Chen Chunhua: 2018, Five Inquiries about Returning to the Origin of Management

 p Recently, the Chinese edition of "Harvard Business Review" interviewed me, focusing on five issues of management. This is a difficult but very essential issue in China's management practice. Today I intend to return to the origin of management and make five inquiries in "Spring Blossoms", hoping to offer some help to your work in 2018.

 

These five questions are as follows:

➣ First, what is management?

➣ Second, what is the biggest difficulty in management?

➣ Third, is the classical management theory outdated?

➣ Fourth, what are the necessary conditions for an excellent manager?

➣ Fifth, why should a manager pay special attention to the acquisition of incremental knowledge?

1

The first question: what is management?

 

In my view, management mainly needs to solve two problems:

➣ The first point: let some people do one thing together.

➣ The second point: how to let everyone play a role and create value when doing this thing?

 

Among many of my works, "Common Sense of Management" is the best-selling one. I guess the reason why it sells well is that it's just about some of the most basic concepts of management and some common sense understandings, and that's where we're most likely to make mistakes. Therefore, I know that it sells well probably for this reason, not because I wrote it.

 

Over the course of more than 20 years of management research, education and practice, I've seen some very interesting phenomena in management that have made me think: If it is not clear in theory, perhaps our behavioral deviation may be much larger than we can imagine.

 

For instance, I have always found that everyone cares very much about the subordinate's capability. But actually, the subordinate's capability may not be the most important. The most important thing is whether the subordinate's immediate supervisor can make him generate performance.

 

For instance, we often see personnel turnover inside the company, and people will be very nervous when they encounter the transfer of personnel. If we understand management, we will understand that turnover is a very normal phenomenon, because if we ask ourselves, we really expect to be mobilized and rather than being fixed in one position.

 

For instance, you will also see that sometimes we have worked pretty hard for a long time and still cannot achieve any performance results. Then we will ask, are we unlucky? In fact, if you really study management, you will draw the conclusion that performance is more likely to result from work, job position, and support from your supervisor. Your efforts also play a vital role, but these supports are equally important, and the combination of these things can actually help us achieve management performance. Then in more cases, everyone will consider that the performance of an organization is really highly correlated to everybody, but I'm going to take it seriously today by saying that: the most important and highly relevant persons for the performance of an organization is actually its managers. If our managers are competent, in fact we can make those who are originally not competent become qualified, and I think this is precisely the greatest charm of management.

 

Perhaps it is precisely due to some long-term observation and thinking about these problems, I will let everyone return to common sense to understand management, and then let this common sense help us not to produce too much deviation in actual work. This is also the answer I gave to the Chinese version of "Harvard Business Review" when I was asked the question "what is management?" Management mainly solves two problems: The first point: let some people do one thing together; The second point: how to let everyone play a role and create value when doing this thing?

 

To help you understand these two points, I hope you acquire an understanding of the following three viewpoints, which will be helpful for you to have a deep understanding of "what management is"

 

➣ The first understanding: where exactly does performance come from? Many a time we hold that management performance may come from the efforts and capability of each of us. But the real origin of management performance is actually whether each front-line employee can get resources and make use of them. However, in reality, what we will care more about is actually the right of management, then we may care more about whether we can make this right more controllable and enable our managers to grasp greater decision-making power. But in fact, there is not much direct relationship between performance and these, and the real direct relationship with performance is whether front-line staff can get and make use of resources. I believe that's what we may need to adjust and recognize in our management.

 

➣ As for the second understanding, I also need to reach a consensus with you, that is, is there any right or wrong management?After my work "Common Sense of Management" was published, the biggest question and the most emails are to ask me about my statement "there is no right or wrong management", and they did not agree with it. I wonder if you don't agree that there is no right or wrong management, maybe it has something to do with our ways of thinking. We are more concerned about whether a thing can really be solved because it is right or wrong so that things can be well resolved. Perhaps the attention on right and wrong is actually very high. There is really no right or wrong management. Why? One simple reason lies in that management is not evaluated with a right or wrong criteria, it is evaluated by results. The reason why I want to use this concept to tell you is because many of us are actually very high on the right and wrong, but our attention to the result is not so high. Therefore, we will find that result-oriented management brings about very obvious performance while the performance achieved through management oriented on the right and wrong is actually not that obvious, and it will even bring us internal friction. This is the second understanding I intend to explain with you.

 

➣ The third understanding that I wish to explain to you is actually about goals. When we talk about plan management, you may be more concerned about how our goals are broken down and whether our goals are reasonable or not. However, if you really return to common sense, think about it, and get a real understanding of the theory, you will know that the goal must be unreasonable, and it is determined by three factors. The first element is your judgment of the future, the second element is the requirement of your strategy, and the third element is actually your own determination. If I list these three elements for you, you will know that the goal must be unreasonable, isn’t it? These three elements are actually uncertain. Strategy is also a choice, this prediction is also a choice, and then your determination is a choice as well. In fact, we have no way to make judgment by whether it is reasonable. Therefore, the goal must be to discuss its necessity rather than its rationality. What is the fundamental reason why an unreasonable goal can support our entire plan management? In fact, the action to achieve the goal should be reasonable. If you can understand this point, you will know that what we understand in management common sense will reduce the internal friction and conflict in our daily work. For example, we may not need to conduct too many internal discussions on whether the goal is unreasonable. Instead, we may spend more time discussing how to find resources, achieve the goals, and how we can find resources to make the goals come true. You will think that if under such a content, we will definitely make the goal achievable, so this is the third thing I hope to reach a consensus with you.

 

Then you will find that the performance of employees is actually determined by managers. As long as each of us managers can truly understand the knowledge and common sense of management, we will let all the people around us generate performance. When each of us produces performance because of you, the performance of the organization and your own performance will also achieve further growth. Drucker gave professional managers a very good definition. What does he mean by manager? The manager himself has no performance, and the manager's performance depends on his boss and his subordinates. When they both have performance, he will get performance. Let some people work together to do one thing, and how to make everyone play a role and create value when doing this thing? this is management.

 

The second question: What is the biggest difficulty in management?

 

 

For business managers in China, I think the biggest difficulty in management lies in these three points below:

➣ First, can there be the same purpose between leaders and subordinates;

➣ Second, can it make everyone realize that there is really a valuable contribution in the process of doing this;

➣ Third, can it bring everyone together with a common goal.

 

People familiar with me will know that 25 years ago, I set up a research topic that lasted for 30 years, that is, to study the leading laws of Chinese enterprises. The research topic lasting 30 years is concerning what are the main characteristics of leading enterprises, and the research report I wrote is called "C-Theory". I selected five of the 3,000 enterprises (Haier, TCL, Lenovo, Huawei and Baosteel) for research, and found that these leading enterprises all have the most important element, that is, they all have a very good leader. Their leaders can all overcome these three difficulties while those enterprises with poor management can't do it. That is, they can share the same desires between leaders and subordinates and make everyone realize that there is a real value contribution in the process of doing this, so that everyone can be brought together with a common goal.

 

The effective management practices of vanguard enterprises such as Lenovo, Huawei and Haier have proved that the core of the sustainable development of enterprises is to inspire people, to inspire people's sense of being masters, to stimulate the self-driving force of people's internal growth, and to encourage people to take on responsibility and thus achieve success. It can be said that inspiring people is the origin of the sustainable development of enterprises. This is a difficult point in management and must cross past barriers.

 

Peter Willis predicts three main trends to push forward the development of the new paradigm. Firstly, increasing pressure and interference in all systems; secondly, commercial and social organizations will develop rapidly to produce more feasible and new organizational forms; Thirdly, the evolution of human values. So what are the key elements of the new paradigm? Willis concluded that " in the business world, we need enterprises with entrepreneurship to solve many problems in the future." As far as I am concerned, the core element of such enterprises with entrepreneurship is to generate those who have entrepreneurship in the organizations. "Generate those who have entrepreneurship". It is not that only entrepreneurs and managers must have entrepreneurship, but that everyone has "entrepreneurship"; not only is it launched and driven from top to bottom, but every node and everyone is the power source of it. This means that for managers, you are not only the first to set the example, but also the initiator.

 

All organizations often put the phrase "people are our most important assets" to their lips. However, there are very few organizations that do what they say, and even fewer managers really think so. This is because with the development of Internet technology, individuals have unprecedented capabilities and information, which brings a brand-new relationship between organizations and individuals, that is, both sides are no longer simple goal-oriented but continuous development-oriented. In this new type of relationship, if an organization wishes to win the loyalty of its employees, it must not only provide competitive salaries, but also offer employees the opportunities for development and cultivate their ability to grow. This is a new requirement both for the organization and for managers. Therefore, managers need to have the ability to activate organizations and their members. A successful manager should be someone that is good at cultivating people and can make people believe in themselves and love their work.

 

Only when your company has the same desires and reaches a consensus can it make real changes, can it truly design a plan for action, and can it also see challenges and opportunities simultaneously. Every manager has an inspiring role to play. What about everyone? Everyone needs to be his own engine, and this must be an echo relationship. The so-called entrepreneurship is not just a top-down delivery, it's a gathering of thousands of "entrepreneurship", including your partners, who will also be deeply affected, trust each other, create truly great products and services, and rekindle your emotional connections with your customers. Only such "wisdom and connection" can produce the nuclear fusion effect, and your enterprise can realize the magnitude growth matched with the Internet spirit, let everyone realize the truly valuable contribution in the process of doing this, and brought together everyone with the common goal.

 

The third question, is the classical management theory outdated?

This is a topic often discussed by the management community and the business community. What I'm sharing with you today is that if we understand that efficiency no longer comes from division of labor, but from coordination, then you have your own answer, because if it comes from coordination, the 100-year management theories all fail to answer this question very well. In the past 100 years, the whole organization management theory all answers the question on how to control management and how to achieve efficiency through control. Internet technology, intelligent technology and digital technology have brought forth many management problems that we have never encountered before. I hope you can understand that the more important thing is that our management has no way to gain our growth, efficiency and creation through control, and we must change to that you are capable to do coordination and empowerment. Therefore, in this era of great change, the theoretical researchers of management and management practitioners have the opportunity to make new creations. This is a huge opportunity for us, and we really need to find some new solutions to solve new problems.

 

If this problem is extended from the perspective of Chinese enterprise management, we will face a huge challenge in the whole management research, and this challenge is whether theory and practice can be linked or not; and one more challenge to China's management practice is to what extent western theories can guide China's management practice. In the past 40 years, Chinese enterprises have gone through a period of high-speed development so that the management practice of Chinese enterprises have the opportunities to lead the world, so we can see that Alibaba, Huawei and thousands of other Chinese enterprises go to the world stage.

 

Everything is changing today, and no one can proceed on by firmly entrenched in their experience. Enterprise management has encountered a fundamental problem: to a great extent, the success of the business model requires that the organization and management are consistent with the logic of the entire customer value, not with the size of the enterprise. When we see the excellent Chinese enterprises like Huawei, Alibaba and Tencent emerge with their new business models, we are glad to see the arrival of an opportunity for Chinese enterprises in terms of management models, an opportunity for all of us to participate in value creation. This is the era of sharing.

 

Why do I tell you with confidence today that there is an opportunity to study China's management theory? That’s because there are three most important trends that have driven the emergence of a new paradigm of management: sustainability and creativity, technological innovations in business models, and changes in people's values. These trends allow us to see that the organization's most primitive proposition today all should be adjusted.

 

These changes have made the challenges faced by management today different from those before to some degree. In the past, we might be more concerned about our peers and opponents, and more concerned about whether we own exclusive resources. While today you'll find that there's nothing exclusive, you don't have to pay too much attention to your opponent today because you don't know who the opponent is, and crossover patterns abound by fours and fives. You don't need to attach too much importance to whether employees are loyal to the organization because the biggest interest point of loyalty has also changed today. All of this has fundamentally adjusted the attributes of the organization. It may no longer be hierarchy, control or management, but a platform, openness, coordination and happiness. Only such an organization is more likely to attract creative, ambitious employees, and then the organization will achieve growth. Hence, we have to make fundamental changes, from leaders to cultures to people.

 

Einstein conducted an examination to the students at Princeton university in 1951. After the examination, his assistant followed him, and the assistant was very nervous and asked, "doctor, why did you give the students in this class the same examination questions as last year? why did you give the students in the same class the same examination questions? Einstein replied very classically: "the answers have changed." I think this is like today, we still have to face the market, or to face customers, or to face ourselves, or to face everything, but we must clearly know: the answers have changed! "Efficiency no longer comes from division of labor, but from coordination." Based on this change, theoretical researchers and practitioners of management will have the opportunity to make new creations, which is a huge opportunity for us, and we need to find something new to solve new problems.

 

The fourth question: what are the necessary conditions for an excellent manager?

 

 

To my way of thinking, excellent managers have four necessary conditions:

➣ Firstly, excellent managers should be more open.

➣ Secondly, excellent managers should have greater tolerance.

➣ Thirdly, excellent managers should have the ability to learn in depth.

➣ Fourthly, excellent managers can truly make everyone create value.

 

Today, everyone is in great need of a platform called efficient work together, that is, all work must be efficient, that requires managers to make organizational changes. If you want high economic growth very much, you must have an organizational structure with high economic growth. You have to bear this concept in mind, and then what's the most important in this concept? It is openness, communication, dialogue, interaction and communication. It's all about these things, not about structure or role solidification, but about truly making everyone create value.

 

Actually, whether your overall organizational system can be open, whether you have greater tolerance, whether you can cooperate and collaborate with more people and organizations, determines how far you can go. While today, you all have a very important requirement for yourself, that is, to do continuous learning, and it is very difficult for us to stop and we should have the ability to learn in depth. I expect you to remember that today we have to go through a way in both knowledge and change management, which is called learning. There is no other way, all of which must be done through "learning".

 

The fifth question, why should a manager pay special attention to the acquisition of incremental knowledge?

 

As far as I am concerned, knowledge will be the most important management factor and productivity factor, and incremental knowledge will become even more important. If we can combine the stock knowledge and incremental knowledge well in one person, this would be a very meaningful thing where new business studies offer managers more help.

 

The only way to gain incremental knowledge is to learn for life. Lifelong learning requires three abilities: basic learning ability, process learning ability and comprehensive application ability. Basic learning ability is the understanding of pure knowledge, professional knowledge, and stock knowledge. Creative knowledge appears in process learning ability, including process knowledge, incremental knowledge and cross-border knowledge. While comprehensive application ability is very significant, that is, whether you can verify your understanding and imagination.

 

Drucker said that the role of professional managers is about to change, those who used to be responsible for the work, subordinates and performance will assume responsibility for the application and presentation of knowledge in the future. Whether a person's ability and future value are qualified for society is pretty crucial, and I'm afraid you really have to change.

 

Someone has been asking me whether the management knowledge is useful or not. I think this answer should be very clear: it must be useful. Then, you will ask whether the management knowledge is easy to use or not. The answer should also be very explicit: management knowledge should be user-friendly. But the reason why the answer to your question is ‘it should be easy to use’ rather than from the perspective of ‘it must be useful’ as what I have said, because whether it is easy to use actually depends on our understanding of management knowledge. The reason why we feel that a lot of knowledge about management is not easy to use is, from my own point of view, actually because you fail to get a thorough understanding of knowledge itself and its essence, so we will feel that it is not easy to use. For example, we will be very concerned about whether the theory of human resources is easy to use or not. We will agree that human resources are more concerned about competency, assessment, and evaluation. Some people even asked me a question in WeChat: which department should I give a bonus to? Is there a rigid coefficient Mr. Chen can recommend to me? I will reply to him that, this question really does not have a rigid coefficient, and in fact, the most important thing is whether you can form a consensus on performance with everyone. If you can form a consensus on performance, there will be no adjustment in the issuance of this bonus. if you cannot form a consensus on performance, your issuance will definitely go wrong.

 

In a knowledge-based economy society, the most intolerable is the waste of knowledge potential. We must find a way to receive self-training and gain profound insight and vision, but the premise is whether you are willing to accept everything more broadly and internalize it into your own. You must deeply intervene in the changes in society before you can acquire the knowledge that is deep enough and of your own, especially the incremental knowledge.

 

Lifelong learning can make you acquire incremental knowledge continuously and help you in the following four aspects:

➣ Firstly, by learning, you cultivate the ability of insight. That is, you will have views about a lot of problems, you will have the ability to think, you will have the imagination, and then you will be able to find it, and the internal logic gives your own judgment.

➣ Secondly, you can keep changes well in hand. You have relevant training to be able to do any job and grasp any opportunity competently.

➣ Thirdly, you are persuasive. As this inner thing of yourself is already connected, you will have the ability to convince yourself and others, and you will not be too anxious.

➣ Fourthly, it helps you to have concentration and willpower.This is of great help, just like I decide to study something myself and spend 30 years, then I think it is because of the support given to me by the school, so you can have this concentration and willpower.

 

These are the five problems that are difficult to reach a consensus but pretty essential in Chinese management practice. Today, I would like to share with you my cognition and understandings of these five problems further. I believe it will be helpful for Chinese enterprise managers to clarify the basic concept of management and return to the origin of management in 2018. (End of the article)

 

 

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