Under the global pandemic crisis, 5 points of effort for Chinese companies

Original Chen Chunhua Spring Blossoms 2020.5.11/Huabao Golden Samurai UPS Power Supply

Guide: Facing the global epidemic crisis, how do companies get out of trouble? How can SMEs find a path of development? On the afternoon of May 7, Professor Chen Chunhua gave a wonderful report at the "Phoenix Net Finance Cloud Summit" and shared with you the five strengths of Chinese companies to respond to the crisis.

Starting in the spring of 2020, the entire market and environment we are facing are unfamiliar to us. The development of the entire economy has entered the "new normal of the global economy", which is completely different from the past.

What should we do? Especially for small and medium enterprises, how should they deal with the crisis?

I am a person doing micro research. I will discuss with you how companies should deal with crises from a micro level.

01Cognitive crisis and live with it

In the face of a crisis, the first choice companies need to make is to quickly adjust their perceptions. Because when all the environment is uncertain, the only thing we can do is to recognize the environment and find ways to live with it.

Cognition One Coexist with the uncertainty caused by the crisis

The uncertainty under the crisis will continue to occur. We not only need the courage to face it, but also the ability to recognize it and the ability to live with it.

How do i do this? The core is to change yourself.

Looking back at the SARS in 2003 and the financial crisis in 2008, many companies have found their own development paths in the crisis. For example, Alibaba, Tencent, New Oriental, Ctrip, JD.com and other companies all started in the SARS crisis. When these companies encounter all challenges, they adjust themselves as soon as possible, accept this change, and find their own development path.

Unlike many people who say "'SARS' is both a challenge and an opportunity," Jack Ma himself never said that. He has a higher elaboration: "During the SARS period, no one should think that this is an opportunity, but should think about what troubles everyone encounters and how can we help everyone."

Cognition 2: Strengthen confidence in self-development

Those companies that can get out of the crisis have a common feature, that is, they all "firm confidence in self-development."

The difference between good managers and ordinary managers is precisely this. A good manager will not regard the crisis or the uncertainty of the external environment as a constraint. On the contrary, he will turn the crisis into an opportunity; while the ordinary manager emphasizes his own business performance when the environment is good, and when the environment is bad Emphasize that performance is affected by market conditions.

When a crisis comes, good managers must only regard the crisis as a business condition, not an excuse for business, and they will strengthen their confidence in self-development regardless of the environment. Especially in adversity, these companies can show their advantages and will usher in strong growth once the crisis passes.

Cognition 3: Evolutionary response rather than prediction and judgment

In a constantly changing environment, everyone must evolve as much as possible to cope with changes, rather than simply predict and judge.

Because in huge changes, there are too many dimensions that affect it, and in many cases it is actually unpredictable. If we cannot evolve to deal with it, we will become very passive.

Especially in this epidemic crisis, the biggest challenge is how to balance the relationship between epidemic prevention and control and economic recovery. If it is done for the prevention and control of the epidemic, it may be difficult to restore the economy; if it is done for the restoration of the economy, there may be a great risk in the prevention and control of the epidemic.

If we use prediction and judgment to do it, we may not be able to really find a solution to the problem. In times of crisis, the biggest test for companies is not whether they can predict correctly, but whether they can respond dynamically. Continuous and flexible adaptability in a crisis of uncertainty is a capability that enterprises must master.

Cognition 4 Self-adjustment mentality

The epidemic crisis has had a huge impact on many small and medium enterprises. As a leader of small and medium-sized enterprises, you need to pay special attention to the adjustment of your own mentality. The psychological stability and state of the leader is actually the stability of an organization.

In the cognitive adjustment of enterprises, the adjustment of the manager's own mentality is a problem that needs special attention. Managers must maintain strong stability to ensure the stability of the entire organization. What does this stability depend on? In fact, it depends on the manager's own mentality.

I suggest everyone to be "four hearts": empathy, equanimity, positivity and confidence. This "four hearts" requires managers to understand the environment, to focus on what they are doing, to be positive and optimistic, and finally to have confidence and believe in themselves.

Cognition 5 What is uncertain is the environment, what is certain is yourself

In the face of all uncertainties, we must clearly tell ourselves, "In an uncertain environment, it is ourselves that is certain."

Huawei has encountered many crises in the course of more than 30 years of development, but it has been able to reach today step by step, including the major crises in 2018 and 2019. Faced with the impact of the US "Entity List," Ren Zhengfei told his team very clearly: "The most important thing for us is to do what we can do well. What the US government does is beyond our control."

In Huawei's risk concept, companies should be plants rather than animals. Animals can move, and once plants grow, enemies can't avoid them when they come. However, the most powerful aspect of plant strategy is to take root. The deeper the root, the stronger the plant. Regardless of the environment, plants must find ways to absorb nutrients and keep themselves strong.

Why can Huawei turn crises into opportunities every time they face a crisis, and can achieve growth and development? This has a lot to do with Huawei's perception of the team and its risk concept.

Therefore, I suggest that everyone should first adjust their perceptions in response to the crisis. What does cognition mean? It refers to the ability to understand and transform all externally input information, and then make different behavior choices based on this ability to understand and transform.

02Enterprises must act in 5 areas

After adjusting the cognition, the next important thing is the company's actions. I suggest that companies make efforts in the following five areas.

1. Operate prudently and be prepared for tough battles

To deal with the crisis, we must be prepared to win this battle.

First, the epidemic is destroying the basic norms of global manufacturing. The epidemic will affect the global supply and demand relationship, and will bring about a completely different supply structure and cost structure. This difference requires companies to have very high efficiency and sufficient cost capabilities.

Many small and medium-sized enterprises have to meet the daily needs of consumers on the one hand, and support the entire industry on the other. Therefore, if SMEs want to survive, they need to be able to reconstruct the supply chain so that they can occupy a place in the entire industrial chain and supply structure.

Second, the global epidemic prevention and control has brought about a lot of uncertainty. While the epidemic has changed people's lifestyles, it has also reconstructed business models.

During the epidemic, some small and medium-sized enterprises have been adjusted or faced very high risks because they have not made adjustments quickly in response to such changes. However, some small and medium-sized enterprises have made adjustments very quickly in this round, switching from the original offline store model to the online live broadcast model, from only providing products to providing services.

Third, under the huge and rapid impact of the epidemic, companies need to adjust their perceptions quickly. This requires us to reconstruct the value system.

Therefore, the first point of effort for companies to deal with the crisis is to operate very cautiously, prepare for tough battles, lay a solid foundation, and strengthen internal strength.

2. Focus on current operation, balance current operation and long-term strategy

I became the president of a company in 2003 and soon encountered SARS. At that time, 95% of the products were exported to Japan. This business was cancelled because of SARS, and the company had no way out in an instant. In this case, what is the only thing to do? In fact, it is quick adjustment and transformation of current business. It is the most important thing to survive in the current period, and then consider whether there is a long-term possibility in the future.

I discussed with the team at that time, after canceling the export business to Japan, where can the company's large number of products go? There is only one answer, which is to return to the domestic market. Soon, the entire team made great efforts to adjust the current business. As a result, we achieved the best operating performance in history that year.

What can you do to focus on current operations?

First, transform the current business with no less effort than anyone else. For example, how to maintain cash flow? In the absence of external business and cash inflows, a very important method is to challenge the limit to reduce costs.

Second, in an uncertain environment, the core of the company's current performance sources is organizational efficiency and customer language.

The case I saw not long ago gave me a lot of inspiration. Affected by the epidemic, the overall sales of the domestic automobile industry in the first quarter fell by more than 40% compared with the same period last year. A high-end auto parts supplier found that in the declining market share, the demand for low-end and mid-range cars did not decrease but increased.

It immediately returned to the customer demand side, quickly adjusted its R&D department and marketing department, and reduced the cost of high-end cars to meet the needs of low-end cars. Ensuring higher quality and lower costs enabled this supplier to grow against the trend, with orders up 50% over the same period last year.

If a company has space and strength in a crisis, it can also open up its organization and make plans for future growth based on changes. But there is a prerequisite that is to focus on current operations. My suggestion is, "Do the present well, that is the future."

3. Competent companies should pay more attention to the symbiosis of industrial partners and value partners

This suggestion is for some relatively capable companies. Under the epidemic crisis, many small and medium-sized enterprises need to use the method of group heating to face the special environment together.

Roosevelt’s New Deal can rescue the United States from the Great Depression. One of its important strategies is called the "Blue Eagle Movement." Without the participation of 2.5 million employers to ensure that all employees receive wages during their employment, this movement cannot be realized.

During the epidemic crisis, capable companies such as Huawei, Alibaba, Tencent, and Ctrip have issued a lot of letters to their partners. Many companies are also looking for ways to reduce the various costs of small and medium-sized enterprises. This is what needs everyone to work hard to do.

From a big tree to a forest, this ecology can survive. Without the entire ecology, it is difficult for small and medium-sized enterprises to survive, and the recovery of the entire market will be greatly affected. Competent companies should pay more attention to the symbiosis of industrial partners and value partners.

4. Online and digital is a must

After the epidemic crisis, online and digitalization have become a must-have item. People from all walks of life may have to learn online and digital. Just like our teachers, almost all teachers must teach online.

Online capabilities can see the company's ability to respond to this round of changes and opportunities.

The department store industry is an industry that has been greatly impacted by the epidemic. However, Rainbow Department Store, because of its digital capabilities, has increased its total orders by six times during the epidemic, but it has achieved an astonishing growth against the trend. Wisdom Tree Network provides the world's largest university credit course platform. Enterprise WeChat and DingTalk provide an open online work platform.

Whether it is work or study, everyone has entered the online mode. Therefore, online and digitalization is a basic survival ability, and we need the ability to turn it into our own opportunity. If companies can make themselves online and digital, they may usher in a new spring after this round of crisis.

5. The entrepreneurial willpower

Under the huge impact, we must rely on the entrepreneurial willpower and entrepreneurial spirit. Because the more in the crisis, the more we need to rely on leaders and entrepreneurs.

Entrepreneurs have four characteristics that can lead organization members to overcome difficulties and get out of difficulties.

The first one is that the leader is the compass in the crisis and can point everyone in the direction.

The true leader determines the efficient operation of the organization, can lead the way, inspire, restore hope, and lead the members of the organization out of crisis.

Second, the essence of the issue of corporate growth is the issue of managerial attitudes. If he believes in growth and he believes in facing crises, he can always find opportunities in crises and changes.

Thirdly, if we can analyze the crisis carefully, it is possible to find any possibility.

The fourth is to interact with the environment to give employees confidence and make clear choices.

Recently, many entrepreneurs are willing to live broadcast their goods and try something they have never tried before. I appreciate it very much. Many people are evaluating how much they can sell, and whether the live broadcast is good or not, I think these are not important. The important thing is that they maintain the interaction between themselves and the environment, give employees confidence, and give everyone a clear choice.

When entrepreneurs, especially those of small and medium-sized enterprises, can possess this kind of business willpower and can constantly seek solutions in crisis, I believe everyone will believe in entrepreneurs. If we have a direction, we can get out of the predicament. Therefore, the focus of problems in the crisis will eventually fall on the leader.

To cope with the crisis, companies need to continue to exert their efforts in the above five aspects. The most important thing is to ask yourself whether you are serious enough and have enough courage to continuously adjust yourself in every moment?

03Entrepreneurs have 4 requirements for themselves

I finally ended this sharing with a few important points in the 2020 New Year message.

Entrepreneurs must have four requirements for themselves:

First, challenge yourself to have a future. If you are based on the knowledge of the past, in fact you will not be able to walk into the future.

Second, be a good one to live together. You must first do yourself well and devote yourself to your irreplaceability in order to find the possibility of symbiosis with others. Today, symbiosis and synergy has become a way of survival.

Third, we must benefit him first before we can benefit ourselves. In this epidemic crisis, we can deeply feel that no one can take care of themselves, and that everyone is actually one. In this mutually integrated environment, only when you are willing to be altruistic can you be self-interested. This is not only the prevention and control of the epidemic, but also the economic recovery, one of the most important concepts we should discuss.

Fourth, this is the end, this is the beginning. This is to borrow a sentence from the famous critic Wallerstein. We may miss something at any point in time, but as long as we restart at this point in time, the opportunity will come again.

Just like Microsoft, even if it missed the mobile era at that time, it quickly entered the cloud era and returned to the highest market value, with new possibilities.

Finally, I would like to end today’s communication with you in one sentence, “What those people who live in the future can do is actually fight against the present themselves.” I wish small and medium enterprises can find their own way. (End of this article)