Chapter 19 five paradoxes

I mentioned just now that there is a rather interesting phenomenon: the streets are full of management books, but there are bankrupt companies everywhere; the bookstores are full of love tutorials, but the streets are full of unhappy marriages.Management, like love, is both clear and unclear; both make sense and make no sense.Each individual has experience, and the whole has experience. Summarizing it into a theory still cannot solve the problem, and the concept of the whole can only be understood in a limited space.So even when goals are defined, organizations are stable, and behavior is clear, there are still many paradoxes in management.

The first paradox is change and stability.For example, some people say that the organization must change, innovate and learn, and another voice says that it must be stable. An organization that has been established for two or three years has not even consolidated the old version. What has changed?Studies have shown that stability is more valuable than change, and change destroys wealth.Change and stability are the balance beams that test entrepreneurs. Absolute change and absolute stability will not work, and it is very difficult to decide.A typical example is Lenovo, which shifted from manufacturing PCs to providing services. After the transformation, the original development slowed down because resources are limited. We must remember that management is managed under limited resources.When the resources are stable, although the growth is slow, there will be no major problems.If Lenovo uses 50% of its resources for transformation, and the service is uncertain, it is risky.The service has not been established, and the original business has shrunk. The time for listed companies to allow this situation is limited.At this time, we must either break the boat and take back the shares, or return to the original state, sell all the services, increase PC manufacturing, and use mergers and acquisitions as the main strategy to expand the scale.It's not that the transformation is impossible. Maybe five years later, Lenovo's services will be completed, but the capital market is under too much pressure and there is not so much time to consume.The success of innovation depends on time and depends on the environment.So it's hard to say which theory is better.Change or Stability?Transformation or development?This is the intellectual choice of entrepreneurs, and it is also the result of external environment and resource constraints. Management theory cannot tell right from wrong.

Let me give you another example.We have a customized service, from traditional real estate development to a new type of customer-oriented service.This service has not made money for three consecutive years, and has no customers. Both inside and outside the company oppose it-the team is full of traditional thinking.Service is calculated as return on capital, and labor, organization, support system, and brand are our resources, but we always use monetary capital accounting to calculate accounts, and financial statements are not good.The company objected from top to bottom, and it was up to me to play alone.You must know that I take Arafat as my idol, and I am stubborn and stick to it.Lost 10 million in the first year, tied in the fourth year, increased by 500% in the fifth year, and increased by at least 400% in 2007. Everyone accepted it, and this business has become the company's best business.Taking this example does not mean that we are doing better than Lenovo, but that we have wider constraints than Lenovo, and we do not have the pressure of the capital market after listing.In management theory, experts will tell you who is right and who is wrong. I hope you don't trust experts.Management decisions are made with established resources. If I lose 100 million in the first year, I may surrender in the first year.Don’t easily affirm or deny a certain decision. Turning a big corner must be slow. If you want to change, you must patiently endure the phased decline, be prepared to pay the cost you can afford, and retrain the team.

The second paradox is centralization and decentralization.Centralization is top-down management, decentralization is bottom-up management, or the interaction between parallel institutions.Since ancient times, many books have compared the effectiveness of these two organizations.The army was originally centralized, but since the Gulf War, the army has adopted a modern hybrid approach, interconnected and interconnected, and a special force on the front line is equivalent to the combat effectiveness of a company.Special forces can mobilize aircraft, behind him is a powerful service system, which is equivalent to a complete supply chain.Vanke began to decentralize powers in 2007, because it only did one out of five projects on average, and 80 projects in a year across the country meant that 400 proposals had to be discussed. .Our company in Beijing and Tianjin is still centralized, because we have few things, pursue high unit value, and have different business models.The internal organization of the company focuses on centralization, and the culture and human behavior are relaxed. In the end, whether it is right or not depends on performance.If the performance is good, it means that both theories are true, and neither is true.

The third paradox is that of individual value and collective value.Some people emphasize the value of personal innovation, encourage everyone to develop space, and activate their thinking; but some people say that the overall goal and individual goal are inconsistent, and the individual needs to raise wages, while the collective needs to focus on development.How to balance personal value and collective interest?Too much emphasis on the individual, put ten awls in a noodle bag, isn't the noodle bag turned into a piece of cloth?Too much emphasis on the whole, the bag is empty, what is the use of the bag?So the bottom line is that the things in the bag cannot pierce the bag and exist independently.Even so, we still don't know which method is better.Companies founded by cultural people and intellectuals place more emphasis on personal value; manufacturing tends to be centralized, with big goals and small individuals.These are both reasonable and unreasonable, antinomy.

The fourth paradox is profit maximization and social responsibility.An enterprise is a commercial organization. It is understandable to pursue profit maximization with the goal of profit.If an enterprise violates the public interest, does not undertake social responsibilities (such as environmental protection, community, public moral ideals, concern for vulnerable groups, etc.), and does not care about public affairs, it will affect the development of the enterprise.A company with a sense of social responsibility is like a person, with full flesh and blood and a sense of justice, which is very good for its own improvement.But how much social responsibility should enterprises undertake?Bearing it every day, the social reputation is good, but the company may not make money, or the company's financial system, income, and shareholders' rights and interests may be damaged due to excessive commitment.Is it necessary not to be responsible to a few people in order to realize social responsibility?The choice in this regard ultimately depends on the values ​​​​of the leader, whether he is motivated by profit, moral conscience, or external pressure.Under normal circumstances, moral conscience is the weakest, external pressure is the greatest, and profit-seeking ranks second.Amway's good deeds mainly focus on health, and the ultimate goal is products, which will benefit the company in the long run.

The fifth paradox is breaking and building.Different from the first paradox, development and transformation are basically "reforms", while breaking and establishing are mergers and reorganizations.Sell ​​or keep?Destruction and establishment are both reasonable, and the goal of leaders remains the same, which is to survive better.Under normal circumstances, if the market space is limited and the national policy does not support it, then it is okay to get rid of it; but if everyone sells it and I can occupy a place in the limited market, then it makes sense not to sell it.The five major problems, all right and wrong, test the level of managers.Verification depends on performance, the process is suffering, and managers must find a balance between the five extremes.