Five Forces Are Driving The Intelligent World
Society is on the cusp of a world where everything is connected to the Internet, has sensory capabilities, and is informed or enhanced by artificial intelligence.
In this diverse and complicated world, the pace of change will accelerate. Boundaries between different organizations will blur, and humans will work with intelligent machines.
These disruptions will bring massive opportunities and challenges, putting companies and managers to the test by asking hard questions:
How to maintain strategic focus? What steps can we take to encourage innovation? How can we create synergy with global resources? What inspires passion across the organization? How can we unleash the full potential of our talent?
Over the years, Huawei has figured out its own solutions to these questions.
The first is a strategic focus. Huawei maintains a strategic focus on data – specifically, the massive increase in the quantity of digital data flowing across the world’s broadband networks.
By 2025, about 180 zettabytes of data will be generated every year. There will be over 100 billion connections, and 85% of enterprise applications will be deployed on the cloud. Such massive volumes of data will require bigger, wider, faster data pipes. This presents Huawei with strategic opportunities.
As more opportunities arise, we must identify what we should focus on – and what we should give up. Huawei’s strategy is to focus on ICT infrastructure and smart devices, with the aim of ushering in an intelligent world. We’ll also advance our AI strategy to deliver pervasive intelligence.
On the other hand, we clearly know what should not be our focus. In the cloud domain, for example, we do not monetize customer data, develop industry applications, or make equity investments in application partners. In the Internet of Things (IoT) domain, we don’t provide end-to-end solutions – we only provide enabling technologies such as networks, platforms, and operating systems for IoT. Our recently announced AI strategy also aims at communications networks, with the goal of using AI to enhance Huawei’s product and service competencies.
Second, we will pursue continuous innovation. In an intelligent world, innovation is what allows enterprises to stand out from the competition. What’s the secret to continuous innovation? In the past, Huawei prioritized customer needs. Now, we have adopted a two-track strategy focused on both customer needs and technological innovation.
Huawei believes the R&D process is like a marathon. It invests more than 10% of its annual revenue into R&D. From 2008 to 2017, its R&D investments topped CNY400 billion ($US58 billion). Last year, Huawei ranked sixth on the EU Industrial R&D Investment Scoreboard.
Soon, Huawei will increase its investment in basic research: areas such as mathematics, algorithms, and chipsets. This portion of the investment will account for 20 to 30 percent of Huawei’s annual R&D spending of US$15 billion to US$20 billion.
Innovation is never a solo sport. That’s why Huawei has established 36 joint innovation centers and 16 OpenLabs with customers and partners around the world. Huawei is now a member of more than 360 standards bodies, industry alliances, and open source communities, and has participated in the development of crucial industry standards. Huawei is committed to enabling every person, home, and organization to benefit from technological innovation.
Third, we need to draw on the best talent from around the world. Huawei operates in more than 170 countries and regions and has 180,000 employees from over 160 nationalities. Our localization rate in some markets is as high as 70%.
In the coming intelligent world, one of Huawei’s core strengths will be that we have global resources. We will need to fully integrate them, build a global value chain, and ensure that value delivered by each link along the chain can be shared by our global customers.
For example, Huawei has established 14 R&D institutes and centers with offices across 18 countries and regions. The one located in Russia focuses on mathematics and the Milan Research Center in Italy is dedicated to research into microwave technology. These centers also help develop and retain local talent, create jobs, and boost local economies – an example of the shared success for which Huawei always strives.
Fourth, we need to inspire passion across the organization. Our founder, Ren Zhengfei, has said that we must be sure we’re headed in the right direction, and that the organization is full of vitality. In the past, many major companies have collapsed because they failed to adapt to the times. The coming intelligent world will be full of uncertainties, and Huawei must embrace change in order to avoid such pitfalls.
To be specific, Huawei is streamlining its internal processes. For every segment or checkpoint we add to our processes, we must eliminate two existing ones. We also want our departments to be more flexible and nimble. That’s why we have been delegating authority to field offices and letting employees who are closest to our customers make decisions.
Fifth, we do everything we can to unleash talent potential. Future competition will center on attracting and retaining talent. In the age of AI, the talent pyramid is being reshaped. The talent structure of organizations will become more diamond-shaped, with AI systems taking the place of people at the bottom and handling huge volumes of repetitive and routine tasks. More creative high-end talent, and top professionals like data scientists, will be in great demand.
Huawei has its own unique approach to talent, including talent selection, deployment, development, and retention.
First, we encourage our internal business leaders and strategic leaders to emerge and stand at the top of the pyramid, helping us maintain organizational vitality. At the same time, we encourage open collaboration, bringing together more external experts, scientists, and high-end talent from international organizations, standards organizations, and industry organizations to work with Huawei.
Second, we motivate outstanding people, especially young people, to stand out from the crowd. Millennials grew up in the Internet era, excel at learning, and are concerned with equality. That’s why Huawei believes that the focus of our management must shift to empowerment. We strive to impart knowledge to young people and create opportunities for them.
This year, we have launched a Dedicated Talent Development Plan to quickly promote outstanding junior employees. We offer talented people more opportunities, brighter career prospects, and more challenging tasks. In 2017, we fast-tracked the promotion of 4,500 top-performing employees. In 2018, we will aim for 6,000.
Huawei’s third approach to managing talent is continuous learning and training. We are living in a rapidly evolving world where technology and business models change overnight. Managers must be able to accurately predict the future and address the uncertainties we are facing.
To this end, Huawei requires its managers, especially senior managers, to broaden their horizons. Our managers must absorb a wide range of information from inside and outside Huawei and continue to learn. We encourage our staff to “absorb the energy of the universe over a cup of coffee,” by which we mean that they should exchange ideas with different people. We want to create a climate where everyone is willing to learn – any time, from any knowledge domain.
What type of leaders will be needed in the future? Bill Gates once said, “As we look ahead into the next century, leaders will be those who empower others.” That’s exactly what Huawei strives to do: empower the growth of industries and our partners.
Our vision is to bring digital to every person, home, and organization for a fully connected, intelligent world. Together with our customers and partners across the ecosystem, we are working hard to make this vision a reality.
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