Chapter 20 19. Liu Chuanzhi: There is no way out, only going forward desperately

"I am an entrepreneur and the main founder of a company called Lenovo. Lenovo only had a capital of 200,000 yuan at the beginning of 1984. By 2007, we had total assets of more than 60 billion yuan. The turnover is 140 billion, and there are more than 30,000 employees..." This is Liu Chuanzhi's self-introduction in a letter written in 2007. Except for a few figures, everything else seems to be ordinary, but this Legend Holdings Group The president is recognized as the soul of Lenovo, and is honored as "the godfather of China's information industry" in the industry. The US "Business Weekly" named him "World Business Leader" together with 24 other most famous entrepreneurs in the world.

Liu Chuanzhi was born in Shanghai in 1944. The persevering and pragmatic family atmosphere had a great influence on Liu Chuanzhi's character since he was a child, but his first half of his life seemed to be unremarkable. Entrepreneur", he followed the emotional growth of that era, and was as intoxicated with political passion as almost everyone at that time, which left a deep imprint on Liu Chuanzhi's entrepreneurial career, and even his discourse system carried strong political overtones.Liu Chuanzhi's dream in high school was to be a pilot, but his dream was shattered because his uncle was a "rightist". In the autumn of 1961, Liu Chuanzhi entered the Xi’an Military Electronic Engineering Institute. Due to political reasons, he was unable to study the popular atomic bomb and missile major in the academy, but could only study radar. No one thought that it was these seemingly helpless "chances" "Coincidence", Liu Chuanzhi's life track unknowingly biased towards the computer road. After graduating from University in 1968, Liu Chuanzhi worked as a researcher in a research institute in Chengdu, and then "went to the mountains and went to the countryside", traveled more than half of China and returned to Beijing. In April 1970, he was assigned to the Institute of Computing Technology, Chinese Academy of Sciences. After staying there for many years, Liu Chuanzhi has never had much color of a technical expert, but more of a political color.By 1976, Liu Chuanzhi was 32 years old, and he had achieved almost nothing in terms of technology. Even he himself felt confused, not knowing what he should do or what he was suitable for.However, Liu Chuanzhi’s competitive and industrialist spirit was left behind by his life experience of wandering after graduation. Faced with such a situation, Liu Chuanzhi naturally couldn’t bear it. In addition, in the mid-1980s, computers began to be neglected. A rooster that lays eggs”, Liu Chuanzhi left the Institute of Computing and went to work as a cadre in the Personnel Department of the Chinese Academy of Sciences, but after a few months he found out that he had made a mistake because he felt that this job could not prove his worth.At that time, the financial situation of the computer institute was getting worse and worse, and the government's meaning began to be clear: you need to find food for yourself.Instead, Liu Chuanzhi saw some bright future.

In 1984, an era of commercial disruption, Liu Chuanzhi was 40 years old in this year. After Zhou Guangzhao, vice president of the Chinese Academy of Sciences, approved the establishment of this company that would become China's largest computer company and a representative of national brands in the future, Liu Chuanzhi was full of passion. Said: "In the future, we will become a large company with an annual output value of two million yuan." Obviously, he knows nothing about the road ahead. In October, maybe one day in November, with 200,000 yuan, 11 intellectuals from the Chinese Academy of Sciences started to start their own businesses, and Lenovo Group was quietly born.

Afterwards, the arduous entrepreneurial story and the ups and downs of the entrepreneurial story were staged one after another. Venture capital was cheated, technical difficulties were overcome, "black storms", internal personnel losses, and the "winter" when the 21st century came, etc., but Lenovo's If development can be summed up in one word, it would be "progressively". It seems that it always becomes more and more courageous with more setbacks. Among them, Liu Chuanzhi's influence plays a decisive role, and his personal character of perseverance, strength, hard work and fearlessness has been built to a certain extent. Lenovo's corporate character has also laid the foundation for Lenovo's development.

Opinion: It's a race.The person who ran in front said: "Eat the dirt behind you." He ran fast, and I was eating dirt behind, that's right.We must now be ruthless and "eat dirt" in the back, but the hope in our hearts is to "lead the way."Lenovo's slogan is: to turn 5% of hope into 100% of reality.Once the goal is determined, it is necessary to use the spirit of taking turns to fight, and never give up until the goal is achieved.When you get on the boat, you must cut off the back road and move forward desperately. "Only the paranoid can survive." Entrepreneurs are a "paranoid" group, and the word "give up" is never in their dictionary.In many cases, the occurrence of a crisis is beyond one's control, but how to get out of the crisis depends on the belief and ability of the business leader.The "black storm" experienced by Lenovo in the history of the computer industry wiped out countless weak people in the computer industry. Under the leadership of Liu Chuanzhi, Lenovo blazed a bright road and laid the foundation for future development in the crisis.

background of the crisis In 1991, Liu Chuanzhi, who was always optimistic, said: "The computer market is in chaos, and the situation is very serious." In this year, a "black storm" broke out in the computer industry in the city. The situation at that time can only be described as "tragic". Intel and Microsoft, almost all computer companies in the world cannot escape.The cause of the incident lies in Intel Corporation. In order to maintain a balance between production and sales, Intel relies on its monopoly position in the market to control chip production within the conventional demand and impose quotas on downstream assembly manufacturers, so as to achieve greater market demand than supply. effect to ensure their own profit margins.However, under the market economy, this state will eventually be destroyed. In 1991, a small-scale chip manufacturer AMD adopted a low-price strategy to launch an offensive against Intel, so the two sides began to compete on price, and the market was in chaos.

A fire broke out at the gate of the city, which affected the fish in the pond. The price war caused the inventory value of computer assembly factories to plummet. Hundreds of computer assembly factories either went bankrupt or lost money.At that time, Lenovo did not get a quota from Intel, but bought 10,000 CPU chips from the black market at a price more than double the quota price. According to Lenovo's plan at the time, although it lost its advantage in processor costs, But you can still make a fortune from the sale of the whole machine.However, when the "black storm" hit, Lenovo's wishful thinking was completely shattered, and Lenovo in Hong Kong was the first to bear the brunt. As the market price of computer chips continued to decline, by July, the price of the batch of goods in Lenovo's warehouse in Hong Kong had dropped by 70%, and the loss reached 1700. At that time, the total assets of Lenovo in Hong Kong were only 30 million Hong Kong dollars. It may be more clear to explain the severity of the situation in a period of time: if the company cannot turn the situation around within two months, the only way out is to close down.

The company was in chaos, and even Liu Chuanzhi began to feel nervous, but facing a desperate situation at this time, Liu Chuanzhi decided to give it a go.While constantly stabilizing the mood of employees, Lenovo began to significantly reduce expenses, and some detailed rules and regulations were created at that time, including the cost of business trips, board and lodging, etc.But the key strategy is that Liu Chuanzhi began to lead the company to carry out a strategic shift, withdrawing the production line from Hong Kong to Shenzhen, and laying off all the more than 100 Lenovo workers in Hong Kong.The austerity policy seems to have worked. By December, the sales volume of Lenovo boards and cards in Hong Kong was nearly 100,000 fast, and the monthly turnover was 130 million Hong Kong dollars, a record high.However, Liu Chuanzhi's other clever trick of "compensating for losses inside the dike and outside the dike" is the real reason for profit. In 1991, Lenovo represented a large number of HP, Sun and IBM products, and the profits obtained from this made up for the company's losses and brought profits. .When a crisis comes, "the one who remains is king" and survival is the first priority. Liu Chuanzhi's flexibility in times of crisis is really admirable.

However, this "black storm" did not subside. On the contrary, it intensified and began to sweep the global market, and it lasted for several years. It was seeing between "planned economy" and "market economy" and the momentum was obviously biased towards the latter. Mainland China also experienced a violent shock afterwards. In 1992, the central government announced the cancellation of the microcomputer import adjustment tax, and would cancel the "import license" for microcomputers within two years. This was a dangerous signal for domestic computer manufacturers at that time. Domestic famous brand microcomputers were protected by several protection policies. At that time, Lenovo ranked second in terms of sales, but unexpectedly, Lenovo’s name did not appear on the protection list that came out later, because Lenovo’s sales mainly depended on acting as an agent for foreign brands. , giving the impression that it is just an agent rather than a "domestic famous brand computer".As a result, Lenovo can only be completely self-reliant.At this time, Liu Chuanzhi's words: "I think the best defense is to attack" set the main tone for Lenovo's next "fight for food from the tiger's mouth". Lenovo had to cut off the back road and move forward desperately.

Everyone knows how difficult this "battle" is, but the grim reality still exceeds everyone's expectations. At the banking trade fair at the beginning of 1992, Liu Chuanzhi lowered the unit price of microcomputers by 4,500 yuan and confidently believed that the price had already taken advantage of it. However, the news that came back on the spot was stunned. Surrounded by manufacturers, and their prices are 2,000 yuan lower than Lenovo, the advantages that Liu Chuanzhi thought disappeared instantly. During this period of time, many offices of Taiwan and Hong Kong companies popped up in Zhongguancun, and the warehouses of computer manufacturers in the mainland began to pile up unsalable goods. In a short period of time, the price of microcomputers in the market plummeted 4000 yuan.When the people in Lenovo's president's office sat down and calculated the accounts carefully, they found that if they sold at the reduced price, they would not be able to guarantee the minimum profit for survival. Taiwanese manufacturers compete.One can imagine the pressure.At this time, the strong political passion left in Liu Chuanzhi's youth began to play a role.Lenovo immediately held a famous "retreat meeting". Liu Chuanzhi started to boost morale like a commander of an army. Just like a swearing-in meeting, after the meeting, everyone was full of enthusiasm, "the military order fell like a mountain", everyone was like a soldier who signed a life and death certificate, and the emotions of the entire company were mobilized.Of course, Liu Chuanzhi understands better than anyone else that the "retreat" is virtual after all, and high emotions are not enough for the real market competition. Apart from mobilizing the fighting spirit of the whole company, the situation is not caused by the "retreat". If there is any sign of improvement in the meeting, it will become more and more serious, and then Lenovo can be described as "internal and external troubles", suffering a double attack.

By 1993, the price war in the computer market intensified, and the "black storm" became more and more fierce. Except for Taiwan, almost all computer manufacturers from all over the world came to China to seize the market, like wolves. Feed.Soon, the domestic computer market was dominated by foreign products, and domestic manufacturers could only survive in the cracks.Everyone started a price war, and the whole market fell into a vicious cycle, chaotic and beyond recognition.Misfortunes never come singly, and at this time, Lenovo had many obstacles due to internal sales system problems.At that time, various departments within Lenovo were doing their own thing, and the entire process of the microcomputer was controlled by at least three vice presidents and one assistant to the president. Because each link hoped to create profits, all of them raised the cost data more or less. , As a result, the cost on the financial book was much higher than the actual cost. The result reflected in the market was that the price of Lenovo's microcomputer was difficult to lower. In the market where the price was winning at that time, Lenovo was naturally beaten to the ground. In 1994, the situation still did not improve, and the depression of the overall environment came one after another. Inflation swept back again. The cost of accessories has increased greatly, which also means that the machines in our warehouses are depreciating every day. At the same time, the tariffs for foreign brand microcomputers entering the Chinese market are still being reduced step by step.However, what was even worse was that Lenovo’s Hanka, which was popular at the time, gradually declined, and the microcomputer did not improve in the past two years. The whole company began to permeate a pessimistic and negative mood, which was extremely dangerous for Lenovo at that time. , Losing fighting spirit means losing all possibilities.At this time, Liu Chuanzhi was admitted to the hospital due to illness. But in Liu Chuanzhi's dictionary, it seems that the word "give up" really does not exist.This has a lot to do with the fact that he has always taken the great cause of the nation as his own responsibility. Since childhood, his political complex has made him take the responsibility of being a chess player in the national computer industry from the bottom of his heart to Lenovo and himself. He also held "retreat meetings" in the hospital every day. On the one hand, he admitted that the situation was severe, and on the other hand, he repeatedly stated that Lenovo must go forward bravely, and there is no way out. It is for Lenovo and the great cause of the nation. Liu Chuanzhi once again stabilized the hearts of the people with his own performance of perseverance.After being discharged from the hospital, Liu Chuanzhi immediately adjusted his strategy. As he himself said: "If you can't change the big environment, you should work hard to change the small environment." Liu Chuanzhi began to seek the possibility of saving from the small environment around him.On March 19, the Microcomputer Division was established, and Yang Yuanqing, a young cadre, was boldly appointed to be in charge of the Microcomputer Division.Liu Chuanzhi, on the other hand, began to turn around and seek support from the government.At that time, the national sentiment in China was high, everyone shouted "Wolf is coming", and even the government departments were uneasy about the large-scale entry of foreign products into the domestic market, so Liu Chuanzhi made up his mind to play the "national card". On September 13, Liu Chuanzhi led all the members of the president's office to "report work" to the then Minister of Electronics Industry and two deputy ministers. At the meeting, Liu Chuanzhi clearly expressed that Lenovo is determined to stick to the possibility of domestic microcomputer brands. , If Lenovo can't persist, then it is possible that domestic microcomputers will not exist at all. Therefore, we ask the government to support Lenovo and hope that the government can benefit the national industry in terms of policies.Reasonable and to the point, this time Lenovo will be reassured. Liu Chuanzhi cleared away the invisible obstacles for Yang Yuanqing to open up the market from a high-level plan. Boldly appointing new people in a crisis situation can often open a breakthrough unexpectedly, but the leader must have the ability to discern talents.Liu Chuanzhi has always been "appointing people on their merits", and this time he was using Yang Yuanqing, which is indeed a completely right move.After taking over the microcomputer business department, Yang Yuanqingxun, who was born in sales, adjusted the two key strategies of products and channels according to the market.Yang Yuanqing boldly overthrew Lenovo Computer's original positioning of Yangchun Baixue, launched the "E series" at the fastest speed, and named the computer "Economic", that is, "economical computer".Yang Yuanqing tried to reduce the cost as much as possible by letting suppliers of parts and components bid against each other, and even tried to save the cost of the plastic foam inside the packing box. Therefore, when the "E series" computer was launched, it only cost 16,000 yuan, while the general price of computers at that time It was 30,000 yuan, which maximized the price advantage, and the effect was quickly manifested. After 30 days, Lenovo had sold 5,500 sets of microcomputers, and the sales target for the first quarter of fiscal year 1994 was completed 15 days ahead of schedule.In terms of channels, Lenovo began to learn the "HP model". Yang Yuanqing drastically changed the original direct sales model into a distribution model, established an "agent system", developed agents with the strategy of "let the channel win", and used the power of agents to improve Lenovo's sales. market share.By the end of 1994, the market share of Lenovo's microcomputers had increased by three percentage points to 8%, ranking first in domestic microcomputers. Lenovo finally survived the crisis.Liu Chuanzhi said excitedly: "The great battle is finally over." "Everyone is faced with the possibility of failure and setbacks. This is a part of each of us's life experience. We must stick to our goals and not waver under any circumstances." Many times, it is easier to give up than to persist. In setbacks, cut off the back road, go forward bravely, with this courage, you have the possibility of winning. The "protracted war" tests not only wisdom, but also perseverance.