How can companies survive for a long time?

Through research and analysis of a large number of companies, long-lasting companies generally have the following five characteristics: having winter awareness; not only good at pulling the cart with their heads down, but also looking up at the road; stable and even slightly conservative financial structure; possess core competitiveness; continue to make bets for the future.

1. Have winter awareness

In the past thirty years, although Chinese companies have also faced various challenges such as intensified market competition, policy adjustments, local financial crises, etc., they have benefited from The rapid growth of China's economy, the shift of manufacturing industries caused by economic globalization, and the global economy (especially developed economies) continue to maintain a high level of prosperity. Chinese companies generally live a relatively prosperous life and have not experienced a real crisis. Economic crisis, compared with those European and American multinational companies that have experienced many economic winters and survived the disaster, our companies obviously lack sufficient winter awareness. This resulted in the vast majority of Chinese companies not being prepared for the winter when this sudden crisis came, and many of them even continued to expect to make rapid progress. However, while these entrepreneurs continue to press the accelerator, the road ahead is already full of storms, ice and snow. For these companies that have neither prepared nor slowed down, this crisis is undoubtedly a disaster.

On the contrary, we can see that some companies with winter awareness tend to have stronger viability and development capabilities. The key to these companies' ability to survive multiple crises is that they are always aware of the dangers and are always prepared for the possible coming "winter."

Huawei, a telecommunications equipment provider founded in Shenzhen in the late 1980s, has achieved rapid growth by relying on itself and its unique wolf culture in just 20 years. Relying on its technological pursuit of excellence, the R&D capabilities of multiple R&D centers around the world ensure that it will not fall behind in the confrontation with international giants such as Cisco. In 2004, it cooperated with Siemens. In 2005, it reached a global procurement framework agreement with Vodafone. It then cooperated with famous telecom operators in the United States, Spain, the Netherlands and other places. In 2007, Huawei became one of the top three mobile networks in the world and wanted to provide services with established networks. Business Ericsson test comparison. Huawei, which seems smooth to outsiders, actually had a "winter consciousness" as early as 2001. In March 2001, when Huawei was enjoying good business development momentum, Huawei President Ren Zhengfei published an article titled "Huawei's Winter." In his letter, he did not mention his personal achievements, but "for the past ten years, he has been thinking about failure every day, turning a blind eye to success. He has no sense of honor or pride, but a sense of crisis. This is how he has survived." Ten years. The day of failure will definitely come, and everyone must be prepared to welcome it. This is my unshakable view. This is a historical law. In the letter, Ren Zhengfei made a request to Huawei’s employees, “Let’s all think about it together. Only in this way can we survive, maybe only in this way can we survive longer. "When Huawei's sales in fiscal year 2000 reached 22 billion yuan, and its profits ranked first among the top 100 electronics companies in the country with 2.9 billion yuan, Ren Zhengfei talked about crises and failures, which shows his strong awareness of crisis. Alibaba, this company has become the leader in recent years. A star company that attracts attention in China and even the world, under the leadership of the little "alien" Jack Ma, opened the door to wealth. On November 6, 2007, the Hong Kong H version was successfully listed. Alibaba's market value reached HK$199.6 billion, a jump. It became the first company in China's Internet industry with a market value of more than 20 billion US dollars. But at the time, Jack Ma said, "No matter how high the market value is, Alibaba is still a small company today. He is only 8 years old and is still a child." This escaped the Internet myth. Small businesses in the cold winter brought about by bankruptcy are always so sensitive and one step ahead of the coming crisis. It is precisely because of this crisis awareness that Alibaba was able to escape the last crisis and when this crisis came, Zhang Ruimin was the first to put forward the theory of winterization and has already stored enough "cash" food.

Similarly, Bill Gates has always emphasized that "Microsoft is only 18 months away from bankruptcy." Zhang Ruimin has been "trembling with fear" for more than ten years. , walking on thin ice," Liu Chuanzhi pointed out, "We have been setting up a mechanism to prevent our operators from taking a nap. As soon as you take a nap, the opponent's opportunity will come. "

The pride of the Chinese community - Mr. Li Ka-shing, who has always maintained the title of the richest Chinese man "Superman Li", obviously has a deeper understanding of this.

This legendary figure in the Chinese business world started his business in 1950. In the past 57 years, he has experienced two oil crises, the Cultural Revolution, and the Asian financial crisis. However, his company has not failed, but has continued to grow and develop. Currently, his business has spanned Multiple industries are spread across fifty-five countries, and the sun never sets. When a reporter from "Business Weekly" asked him about the secret of his long-term success, Li Ka-shing responded like this: "Think about it when the wind is nice and sunny, assuming you are driving an ocean-going ship propelled by the wind. When you leave the port, you have to First think about how you will cope if a typhoon signal No. 10 is hoisted (the typhoon signal in Hong Kong represents the intensity of a typhoon, and No. 10 is equivalent to a strong typhoon). Although the weather is quite good, you still have to estimate the impact of the storm if a typhoon strikes. What should you do before you leave? I will keep studying the possible problems that may arise in each project in the face of possible bad situations, so I often spend 90% of my time thinking about failure." Obviously, Li Ka-shing put this aside for 57 years. The defeat was attributed to his sense of risk and winter awareness.

From the above vivid examples, it is not difficult to find that these long-term roly-poly players in the industry have a profound sense of crisis. This also corresponds to an old Chinese saying: "Be born in sorrow and die in trouble." Peace". Obviously, whether it is yesterday, today, or even in the future, only companies that plan ahead and have winter awareness can live long and live wonderfully.

2. Not only good at pulling the cart with your head down, but also good at looking up at the road

Enterprises that can survive the cold winter must have solid internal strength, not only from the beautiful market sales figures, but also from the beautiful sales figures. It is necessary to have a strategic system and corresponding strategic organizational framework for the long-term development of leading enterprises. A closer look at the Chinese companies that are deeply involved in this crisis shows that the previous good market economic environment made most Chinese companies only focus on speed, market share, and diversification. While pulling the cart with their heads down, they forgot to look up at the road. Pulling the car without knowing the direction ended up either spinning in circles or hitting the south wall.

As Ari Deges, the author of "The Longevity Company" and a famous economic and management scientist, mentioned, "The longevity companies that have survived countless cold winters have experienced wars, economic depressions, technological and political changes, and But they always seem to be able to stretch out their tentacles and face whatever is going to happen in the future. In a word, they are good at learning and adapting to the environment, and they can keep pace with the times, pay attention to changes, and adapt to the market. , to adapt to the needs of the outside world.”

Swarovski agents have long realized that the European and American markets are saturated, so they went to open up the Arab market. When the financial crisis came, European and American orders fell by 60%, but emerging markets gave He brought about 70% growth, and the total volume increased by 10%. Many gift companies in Guangdong have closed down, but Wenzhou's gift industry has shown amazing ability to withstand the "cold". Because Wenzhou gift dealers discovered that foreign consumers used to buy mid- to high-end gifts, but now that their spending has shrunk, many people are turning to mid- to low-end products, so they stepped up the development of mid-to-low-end products. At the 104th Canton Fair, many Wenzhou gift merchants received more orders than in previous years.

Li Ka-shing, chairman of the board of directors of Cheung Kong Group, who pays attention to long-term interests, is more concerned about grasping the future of the economy, and managing and predicting the strategic direction of the enterprise. As he said, he often thinks about a few years or even ten years. What happened next was the guarantee that Li led the Yangtze River Group to achieve great gains instead of being harmed by multiple depressions, crises and financial tsunamis. In the turbulent Hong Kong in the 1960s, when a credit crisis broke out in banks, real estate prices plummeted, people's hearts were floating, and all industries were depressed, Li Ka-shing once again showed his unique vision and foresight. On the one hand, he strengthened and stabilized the "Changjiang Industrial Co., Ltd." in the rear area and continued to maintain its leading position in the plastics industry; on the other hand, he quietly converted factory profits and property rents into cash for storage, and collected relevant information through different channels to fully Take advantage of this once-in-a-lifetime opportunity, take your time, use cash confidently, and buy the land and old buildings at the lowest price from those "insightful" people who are eager to sell their properties, urgently need cash, and abandon Hong Kong.

In other words, from 1959 to 1969, during the turbulent years when Hong Kong's economy experienced several ups and downs, when people were scrambling to sell off large amounts of land and properties, Li Ka-shing, who was not eager for quick success and quick profit, left himself some room - "Cheung Kong Industries Co., Ltd. "Based on a large number of properties, he took a moderate risk. He planned and used cash to renovate and rent out the old buildings he purchased, and then used all the profits to exchange for cash to acquire a large amount of land, and took various measures to defeat the problem. , a centralized approach to land development in a point-to-point, surface-to-surface and crisscross manner. In the end, with his accurate foresight and grasp of the future development of Hong Kong's economy, Li Ka-shing once again became the winner.

3. Stable or even slightly conservative financial structure

Most of those long-lived companies that have experienced multiple economic crises have one thing in common, which is a relatively stable and conservative financial policy. and financial structure. These companies do not achieve rapid development through heavy borrowing; their pursuit of profits is also relatively stable and will not cause too many ups and downs. Enterprises can organically link capital allocation with strategic goals.

Changshou Company never takes risks with its own capital easily, and its good capital allocation makes it sufficient to meet the needs of corporate growth. On the contrary, many companies do not have long-term strategic goals. They blindly waste money when they have plenty of funds, but are short of funds when they need funds. This shows that they do not know how to use funds, and they do not understand that long-term benefits are more important than short-term benefits. Holding cash can support companies to seize opportunities in a timely manner or better cope with crises. Procter & Gamble and Cisco, which rank high among the Fortune 500, both stated that maintaining a reasonable asset-liability ratio has become one of the magic weapons for these companies to survive major crises.

Microsoft is a good example. Not only is Microsoft debt-free, it also has $50 billion in cash. During the downturn in the IT industry, the software giant became even more invincible. Bill Gates's entry into any emerging field is a chilling one. In the capital consumption war in emerging industries, whether it invests its own funds in research and development to compete, or directly buys competitors, Microsoft appears to be able to do so with ease.

In the face of this crisis, Li Ka-shing’s flagship company Hutchison Whampoa has established a strategy of “maintaining profits and maintaining profits” and adopted a consistent and extremely conservative financial management approach, holding US$22.1 billion (approximately 172.4 billion US dollars). Hong Kong dollars) funds, as much as 69%, nearly 119 billion Hong Kong dollars, are deposited in cash. The rest are mainly invested in the safest government bonds, and stock investments only account for a relatively small proportion. Hutchison Whampoa's management has emphasized many times that it has no investment in corporate bonds, structured investment instruments and cumulative option products. Facts have repeatedly proved that a sound investment strategy is the only magic weapon for Mr. Li's long-term success.

In China's real estate industry, companies generally pursue debt operations, with debt ratios as high as 80% to 120%. However, unlike these companies, there are a few companies such as Vanke and China Resources Land that maintain relatively low debt ratios. The latter's debt ratio is less than 50%, and it has tens of billions of cash reserves. It is these former "spare money" that provide solid reserves for the two companies to survive the winter. On the contrary, companies that borrowed heavily to expand are now reaping the consequences of their own sowing.

Throughout the history of corporate development, we find that financially conservative companies that are often criticized or even ridiculed tend to have longer vitality. The principle they believe in is always stability first, and stability is sustainable. premise. Obviously, there are unforeseen circumstances. No one knows what will happen tomorrow, and once a crisis strikes, only companies with a healthy financial foundation will have more and better chances of survival.

4. Have core competitiveness

Those companies with 50 or even century-old histories still maintain strong competitiveness and occupy important positions in many industries. location. What makes these "monsters" still radiant and youthful after hundreds of years? What makes them invincible? The answer lies in the core competitiveness of these enterprises.

The concept of core competitiveness was co-authored by C.K. Prahalad, a professor at the University of Michigan Business School, and Gary Hamel, a professor at the London Business School in 1990. First put forward in the book "The Core Competence of the Corporation" (The Core Competence of the Corporation).

Their definition of core competitiveness is: "The knowledge and skills integrated within an organization, especially the knowledge and skills on how to coordinate multiple production skills and integrate different technologies." Porter, the master of competitive strategy, once gave this Description: "Core competitiveness is the ability of an enterprise (talent, country or individuals participating in competition) to obtain competitive advantage in the long term. It is unique to the enterprise, can withstand the test of time, is malleable, and is a competitor Technologies or capabilities that are difficult to imitate. ”

In this round of economic winter, except for a few extreme radicals, most of the companies that have fallen are companies that lack or even have no core competitiveness. Companies without special skills or unique skills may still be able to make a living when the economy is good, but once the economic environment is bad and the market declines, they are often the first companies to fail. Wang Yang, Secretary of the Guangdong Provincial Party Committee, is obviously deeply aware of this. He once said that the bankrupt enterprises were eliminated because of backward production capacity. The government must properly resettle laid-off workers, but it cannot rescue backward production capacity. .

While most ordinary companies are swaying in this century tsunami, we have also seen other companies that have maintained stable growth by virtue of their long-term core competitiveness. Zhuhai Gree is such a company. 2008 is a veritable "cold year" for the air-conditioning industry. As a leading company in the industry, relying on its independent innovation, independent research and development for more than ten years, and correct business strategies, Gree Electric Appliances achieved business in the first half of 2008. Revenue was 24.952 billion yuan, a year-on-year increase of 24.44%; net profit was 1.004 billion yuan, a year-on-year increase of 104.67%. On October 8, 2008, Gree Electric joined hands with industry giants such as Lenovo and Huawei to enter the "2008 Most Globally Competitive Chinese Company" jointly selected by international management consulting firm Roland Berger and Global Entrepreneur magazine. This is the second time in a row that Gree Electric has won this honor among the top 20 companies. At the same time, Gree Electric Appliances is also the only professional home appliance manufacturing company among the top 20. When talking to reporters about the impact of the financial crisis on enterprises and the reasons why Gree has become popular despite the trend, Dong Mingzhu, vice chairman and president of Gree Electric Appliances, said that in the face of the financial crisis, enterprises still have their own core competitiveness. The key to a successful winter. Nowadays, many companies are facing big problems, including some companies that are constantly laying off employees and reducing production, which to a large extent shows that there are some problems within these companies themselves. Gree obviously has its own core competitiveness. When we encountered the financial crisis, we felt that although there were problems, we could get by.

The business world is a world of value competition and value exchange, and core competitiveness is the value basis for the existence of an enterprise. If you can't defeat your opponents in terms of capabilities and complete the value exchange with your customers, then you actually don't have much value. Even if you are unwilling to quit, the market will eliminate you. Obviously, for an enterprise, the key to determining your commercial value and sustainability lies in what core competitiveness you have. Wang Yang said it well, it is useless to save an incompetent enterprise. Sooner or later, it will die. This is the law of nature. Nature cannot be said to be sentimental or ruthless, the passing of winter and spring is just a rule; the market economy cannot be said to be passionate or indifferent, survival of the fittest is the law. And only if you truly have the core competitiveness to deal with all difficulties, can you "let it be blown by the wind and waves, which is better than taking a leisurely stroll in the garden."

5. Continue to make bets for the future

Why some companies can always seize the opportunity while most others cannot. After conducting some research, we found that the leading companies Transformation usually occurs in two situations: first, the emergence of new technologies replaces old technologies, such as digital technology in the field of mobile communications replacing analog technology, and digital cameras in the field of personal photography replacing traditional film cameras; the other The first is that the rise of new business models has caused the decline of traditional business models, such as the impact of large chain professional stores on comprehensive department stores, the impact of Internet-based businesses on traditional businesses, and the replacement of traditional production models by lean production models.

Every time an industrial change occurs due to the emergence of a major new technology or business model, slow-moving and short-sighted companies will pay the price. Motorola's slowness and hesitation in the face of mobile digital technology made Nokia successful; Microsoft's early misjudgment of the advent of the Internet almost ruined itself.

Apple turned a blind eye to the open component-based operating model in the personal computer field, and as a result, it once withdrew from the mainstream market.

Although it is very difficult to accurately predict every industrial mutation and transformation, this does not prevent companies from preparing for these sudden changes that may occur at any time. The most important preparation is to focus on and cultivate new businesses and continue to make bets for the future. We found that those companies that seize opportunities when every wave of industrial change comes are those that continue to bet on future uncertainty. Although Watson Sr. was not optimistic about minicomputers, he made a bet on the project through Watson Jr. After all, when the minicomputer market was booming, IBM's minicomputers naturally took advantage of the trend and closely followed the trend. Industry leader DEC. Although Microsoft made its bet on the Internet relatively late, fortunately it was not too late and it finally caught the tail. For companies like IBM and Microsoft, the most important thing is that they participated in the competition, heard the gunshot, and did not fall completely behind. Their running skills during the process were excellent, and falling behind at the beginning will not have any impact on their final results. Too big an impact.

Obviously, in the face of an increasingly complex and ever-changing business environment, even today's most successful companies must be multi-faceted to cope with sudden changes. Continuous attention and investment in new businesses and models will undoubtedly greatly increase the strategic flexibility of enterprises and further improve the success rate of enterprises in strategic transformation. And those companies that are unwilling to bet on the future and only indulge in current success are destined to fail one day in the future.