The Pioneering Story of Li Dongsheng from ＂Telephone King＂ to ＂Ace＂ Color TV
Xiaoxin said
Forty years of spring rain, nine Wan Li Fengpeng is a positive move. At the celebration of the 40th anniversary of reform and opening-up, the CPC Central Committee and the State Council commended 100 "pioneers of reform" who made outstanding contributions to promoting reform and opening-up, at least 18 of them came from state-owned enterprises, and the top leaders and other leading comrades presented awards to those who were awarded the title of pioneers of reform.
In order to thoroughly study and implement the spirit of the important speech delivered by the Supreme Leader General Secretary at the 40th anniversary celebration of reform and opening-up, and to strengthen the confidence and determination in starting reform and opening-up, on December 18th, the website of the State Council State-owned Assets Supervision and Administration Commission, in conjunction with the State-owned Assets Report Magazine and State-owned Assets Xiaoxin, launched a series of reports on "Pioneers of Reform in State-owned Enterprises", taking the commended advanced individuals as examples, gathering the majestic forces to promote reform and opening-up, carrying forward the reform spirit of being bold and daring to be the first, and further strengthening the "
Today, the 18th article "Li Dongsheng, the Pioneer of Electronic Industry Opening the International Market" was published.
"All one’s life, into one thing. In the face of various difficulties, challenges and even setbacks, we must not change our minds and always stick to it. " This is the experience of running a business in Li Dongsheng. Over the past 40 years, he has been sweating profusely, fighting spirit is high, and he has practiced his feelings and beliefs of serving the country by industry with all his blood.
Someone asked, is it cost-effective to invest so much in industry? He just smiled. "What about dreams?" Someone asked, was it worth risking your life for enterprise reform? He asked, "If God gives you a chance to realize your life ambition, isn’t it a pity if you don’t seize it?" Someone asked, do you regret that the international mergers and acquisitions almost brought TCL down? He waved his hand. "I will do it again and do it better." His words are sonorous, hit the floor.
Standing at the time node of the 40th anniversary of reform and opening up, looking back on the stumbling all the way, Li Dongsheng felt a lot: "Being born in this great era is the luck of our generation. Reform and opening up have made TCL and me personally."
From "Telephone King" to "Ace" Color TV
In 1982, Li Dongsheng, who just graduated from college, did not choose to work in a government unit for a decent and stable job, which made the comrades in the local personnel bureau quite puzzled: "You don’t want such a good job. What do you want to do?" Li Dongsheng’s answer is simple and firm, "I don’t think I’m fit to work in an office, I want to go to a factory". As a result, TTK Home Appliances Co., Ltd., located in Huizhou, Li Dongsheng’s hometown, welcomed the 43rd employee.
This joint venture company, which started with the production of tapes, encountered its first crisis since its establishment in 1985: Hong Kong investors announced their withdrawal from cooperation. When Li Dongsheng came to Hong Kong, his urgent task was to deal with the business vacuum caused by the withdrawal of Hong Kong shareholders, which made him feel pressure as a business manager for the first time. Fortunately, Zhang Jishi, then general manager of the company, taught Li Dongsheng a lot of business experience and encouraged him to do it. After several months, Li Dongsheng gradually mastered the negotiation skills and the work was carried out relatively smoothly.
After handling this emergency, Li Dongsheng received the mission of helping the company find new business. After a period of market research, he turned his attention to the recording telephone. "Upstairs and downstairs, electric lights and telephones" was once a beautiful vision for life in the early days of the founding of New China, but until the 1980s, telephones were still a luxury in the eyes of ordinary people.
Facing the huge potential of domestic communication market, TTK entrepreneurs including Li Dongsheng are determined to set up a telephone factory. After several months of negotiation and preparation, in September 1985, the joint venture TCL Communication Equipment Co., Ltd. was established, with Li Dongsheng as the general manager, and the prologue of TCL brand development began.
With the factory, where do the products come from? As an electronic engineer, Li Dongsheng led a group of engineers and technicians to huddle in a tin room to discuss product design and test the quality of telephone. Fail again and again, improve again and again. Finally, the earliest speakerphone in China — — TCL-HA868 was successfully developed.
Later, the story is familiar to everyone: in 1989, TCL telephone achieved the first place in the country with an annual sales volume of nearly 10 million, and the "telephone king" deserved its name, and this product with the largest sales volume of a single model in China telephone market — — HA868, thanks to it.
At the time when TCL telephone business was in full swing, Li Dongsheng began to look for the next profit growth point. In 1993, as the general manager of TCL Electronics Group, he decided to March into the color TV industry. Making color TV is by no means as simple as a slogan, and difficulties follow. Without a production license, he visited the chairman of Rainbow Group many times, hoping to obtain a long-discontinued color TV production line of Rainbow Group by setting up a joint venture company. The product design scheme didn’t pass the mark, so he led a team to participate in the International Electronics Show, studied new products, and explored a development path of rapid follow-up and local innovation through imitation and reference.
With the unremitting efforts of Li Dongsheng and the team, in 1992, the first TCL28-inch trump card large-screen color TV came out, and the sales momentum of the first batch of products was fierce, and the "trump card" became an instant hit. Subsequently, Li Dongsheng took advantage of the situation and put forward the marketing concept of "planned marketing promotion".
"Before entering the color TV market, our sales methods in various places relied more on the personal ability of the general manager of the branch, and there was no clear brand positioning and promotion strategy." Li Dongsheng recalled that the company hired marketing consultants to conduct market research and customer demand analysis, and made promotion plans according to local conditions, and gradually gained a firm foothold in Beijing, Tianjin, Hebei and other markets.
In 1995, with the innovation of business concept and business model, TCL’s color TV sales exceeded 1 billion yuan, with a profit of more than 80 million yuan, surpassing many domestic old color TV enterprises, and the "dark horse" was particularly dazzling.
From property right reform to overall listing
At the end of 1996, Li Dongsheng, who just became the chairman of TCL, realized that with the continuous advancement of the national market economic system reform, it was imperative for the company to further develop and improve its corporate governance structure.
"As the chairman of the board, I have to bear the most important responsibility for the development of the enterprise. At that time, I asked myself almost every day, how should the company go in the future?" After some systematic research, Li Dongsheng put forward the management concept of "management change and management innovation", which is still recognized and used by TCL management team today.
Reform, entered the deep water area in 1997. As a state-owned enterprise, problems such as low efficiency and lack of incentives brought about by rigid system have become increasingly prominent, and property rights reform is urgent.
"Cross the river by feeling the stones!" After four months of intensive research and preparation, Li Dongsheng and his team handed over an unexpected plan: dynamic increment, fixed stock — — Take the increment of state-owned assets as the incentive index of management equity. Subsequently, Li Dongsheng signed a five-year authorization agreement with Huizhou Municipal Government of Guangdong Province: the net assets of TCL at that time were about 300 million yuan, all of which were owned by the government; The annual growth rate of enterprise net assets shall not be less than 10%.
According to the above agreement, as the first responsible person, Li Dongsheng needs to pay a deposit of 500,000 yuan, and from the date of authorization, only 50% of the basic salary will be paid, and the full salary will be paid only after reaching the target. At that time, for Li Dongsheng, whose monthly salary was only several thousand yuan, 500,000 yuan was not a small sum. In order to raise the deposit, Li Dongsheng, desperate, took the house of himself and his parents as collateral.
"When I learned that I took the house book at home as collateral, my mother even suspected that I had committed the crime of corruption and was very worried." In the past, this episode made Li Dongsheng laugh and cry. "After knowing the truth, my parents not only didn’t blame me for being good at making claims, but also encouraged me to run my business well and not take the house thing to heart.". Parents’ understanding added a lot of energy to Li Dongsheng.
At the end of 2001, TCL ended its five-year authorized operation, and its report card far exceeded expectations. In the past five years, TCL’s state-owned assets have more than tripled, its sales revenue has increased from 5.6 billion yuan to 21.1 billion yuan, and its total tax paid has increased from 151 million yuan to 1.254 billion yuan … … While the property right reform is releasing dividends, it also clears the way for Li Dongsheng team to participate in the market competition in a drastic way. And this kind of institutional advantage will play a particularly obvious role when enterprises encounter operational difficulties in the future.
In 2002, the 16th National Congress of the Communist Party of China clearly put forward that state-owned capital should gradually withdraw from the competitive field. Under the stage, Li Dongsheng, as the representative of the 16th National Congress of the Communist Party of China, secretly came up with the next step of enterprise system reform — — The whole group is listed.
However, once the plan was put forward, it attracted controversy from all sides, and doubts such as "arbitrage in the name of listing" were endless; The CSRC does not support TCL on the grounds that "TCL already has a listed company in the mainland capital market, and its parent company cannot be listed again". At that time, Li Dongsheng like ants on hot bricks, worried.
The turning point came when Li Dongsheng reported the significance of the overall listing to the relevant leaders and competent departments in the State Council, and received affirmation and support.
In January, 2004, TCL Group exchanged shares with its subsidiary TCL Communication to realize the overall listing of the group. Since then, TCL has made great strides in the market and achieved great success, ushering in another golden period in the history of development. And Li Dongsheng and his partners began to have a more international vision and ambition.
From the Frustration of M&A to the Rebirth of Eagle
In 1999, Li Dongsheng led TCL to implement the globalization strategy. The successful experience of building a factory in Vietnam enhanced Li Dongsheng’s confidence in internationalization. Soon, he set his eyes on the real main battlefield — — European and American markets. In January 2004, TCL quickly acquired Thomson’s global color TV business and Alcatel’s mobile phone business.
Thomson, the originator of traditional CRT TV, produced the world’s first color TV. Moreover, as one of the top 500 companies in the world, Thomson is much larger than TCL.
For Li Dongsheng, this snake-like gamble is as tempting as the risk. After 10% of this campaign, TCL will rank among the top three in the global color TV industry. What’s more, 2004 is the year of Sino-French culture, and the acquisition of two French companies will also be a witness to Sino-French friendly exchanges.
After several days of negotiations, the two sides signed an agreement. This year, Li Dongsheng appeared on the cover of Fortune magazine and was awarded the title of "Asia’s most influential business leader" of the year; It was also named "the 25 most influential business leaders in the world in 2004" by the media such as Time magazine.
After M&A, it is not the imaginary rapid growth of business, but the difficulties. The color TV industry has rapidly transformed from the CRT era to the flat panel era. Thomson’s original CRT technology completely lost its value almost overnight, and its assets became a burden.
Li Dongsheng saw the trend of technology iteration, but he didn’t expect it to come so quickly. In the field of mobile phones, the lack of core technology and the unsatisfactory quality of popular mobile phones, coupled with the double attack of foreign brands and domestic cottage factories, TCL’s mobile phone business suffered a waterloo, the first annual loss since its establishment 20 years ago. Under heavy pressure, Li Dongsheng lost more than 20 Jin. At the shareholders’ meeting, he was criticized by name for the first time.
In the first half of 2006, TCL Company suffered a loss of 738 million yuan, and its internationalization road was hit hard. Followed by the departure of several senior executives, media questions and various questions rose. During the controversy, Li Dongsheng published a reflection article "The Eagle’s Rebirth" at the company’s internal meeting, pointing out that the eagle is the longest-lived bird in the world, but at the age of 40, it must make a difficult but important decision: either wait for death or complete its transformation through a very painful renewal process.
Borrowing the story that the eagle lost its beak, toe and feather at the age of 40 to be reborn, Li Dongsheng called on all TCL employees to unite as one to cope with the crisis, jointly promote organizational processes and corporate culture changes, and firmly push forward the international enterprise strategy. Li Dongsheng said: "Internationalization is the only way for China enterprises to grow into respected enterprises."
These words did not immediately quell the doubts from all walks of life, but they won the support and respect of many entrepreneurs. Some people commented that no matter what the final outcome of TCL is, Li Dongsheng has demonstrated a rare entrepreneurial spirit with his actions: determination to change and perseverance. The practice of TCL also provides experience and lessons for the internationalization of China enterprises.
At the end of 2007, TCL finally took off the hat of losing money for two consecutive years with a profit of 360 million yuan. Li Dongsheng said: "If I have to do the merger again, the cost will certainly not be so great, but what has passed, don’t think about it again, because you can’t change the past, you can only create the future." (Economic Daily China Economic Net reporter Li Peng Da)