NVC Lighting: Change Wins

Ten years ago, when Wu Changjiang established NVC Lighting Co., Ltd. in Huizhou, with the long-term goal of "striving for the first in the industry and creating a world brand" on the wall of a slightly rudimentary factory building, many employees Think it's a fantasy. "In 2003, when the company doubled its output value for three consecutive years, its sales reached 300 million, and in 2005 its sales reached 800 million, we became more and more confident in the future blueprint." He joined NVC in 2002 and is now the Shi Yongjun, the brand director, recalled.

From 2005 to 2008, NVC experienced development bottlenecks such as shareholder disputes, market, technology, management, etc., but under the leadership of President Wu Changjiang every time, in the process of active reform, NVC turned difficulties into opportunities and welcomed The period of rapid development of the enterprise has come. In 2008, under the unfavorable environment that 70% of the enterprises in the lighting industry suffered losses, NVC achieved a 50% performance growth against the market, and overseas sales increased by 300%, becoming the leader in China's lighting industry in 2008.

Ten years sales have increased by more than 110 times, with an average annual compound growth rate of 70%. NVC has surpassed most of its competitors and achieved leapfrog development. In the past ten years, NVC has exerted its strengths and carried out an effective transformation in response to market changes. It has been fully developed from the three dimensions of channels, products and speed, and finally formed a synergistic effect.

Channel transformation: win-win with distributors

2005 was a year that Wu Changjiang remembered deeply. The channel reform he promoted encountered doubts from shareholders and distributors, but in the end, relying on the trust established by cooperation with distributors for more than five years, and relying on the success of the first three provincial pilots, he finally strengthened everyone's belief and advanced the The process of channel change.

In 2000, under the condition of limited funds in the initial stage of business, NVC adopted a strategy of positioning market segments, focusing on commercial lighting. In order to show a unified image to the outside world, and to quickly open up its own sales channels without taking up too much capital, NVC has pioneered the sales model of brand stores in the domestic lighting industry. At that time, it provided a subsidy of 30,000 yuan to each franchised dealer for store decoration and sample display, and paid a basic wage subsidy to the clerk. Dealers have their own sales terminals almost without much upfront investment. In July of this year, NVC opened its first store in Shenyang, which reached 800 in 2003 and over 1,000 in 2005.

In the past five years, NVC's channels have basically covered the primary and secondary markets in most provinces and cities in China, but when expanding to the tertiary market in counties and townships, the drawbacks of the specialty store system have fully emerged. The first is the low threshold of specialty stores, and the psychological loyalty of dealers is low because of profit-seeking; secondly, dealers in the same area frequently fight price wars or sell goods in order to increase sales, which affects the healthy development of channels.

In addition, the management and support of the specialty store also consumes most of the energy of NVC management. In order for the company to transform from a sales-oriented enterprise to an international enterprise, the management must focus on product manufacturing, research and development, brand operation and opening up new markets. In order to improve the efficiency of resource allocation and speed up the response to market changes, the reform of channel management model is imminent.

In April 2005, NVC held a dealer conference. Wu Changjiang announced the establishment of a new channel reform policy with the operation center as the main body. At the meeting, the dealers did not directly object. "Establishing an operation center, the big dealers feel that the burden is heavy after the change, the pressure is great, and the money may not be as good as in the past, why bother? At that time, the focus of the change was the concentration of marketing power and the decentralization of management power. The original two equal dealers , now that one manages the other, and the treatment is not very high at the beginning, I feel that I don’t care about the dealer so much, it’s better to leave it alone.” Wu Changjiang bluntly expressed the dealer’s concerns.

A dealer who is responsible for the management of the operation center may not make much money at the beginning of managing other dealers in the region. When you get it right, you can make a lot of money.

As early as mid-March 2005, NVC was already experimenting with reforms, and the first batch of pilot operations were carried out simultaneously in Jiangsu, Shandong and other provinces. The first phase of the pilot campaign lasted 15 days. NVC's marketing team carried out dragnet operations in 109 cities and counties in the pilot provinces and visited thousands of terminal sales outlets. After 15 days of joint efforts, NVC has added more than 100 effective sales outlets in the pilot provinces, and the first batch of sales has received nearly 10 million yuan.

Seeing the operational performance of the pilot provinces, NVC's marketing team has increased confidence in the change. The channel reform is in full swing, and 36 operation centers have been established by larger distributors in various provinces and cities. In addition to continuing the original sales terminals, each operation center is also responsible for product distribution, brand services, market order maintenance and sales planning in the region. NVC has set up offices in various places to assist the operation center in managing dealers and specialty stores.

“In the past two years, they have experienced the benefits of channel reform. For example, the sales of Beijing operation center exceeded 12 million in 2005 and 160 million in 2007. Some provincial operation centers also achieved 1-2 sales per year. A hundred million. You want to buy their management rights, but they are unwilling to sell." Wu Changjiang laughed.

In 2008, when some peers were studying how to obtain cash flow and continue to survive, NVC provided 200 million yuan of market credit to develop together with dealers. This figure is almost equal to the one-year sales performance of many domestic medium-sized lighting companies. "The objects of credit include 36 operation centers, more than 2,200 brand stores and more than 1,500 dealers across the country, in the form of cash and goods. A large credit line can help channel dealers become bigger and stronger, improve channel competitiveness and sales performance ” said Shi Yongjun, the brand director.

"Let dealers win first, NVC can win." Wu Changjiang said, "We have a strategic partnership with dealers. The basis of cooperation is the recognition of values, and the rights and interests of dealers can be protected fairly and equitably." A dealer once said that during the ten years of joining NVC, the biggest gain is that he has changed from a businessman to an entrepreneur.

Product Innovation: From Products to Solutions

“Twenty years ago, people only used lamps to illuminate, and ten years ago they began to pursue decoration while illuminating, and now it can truly be called lighting. Pay attention to functionality, comfort and decoration, use different styles of lights for different rooms, use lights with different color temperatures for different environments, and use different lighting for different home designs. Only then can it be called real lighting." China Lighting Association Deputy Secretary-General Dou Linping broke through the 20-year changes in consumer demand for lighting products.

From lighting, to lighting + decoration, to the current lighting, in Wu Changjiang's eyes, this is to respond to market demand and change the idea of product innovation. "When we first started our business, we mainly sold products. With the improvement of people's living standards, the decorative and quality requirements of lamps and lanterns have increased. We pay attention to the inherent quality of products. Today, people need a light environment, so we propose to create a light environment. The development concept of experts."

NVC started with commercial lighting, and established a product line mainly focusing on downlights and spotlights in the early stage of business. "In the early stage of our business, we want to use new products to quickly open up the market. We put innovation in the design. We make novel and differentiated products to attract customers." Wu Changjiang said, "At this stage, we must focus on the inherent things of the product. , such as technological innovation, product quality stability."

In order to improve product quality, NVC first introduced a large number of finishing equipment. The NVC energy-saving lamp manufacturing base has designed 20 production lines, and the entire process from the capillary to the whole lamp has been self-owned and automated. In the production process of energy-saving lamps, a large number of environmentally friendly materials and processes such as lead-free glass, lead-free lamp caps, three-base color powder, and solid mercury are used to ensure the stability of the product and improve the light efficiency and service life of the product.

High standards in craftsmanship details. At the regular meeting held with the product development department, Wu Changjiang proposed that NVC energy-saving lamps must be done in accordance with the standard of first-level energy consumption. For example, the technology of mercury content needs to be improved. Other manufacturers of an energy-saving lamp can achieve 5 mg, and NVC is now 3.5 mg. This is not enough, because it only meets the national second-level energy consumption standard, and must reach the first-level energy consumption. 1 a little more than milligrams.

As early as 2006, NVC established a lighting laboratory in Huizhou headquarters in accordance with international standards, introduced a large number of internationally synchronized testing and testing equipment, and established a professional laboratory team to ensure product quality is excellent and stable, and the products are qualified before leaving the factory. The rate remained above 99.5%.

In July 2008, NVC established Shanghai R&D Center, hired former Philips senior technical engineer and well-known domestic electric light source expert Zhou Xiang as the general manager of the R&D center, established a R&D team with dozens of employees, dedicated to light The research and development of power supply has rapidly improved the efficiency and speed of NVC's independent research and development and technological innovation. The "Light" series of energy-saving lamps independently developed by NVC has maintained a double-digit growth in sales since its launch in July 2008, reaching 200,000 in a single day during the peak period. The light series Hyunliang semi-full screw energy-saving lamp is currently the smallest energy-saving lamp in China, which can directly replace ordinary incandescent light bulbs, and has reached the national first-class energy efficiency standard.

When serving commercial lighting users, NVC found that many customers pay more attention to the appearance and color of products, ignoring the effect of lighting. Therefore, NVC strengthens the pre-sales service to customers, that is, strengthens the communication and exchange with users, designers and construction parties. "It is not about recommending anything based on profit, but recommending the most optimized lighting solutions. After a long-term cultivation, NVC has a team of high-quality lighting designers, who will play a role in various operation centers and offices. It can provide users with the most optimized light environment solutions." Shi Yongjun, who used to work in front-line sales and is now the brand director, said.

Change process: rapid response

"NVC has experienced bottlenecks in capital, market, technology and management during the ten years of rapid development, including the corporate governance structure and equity. I always feel that these experiences are a Wealth, because we are developing too fast." Wu Changjiang said, "As a private enterprise, we have experienced the ups and downs of business operations earlier. Every time we make changes, we can seize the opportunity and step on the right rhythm. The key is to Establish a sense of urgency in corporate development and turn pressure into opportunity."

Introducing strategic investment In 2006, SoftBank SAIF invested US$22 million in NVC. Wu Changjiang believes that the introduction of venture capital achieves three purposes: first, to straighten out the capital chain of enterprises; second, to value the resources brought by investment banks; third, to share the cake.

At the end of 2005, NVC Lighting experienced shareholder disputes, and the other two shareholders who started the business with Wu Changjiang withdrew their capital, resulting in NVC Lighting facing a capital chain crisis. SoftBank's capital injection enables the company to obtain financial guarantees for rapid development. In addition, Wu Changjiang also realized that after the enterprise has developed to a certain scale, relying on the president to make decisions alone will bring huge risks to the development of the enterprise. The decision makers and executors of venture capital have operated many international enterprises, and have a unique understanding of enterprise management. Views, major decisions are decided by the board of directors, and the development of the enterprise will be more standardized. The injection of international capital has brought changes in the corporate equity structure to NVC, which has a positive effect on the listing of the company and the attraction of high-end talents. In 2008, Goldman Sachs invested US$37 million in NVC, and SoftBank also invested US$10 million. The two financings accelerated NVC's efforts to strengthen the electric light source field through mergers and acquisitions, and to rapidly advance the pace of international development.

Management guru John Kotter once said that the first step to a successful business change is to create enough urgency. One of the ways is for the organization to introduce external opportunities, connect them with the internal reality of the enterprise, use data, people, images and even voices to impress insiders, and finally discover opportunities in crisis and actively initiate important changes. Wu Changjiang is a practitioner of successful change.

Put the right people in the right positions NVC attaches great importance to the cultivation of internal talents and the introduction of high-end external talents. "All middle-level managers must obtain an MBA degree, and the company allocates funds to train them every year, hoping that they will have the ability to manage a company." Wu Changjiang said, "We introduce high-end talents from the outside, which can accelerate the management of enterprises to international enterprises. Change."

Yin Kang, former Philips Lighting China Engineering Channel Sales Director, Product Management and Development Director, worked for Philips for 11 years, joined NVC in 2007 and served as the company's executive vice president; Wang Hua, former Boosi Senior consultant of a corporate consulting company, coaching experience in several listed companies, joined NVC in 2006 and served as the vice president in charge of administration, human resources, auditing and logistics systems; Zhang Qingyu, the former logistics director and sales director of Philips Lighting China, worked at Philips In 2011, he joined NVC in 2007 and served as vice president of overseas marketing system; Tan Ying, former financial director of Hong Kong New World Group, joined NVC in 2006 and served as vice president of finance; Zhou Xiang, former senior technical engineer of Philips, in 2008 Joined NVC as General Manager of Shanghai R&D Center.

The introduction of foreign aid by NVC has had an impact on the old management team, but the important thing is that this sense of crisis will rejuvenate the organization. After a period of investigation, Wu Changjiang handed over the signing rights of many affairs to the relevant vice presidents.

Dare to act and respond quickly From April to November 2007, NVC has successively won the bidding of lighting engineering contracts worth more than 70 million yuan for the Olympic Village, the Olympic Central Area, the National Convention Center, the Olympic Wrestling Hall, and the Olympic Badminton Hall.

"NVC stood out from nearly 30 domestic and foreign lighting companies and lighting engineering companies, and won the bid for the landscape lighting project in the second bid section of the Olympic Central District, relying on the comprehensive strength of the company." Wu Changjiang said, "At that time, the bidding process was in progress. There are many manufacturers who have come up with design drafts, but we also took out samples. Others are thugs, and I am making molds. The investment in molds alone is more than 5 million. Many people dare not. They are worried that if they fail to win the bid, If millions are gone, I dare to do it. If we fail to win the bid in the Olympic Games, we can also choose to bid for the Asian Games in Guangzhou and the Universiade in Shenzhen."

From scheme design, technology research and development to installation and commissioning, NVC United The R&D design team has completed the customization of dozens of products in just a few months. Among them, the "Flying" series of street lights in the Olympic Square won the "Supreme Gold Award", the highest award of the Red Star Award for Innovative Design in China.

Wu Changjiang believes that NVC pays attention to vigorous and resolute actions, including organizational process changes and feedback to customers. It takes a long time to change the organizational structure and process of other enterprises, and NVC said that it will change. Some changes are bigger, some changes are smaller. 2004 was the reform of the sales management team, 2005 was the channel reform, 2006 was the shareholder structure reform, and 2007 was the internal management and promotion reform.

“After NVC entered the international market, we also clearly realized that there is a big gap between ourselves and the lighting giants, but the development belief of our own brand remains unchanged. In the next three years, we will strive to achieve sales of 10 billion and the sales market Five continents in the world." Wu Changjiang has obviously decomposed the goal of building a world brand into different implementation stages, and we will wait and see how it develops in the future.