Chapter 19 The CEO's Living Room: Shi Zhenrong's Asian Experience

The small business run by the family provided Shi Zhenrong with his initial business education.He discovered that selling stationery and selling duck eggs turned out to be two different businesses. The former had high profits but slow capital turnover, while the latter had meager profits but capital turnover every two days. The duck egg business with fast cash flow could make more money. much money.In order to recover the arrears, the elders sometimes go to the debtor's house early in the morning to drink tea and chat, which takes most of the day, and may return empty-handed.When he founded Acer in the future, Shi Zhenrong will deeply understand how important financial management is.

It was Taiwan in the 1950s. Although the Kuomintang government shipped a large amount of gold and foreign exchange reserves from the mainland, and the Americans provided new aid, no one could predict the future Taiwan miracle.Taiwan's economy is dominated by crops represented by sweet potatoes, and the grocery store in the village is an important means of commercial distribution. The so-called modern industry is just light industrial products such as textiles, plastics, and artificial fibers, which lack technological content.Life is difficult, slow-paced, and even idyllic in retrospect.

Before he founded Acer in 1976, Shi Zhenrong possessed everything that every educated youth would be envious of: ideals, talents and luck.When he was in college, he wanted to become the president of Jiaotong University. At the age of 28, he developed Taiwan's first electronic computer, and at the age of 32, he was selected as one of the top ten outstanding young people in Taiwan.If Rongtai Electronics, where he worked, hadn't been in trouble, he might still continue to develop on the track of technology development director. The following story is already a legend familiar to Taiwan and even the entire Chinese world.In Taiwan's new business landscape, at most only Zhang Zhongmou can be as representative as he is.What's more commendable is that Acer has taken a different path from almost all Chinese companies. It wants to create its own brand, rather than just relying on low-cost OEMs.When Shi Zhenrong officially retired at the end of 2004, he was the longest-serving leader in the global high-tech industry. Among Chinese business leaders, he watched the former leaders fall one by one. In the field of self-created brands, he may Is the only success, although Acer also faces several major setbacks on the road.

What is impressive about Acer is not its company size, but its innovative power, which is rare in the Chinese business world. This includes not only the innovation of the product itself, but also the exploration of its organizational form.Shi Zhenrong's interest in opening up new fields is far greater than his desire to control old territories. His respect for personal creativity and admiration for experimental behavior are the most impressive candidates, if not unique, among successful Chinese entrepreneurs one.At the age of 60, he bravely relinquished his power. During his retirement, he devoted himself to becoming a business thinker, hoping to use his accumulated wisdom to help the growth of Asian companies.

Not long ago, the author had the honor to share his experience and conducted a far-reaching interview with him.Two days after the interview, at the Fortune Forum, he declared that Asia will become the center of world innovation, but for China, a crucial issue is that China does not yet have a good incentive mechanism.If such a mechanism is established in 10 to 20 years, China will replace the United States as the innovation core of the world.The following is the content of the conversation between the author and Shi Zhenrong. Xu Zhiyuan: Looking back at the 28-year history, how do you understand your position in the global Chinese business community?

Shi Zhenrong: The education we have received since childhood is that the Chinese people have been weak for hundreds of years, have no modernization, and are looked down upon internationally.Are you determined to change this situation?Those who have a heart will act.For example, Wang An in the early days, although he started his business in the United States, he still has Chinese traditions.Another caring person is Wang Jialian who founded CA company. Of course, Wang Jialian's model may not be applicable to Chinese. The personal computer industry is like the World Cup football match, or the Olympic track and field competition. It is a field that attracts more attention. We have gained a certain status here, which will encourage Chinese companies.I look forward to more Chinese establishing global enterprises in the future.Corporate brand is related to two points: one is innovation, and the other is international management.European innovation actually started with the Industrial Revolution, and now it is the turn of the United States.The East India Company is the earliest case of international management in the past 400 years, and the international management of the United States started from Thunderbird (Thunderbird) Business School.Thunderbird was a US Air Force training base during World War II.Why was there such a business school fifty years ago?Because Americans think they want to achieve internationalization but not enough talent.The United States only started to cultivate international industries 50 years ago, so how long does internationalization take?Japanese companies have done a good job in innovation, but now it seems that their international management is not very ideal.Internationalization must trust the locals.

Therefore, Acer's 20 years is a very short period in the history of the internationalization of Chinese enterprises.Such a result today should be encouraging.If we do well, we may be able to catch up with Japan.Even with such a powerful economy as Japan, it is still learning from international experience.Taiwanese companies can go global first, and mainland companies are slower, because they have great obstacles to innovation on the one hand, and they also have a huge domestic market on the other. This huge domestic market is very important. In such an environment, enough marketing talents can be trained.If Chinese enterprises want to go international, they need a large number of marketing talents.Taiwan lacks a large-scale market management mechanism, so that Taiwanese companies have suffered losses abroad for 20 years.No matter how well Taiwan is doing, it is still a small market management model, and it does not know much about the big market.

Xu Zhiyuan: What do you think of mainland companies? What are their weaknesses and strengths? Shi Zhenrong: The strengths are talents and aggressiveness.When I started my business 20 years ago, the company I built was small, but it had excellent people, which is the most important strength. The biggest weakness of mainland enterprises is the lack of product innovation.Could it be that the technology of the Chinese is not working?The innovations made by Microsoft's research center in Beijing are world-class.So, is it a matter of talent?Nor is it.It is an environmental problem, and the enterprise lacks an environment that allows its resources and funds to continue to invest and make continuous progress.In addition, enterprises can only grow by taking the international route. It is important to consider paying less tuition fees for the most important and best products during the growth process.

Xu Zhiyuan: Although the domestic market is huge, the fierce competition has forced many mainland Chinese companies to cope with low-profit competition, and they do not have enough funds to invest in technology research and development and market development. Shi Zhenrong: It is not entirely a question of funding, but a question of innovation.I had an idea more than 20 years ago: In addition to existing products, new products should continue to appear.For example, just like buying insurance, I save a little money to buy insurance while I am still able.Earn 100 yuan and spend 30 yuan to buy insurance, but that 30 yuan will bring returns as a new development investment.When you make a lot of money, you will want to expand the scale, but increasing the investment will reduce the profit, and the reduced profit will increase the difficulties of the enterprise.Therefore, in order to change this situation, it is necessary to expand the competitiveness of existing products while accelerating the development and research of new products. The continuous emergence of new products will bring new market expansion forces.The original product is making money, and the new product is also making money, so the enterprise will grow bigger and bigger.It's like prospecting is needed while mining.

Xu Zhiyuan: How do you develop such a spirit of continuous exploration? Shi Zhenrong: Maybe it's genes.This gene allowed me to start a club in college, let me build the first calculator in Taiwan, and let me create many firsts in Taiwan.Life positioning needs to be done by yourself.My positioning for myself is that I will not do what others do. This society does not require me to repeat what others have done, but this society requires only one person to "prospect". "Prospecting" cannot be based on ideals alone, but must have a pragmatic spirit. In the process of "prospecting", many people will stop when there is no hope. How many people will continue to invest in resources?I will first find some small mines to mine and make money. After I have a lot of accumulation and funds, I will come back and continue to "prospect". Anyway, no one has discovered it yet.

Xu Zhiyuan: In the past 30 years, how have the political and situational changes in Taiwan affected you? Shi Zhenrong: The situation 20 years ago was different from what it is now. At that time, after graduating from university, there were no good jobs for us.Many people have gone to the United States, and I "explored" with my friends here, and I can also do not worry about eating and drinking.The situation is different now. There are many people "prospecting" and many high-level intellectuals have come to "prospect".Some of them overwhelmed themselves and died as a result.Faced with such a situation, enterprises should transform, and some past models and ideas will become burdens.Too many people is a burden, and too much equipment is a burden. We should let go of these burdens, and the enterprise can only make progress through continuous transformation. Xu Zhiyuan: Who is the "prospector" person who left the deepest impression on you? Shi Zhenrong: Among the few people I know, I think Liu Chuanzhi, Yang Yuanqing, Li Dongsheng, and Zhang Ruimin are such people.The reason why they can do what they are today is because their business philosophy has many unique insights. On the one hand, they must do a good job in the Chinese mainland market, and on the other hand, they must have the spirit of self-cultivation. This is better than Taiwanese entrepreneurs. it is good. Mainland entrepreneurs are already very mature, but if they only consider the mainland market, no matter how they do it, it will not be very effective, and there will be constraints.They want to take the road of internationalization and explore "new mines".Therefore, Haier also makes computers and mobile phones, but it has left its original core business.Of course, when a large company has a lot of financial resources, it can do anything, but to explore "new mines" requires a correct concept and good management.Samsung is very international, they do everything, but they are also forced out.During the Asian crisis in 1997, Samsung abandoned cars and focused on electronics, mobile phones and televisions. This approach is unique. Xu Zhiyuan: Then, what scale should the enterprise maintain? Shi Zhenrong: What is the value of an enterprise?The greatest value of an enterprise should be to make the greatest contribution to stakeholders—investors, employees, suppliers and dealers.Businesses want to maximize the use of resources—money and people.The size of the enterprise is not the bigger the better, the important thing is the maturity.If the enterprise is too big, it will be heavy, and if it is too small, it will be uncompetitive. Xu Zhiyuan: Ten years ago, people would not talk about the Chinese economy like they do now.What do you think about this? Shi Zhenrong: In the early days, whether it was in Taiwan, Southeast Asia, or Chinese enterprises in mainland China, there were some examples of failure.The Chinese have a unified consciousness, which is Confucianism, which is how to gather talents, gather some good talents and allocate them reasonably to "mine".Li Ka-shing also came here in the same way. He seized some opportunities of "prospecting" and invited others to participate. This is the reason for the success of the Chinese. In Southeast Asia and Taiwan, there have been some Chinese failures because of funding problems.A lot of their funds are borrowed. When the Southeast Asian economic crisis broke out, this problem became more prominent.Why do Chinese enterprises have these problems?Mainly because the Chinese like control, especially controlling equity.The development of an enterprise requires the expansion of funds. Sometimes it is necessary to borrow money from the bank to expand funds. If the development goes well, there will be no problems, but if it is not smooth, the development of the enterprise will fall into a passive state. Now, many Chinese companies have begun to realize this problem and are gradually participating in the internationalization of the capital market.When a company does well, it can borrow money from the capital market.Money in the capital market is different from loans. The capital market is your own money. If shareholders have no confidence, they can sell their stocks. Xu Zhiyuan: Among the entrepreneurs you have contacted, what is the difference between young people in their 30s and your generation?Which things are better and which things are worse? Shi Zhenrong: In the past at Acer, I felt a little overhead, and it was difficult for me to get in touch with the young employees below.To run a business, you have to consider whether to fight for a while or for a long time, and most young people may fight for a while.My advice to them is, don't just look at the moment in front of you.In fact, the older generation worked very hard and seized some opportunities to create enterprises, hoping that enterprises can develop for a long time. Xu Zhiyuan: In the 1990s, the Pacific coast was talking about "Great China". More than 10 years later, what do you think about it? Shi Zhenrong: The market is the leader of innovation and the leader of the economy.Talent is the most important thing.Every year, a large number of talents emerge in the mainland, not including laborers, but mainly intellectuals, because a large number of innovations are realized by intellectuals.Our intellectuals are number one in the world, but we need to give them a mechanism that will enable them to function.The society needs more and more innovations, and the initiators of innovations are intellectuals. Asia will be the center of future innovations. It is at most a matter of time. Xu Zhiyuan: When do you think this time is? Shi Zhenrong: We used to be number one in the world in table tennis, and now we are also number one in some track and field competitions. Sooner or later we will achieve the number one number of Olympic gold medals.Don't worry too much, time is on our side.The influence of the Chinese on the world in the future is important. Historically, we have been the first in innovation, not by the number of people, but by the environment.During the Tang Dynasty, we had already formed an international center.Chang'an in the Tang Dynasty was like New York today.China in the Tang Dynasty had only 20 million people, so innovation does not depend on a large number of people, but a large number of people can create a large market. Foreigners see this market in China, and we can use this market to develop ourselves.The problem now is how to coordinate the market, talents, innovation, and capital to build a good platform.The United States has the best platform, but there are also problems now, and they have gone to extremes. , "The Nasdaq Generation", "The Turning Years", "The Chinese Consciousness of This Generation", etc.