Shi's crisis leadership

Into Suntech, two iconic solar-powered photovoltaic office buildings were the first landscapes, and the building, which was built in 2005, cost about 200 million yuan. "If the current PV plate market, the whereabouts of the 50%-60%."　　Shi told reporters. The price drop is also the epitome of the PV market over the past seven or eight months.　　The international price of PV panels has fallen from more than $4 trillion last year to $2.5 trillion today, and is still going down. Shi used "Back to the beginning" to describe Suntech. But the reality can not avoid, "know if there is no financial crisis, Suntech this year's profits can do 1 billion U.S. dollars", under the Shang of the PV bubble disillusionment, Suntech shares plummeted, from December 2007 to 85.16 Yuan to a minimum of March 2009 of 5.34 Yuan, the personal wealth shrank by more than 90%; Suntech's internal management problems, which have been lurking in the past, have also been concentrated: staff turnover, corporate solidarity and managerial power have been questioned.　　Shi confessed that this was his "biggest test of entrepreneurship".　　Although Shi said he had already seen the industry has a bubble, "when clothing, do real estate all switch to do PV, the industry bubble has been very obvious," he said, "Do this industry, if they do not understand technology, is very easy to be fooled by others." But the human nature of too greedy and ego is often "know and do not" paradox: on the one hand is clearly seen there is a bubble, but also have to "drift", perhaps the wise people always confident that they can step on the node of the market, to condone the maximization of the bull's interests,　　And thought that he could be smart enough to flee quickly before the market fell.　　Even if it is clear that China's excessive investment in photovoltaic and the excessive price of silicon in the global Rise, Suntech in 2007, the price of silicon materials in the case of a long list, investment upstream silicon material companies-after the collapse of silicon prices, this becomes Suntech's cost burden.　　Financial statement analysis, 2008 years ago three quarter gross profit margin of 22%, 24%, 21.6%, silicon Price plummeted after the fourth quarter gross profit margin only 0.6%, if there is no inventory factor, the fourth quarter gross margin should be in 13.1%. Whether he can cross the road is a "big test" for Shi from the entrepreneur to the entrepreneurial growth path. At the same time, Suntech CEO, he began to launch a series of self-help.　　What we can see right now is that, strategically, Suntech has infiltrated the downstream market of the industrial chain, participated in the construction of solar power stations, entered the "solution" market in order to reduce reliance on "manufacturing", and at the same time opened up new international markets and domestic markets by investing in the local market to address policy constraints.　　Reflecting the gains and losses of the Suntech crisis, Shi argues that Suntech's use of government relations and media relations has been unsuccessful, and that it is not bad that 10% of what was reported to Suntech in the most difficult times. "The so-called catches, good time people come to boast you, bad when the gun hit"He made a gesture with his right thumb and forefinger," he said.　　He still believes that Suntech signed a large number of long list strategy is not wrong, because the long-term stability of the single, to ensure that the upstream supply of raw materials stability-to know, at that time the market is in short supply, orders full.　　"To learn from the seller's market, to transfer to the buyer," after an average of three months of inventory, Shi began to call on staff to change. Shi admits that human resources are now a bottleneck. Prior to this, Suntech had paid for Mr. Johnson Chiang as COO, but resigned this June for personal reasons.　　"We will be more cautious about the airborne of the top team."　　If all this is an operational adjustment, Shi believes that his biggest consideration during the period of the market downturn is a more systematic review of Suntech's business values. "The bigger the company, the more important it is to discover the value of values," he said. What values guide what kind of action, short-sighted "Silicon is King" judgment, led to the proliferation of photovoltaic upstream enterprises and the mess. He even thought that those who left Suntech were mostly "different" people, "want to go?" Others pay higher?　　No problem, please,please go.　　Shi said he had no pressure, he patted his forehead with his hands, said his forehead is not "vertical", thereby proving himself to be a "will not frown", even if the stock price falls at the lowest, it is still "eat, sleep." Shi told reporters that he had recently been reading the "enmity and the Decade", "revenge and this man is a great, a firm change, I need his spirit of change."　　"Change:" The biggest test of entrepreneurship "21st Century": you have always said that you see the industry's bubble, there are some precautionary measures in advance? Shi: To be honest, I didn't realize that the last two years I had a bubble, I couldn't understand the market so well.　　But we are predicting that there will be oversupply in the market because of the financial crisis, the bubble is six months early.　　We have some response measures, such as cost control and efficiency improvement, we originally expected that even if the oversupply price drop by 10% to 20%, our profit this year will be 1 billion dollars! "21st century": but from the 08 Q4 earnings and this year's Q1 earnings, the loss has occurred. Is the price of the main tun-Si and the long list too high, as analysts have said?　　Is this a decision making mistake? Shi: I don't think it's a mistake, I don't think anyone has done a better job than Suntech, with a three-week inventory of material that's normal, our raw material stock is about three weeks to one months, depending on the material. Before August last year, we have a lot of orders, if not one months of raw material inventory how to deal with?　　At that time did share some upstream silicon companies and signed a long list, but the financial crisis came overnight, inventory four quarters of impairment, this is normal. I think the long list relationship is still very heavy.Want, or have a long list. If China had signed a 10-15-year long list with Rio, it wouldn't have to talk about it every year. The United States and Saudi Arabia for the United States 5 U.S. dollars a barrel of oil, this is the 1950 's talk with others.　　Our current long list probably accounts for 60% to 70%, others depend on the spot market.　　"21st century": But long single on the price of the locking and payment methods, directly affect the profit.　　Shi: Our long list price is also very competitive, we just place an order when we need it, and now everything is customer-centric, price and supply can be talked about, Suntech is the world's largest customer, no one to offend us, this (long single problem) is not important.　　"21st century": But Suntech is a listed company, the share price will react ah, investors there will be pressure?　　Shi: I understand the share price, decided that the stock price is the trend, the industry, and then the company, as long as my company no problem, do not worry too much, if it is the trend of the problem, I also can not save my share price, powerless.　　It doesn't matter to me that I don't want to make that much money. "21st century": During the Spring Festival, you write to employees, said to adapt from the "seller's market to the buyer" change.　　It is not the change in the big environment that makes some changes in the way you think. Shi: neither.　　In fact, I think the industry is rational, our 2003-year, 04 component price is already less than 3 U.S. dollars, and then the price increase for us this is equivalent to a bonus (dividend), we are not planning to develop the price is so high, this year's solar panel price of 2.5 lower, which I predicted last year.　　Why am I writing that letter? More is the warning to our employees, want them to change, because I have the idea is not useful, such a good situation staff not necessarily this did not think, remember the "Huawei of the Winter" I was two years ago let management, perhaps at that time to see no such a personal experience. But with the depletion of energy, the more upstream, the likelihood of future bargaining (negotiation) capacity will be greater. I think this is a trend. Do not underestimate this, do not think that the financial crisis, temporary oversupply, will be completely changed in the future.　　This is one of my views that may change from buyer back to Seller's market in the future.　　Self-help: Go down, go outward, go inward "21st Century": PV panel Components market bubble broke, where is the market opportunity? Shi: Developing new markets. In the past we have relied heavily on the European market, we have a joint venture in the United States this year to build solar power stations, already two, has won the first 35 MW project, will start next year.　　There is also a 1GW project under tender; in Europe, Italy, Spain and other fields, we are also cooperating in the development of downstream markets, including engineering construction.　　"21st century": After the construction of the power station, it is not possible to stabilize Suntech's battery sales market. Shi: Yes. Because not every company can do downstream, the world AlsoFirst Solar, SunPower and Suntech three. Downstream requirements for technology, on the scale, on the future operation of the power plant, design and financing, can do very few people.　　is the combination of technical strength and economic strength. "21st century": as you've said many times before, you've always wanted to jump out the bottom of the "Smile Curve".　　Is there any chance of seeing it?　　Shi: We are transforming into solutions, and I hope that the future Suntech will slowly reduce its reliance on manufacturing and get into the solar integrated solutions market, like IBM. 21st Century: Are there any orders now?　　What is the main place?　　Shi: Mainly in Europe and the United States market, slowly began to do.　　21st Century: Why is it more expensive to build factories abroad this year? Shi: We have three headquarter in the world, North America in San Francisco, Europe in Switzerland, Asia and Africa in China. This is also due to the pressure of local policy, the Germans said, "We have introduced policies to let you Chinese to enjoy, your China's policies we Germans can not enjoy."　　"So we go to support local businesses, we go to local factories, joint ventures, so they have nothing to say."　　Moreover, China's low-cost labor force is also slowly disappearing, China's labor force is more and more expensive, I think, the future of the regional economy will be growing.　　"21st century": The Chinese Government has also introduced a series of new policies to encourage photovoltaic solar energy development, the domestic market is how to consider? Shi: There are some in the domestic market, but there should be 1GW next year.　　We hope that the domestic market in the future can account for 20% of the total revenue.　　"21st century": but the domestic market and do foreign markets need different ideas. Shi: There will be different, like the government relationship, but Suntech has a good brand and foundation. In terms of government relations, we have never asked the government to help with funding. We have only recently realized that there are so many government resources in Wuxi and Jiangsu province that Suntech is not making good use of it and the government is waiting to help us. In this regard, we have later reflected on the many resources that the government has not been making good use of.　　If we can use government resources as well as some domestic enterprises, then we will ... "21st century": Is there any specific example of what happened? Shi: For example, we register some other services companies, need to go to the central batch, granted for a year or two, we do not have a good use of our government resources, if we give this matter to the government, the government will naturally run down to you, do not need us to run.　　We do not understand this. Short board: Human Resource and value system reshaping "21st Century": from a company of only dozens of people in 5 years to expand to 9000 people, there will be a lot of management problems.　　What problems have become bottlenecks in development? Shi: Human resources are a bottleneck. It's not easy to recruit the people you want, the training of managers, the training of cadres is very important.　　The highest level of recruitment we are very open, airborne or to cultivate themselves, of course, if able to cultivate their own words is the best.　　"21st century": see you also concurrently as CEO, but not long ago your coo left, the high-level also carried out some reorganization, the staff loss is quite large. Shi: That explains the problem, the more senior, the more twist (operations) related, the more risk, coo this, we really want to find a person to share the day-to-day operations and management work. But different industries, different cultures, such a more senior senior, to a new industry, new companies, learning ability, philosophy to change is difficult.　　Recently we have also done a lot of thinking about talent, this question is very important. We are now outside also attract (senior executives), looking for the CEO to be able to pick up my class, if you can not find versatile, it is better to find 2-3 individual separate tube more effective.　　We are more concerned with the effectiveness of management.　　21st Century: What do you think is the core problem behind the loss of staff?　　Shi: It's values.　　"21st century": most of them believe that values are a virtual thing. Shi: No, the bigger the company, the more important the values.　　Before the listing of the company's survival, there is no time to consider, after the listing, contact more people, such as with Gore (former vice president of the United States) and other contacts, the more the feeling that the enterprise does not have a system of business values is not. Business values determine how to operate micro, how to formulate the company's strategy, how to allocate all aspects of your company input, including technology research and development investment, corporate culture and so on, if there is no business value, then our office on the first floor without circulating waste water to raise fish.　　Use your mind to guide your actions. I think China's entrepreneurs should be thinkers, will do a lot of thinking, this is very important, and do not limited to the thinking of what they do, the industry for the whole society and even human development trends should do some thinking, at least I do. To be honest, you didn't think much when you were a scientist.　　Enterprises should serve mankind and serve the future.　　"21st century": at least have a market. Shi: Yes, the more white point is the market, why I do not want to say the market, the market tends to limit people's thinking.　　will be regarded as a utilitarian thing, I just want to sell my things, just to make money, but if I promote it, I am for the community to provide solutions, so the way of thinking is not the same.　　"21st century": can be more noble to make money, ideals and money can be achieved at the same time.　　Shi: At the World Business Leaders summit in Copenhagen in June, you can see from the many details of our company that our philosophy is different. "21st century": this is good.　　But it is not easy to graft this idea into a large organization. Shi: So we have to change, to emphasize corporate culture, to keep talking about this thing, the best of the whole society are aware of this problem. Chaixiaoyan WengHaihua Fang