Chapter 14 13. Yu Minhong: Looking for Hope in Despair

Yu Minhong, founder of New Oriental Education Technology Group.In the school motto of New Oriental, Yu Minhong drew up such instructions: "Pursue excellence, challenge the limit, find hope from despair, and life will eventually be brilliant." A spiritual antidote often used to inspire others.This person, who has become a leader in contemporary private education in China, has encountered too many obstacles and crises in his 46-year growth path, and has opened up a bright road in China's closed and rigid education market.Indeed, as he himself said: he found hope in despair. In 1962, Yu Minhong was born in a peasant family in Xiagang, Jiangyin.Since he was a child, he liked to climb the mountains in his hometown, looking forward to the future with the Yangtze River flowing in front of him.In his own words, it was a "longing to cross the horizon".But the future of this rural child is not as indomitable as the lower reaches of the Yangtze River, but full of twists and turns.

He failed the college entrance examination three times, failed twice, and finally entered Peking University the last time.In Peking University, he was an unknown and inconspicuous student who was not favored by female students. Due to his poor life and poor nutrition, he contracted tuberculosis and almost died.At Peking University, many outstanding students wanted to study in the United States, and Yu Minhong was also planning to go abroad, but after three years of preparation, he was not accepted by any overseas college, and his dream was shattered.After graduation, he stayed at Peking University to teach and became an ordinary English teacher.At that time, the university teacher’s overall income was meager and his life was poor. He could only live in an 8-square-meter basement. The sewer pipes of the entire building passed through his room, and there were rushing water in the room all day and all night.Due to his poor life, in order to earn some extra money, he went to an off-campus English training institution to teach, but was discovered by Peking University and was punished by a notice of criticism.So he resigned in anger and founded New Oriental School. From a small TOEFL training class, New Oriental gradually grew into the largest short-term training institution in Beijing.However, with the development of the school, the original partnership system brought about the problem of profit distribution, the shareholders disagreed, and faced the crisis of dissolution, so Yu Minhong began to restructure with difficulty.After the restructuring was successful, New Oriental was facing a second leap in development, and then encountered the natural disaster of SARS...

In every setback, Yu Minhong never stopped or hesitated, or every setback has made Yu Minhong and New Oriental.Although the explosive power of this short man may not be astonishing, he has indomitable willpower and tenacity. Even when he was kidnapped and robbed by gangsters and was injected with an excessive amount of anesthetic, he still relied on his tenacious physique and will to survive from death. The door closed and crawled back.Correspondingly, his New Oriental also grew, changed, and developed amid setbacks until it became a miracle of private education in China. Today's New Oriental, after 15 years of ups and downs and twists and turns, is a language training as the core, with short-term training system, higher education system, basic education system, vocational education system, education research and development system, overseas consulting system, cultural industry System, technology industry system and other development platforms, a large-scale comprehensive education technology group integrating education training, education research and development, book and magazine audio-visual publishing, overseas study services, vocational education, online education, and educational software research and development. The number of students trained In millions, it was successfully listed on the New York Stock Exchange on September 7, 2006.

China's private education is still in its infancy, and New Oriental has already taken the lead and is at the forefront. Of course, it is not without paying the cost of leading - crossing the river by feeling the stones, the leader must have the most wrestling.But Yu Minhong and New Oriental have grown up through hard work, and they will never be discouraged by their falls. From their falls and crises, we can find the way to build confidence in despair. Viewpoint: Accepting setbacks is definitely a kind of ability. Only when anyone can accept setbacks calmly can he achieve great things in the future.As an entrepreneur, you must learn not to complain or give up, and you must embody a generous, magnanimous, and generous temperament.

Iron-clad battalions and flowing soldiers.When there are major disagreements in the team, in addition to dealing with them in a timely manner, Yu Minhong also used a very powerful trick: isolation - to isolate the information between the high-level and middle-level, and between the middle-level and the grass-roots, that is, to keep the team's differences to a minimum. within range.This is a very important move, because maintaining institutional stability often plays a decisive role in surviving a crisis, which is the business interpretation of "stability overwhelms everything".

background of the crisis From 2001 to 2004, since New Oriental started its business, its business has expanded rapidly, but it has also brought about the problem that the system cannot keep up with business development, and it is facing a major crisis that urgently needs to be restructured. In 1993, when Yu Minhong established the predecessor of New Oriental - "Oriental University Training Department" from a dilapidated bungalow in Zhongguancun No. .In fact, the training department at that time was just the "husband and wife shop" of Yu Minhong and his wife.However, with his tenacious struggle and charismatic teaching team, Yu Minhong quickly made the TOEFL, GRE and other overseas test programs bigger and stronger.New Oriental's teachers' in-depth research on exams, their free and easy humorous presentation of teaching content, and their enthusiasm and inspiration for students are like a whirlwind blowing all over the university campuses in Beijing. Condition.Yu Minhong also accumulated a certain amount of wealth in a short period of time.However, when New Oriental had more than 15,000 students at the end of 1995, he also quickly realized that the power of one person to start a business is limited. To expand the business, more people are needed to work together for this cause.

In the winter of 1995, Yu Minhong, who had accumulated a small fortune, flew to Vancouver, Canada, and found Xu Xiaoping, a friend who had been a teacher at Peking University together.After days and nights of long talks, Xu Xiaoping was so excited about Yu Minhong's career that he resolutely decided to give up his comfortable life in Canada and go to Beijing to join New Oriental.Later, Yu Minhong invited Wang Qiang, his former Peking University classmate, back.These three people formed what was later called the "Troika of New Oriental". Since Xu Xiaoping, Wang Qiang, etc. joined, New Oriental formed a loose partnership system. In order to create the New Oriental brand, from 1995 to 2005, everyone was responsible for a project, and basically had a relatively clear boundary of interests.This kind of partnership system greatly stimulated everyone's entrepreneurial motivation in the early stage. Everyone was as enthusiastic as if they were doing their own business independently, and quickly expanded New Oriental's business.Before 1995, New Oriental was only led by Yu Minhong, and the courses were mainly TOEFL and GRE exam training.Subsequently, Xu Xiaoping founded the New Oriental Study Abroad and Immigration Consulting Office, and at the same time promoted the concept of "life design".Wang Qiang created the American Spoken Project and introduced the concept of "American Thinking".In addition, there are Du Zihua's "English Film Listening and Listening" project, Bao Fanyi and He Qingquan's New Oriental Writing Center, Hu Min's IELTS Training Department, Jiang Bo's New Concept English Training Course, etc.This "enfeoffment system" method, that is, each member of the core team is responsible for a piece of business, only pays 15% of the management fee to Yu Minhong, and the rest is responsible for its own profits and losses, which gives a lot of work space and paves the way for the vigorous expansion of New Oriental in the next five years up the road.

However, five years later, when New Oriental's board members had a group of major shareholders and minority shareholders, the disadvantages of the original profit distribution structure gradually emerged.The original enfeoffment system could not cover all areas of education, and the gray area in it led to border confusion, unbalanced interests, and a large number of disputes.Another problem was that at that time New Oriental still hadn't gotten rid of the shadow of Yu Minhong's family business, which increasingly caused dissatisfaction among shareholders.At the same time, due to the absence of rigorous management models and management tools, management loopholes brought about by rapid business development gradually emerged.The crisis of interest distribution and interest balance between shareholders is becoming more and more serious.The lack of professionalism among intellectuals, and the style of going online at every turn also made the whole situation worse.

Faced with such a situation, Yu Minhong resolutely decided to change the system, but the repetition and pain almost dragged him down.Prior to this, Yu Minhong had already reformed the family business and invited the family members out of New Oriental. This has offended a bunch of relatives, and made his mother and wife ignore him for half a year.But this reform involves the existing interests of these elite intellectuals, making it more difficult. "Good friends don't recognize you, and they fight openly and secretly with each other. You feel that your whole foundation is gone." From 2001 to 2004, "everyone started to argue and quarrel."

Under the desire of intellectuals for democracy and the restriction of power, the shareholders established a "CEO Joint Meeting", which excluded Chairman Yu Minhong and made strict regulations on his authority: "The company's strategic development strategy, investment The chairman makes the final decision on major decisions, mergers, and closures. However, the specific management decisions of companies and schools, and the decisions made by the CEO office meeting are final. The meeting decided to notify the chairman in the form of a "memorandum of meeting minutes." There is often an interesting scene in the core of New Oriental: the CEO office meeting in the conference room is in full swing, and Yu Minhong can only pace anxiously outside the door.

It can be said that the CEO joint meeting successfully restricted Yu Minhong's power, but apart from this point, this so-called product of democracy did not do much.Whether a democracy succeeds or fails, the biggest problem is that it comes at the expense of efficiency.And the joint meeting of this group of intellectuals is not more efficient than Yu Minhong's "do everything by himself", at least Yu Minhong "do everything by himself" This kind of highly centralized governance structure has high decision-making efficiency, which can prevent the transformation process from getting out of control and affect the overall situation of New Oriental. Therefore Yu Minhong, relying on instinct and absolute control power, separated the school from the quarreling companies, separated the high-level management from the middle and low-level, firmly grasped the development of the school, stabilized the teaching team, defended Beijing, consolidated Shanghai, and marched into Guangzhou. The number of students in New Oriental increased by 100,000 within a short period of time, which objectively reduced the risk of New Oriental’s transformation; otherwise, New Oriental would have fallen apart long ago.” In the end, due to inaction, the CEO joint meeting was finally aborted, the board of directors was reorganized, and Yu Minhong served as chairman and general manager concurrently.However, the personnel turmoil did not stop. According to Yu Minhong himself later recalled: "At that time, New Oriental began to change the president. First let this person go up to do it, and after a while, he found that this seat is not for people to sit on. Because of something, whoever sits on it will be pointed at him. , that person came down again, and another person went up, sat for a while, this position was not good, and in the end I was up and down in the position of chairman and president, but I understand one thing, and they understand it, that is It is not easy for these buddies to be together, so first try to ensure that the core members of this team do not disperse, and second, New Oriental itself is still developing, that is, no matter what, we in New Oriental, while discussing the rules and quarreling, we put New Oriental's management and middle-level cadres completely shielded them from this kind of quarrel. It is our quarrel, and the people below us don't know it at all, and it is limited to us. If this is the case, the people below still think that New Oriental is stable. , a piece of peace, this feeling is there.” For the team "not giving up", although the internal power disputes are fierce, they will not voluntarily give up core personnel; for employees "not complaining", even if there are internal quarrels, it still ensures a harmonious atmosphere in the entire enterprise.This kind of spiritual concept and gradual management adjustment made the restructuring of New Oriental gradually on the right track, and finally completed the transformation from a family business, a business of relatives and friends to a modern management company. "My personality has played a bonding role within New Oriental, and I will not go to extremes under any circumstances. This is an important reason why New Oriental did not collapse." Yu Minhong once summed up the crisis at that time to the media.His method is that he will not conflict with people face to face, but he will stick to what he thinks is right, "If I want to communicate, I will wait until the other person loses his temper before communicating."He claimed that he has never had a record of confronting people face to face. When any crisis comes, whether external or internal, stabilizing the morale of the team is the most important thing. When the crisis really becomes a team crisis, it is the most terrible time.At this moment, first of all, we must accept the fact that setbacks and crises are coming. Secondly, not complaining and not being discouraged will be the deep psychological basis for solving problems. abyss. Viewpoint: Major events in the world are done in a hurry. Although many entrepreneurs seem to do things easily, they have been working behind the scenes for many years.Foresight and advanceness are very important. Do things that need to be done slowly in advance, so that when a crisis occurs, you can cope with it. Under the economic crisis, which part of the enterprise is most vulnerable?Yu Minhong's answer is cash flow.Therefore, the best antidote for New Oriental to survive the crisis is to ensure cash flow, and Yu Minhong designed a plan for this.However, the most important thing about this set of plans is not the plan itself, but that it should be implemented before the crisis. background of the crisis SARS was a natural disaster, and what was even more frightening was that it came violently without any warning. During the SARS outbreak in 2003, due to traffic closures and personnel isolation, many companies and enterprises failed to stand upright in this disaster and had to withdraw from the stage of history; There are only a handful of them, and New Oriental is one of the special cases.There are two reasons: have a sense of crisis and prepare for unpredictable markets at any time; always think one step ahead of others and think one step earlier. Due to the characteristics of New Oriental’s business, it has a large amount of cash. Yu Minhong has always adopted a more cautious and conservative strategy in this regard, never getting involved in real estate and other industries that require a large amount of investment. One of the reasons is to ensure that there is relatively sufficient cash in hand , so as to be able to cope with unpredictable crises.In the SARS incident, the forward-looking nature of this strategy was fully reflected: out of the attitude of putting students’ interests first and being responsible for students, New Oriental proposed four solutions for students who enroll in classes: Pay the registration fee but the class has not yet started The training courses can be fully refunded; all the training courses started in May can be cancelled; students with existing attendance certificates can go to New Oriental to study the same courses within two years; New Oriental’s distance education system will continue to be opened as a supplement. Promise to suspend classes and refund tuition fees.The direct loss caused by this move is tens of millions of yuan.This number is a catastrophe for many small organizations, and because Yu Minhong had made a rigid rule that a reserve fund of 200 million yuan must be kept in the account for a long time, and it is not allowed to be used under any circumstances, in case of special circumstances.It was this 200 million yuan that saved New Oriental at this critical juncture. On the other hand, since New Oriental has started to promote the distance English education business after the face-to-face teaching business of overseas examinations has flourished, it has ensured a multi-level and all-round penetration of the education industry.Before SARS, the development of distance English education was not smooth.On the one hand, Chinese people have a relatively traditional concept of education, and believe that face-to-face teaching is the real teaching; on the other hand, the software, hardware and network environment at that time were not as mature as they are now.Therefore, since the establishment of distance education, it has only accounted for a small share of New Oriental's overall revenue.But in the stage of SARS, this business, which was originally a supplement and foil to traditional teaching, really showed its value.When SARS was raging, distance education was undoubtedly the best choice for those who did not want to go out but needed to learn English.At that time, New Oriental Online’s courses covered foreign exams, domestic exams, postgraduate entrance examinations, new concept English and other programs. During the SARS period, the online business soared by 60%. Suddenly, tens of thousands of network terminals in China had the shadow of New Oriental students. , although it is not as crowded as in Taipan, it also formed a unique scenery during the SARS period.New Oriental's comprehensive business has become a real shield against risks and crises. When Yu Minhong asked to keep a deposit of 200 million yuan in the account for a long time, it was only because of his natural sensitivity to risks, and he did not necessarily expect to encounter a century-old disaster like SARS.When Qian Yongqiang established the online education project, he did not necessarily expect that because of SARS, the traditional education field of New Oriental would be forced to stop temporarily.Yet this constant preparation for career peaks and troughs, for emergent crises, really shows its value in times of crisis. In times of crisis, one can really see the superiority of planning for a rainy day.It is definitely not feasible to rush to the Buddha's feet temporarily, but the truly far-sighted entrepreneurs have already made the layout, and spent many years in advance to slowly accumulate and prepare, so that they can calmly deal with the emergency when it comes.