Home Categories political economy Case (Seventh Series): President's Review Letter

Chapter 15 why are we so mediocre

Review background: On September 29, 2005, Hony Capital, a subsidiary of Legend Holdings, became a shareholder of Simcere Pharmaceuticals.On October 29 of the same year, Ren Jinsheng, chairman of Simcere Pharmaceuticals, wrote the article "Why We Are So Mediocre".He saw the gap between Simcere and China's first-class companies such as Lenovo and Huawei.The cooperation with Lenovo allowed Simcere to set a new goal, that is, "enter the first echelon of the domestic industry in the next three to five years", and Simcere's development has entered the fast lane. Next, it made an extraordinary move. In May 2006, it bought 80% of the shares of Yantai Medezin at a cost of RMB 2006, and included the new anti-tumor drug "Endu" under its command. On April 20, 2007, Simcere was listed on the New York Stock Exchange as the first chemical and biopharmaceutical company in China, stepping onto the stage of international capital.With a global perspective, Simcere has a broader vision. Through comparison with world-class biopharmaceutical companies such as Genentech, it sees its own gaps in R&D, internationalization, marketing, and basic management, and has a growing sense of crisis. Strong—IPO may become a turning point for Xiansheng to fall into mediocrity.

Ren Jinsheng began to rethink Xiansheng's career and mission.He announced that the funds raised from the IPO will be used for research and development, expanding marketing teams, and acquisitions and mergers, of which more than 400 million yuan will be used for special research and development.Xiansheng is consciously carrying out management transformation, learning and drawing lessons from the essence of international enterprise system management, so as to make itself develop sustainably in the future. Constantly discovering one's "average seat", and then constantly rejecting mediocrity and pursuing excellence, this is the value of Xiansheng.When talking about the company's 12-year growth history, Ren Jinsheng said: "This is not a legend of wealth creation, but a process of continuous learning, exploration and growth of a group of people who are unwilling to be mediocre."

For more than a month, I had the opportunity to get in close contact with and interpret Lenovo and Huawei. Lenovo Liu Chuan started his business at the age of 17. When he did his first business, he was defrauded of 140,000 yuan from his only 200,000 yuan start-up loan. Afterwards, he experienced numerous setbacks and failures. Twenty-one years later, Lenovo successfully acquired IBM's PC business. This year (2005, editor's note), Lenovo's sales were nearly 100 billion yuan, of which overseas business accounted for 70%, making it the third largest personal computer brand in the world.

Huawei Ren Zhengfei, 44 years old, started selling telephones by riding a bicycle. In less than 17 years, he has ranked first, second and third in the world in five or six fields such as network access and data communication. In the first half of this year, sales exceeded 33 billion yuan, of which overseas sales accounted for about 60%, and last year's tax contribution alone reached 3.8 billion yuan. Lenovo and Huawei have become or are becoming world-class companies, and they compete directly and comprehensively with the world's top multinational companies in their respective fields.These are two of the most awe-inspiring private companies in China. Whether it is the high-profile Lenovo, which focuses on brand promotion, or the low-key Huawei, which focuses on research and development, they have created a development speed that has attracted the attention of the world and made the Chinese people proud. .As a member of Chinese companies, it is necessary for us to interpret the reasons for their excellence and explore the key forces behind their stunning performance.

If Lenovo and Huawei are defined as the best companies in China, then can our 10-and-a-half-year-old Xiansheng be considered an excellent company?If you can't talk about excellence, then what state is it in?From the Huawei product display center, R&D center, logistics center, data center, and training center the day before yesterday to the flight back to Nanjing yesterday, I was always excited and excited, and it was hard to calm down for a long time.I really feel the lofty ambition and strong sense of mission of these two 61-year-old outstanding Chinese entrepreneurs who take the industry to serve the country as their own responsibility.

Only by comparison can people be sober, and only by being sober can we truly see the gap.I clearly saw my narrowness and mediocrity, and every cell in my body seemed to be filled with guilt and anxiety. Survival of the fittest is the rule of market competition, either superior or inferior, win or lose.Since it is not excellent, it can only be regarded as inferior. Admitting inferiority and not being excellent requires not only self-knowledge, but also the courage to seek truth from facts and self-criticism.This year, our sales are just over US$100 million, and the sales of the world's No. 1 pharmaceutical company last year were US$46.1 billion.Even compared with China's No. 1 pharmaceutical company, this year's profit and tax of nearly 300 million yuan is only 1/7 of that of the leader.

Looking back and reflecting on the 10 and a half years of entrepreneurial experience of Simcere Pharmaceuticals, at the beginning there was a passion of "we are extremely excited in the face of competition" and "we don't want to breathe the dust raised by the leaders". Under the conditions of strength, we have created a few small-scale innovations for comfort, such as Zailin, Chengong Zaixin, mergers and acquisitions of Haifu, and Bicun's first R&D and listing.Perhaps, we can easily list 100 reasons for not being ahead and 1,000 excuses for not being good enough, but if we still have integrity and brave hearts, it is difficult to forgive ourselves for more than 10 years of mediocrity and complacency.Maybe we have become accustomed to self-satisfaction and self-comfort, maybe we have become very numb to what is considered excellent and what is mediocre, maybe Xiansheng only pursues leading words but has no real leading actions and steps.

Why are we becoming mediocre?What are we most lacking?Lack of talent?Lack of management?Lack of mechanism? Lack of funds?Maybe what we're missing is exactly what Lenovo and Huawei have.I pondered for a long time, and strongly felt that what we lack most is not talent, knowledge, or capital, but a spirit, a heart that is unwilling to be mediocre and eager for success, a force that can get closer to the opponent faster and faster in a shorter time The drive to surpass oneself. There is no association of Saturday and Sunday. Huawei’s office buildings and R&D buildings are still brightly lit at 12 o’clock in the middle of the night. The folding quilts under the desks of Huawei’s R&D personnel truly interpret this spirit. The spirit of bombing one satellite is exactly the same as the spirit of spaceflight embodied in "Shenzhou-6".

Huawei's current R&D personnel account for 48% of the 35,000 Huawei employees, and it already has 8,000 patents, which are increasing at a rate of 8-10 every day.The vice president of Huawei told us that Huawei's R&D investment this year is expected to exceed RMB 4 billion. Because of the low cost and high work intensity of China's local R&D team, the actual efficiency of its R&D investment can completely compete with Cisco's investment of US$4 billion. .When the Chinese pharmaceutical industry talks about the development of innovative drugs, they talk like gossip about the law that multinational companies need 10 years and 1 billion US dollars to develop a new drug. Is it possible that Chinese pharmaceutical companies will never be able to develop innovative drugs without 1 billion US dollars?Zhundao Shenzhou VI needs tens of billions of dollars to go to the sky?Are we just missing dollars?What we really lack is a spirit, the spirit of Lenovo daring to acquire IBM PC, and the spirit of Huawei daring to challenge Cisco.

The annual growth rate of Lenovo and Huawei's sales has exceeded 100% in many periods, but we seem to be more and more satisfied with 10% and 20%. When setting the next year's business goals, bargaining has gradually become a habit. Is this true? Is it an expression of unwillingness to be mediocre?How can you understand the desire for success?How can one rank among the best?Are we willing to allow competitors to occupy several times, or even ten times the market share of Simcere in the target regional market?As passionate men, are we willing to breathe the dust raised by the leaders?When our hundreds of middle and high-level managers summarize the work of a quarter or a year, what specific tasks do they have to prove our professionalism, dedication, innovation, teamwork and excellence?What creative work is ahead of the 4,000 domestic pharmaceutical companies?

The five leading figures under Liu Chuanzhi's command are all around 40 years old, managing billions and tens of billions of assets respectively; the youngest vice presidents of Huawei are less than 30 years old.What makes me feel ashamed is the slow and stagnant growth of the management team. What exactly is hindering the emergence of outstanding talents?What weakened Xiansheng's ability to absorb external elites?Maybe it's just a little bit of poor achievements and progress in recent years that make us stagnate and stagnate. Maybe it's my short-sightedness, eagerness for quick success, and indecision that erode the concept and pursuit of starting a business. Maybe our company is declining, aging, and losing. vitality. The first voice is the pursuit of leadership.The reason why Lenovo Hony invested in Xiansheng is not because Xiansheng is already an excellent company, but because they feel that there is a gene for pursuing leadership in the blood of Xiansheng, and they are full of expectations for the growth of Xiansheng , hoping to accompany and push Xiansheng to go faster and further on the road of pursuing leadership.If we are self-satisfied, don't reshape our spirit, only regard Lenovo's investment in Xiansheng as an affirmation of Xiansheng, and don't think about making progress in the increasingly fierce competition, then we may make Liu Chuanzhi regret the cooperation with Xiansheng endlessly. The corporate logo of Xiansheng is a fluttering flag and a running man.If we can't run fast, the flag will stop flying, and we will be ashamed of our predecessors.People who are running should also be replaced by people who are sitting or standing or sleeping soundly, that is, people who are no longer alive. It is a kind of spirit that supports the miracle of Lenovo and Huawei. The new era and the rejuvenation of the Chinese nation are gestating this great spirit. Xiansheng should also reshape the company spirit.With the spirit of daring to pursue the first, daring to create miracles, emotional spirit combined with rational wisdom, we will have the courage to constantly challenge the impossible, we will have the power to overcome obstacles and overcome difficulties, and we will be able to turn our dreams into reality. Only then can we be worthy of our pioneers and decades of life.
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