improvement proposal activity, it has received more than 600 proposals and more than 200 winning proposals. The implementation rate of various award-winning proposals has reached 74%, of which more than 50 proposals have been converted into projects, organized by the project office. Project approval and unified management and implementation. The performance of Tasly Pharmaceuticals in material saving, energy saving and consumption reduction, quality improvement, increasing employee benefits, improving working environment, and fine management has been significantly improved. Many QC project teams on the above for the purpose of improvement and innovation have carried out thematic activities with the purpose of emphasizing on solving problems and improving the status quo.

Li Wen believes that in 2003, it will solve another thorny problem of fast-growing enterprises - the problem of talent attraction, incentive, promotion and ability improvement, and create a new value proposition to attract and retain talents (Value Proposition ), through differentiated management within the organization to change the state of unconscious natural growth of talents in the past, by granting challenging job opportunities, experience and training, and under the correct supervision, become the talents of the company and the wealth of the company. Implement the 555 plan, that is to train 5 general managers, 5 senior project managers, and 5 technical experts within three years to support the company's development strategy of rapid growth in the next 5-10 years, and change the traditional line of management and administrative promotion to The three lines of management, technology, and professionalism design differentiated Careerplans for different employees, and activate people, the most creative resource. He proposed that "learning builds ability, standards form habits, and habits become culture." Through Benchmarking learning method Improve the quality of enterprises and employees in an all-round way, and form a high-standard behavioral habit by instilling GMP and ISO standards into the hearts of the people, and promote the formation of a healthy, efficient, and high-speed growth organization that constantly pursues excellence.

UT Starcom: Let employees and the company grow together

UT Starcom is a high-tech communication equipment company that relies on China's huge communication market to grow rapidly. It was founded in 1995 by several Chinese students. Since its establishment in 1995, UT Starcom has invested more than 3 billion yuan in China, established 4 R&D centers, more than 20 branches and offices. At present, there are more than 2,700 employees in China, and at the same time in the Americas, Europe And Japan, India and Southeast Asia have established branches to expand the global market with competitive products. UT Starcom was selected as one of the fastest growing companies in Business Week's 2002 Top 100 Global IT Enterprises. UT Starcom's sales are growing at a rate of nearly 100% every year, and in 2002 its sales were $981 million. The wireless local phone PHS, which contributed to the company's main sales, was the main driving force for the company's rapid growth in the past 8 years. A slogan that UT Starcom constantly instills in its employees is "growing together with the company", and believes that this is the core driving force for the company's long-term development. An rank-and-file employee expressed his pride on the company's internal website: "We are a young company, a fast-growing company. A desirable and well-respected company. A few days ago and a few A colleague is discussing the topic of 'growing together with the company'. The common feeling is that the improvement in the past few years is very obvious. In fact, growth has to pay a price, and sometimes it is painful, but growth is happy. Pain and be happy!"

Wu Ying, President of UTStarcom China, reflected on growth: "The biggest challenge for the company's growth lies in management and talent." Wu Ying believes that UTStarcom's The growth in sales from $10 million to nearly $1 billion in eight years is largely due to the company's excellent talent base. "So the company attaches great importance to talents, and the management spends a lot of time and energy to maintain a balance between internal training talents and external talents." Wu Ying himself and the company's chief operating officer Zhou Shaoning spend 30% of their daily work on finding people. When UT Starcom started its business in 1995, there were about 200 people. They were numbered in the chronological order of their entry into the company, and Wu Ying himself was No. 30. In the past 8 years, the turnover rate of the company has been very low, and the 15 or so veterans before Wu Ying are still in the company.

As the first Chinese technology company listed on Nasdaq, entrepreneurial veterans enjoy company equity rewards according to the system. Wu Ying said that UT Starcom has not seen the entrepreneurial veterans hinder the company's development and become a stumbling block for the company's growth. UT Starcom tries to combine the western management with the eastern human touch, and give the entrepreneurial heroes ample opportunities for development. For unqualified old employees, "if they can't meet the requirements within the 3-month improvement time given by the company, give them a different environment, maybe the position will remain the same, but the scope of responsibility will be smaller. There are 2 such opportunities. , until they find a suitable position for them."

UT Starcom has recruited a large number of people in recent years, and it is common for more than 700 people to enter a year. Those who have been in the company for more than 5 years are already considered veterans. For new employees, UT Starcom tries to use the common culture as a link to achieve the integration of the old and the new. Wu Ying explained that the core ideas of company management are innovation and efficiency, growing together with the company and customer-centricity. Management, including Wu Ying himself, often lectures at the internal UT Starcom University, spending a lot of time instilling the above company philosophy into ordinary employees. 60% of UT Starcom employees are R&D personnel, and the pure sales force is less than 200 people. UT Starcom is therefore fully decentralized, and the top management allows employees to make mistakes after establishing a unified assessment system.

In such a "small" company, Wu Ying believes that the advantage is that it is small and efficient, and there is no need to report at every level, but the disadvantage is that the decision-making is not rigorous enough. For a fast-growing company like UT Starcom, management at every level must maintain high efficiency, which requires every employee to take the initiative to do more things. In order to urge every employee to take the initiative to find something to do, the company management must break the glass room in every link and department to achieve free and smooth communication.

In fact, in addition to attaching importance to the cultivation of talents, as China's leading high-speed growth company, UTStarcom has been actively preparing for its financial system, growth scale and future business expansion for a long time. After UT Starcom was listed on Nasdaq in 2000, it issued new shares to raise funds again in 2001, actively preparing for a new round of expansion. Wall Street has long praised the company's financial performance, and UT Starcom has specially hired a CFO from a well-known American company from the very beginning of the company's establishment, standardizing the company's financial system and pursuing conservative financial management. In the IT bubble, quite a number of companies adopted overly aggressive expansion policies, which caused serious problems with the company's cash flow. Although UT Starcom has been spared the difficulty due to its cautiousness, the lessons of its peers have always reminded the company to remain cautious. UT Starcom's current daily financial status will be counted out, the company's executives are familiar with the daily incoming and outgoing accounts, and the company has achieved a balance of income and expenditure every day.

In terms of controlling the scale of growth, Wu Ying does not like layoffs. He said that the fixed view in China is that layoffs mean that the company will not be able to. Therefore, although UT Starcom has entered a large number of people over the years, it has developed in a controlled manner, and has never been overwhelmed and exceeded the budget. In 1998, the company avoided layoffs through automatic salary reductions due to the slowdown in growth due to the external environment.

Wu Ying summed up the preparations for growth over the years and said that the most important success of UT Starcom lies in four aspects: 1. Product innovation. He believes that PHS is a good technology that can really benefit customers; 2. UT Starcom has made great efforts to develop the Chinese market. The rapid growth of the Chinese market has undoubtedly promoted the company's business growth. ; 3. UT Starcom has accumulated a large number of management talents, hoping to combine Chinese and Western management ideas; 4. With the success of capital operation, the company is not only profitable every year, but also holds a large amount of money every year. Cash, didn't run out of money.

Wu Ying believes that the current development of UTStarcom has reached a critical "hurdle". The 8-year high-speed growth brought by PHS for UT Starcom should continue for several years. Wu Ying's calculation is that if 20% of China's 1.3 billion people have the consumption ability to use wireless mobile, the remaining hundreds of millions of people It is the market demand that PHS is looking for: "The most advanced technology must be developed, but for a manufacturer, the most realistic and good technology is the most popular technology in the market." But for long-term growth, UT Starcom is prepared to spend a lot of money Invest in research and development of 3G (third generation mobile communication technology), hoping to catch up with the wave of new technology development in China Telecom.

UTStarcom is always ready for sustained high growth. Huang Song, president of Anheng, also believes that the negative growth in 2002 will outweigh the losses. Because the management system established after calming down has laid the foundation for greater growth in the future.

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