The truism that you learn from the past can be applied in almost all aspects of life, even in business so to say, particularly in improving leadership and management strategies and in making better decisions for future success. Read on and discover how learning from and using history led Huawei to becoming a global giant.
Being an effective leader is not only a concern in the business world but basically everywhere you look in society. Because of this pregnant concern, we are all searching for recipes, handbooks and other wonder tools to achieve the status of a leader-can-do-it-all. One dimension that may be instrumental in making you grow as a leader is currently debated. This dimension is whether historical knowledge can play a significant role in becoming a more effective leader or not. Why should there be a debate? Isn’t it the case that one hobby for many business people – once they have some free time on their side – is exactly to read about leaders in the past? Is it not a given to use historical leadership efforts as a source of inspiration to lead your own company, department or team?
Yes, the practice of reading biographies of successful business leader is widespread in the business world today, but at the same time, most business people – when reading those books – quickly realize that many conditions being discussed in the book are not a reality in their own business life. Consequently, reality quickly kicks in and the focus returns to the “here and now” without taking any lessons from the past with them to use today. It may be sheer disappointment or frustration that may guide this reaction, but at the same time it is also being documented that today’s generations wonder why they should listen to the past. This is especially the case when we see that the future generations may be well less off than past generations, thereby emphasizing that our historical deeds have not been too successful after all.
The beautiful song of Sam Cooke “What a wonderful world” even features the famous words “Don’t know much about history”, so, maybe the secret for being a truly effective leader nowadays is to live in the present and not being aware of the past. A focus on what you feel here and now in a way underlies also the success we expect from charismatic leaders. People do like to believe in the myth of the leader who is so appealing and inspiring that you can only look up in wonder. You feel enlightened and motivated to follow right here and right now. However, if we do allow ourselves to look back in the past, too many examples exist that following blindly and only relying on your intuition is not necessarily the way forward to become successful on the long term.
So, yes, it may well pay off if we can take more time and reflect on one’s own leadership abilities and what can be improved by learning from the past.
Take, for example, the widely endorsed assumption that the best leaders lead by example. Where does this idea come from? How do we back up over time that this style works? One reason is that leaders who lead from the front are inspiring and contribute to our faith that we are following a path that is righteous and likely successful. A famous example illustrating this kind of inspiration concerns the British vice-admiral Horatio Nelson. Nelson has been identified as one of those remarkable historical figures who contributed much to the validity of this leadership law of leading by example. Known for his many naval victories, Nelson inspired because he took the lead in battles where he suffered many injuries – losing an eye in Corsica and having amputated an arm in Tenerife. His great courage and sense of determination earned him the reputation to be nothing less than a hero being able to mobilize his men. And, isn’t this what all effective leaders aspire to do? Aren’t this what business people today aim to achieve as well? That is, having a work force they can motivate and inspire to perform better than before?
The admiral Nelson story points out an important reason why learning from history is an essential part in any leadership training. Specifically, most problems leaders nowadays face are not so unique when looked upon from a historical perspective. Over time, it seems, that most problems leaders face have already been faced by others in the past. In other words, the leadership challenges you face today are challenges that repeat themselves over time! A smart business leader therefore needs to have some sense of historical awareness. After all, as humans we are all part of history. We all speak languages that have developed over time, use products and technologies that have their own history and most importantly because of our biological ties we do relive to some extent the past (but then in future times).
One of the important challenges companies nowadays face is dealing with change. Leaders need to ensure that their companies can transform themselves successfully from one given state into a new one that is more adaptive to the dynamic environment. This type of ability implies that as a leader you understand what bridges the old with the new company. This line of thought makes clear that understanding the linkages between past and present is an absolute requirement for successful leadership in business. Another aspect of contemporary business is that we live in a global world, as such introducing the question: which history do we focus on? In this respect, I examined the significance of historical awareness in the context of Chinese companies. China has 5000 years of history and many Chinese citizens are proud of this past. It provides them with a sense of identity, but at the same time it also has made them focused on primarily local business for a long time. Furthermore, with the rapid development of the country in the last 40 years (since the opening of the country in 1978), many historical places were removed in favor of a more modern view on China. As a result, despite having a rich and ancient heritage, the current Chinese business person is not so much involved anymore with the past.
An important task for Chinese companies going global is therefore to being able to successfully integrate their focus on more local historical events with a global business mindset that learns from a diversity of historical events and influences.
As Thomas Jefferson – who was a veracious reader of history – noted: “A nation that expects to be ignorant and free in a state of civilization … expects what never was and never will be.” In other words, leading a global business also means to understand the history of the world and learn from these lessons to conquer. One Chinese companies that has taken this message to heart is Huawei. This company managed to grow into being one of the global leading technology companies and in this process was able to maintain its Chinese roots but also grow up with a global mindset – thus successfully combining Eastern and Western perspectives. Huawei, which was founded in 1987 in Shenzhen by Ren Zhengfei, has grown into a private company serving more than 3 billion customers worldwide and earning 67% of its revenue from outside China. The company serves as an example for many Chinese companies wanting to go global. According to its founder, the ability to learn from and use history in efficient ways may be lacking for most Chinese business people. Specifically, Ren Zhengfei has noted that “Today’s leaders are fire fighters – they have no sense of history. Therefore, they more easily repeat the mistakes of the past.”
What is interesting to realize is that Ren Zhengfei is in a way history himself for the Chinese business world. Given the fact that only in April 1988 at the National People’s Congress, China’s parliament approved that private companies could do business, and that Huawei was founded a year earlier, makes Ren a somewhat mythical figure we can learn from (Tian, De Cremer, & Wu, 2017). Throughout his struggle with the State-Owned Enterprises enjoying protective measures from the government, Huawei always survived as a private company as such leaving a landmark in its industry. What kind of leadership was needed to achieve this result? One of the defining features of Ren Zhengfei’s leadership is his preference for using vivid images and practice of story-telling. He is a big advocate for using historical facts to illustrate vision rather than using words of vision. He is convinced that the more you talk about something the less it is there. Understanding his leadership philosophy makes clear that Ren Zhengfei made a mark in China’s business history by being aware of history himself.
How does Ren Zhengfei integrate historical awareness in his decision-making? The use of history at Huawei is demonstrated by how their founder analyses (1) Huawei’s leadership philosophy, (2) the make-up of the company’s DNA, (3) their strategy to the outside world, and (4) their approach to motivating and making employees in Huawei excel. Below, I elaborate on each of these four points in more detail.
1. The historical dimension of Huawei’s leadership philosophy
Throughout his career Ren Zhengfei has given much thought on the value and significance of leadership. Driven by a passion to succeed and ensure Huawei’s survival on the long-term, he realized soon that a focus on past is not all bad as it allows for taking the nutrition of the past to the future. It also forces you to reflect on identifying what was done well in the past and undertake appropriate and constructive action to translate those strengths into the future. After all, in his opinion, there is no value to be created by introducing and fostering a conflict between nostalgic feelings about the past and your future tasks. If you do so, however, you will constrain yourself in your leadership as you will always be drawn back to the past. It is those who able to connect past and future in constructive and inspiring ways that can be called visionary leaders.
Considering this leadership philosophy, it is therefore no surprise that Ren Zhengfei values very much the importance of history in how well a company can fare. As a case in point, Ren Zhengfei has been known to say that if after the Cultural Revolution no reform would have taken place in China, then Huawei would not be here today (Tian et al., 2017). In his view, there was no lack of talent in the generations before his, it is only that they just did not live at the right moment in history. For this reason, Ren Zhengfei, believes that we have been given a great age to live in, with almost unlimited opportunities. In his words: “It is like riding on a flying carpet. It is not us who are flying, it is the carpet carrying us upwards.”
2. How history made the company’s DNA
Founded in 1987, Huawei underwent several stages of development where they shifted from being a Chinese company to a global giant (Tian, De Cremer, & Wu, 2017). Being able to transform in such a way (especially in times when most Chinese companies were not interested yet that much in looking beyond the Chinese market) requires not only a vision but also a strong sense of determination. In Huawei the belief exists that one’s sufferings in the past will help you to persevere in any future actions. Ren Zhengfei his own childhood is in that sense a perfect example of why Huawei contains this determined fighting spirit – a defining element of the company’s DNA. He was born in 1944 in South-West China’s Guizhou Province, which at that time was one of the poorest regions in China. Having to live together under those circumstances with his 6 brothers and sisters made that poverty and hunger were part of his daily life. This experience makes that Ren Zhengfei has learned not to take anything for granted.
As a founder, Ren Zhengfei has always tried to infuse a strong sense of determination in Huawei’s work environment. To achieve this, he makes use of past events to illustrate that hardship is inevitable but is needed if one wants to be successful in the future. One such typical example is the following: In 1999, Ren Zhengfei visited the Voortrekker Monument in Johannesburg, which honors the Dutch immigrants who spent 19 years moving from Cape Colony to the continent’s interior in the 19th century. After leaving the monument, he cried for hours. After seeing how hard the lives of these Dutch immigrants had been, he thought of how hard Huawei had suffered during its first 10 years and that their sense of determination made them survive and eventually excel (De Cremer & Zhang, 2016). It is for this reason that in his speeches he often reminds his audience that a main goal for Huawei is to stay determined else Huawei may not survive. Illustrative of this fact is that during one of those speeches, someone asked him what Huawei’s most basic goal was. He replied immediately: “survival.” The person then asked what Huawei’s goal would be. Ren Zhengfei replied that it was also survival. If not for the strong will and beliefs of Huawei’s founders and leaders, the company might have failed long ago.
3. How history shapes Huawei’s external strategy
When Huawei moved its business towards the European Union (EU) market, suspicion and a lack of collaboration was their initial share. Seeing this new entry into the market made established EU companies fearful that Huawei – in line with Chinese stereotypes – would use dumping prices to acquire market share quickly. As a result, these companies expressed strong opposition towards this Chinese giant, which led EU officials to investigate the anti-dumping act in relationship to Huawei’s products. How to deal with such an opposition? In looking for an answer, Ren Zhengfei, found inspiration in the heroic tales of the Glorious Revolution that took place in England in 1688. This tale tells the story of how King James II of England was overthrown by a union led by William of Orange in 1688. What was unique in this story was the fact that the victory of William of Orange was achieved without bloodshed – therefore also referred to as the bloodless revolution. Inspired by this historical event, Huawei realized that the best strategy for becoming a player in Europe would be to adopt the belief that a stronger – and thus bigger – market to be shared by more companies could only be achieved by cooperating with its competitors. In line with this belief, Huawei undertook great efforts to frequently interact with their European competitors to create some good-will. These efforts eventually paid off when companies like Ericsson and Nokia decided to be supportive in counteracting the assumption that Huawei was dumping its products in the EU market. Ever since then Huawei prides itself internally to embrace the idea of opposing forces in which cooperation and competition can go together (De Cremer & Tian, 2015).
4. Using history to make employees excel
Rem Zhengfei believes that all people can be heroes (De Cremer, 2017). Such a belief implies that people have the flexible ability to grow and improve on their strengths – if guided well. In addition, this way of looking at motivation suggests a perspective on human performance that is driven by a free will but combined with a guiding leadership style. Where did Ren Zhengfei find this wisdom? His insights are again based on a historical sense of awareness. Specifically, he admires the decision of the West to provided people with the freedom to choose and act, but with restrictions. He believes that these restrictions are needed because only the power of systems can control the human desires of greed and selfishness. To illustrate this logic, Ren Zhengfei, refers to the story that when Europe was confronted with the depths of the Dark Ages, they decided to implement organizing systems at the heart of its civilization. In China, during the glory years of the Tang and Song civilizations, the focus, however, was to rely on the positive powers of human nature. The result of this difference in focus was that China declined and Europe became more powerful. Ren Zhengfei believes that China’s assumption that people at birth are naturally good is wrong. According to him, people are not born as good people. For this reason, we need systems that help humans to achieve good things. This logic is, in his view, is represented well in our idea on why we have adopted education systems in our society. That is, to achieve excellence it is needed that people receive education when they grow up. In a similar vein, we need systems to mentor and guide employees.
In conclusion, becoming an effective leader able to transform companies and guide them from the past into an uncertain future can benefit significantly from knowing your history. As a human being, we are a result of what happened in the past and as such are given the opportunity to carry the best practices into the future.
How you will do this is something that creates your own place in history. Therefore, it is wise to learn lessons from the past by not only aiming to avoid repeating mistakes, but also to inspire and motivate the right kind of behavior. Of course, all individuals have their own life path and it is those unique experiences in combination with the lessons of the past that will decide whether your leadership will be great or not. In this respect, the Chinese film Gold and Sand from the 1960s tells a story of 4 young people entering the Whampoa military academy and ultimately taking very different paths in life. They have the same start but eventually lead different lives and achieve different aims. Needless to say, all of the above illustrates that a wonderful business is clearly a reflection of the past!
Featured Image: Huawei Founder: US wants to curb China © Zhang Rui / China.org.cn
About the Author
David De Cremer is the KPMG professor of management studies at the Judge Business School, University of Cambridge, UK, a co-founder and co-director of the One Belt One Road center at the University of Cambridge and a visiting professor at Peking University HSBC Business School. He has published over more than 205 academic articles and book chapters and is the author of the book Pro-active Leadership: How to overcome procrastination and be a bold decision-maker and and co-author of “Huawei: Leadership, culture and connectivity”.
1. De Cremer, D. (2017). Organizational vitality: The life line of your company. The European Business Review, November-December, 44-50.
2. De Cremer, D., & Tian, T. (2015). Leading Huawei: Seven leadership lessons of Ren Zhengfei. The European Business Review, September/October, 30-35.
3. De Cremer, D. & Zhang, J. (2016). Why Focus-based Leadership is important to Huawei’s Business Strategy. The European Business Review, May/June, 40-43
4. Tian, T., De Cremer, D., & Wu, C. (2017). Huawei: Leadership, culture and connectivity. Sage Publishing.