Introduction Private enterprises typically start and grow in this way: setting out with a belief that they can succeed, which is actually a rash action, and then stumbling along with limited resources to reach their current state. They learn by doing, sometimes chaotically, enduring hardships and growing wildly. Looking back, they find that the enterprise has grown and people have matured (like a bricklayer-carpenter, the more they do, the more skilled they become). Throughout this process, business, organization, and team interact and constrain each other, becoming the main line and core issue of private enterprise management. During this, the leader's overall vision, willpower, sense of direction, balance, rhythm, and leadership are key. The organizational development and construction of private enterprises must be discussed and considered within the context of this management main line, core issues, and overall vision. Based on my years of observation and experience with the survival state of private enterprises, I will share nineteen insights on organizational management for private enterprises. These nineteen insights have been hard-earned, and I offer them to you as my suggestions. I hope they help you in running your business and managing effectively. First: Prioritize Business, Then Organization Getting the business moving first is most important for private enterprises. If you focus on organizational management in a general way, detached from business thinking and operational operation, that would be a disaster. Organization and management are actually pulled by business, so the order is business first, then organization. Don't get the sequence wrong; getting the business moving first is most important. There is an entrepreneur in Shenzhen with a very famous brand and excellent business performance. In a discussion with Hejun, he mentioned that a real private entrepreneur cannot think everything through in advance. Even if they could, can they execute perfectly? If you truly want to do something, just start! He said that when facing market competition and real situations, private entrepreneurs do not really believe in completing organizational construction according to the principles of organizational theory. In the end, it's about doing first, facing problems when they arise, dealing with them, then moving forward again, encountering bigger problems, and continuing to face and solve them. After hearing this, I thought this boss had substance. Which real enterprise is not like this? Just do it, grow wildly. Starting is the most important thing. Second: Scale Matters For private enterprises, scale is important. Tonnage determines status, and volume determines weight. If your company lacks tonnage, it's hard to have status. Without status, it's difficult to get a bank loan, and interest rates are high. Even asking relatives and friends for help is difficult. You will find that in real business, "small and beautiful" is often a fantasy and hard to sustain in reality. In reality, whether it's wild growth, winning through chaos, grabbing territory, or competing for the market, as long as you can achieve scale, volume, and territory, let it be chaotic for a while. Scale is the most important, and most successful people share this trait. Third: Adjust Posture While Running You must run with problems, adjust your posture while running, strengthen your physique while running, and create territory and win the future while running. In running a private enterprise in China, growth means future; no growth means crisis is imminent. It's okay to be a bit chaotic, or have lower profit margins, but maintaining growth is the absolute principle. As long as there is room for growth, you are moving forward. Fourth: The Leader Must Timely Complete Role Transformation After growth reaches a certain stage, management issues become prominent. At this point, the leader must timely complete role transformation. How? Shift from focusing on business to management, from doing business to building mechanisms, from pondering products to pondering people, from managing customers to managing employees. Whether the enterprise can hold on as it moves forward depends on the leader's role transformation. The continued development of most small and medium enterprises is stuck on this issue: the leader fails to complete role transformation or lacks this awareness. This is what is commonly called management lagging behind. I know some private entrepreneurs whose businesses are very large, even reaching tens of billions in scale, but they have not yet transformed their roles and are not playing the manager role. They find it hard to fight forward because the team can't keep up, or there is no team at all. Then they go headhunting, offering high salaries to find talent. When the talent arrives, they find it impossible to manage, there's no efficiency, and they leave after a while. In the end, it's because the role transformation was not completed. Fifth: Management Should Be Simple and Practical, Avoid Seeking Grandeur and Completeness For a long time during the growth of private enterprises, returning to common sense can achieve effective management. Using common sense in human relations and business principles can run the business well. Knowledge without common sense often complicates management. Of course, when the enterprise reaches the scale of a Fortune 500, these words do not hold; common sense cannot manage such companies. But for most private enterprises with revenues of several hundred million or over a billion, management should be simple and practical. Systematic thinking and overall planning will ultimately make management very complex, with employees spending a large amount of work time meeting your management requirements rather than creating value for customers and business. This is very frightening. Employees have no sense of achievement, and wages are paid for work time that does not generate value. Sixth: Two Manuals to Conquer the World Simplify the myriad management tasks into just two things: first, compile and execute a management manual; second, compile and promote a corporate culture manual. On one hand, grasp rules and organizational system construction; on the other, grasp corporate culture construction. The first edition of the management manual can be just two pages; don't make it too complex. If the enterprise is only tens of millions in scale, two A4 pages can clearly write all that needs to be managed. The second edition might be 10 pages, and by the fifth or sixth edition, it might become a book. Eventually, it becomes a compilation of rules and regulations, possibly in multiple volumes. The corporate culture manual is the same. So, the management manual and corporate culture manual can be a comprehensive encyclopedia or just two A4 pages. Essentially, the enterprise needs to evolve a complete set of rules, and then require everyone from the boss to employees to follow them. Seventh: Two KPIs Are Lifelines The business indicator is customer satisfaction, and the management indicator is employee satisfaction. The ultimate direction of all corporate systems is these two KPIs, and there is a causal chain between them. If they do not point to these two KPIs, the systems and culture are problematic. The two manuals must revolve around and run through these two lifelines. Why are these cultural requirements and institutional clauses stipulated? What contribution do they make to customer satisfaction and employee satisfaction? If there is no contribution, cancel them; if there is contribution, persist. Management should be as simple and streamlined as possible; avoid over-management. Chinese private enterprises have two extremes in management: one is too rough and crude, lacking basic management; the other is over-management, too detailed and strict, causing the organization to lose vitality and management costs to be too high. Eighth: Bodhisattva Heart, Thunderbolt Means Running a business requires a bodhisattva heart, to save all sentient beings, letting customers and employees gain value, but at the same time, it must be with thunderbolt means. Handling historical issues must be clean and decisive, without entanglement or nostalgia. When it comes to important figures, be bold in letting go when necessary. If there are fundamental issues like cultural non-identification, do not cling to their talents, historical contributions, or even face. The handling can be done morally, with interests clearly discussed, but moving forward cannot be together. Handle historical issues cleanly, and show no mercy to those who violate discipline. The faster the team advances, the stricter the discipline must be to maintain formation. The leader must show absolute decisiveness and toughness on this issue. Ninth: Build the Mold, Enter the Mold, Optimize the Mold, and Filter the Team Organizational construction is essentially a process: using clear organizational mechanisms and cultural requirements to recruit, inspire, select, and shape members, then filter out unsuitable people and retain suitable ones. In the end, it's a process of "people." Only when the two manuals are clear and stand the test of time, value, and facts can such a process be initiated. The deep logic of recruitment is: "Our company's rules and culture are like this; are you suitable to work here?" It should be such a process, called selecting members. No one can fully meet the requirements; after entering, you must influence them with culture, discipline them with rules, and shape them into your warriors. Every employee is a specimen of company culture and a conscious warrior. Not everyone can adapt; those who cannot are filtered out. Retain the suitable ones, and as more people are retained, the organizational atmosphere naturally forms. This is the process of "build the mold, enter the mold, optimize the mold, and filter the team." In this process, "patience is wisdom," and "slow is fast." Don't overestimate the impact of two years, but don't underestimate the impact of five years. Tenth: Organizational Growth Has Footsteps and Rhythm A very important manifestation of an entrepreneur's level is whether they can hear how far the enterprise has progressed. Have you heard the footsteps of organizational growth? If you mishear the footsteps, all management and operations will go wrong. If you hear them correctly, you will grasp the rhythm of management and operations very well. Even if your ability is slightly lacking, it doesn't matter; the entire undertaking will go smoothly in the end. Grasping the rhythm of organizational growth and business evolution is very important. During the development and growth of an enterprise, when to grasp what, when to let go of what? When to tighten, when to relax? When to be fierce, when to be lenient? On what matters to drive straight in, and on what matters to let things drag? These are all very particular. It is an important manifestation of an organizational leader's leadership art. Eleventh: Try Not to Poach Talent with High Salaries Talent shortage is an eternal pain in the hearts of all Chinese private entrepreneurs, and it has not been resolved for a long time, causing great distress. Talent shortage has become a key bottleneck for many enterprises' development. It's not that there is no business, no opportunities, or no resources, but if people are not effective, either things are ruined or opportunities and resources are wasted. In reality, private entrepreneurs are often troubled by talent shortages and often resort to poaching with high salaries when desperate. My suggestion is to try not to do this. Breaking through the talent bottleneck requires treating it with the specifications of strategic planning. Today's talent shortage severely constrains your enterprise's development because you did not plan for talent three or five years ago. Similarly, solving the talent shortage three or five years from now requires action starting today. This problem cannot be solved in one or two years, but it can definitely be solved in three to five years, or eight to ten years. In the end, you will find that you are not short of talent at all. But if you don't act today, the talent shortage will hardly change in five years, and your original team will not be able to keep up. Twelfth: Gradually Improve Management Level in the Direction of "Six Modernizations" That is, "Mission to Strategy, Strategy to Organization, Organization to Institution, Institution to Process, Process to IT, IT to Ecosystem." When the enterprise reaches a certain stage, it should gradually improve management along the direction of these "Six Modernizations." At this point, it's no longer about being simple and practical; it's about systematic organizational rationality construction. Thirteenth: Benchmark Management and Operations Against Listed Companies, Fill Gaps Listing is a legal standard for how to run a business and find development direction. Benchmarking management and operations against listed companies is an excellent choice and a simple method for selecting direction, conducting business, managing, and training. You can solve a series of major issues in enterprise growth around listing: 1) Boss gets rich: profit model upgrades from product profit to capital appreciation; 2) Original sin erased, wealth confirmed: one-time redemption, from then on, sunshine, light-hearted, and reassured; 3) Corporate governance and management standardization: enterprise operation shifts from individual-driven to organization-driven; 4) Development direction and business structure optimization: industry selection, rationalization of business structure, identification of core capabilities, clear business model, clear growth plan, feasible use of raised funds; 5) Talent attraction: talents in the industry flock to you, hearts are with you, competitors' morale shakes, and people think of leaving; 6) Financial strength: gain air superiority in competition—capital contest; 7) Credibility and brand reputation: government, banks, customers, society... Fourteenth: The Top Leader Must Have a Backbone At any stage of enterprise growth, there are many different views, propositions, and disputes. Some need to be firmly advocated, some clearly opposed, some feigned ignorance, some silence, some ignored, and some compromised (as the saying goes, "If you're not deaf and blind, you can't be the head of the household"). But no matter how you respond, you must be a clear-headed person with a backbone, able to make decisions, and clearly make your choice and the company's choice. If the top leader lacks a backbone and is not strong enough, organizational development will be difficult. A truly ambitious entrepreneur, if they want to build a career, should have goals, stay calm, work steadily, achieve results, and let rumors and disputes be stopped by facts. Fifteenth: Management Is a Slow Variable Managing is not something where you see results the next month after starting. Management is a slow variable. Use the flywheel theory to manage, with patience, confidence, and perseverance. The so-called flywheel theory means: getting a huge flywheel moving is not easy. You need to keep pushing it. At first, it's very hard; no matter how hard you try, it doesn't seem to move. You push and push, but there's no effect. But don't give up, don't loosen your effort. Keep pushing. Gradually, you notice the flywheel starts to move. Increase your effort, and it really starts to move, slowly at first, then faster and faster. With a little force, you see great effect. Finally, the flywheel spins on its own, and it spins faster than you can imagine, as beautiful and joyful as flying. The entire trajectory and scene of a private entrepreneur engaged in organizational construction and management is exactly like this. So patience is very important. You must let your enterprise enter this scene, and then the more you do, the easier it becomes. Otherwise, the larger the scale, the more tired you become. Sixteenth: Enterprise Development Must Rely on Employees Organizational change and enterprise development must rely on employees. So whether a boss can build a career depends first not on how he treats business, but on how he treats employees. Look at how he treats employees, and you know how far the enterprise can develop. Doing organization and management, in the end, is about treating employees well. If you take this as the soul, you will find that many management tasks can be omitted; employees will automatically enter the state, and even if an oil bottle falls, they will pick it up. Otherwise, even with strict assessments and high bonuses, there will still be situations where no one picks up the fallen oil bottle. Respect vested interests, establish fair rules, be willing to yield benefits, and keep promises. The leader must lead by example, build trust with sincerity, treat employees sincerely, and rebuild company credibility and employee confidence. By winning the hearts of employees, then gradually radiating outward, win the hearts of customers and external talent. Win people's hearts, and you will naturally win the world. Seventeenth: Team Building Starts from the Heart Believe that everyone has innate wisdom and can become an angel. Believe in the meaning and effect of "I believe," and treat others as you would treat yourself. Don't think I'm fooling you; I hope you can realize early: saving others is saving yourself. Being good to others is not for their sake, but for your own. Eighteenth: Correctly View Problems, Difficulties, Failures, and Even Crises in Enterprise Survival and Development All private enterprises face problems, difficulties, and even failures at all times, and they will likely face a crisis every few years. No one can escape this fate; as long as you run a business, it's like this. As an entrepreneur, if you don't have the right attitude towards problems, difficulties, failures, and crises, and cannot view them correctly, you cannot continue your career, and the organization cannot develop. Difficulties, failures, crises, and unyielding pursuit are the best teachers in life. Experience and life are the best business schools. In the end, you will find that without problems, there is no enterprise; without difficulties, there is no progress; without challenges, there is no transcendence; without crises, there is no vitality. How are truly outstanding and accomplished people forged? It must be through continuously solving problems, overcoming difficulties, and responding to crises. In fact, in this process, whether bitter or joyful, loving or hating, tired or idle, successful or failed, as long as you strive for self-improvement and pursue dreams, as long as there are people who share your hardships and treat you sincerely, this life is the most beautiful heaven on earth. Nineteenth: A Grateful Heart, Thankful for Life When you reach the end of running a business, you must lead all employees to cultivate a grateful heart and be thankful for life. 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