Chapter 2 my top 4 mistakes

Review background: This is a legendary figure in the history of contemporary Chinese business. In 1989, he just walked out of the campus, relying on the M-6401 desktop typesetting and printing system software developed by 9 months of painstaking efforts, as well as the 4,000 yuan he scraped together and his gambler instinct, he quickly grabbed the top spot in his business career. The "first bucket of gold" was 100,000 yuan; shortly thereafter, he nailed himself in front of a computer, and after 150 days and nights, he developed the M-6402 word processing software series.Soon after, he founded his own company.

This person is Shi Yuzhu.His company name is Giant. In the following period of time, with the continuous development of Chinese handwriting computers, Chinese notebook computers, Giant fax cards, Giant Chinese electronic cash registers and other products, the annual sales of Giant are growing at a geometric progression rate, and the annual sales of Giant The business conference has become the largest computer event in the country.Since 1992, Giant has become the leader of China's computer industry. Shi Yuzhu has also become a model figure of China's new round of reform and opening up and the most promising intellectual representative of modern business circles. He was named "China's Top Ten Reforms" People", "Top Ten Outstanding Science and Technology Entrepreneurs in Guangdong Province", and won the Second Special Contribution Award for Science and Technology Progress in Zhuhai City, and received many central-level leaders and many other honors.

In 1992, Giant's asset scale exceeded 100 million yuan, and its working capital was about several million yuan.Shi Yuzhu, who was at the peak of his career, decided to build the Giant Dog Building. The original plan was to build 38 floors.But in the ensuing two years, after some proposals and rash decisions came to "inspect the leaders", the Giant Building was raised from the originally planned 38 floors to 54 floors, 64 floors, and then to the final 70 floors.To build a 70-story building, the budget increased sharply from 200 million yuan for the 38th floor to 600 million yuan, and the construction period was extended from 2 years to 6 years. Such a large-scale capital demand was unbearable for the giant at that time. Heavy.In the end, the sale of off-plan buildings of the Giant Building became a means of financing for the Giant to collect money.

However, since 1993, as the ban on exporting computers from Western countries to China expired, internationally renowned computer companies such as Compaq, Hewlett-Packard, and IBM entered the country in large numbers. Get up.At a meeting, Shi Yuzhu put forward the idea of ​​the giant's second venture: jumping out of the computer industry and taking the road of industrial diversification.He targeted the new industry on health care products and pharmaceuticals, announcing that he would spend 500 million yuan to launch hundreds of new products within one year.Shi Yuzhu hopes to stimulate new entrepreneurial passion through new expansion, and use the giant's brand advantage to quickly grab excess profits, so as to alleviate the plight of hindering the development of leading industries.

On May 18, 1995, Shi Yuzhu issued a "general attack order", and in hundreds of major newspapers across the country, full-page advertisements of the Giant Group appeared on the stage impressively.The giant launched 30 new products in 3 series of computers, health care products and medicines at one time by means of intensive bombing, and the series of products of the giant appeared on the counters of 500,000 shopping malls across the country in the shortest time.In less than half a year, the number of subsidiaries of the Giant Group has grown from 38 to a record 228, and the number of employees has increased from 200 to 2000A. Within 15 days after the "General Attack Order" was released, the orders collected by Shi Yuzhu from markets all over the country exceeded 1.5 billion yuan.

But soon, as the overall coordination and combat ability was low, the "battlefield" became chaotic. Only two months after the general offensive order was issued, Shi Yuzhu had to announce "entrepreneurship and rectification."Giant's blind advertising bombing and disorderly marketing promotion, as well as the lack of real scientific basis and practical effect of taking giant's health care products, have led to the stagnation of giant's sales in the health care product market.The Giant Building is like a big mouth that is always open, and it needs to be filled with a large amount of funds every day to continue to grow. The evil results of multi-front warfare have finally been revealed.In addition, during this period, the news media carried out high-intensity bombardment of the giant incident, the image of the subject was completely destroyed, and the giant fell into many crises.

When there were indications that the giant group might have lost the ability to continue building buildings, the creditors who bought the uncompleted buildings of the giant buildings in the early stage were moved by the news, and became debt collectors one after another, blocking the door, and the giant fell further into financial crisis.Three months after the financial crisis was exposed, Shi Yuzhu proposed a "Giant Reorganization Plan", which consisted of two parts: one was to sell 80% of the shares of the Giant Building at a price of 80 million yuan; Product marketing company, relaunch the market. After more than 10 talks, nothing came of it.In the process, the huge "Legion of Giants" fell apart, and Shi Yuzhu disappeared from public view.

The Giants looked as if they fell overnight, but that's never how things played out.In the process of the giant's downfall, what Shi Yuzhu was always proud of was not asking for zero debt from the bank, which made the giant lack the necessary financial crisis awareness and early warning mechanism, and the debt structure of the giant group was always in an unreasonable state.In addition, after the crisis broke out, due to the lack of crisis management capabilities, the giant group only appointed lawyers to deal with creditors and reporters, resulting in the rapid deterioration of the relationship between the giant and the media. In a sense, it was Shi Yuzhu's own lack of communication. Personality finally ruined the giant group at the critical moment.And all of these may be the reflections of Shi Yuzhu's after-the-fact summary of "My 4 Big Mistakes".

First, the blind pursuit of development speed.The output value target of Giant Group can be described as big: 1 billion yuan in 1995, 5 billion yuan in 1996, and 10 billion yuan in 1997.However, the bigger the goal, the greater the risk. If there is no scientific analysis and demonstration, and there is no necessary organizational guarantee, it will inevitably suffer heavy losses. Second, the blind pursuit of diversification.The Giant Group has set foot in the computer industry, real estate industry, health care products industry, etc. The industry span is too large. The newly entered field is not an advantage, but it is eager to lay the groundwork. The limited funds are firmly locked up. The financial crisis caused by the Giant Building almost delayed Crashed the whole company.Technological innovation in the computer industry, the giant's main business, stagnated for a while, but it invested a lot of energy and funds in fields that it was not familiar with. It lacked scientific market research and was so successful that it failed to form mature diversified management capabilities.

Third, the giant's decision-making mechanism is difficult to adapt to the development of enterprises.The giant group also set up a board of directors, but it was empty.My personal shares account for more than 90%, and I can't tell the exact figure, nor can the financial department.Several other bosses have no shares.Therefore, when making decisions, they seldom stick to their opinions.Since they have no shares, they cannot interfere with my decision-making.The president's office meeting can influence my decision-making, but the final decision is basically made by me alone.In retrospect, the mechanisms that constrained my decision-making were nonexistent.This highly centralized decision-making mechanism fully reflects the high efficiency of decision-making in the early stage of entrepreneurship, but when the scale of the enterprise is getting larger and the overall quality of the individual is not comprehensive, there is no mechanism for collective decision-making, especially the intervention of one person If the wrong decision-making is weak, then the operation of the enterprise is quite dangerous.

Fourth, the technological innovation of the main business has not been placed in an important position.From the M-6401 desktop typesetting printing system in 1989, the M-6402 word processing software system in 1990, to the Giant Chinese handwriting computer and Giant software in 1993, these are the keys to the success of Giant.After the computer industry went into a trough, I ignored technological innovation, the lifeline of the giant computer, and my response in the industry was mediocre for two consecutive years. It was not until 1996 that the "giant" launched the M-6407 desktop publishing system.The failure of Giant's second venture has a lot to do with this.