Be tolerant and allow entrepreneurs to make mistakes

In 2010, Li Rucheng, the founder and chairman of the group, was 59 years old and was still a year away from his oft-proclaimed 60-year-old retirement age, Li Rucheng the present as the "key turning point" of Youngor. The previous year was the 30 anniversary of the creation of Youngor.　　But Li Rucheng no publicity, two didn't send bonuses, but will senior management team in Dapengshan closed-door meeting reflection, summed up the lesson. "30 is over, the next 20 years is better than ever, this is my biggest worry," said Li Rucheng, who sits opposite to the newspaper reporter.　　In his opinion, for an enterprise, 50 is a big hurdle, 50 years to walk well, 100 years to be reliable.　　So he did a series of things, one of which was "succession planning," after all, it was crucial for a company to be the right person to lead. To his headache, Youngor is fragmented and has no absolute control of either side, even though he is less than 8.5% per cent of the founders. "Neither the state can be appointed as a state-owned enterprise, nor can it appoint its next generation to take over as a real private company." I hope we can get out of the new path.　　"The choice of successor is still on the way, but in Li Rucheng's view, this is not the most important," he said, "the establishment of a good system, through the system to control, more important." This is exactly the style that Li Rucheng has always had.　　Any single item, in his view, can not be regarded as the ultimate, also can not be ignored, a variety of individual combination of operation, is the most important competitiveness.　　He admits that the "tactics" that have played a positive role in today's Youngor are now becoming weaker, some of which may be a stumbling block to Youngor's advance. For example, in a listed company to implement the diversification of the main business strategy.　　Youngor started with clothing, but has formed a clothing, equity investment and real Estate "troika" mode, this kind of GE diversification, was once praised and imitated by domestic private enterprises.　　But the 2008 financial crisis, so that the "two wings" of Youngor suffered a small loss, although this year, its textile and apparel business net profit growth of 9.61% Year-on-year, real estate and investment business led to annual net profit fell 36.05%. In that year's earnings, the net cash flow from its operations was reduced by 55.77% from the previous year, mainly due to a decrease in the amount of pre-purchase housing for the company's real estate business. As the shares of Haitong Securities and Jinma shares continued to fall, the value of the asset impairment was nearly 1.32 billion yuan in the year.　　But as a result of equity investment losses, its annual net profit fell 36.05% year-on-year.　　Youngor's "troika" model has been questioned by investors, and its share price has suffered a roller coaster, falling from more than 20 to single-digit levels, and has not yet recovered to its previous level.　　How to adjust the strategy with the Times, to pave the way for the next 20 years, or even "hundred century", so that Youngor to embark on a benign institutionalized detour, is the focus of Li Rucheng now to think, but also test its wisdom and strategic vision of the critical moment. We are always in the "Wu Zheng Industry" 21st century: 2009, Youngor put three pieces of businessThe structure was sorted out more clearly.　　Is it the adjustment made by the financial crisis? Li Rucheng: This is not 2009 years of thinking, we have been thinking and trying to make the main business more smoothly, the financial crisis just accelerated the process.　　In the past few years, Youngor is concerned about the development of the problem, the last 2 years, in consideration for the future development lay a good foundation, adjust, practice the internal strength. Of course, this issue is also related to the succession plan. A few years ago, we accepted the practice of Taiwan Acer Group Shih and Lenovo Group Liu. (Editor's note: At the end of 2000, Shih began the Acer group's "recycling program" to cultivate the "post-shih era" of their own one-day Mr Wang, Li Yanyao and Lin Xianming; the same year, Lenovo Group was split into Lenovo computer and digital China, and launched Yang and Guo Wei.　　"21st century": indeed, the three main industries are strong, but in a listed company, the premium capacity is hedged with each other, investors can not give you a suitable valuation. Li Rucheng: This is a problem.　　For example, when the property is bad, it will have an impact on our stock price, but in fact our clothing and investment business income is very good, these may not be reflected in the share price. Stock prices are actually an integrated response.　　Why our stock price is relatively low, because the plate is bigger, and the transparency is high, do a few industries very clear, we do not engage in speculation. 21st Century: The CSRC has begun to push for a split-listing process, but it is still a while. Looking back, is it easier to set the architecture in the first place?　　For example, the real estate sector Youngor property, then put in the public company will be better outside? Li Rucheng: It's hard to tell. Our idea was to make the listed companies bigger.　　Now it seems, because the recent real estate business does not allow financing, we have so many financial assets, listed companies have no financing function. "21st century": also because of a number of main business, the United States "Businessweek" Criticism of Youngor "do not do", what do you think?　　Do you feel aggrieved?　　Li Rucheng: They're reminding us to go. I think, first, that we have aroused the concern of the U.S. Business Week, that Youngor has come to such a stage, but also to be careful to walk well; second, what is called Zhengye? I used to be a farmer, the farmer is my zhengye, then make a shirt, shirt is my zhengye, then make a suit, suit is also not normal? What do you mean by GE's Zhengye? What is Toyota's Zhengye?　　Toyota's Zhengye was first made of textile.　　My opinion is that first to listen to, people speak good, we go forward (keep), people say wrong, we struggle (improve), there is no need to dispute.　　We can't learn ge 21st century: At the same time as the business adjustment, I heard that you have reformed the system of the board of Directors. Li Rucheng: We have created a system of board meetings, a monthly meeting to allow the directors to truly participate in the specific business. There have been criticisms of the directors of Chinese listed companies, sayingThe directors are "not sensible", but we will not. At the same time, we are slowly separating the meetings of the Board and the executive floor, the board discussing the big picture and the executive floor discussing the specific business.　　In the beginning, both of them were always easy and together. "21st century": that seems to be a group decision?　　What if the decision is wrong? Li Rucheng: Don't ask too much, making mistakes is a normal thing.　　To be tolerant, to allow entrepreneurs to make mistakes, not make mistakes in the enterprise is not successful, only the enterprise can accept the mistakes of the lesson.　　"21st Century": General Electric (GE) is a global business management model, in the adjustment has no reference to GE?　　Li Rucheng: We have not studied, GE is too big, we still do according to our situation. It is not simply a matter of architecture, it is the team that matters.　　Please professor, the most optimized structure can be done, but that is useless, the key is the human configuration, the allocation of human resources is alive. Each enterprise has the characteristics of each enterprise, has its ecological environment, internal culture, can not see the problem from the outside.　　We can not learn Toyota, we can not learn GE, others are people, Youngor is Youngor, not the same.　　"21st century": like the 2009 such adjustments also did not exobrain participation? Li Rucheng: No.　　We all study by ourselves, according to our own conclusions. Now the information is very advanced, from the Internet, the media, can learn some outside information, this is in the use of Exobrain.　　A business or a person, he does not exist in his own natural things, he is constantly digesting and accept foreign ideas, ideas, and finally combined in the enterprise inside, see you will not use.　　21st Century: What do you think of your acceptance and digestion of foreign ideas? Li Rucheng: It's OK.　　I still like to meditate on something, but it all has to do with Youngor's own situation.　　Successor and property reform "21st Century": The outside world says you will retire at the age of 60, which is next year, what is the successor? Li Rucheng: That's what we're thinking about right now.　　I am a rabbit, jokingly said, Youngor stocked a lot of rabbits, "Sancho", Youngor has four generations of employees, the training of successors, there are many ways. But my biggest headache is how to set up a successor system for a company with a shareholding structure like Youngor? The state cannot be appointed as a state-owned enterprise, nor can it appoint its next generation to succeed, as the real private sector does.　　I hope we can get out of the new path.　　21st Century: Indeed, how will the successor manage and lead the company without a sufficient stake? Li Rucheng: This is going back to system building.　　Youngor is sure to rely on the system to control people, rely on the system to make decisions, the leader is important, the system is also important.　　But in the long run, we are also considering how to adjust the equity structure in the next step.　　"21st century": Will the successor be the professional manager of airborne? Li Rucheng: China's professional managers team alsoImmature. It's hard to find a professional manager in a business like ours. Youngor is also a small society, has a multicultural culture, so airborne is very difficult.　　Many options can be considered, the key is a core person to confirm is difficult. Ma Yun said very well, in the business world, he must adhere to customer interests first, employees second, shareholders third.　　We may be more responsible for shareholders in the future, and more on the interests of customers and employees. "21st century": Have you thought about these?　　Otherwise now only a year or two, it seems a little late. Li Rucheng: This is not to say "late or early" thing. I think as long as you are moving forward, there is no late early this concept.　　Youngor 30 has been doing something else for 100 years, it is impossible to think too thoroughly, everything is done, in fact, this idea is not too realistic, really is not too realistic. 20 years ago, I never considered the issue of shift, I am still very can-do.　　By this time, I will consider, to 60 years old feel very urgent, these 5 years must solve this problem. "21st century": if the handover is not as good as expected, or there are some uncontrollable problems.　　What to do?　　Li Rucheng: I've already thought about it, and the worst thing is to sell Youngor, which is possible.　　I hope that after the handover, the enterprise can operate better than me, this is my happiest thing, if I can live steadily, I will also be satisfied, if I can not go on, I would like to intervene, to think of ways to support it, after all, I still shareholders.　　"21st century": Look Back again, if you choose personal Holding, these troubles can be avoided? Li Rucheng: At that time, the practice of not holding is right. Your equity is not given to others, the enterprise does not.　　It should be said that it is precisely because I share the shares to everyone, the team is so stable, we are more consistent direction, the rapid rise of Youngor.　　In my generation, the concentration of equity is not very important, but it has an impact on the next generation.　　"21st century": You will "help the new successor to the horse, give a Ride", escort for a period of time? Li Rucheng: It is not possible to make a conclusion now, it is necessary to see. He is to be escorted, that will escort, his personality independence is very strong, there is no need to escort.　　Your escort is helpful to the next team, you do, do not help, have side effects, do not.　　Distribution to the first-line staff "21st Century": Employee shareholding, so that the old employees share the company's development dividend, what to do after the new? Li Rucheng: This is a problem, at that time, the incentive should now be retired, at that time more than 800 people, even when we were a doorman, are millions of millionaires, but now a large number of new cadres, we now do not have so much equity, of course, equity also has, but the high price of equity, It's been a lot of times, so now we're thinking about it.　　In addition, there must be some changes in the distribution pattern. "21st century": How to change? Li Rucheng: The basic distribution we have to deal with the interests of shareholders, employees, the future allocation of special emphasis on the front-line staff.　　We have set a principle in these two years, the growth ratio of middle-level cadres cannot exceed the growth of grass-roots staff, and the principle of high level no longer increases. With the development of Youngor, the income of our employees to give him a guarantee, annual growth to reach 10%, so that we can recruit excellent staff, middle-level cadres in principle not more than 5%, the high-level principle does not increase. Employees are the basis of economic development.　　The distribution mechanism is also very important to Youngor, the original method still works, some new things to come in.　　The new 5 years: Talent training is the key to 21st century: If Youngor might have had some lessons in the past, what would it be? Li Rucheng: We are also summing up.　　If Youngor now seems to have some regrets about future development, I think there may be some gaps in the training of talents.　　We all know more economical, more reasonable to use people, but do not want to cultivate, the use of more, less training, talent or need to constantly try to cultivate. So, we now have a sense of urgency to speed up the development of Youngor's next round of talent.　　Enterprise 30 years, to a very critical turning point, the next 20 years than the original development of 30 years faster, this my heart is no bottom, I am not sure, because we do in this respect is still relatively scarce. But this cannot be said to be a mistake.　　Any action, policy or behavior, under certain historical conditions, can play a certain effect.　　"21st century": Is it still a few years late to realize the problem? Li Rucheng: It's hard to tell. The development of Youngor for so many years is not the first to determine what kind of enterprise must be developed into. Like a country, are stones, and finally to sum up, and then to set down, there is a lag.　　Business is the same, there is no such a stage, you can not have such a feeling.　　"21st Century": Enterprise development Fast, also requires a lot of entrepreneurs, in addition to learning power, but also to deal with all aspects. Li Rucheng: In fact, not so complicated, to do their own things well, everything is good co-ordination;