More familiar with distributors than manufacturers, more knowledgeable about internal management than distributors. ---------------------------- Leadership Style: From "Military Management" to "Humanized Management" At the beginning of reform and opening up, people generally lacked awareness of market economy and rules. Everyone did as they pleased, with no distinction between good and bad work, and the "iron rice bowl" problem was not fully resolved. Faced with many migrant workers who had little education and lacked self-discipline, many enterprises adopted military management, demanding strict compliance with rules from a superior position, with severe punishment for violations. I remember my first training trip to Yili in 1997, when I visited the factory and saw a slogan on the wall: "If you don't work hard today, you'll work hard to find a job tomorrow." I was shocked and thought, how can they scare employees like this? Later, as I learned more, I understood and agreed with these practices, because those blue-collar workers were temporary or seasonal workers with high turnover. Without strict rules and constraints, chaos would ensue. Later, both Yili and Mengniu factories had dedicated routes for employees to enter and exit, and everyone had to follow these routes without deviation, which was very helpful in cultivating rule awareness among blue-collar workers. But if our enterprises still follow this old path today and use this model to manage knowledge workers, it may fail. Especially as the number of employees with higher education increases, entrepreneurs must adjust their thinking and transform their practices to adapt to the times and environmental changes. A few years ago, there was a trend in the business world to "learn management from the People's Liberation Army," hoping to introduce military management methods into enterprises. However, we must admit that the military and enterprises are different. Soldiers' duty is to obey, and they shouldn't have too many ideas. But enterprises cannot require unconditional obedience; instead, they should encourage employees to think. Some advocates of military management believe that military orders are like mountains, and there is no room for negotiation. If employees resolutely obey leadership instructions, resolutely implement the company's established policies and strategies, and focus on coordination and collaboration during execution, then the enterprise will have super combat effectiveness and will be invincible. These ideas seem correct on the surface, but upon closer examination, logical errors emerge. First, the premise of military management is the high concentration of power, assuming that those in power are selfless and possess extraordinary wisdom. In other words, this thinking assumes that instructions are absolutely correct and that leaders' judgments are always right. But do these premises hold in an enterprise? Second, employees are not soldiers. They have the right to know why they must resolutely execute, what benefits execution brings to them, and what the common interests are. These three "whys" must be answered convincingly. Third, many bosses are accustomed to using pressure, coercion, and force to solve problems and force others to comply. This thinking is outdated. Bosses should not treat employees as soldiers but as partners. Soldiers can sacrifice for their country, but employees will not sacrifice for the enterprise. Employees only strive for their own interests. There is an essential difference between the two. If a boss regards military management as the foundation for improving execution, that's a big mistake. At best, it will only cultivate a group of obedient sheep, and only effective in the short term. Look around, which company implementing military management has very high employee satisfaction and loyalty? It can be said that execution comes from employees' sense of ownership, which in turn comes from the alignment of employee interests with corporate interests. Haidilao's success is not due to military management but humanized management. Because employees do not live in a vacuum; they live in reality. Only by effectively solving the various problems employees care about will they go all out. At dinner tables, I often hear people say: "Many CEOs of America's top 500 companies are graduates of West Point," and some even say that West Point has a portrait of Lei Feng. I wonder who did the research or saw it with their own eyes at West Point? If you have a basic understanding of American values and investigate where the CEOs of the top 500 American companies graduated from, you wouldn't spread such misinformation. Unfortunately, we like to reason based on our own imagination, fabricate stories to comfort ourselves, and find theoretical basis for our practices. In fact, many stories about Americans are made up by Chinese people. Many have heard that the marketplace is like a battlefield, but this saying has boundary conditions because the marketplace and the battlefield are fundamentally different. In war, as long as you defeat the opponent, even if only one person remains on your side, it's victory. But in business, defeating one enemy will give rise to a second, third, or even "the fisherman profits from the fight between the snipe and the clam." The military requires strict discipline, so good armies are called "iron armies" to represent strict discipline and uniformity. But enterprises are different. The relationship between employees and bosses is a contract, a fair exchange. Therefore, to make employees work hard, we must respect their individuality, encourage innovation, and let them do things according to their own intentions. This is how to mobilize employee enthusiasm. Soldiers don't ask why; they just follow orders. But employees can ask why, and they must ask why. Only when they genuinely agree will they execute from the heart. Where do discipline, execution, and teamwork come from? They come from a change in understanding. Once employees realize that strict requirements benefit them and improve their skills, they will be strict with themselves. Once they know that helping others leads to earning more money, they will naturally cooperate. In today's era of materialism and privilege, bosses cannot change the big environment, but they can create a small environment where employees feel warmth and care. If you make employees happy, they make you comfortable; if you help employees grow, they help you increase efficiency. Bosses and managers at all levels should find ways to stimulate employees' innovative awareness and potential, guide them not to follow others' paths, and generously reward innovations that bring benefits to the enterprise. Pursuing material enjoyment is natural and justified. The key is that gentlemen love wealth but obtain it in a proper way. If no one pursued material enjoyment, where would domestic demand, prosperity, and growth come from? So the pursuit of material civilization is a driving force for social development. Remember, soldiers live in barracks all day, not exposed to society, not worrying about housing prices, car purchases, or seeing corruption and chaos. Their thoughts are relatively simple, and their lives are relatively simple. But employees in enterprises are different. They need to live, to establish themselves in cities, to buy houses, cars, travel, consume, and live a decent life. They have to worry about children's education, medical security, and so on. Their pursuits are completely different from soldiers. If an enterprise wants to implement military management, it must bear all obligations, provide housing, cars, education, medical care, etc., so employees have no worries. Due to excessive focus on performance, many enterprises have adopted the slogan "build a wolf-like team," thinking that a wolf-like team is the vanguard for achieving goals. But in highly competitive industries, customers have many choices. Regardless of whether they like dealing with wolf-like salespeople, the enterprise must return to its reason for existence: helping customers solve problems. That is, business must be conducted based on the guiding principle of "altruism," otherwise it won't last. So talking about wolf-like teams is more about looking at problems from the enterprise's own standpoint, ignoring customers' feelings and experiences. ◎ Decision-Making Mechanism: From "Emotional Decision-Making" to "Systematic Thinking" Intuition is important, but decisions cannot be made solely on intuition, especially major ones. A small error can lead to a huge mistake. So what is the most scientific way to make decisions? On the surface, decision-making seems simple, but it's not. Decision-making is choice—selecting one option from several. Once you choose wrong, no amount of effort will help. As society evolves, variables increase. How to reduce variables and convert some variables into relatively constant ones through transformation is the technical content of decision-making. Unfortunately, many people are unwilling to go through complex processes and use the simplest method: making decisions by patting their heads and following their feelings. This is fastest but lacks precision. Intuition can give rough judgments but is prone to loopholes. Because head-patting decisions often focus on a single point, thinking about a specific problem without deeply analyzing the root cause. In fact, as the environment becomes more complex, decision-making involves more factors, gradually becoming a complex function where variables interact and influence each other, making decisions very difficult. This requires us to use systematic thinking for decision-making. For example, we can use fishbone diagram analysis (Figure 3-4) to analyze the crux of the problem, use mind maps to sort out solutions, and analyze from the following five aspects. First, grasp the fundamental contradiction. Many people judge based on a problem they see—making decisions based on surface phenomena, treating symptoms rather than the root cause. In fact, many surface problems have underlying causes, which expose deeper issues, and deeper issues are caused by fundamental contradictions. This fundamental contradiction is the real crux. Without clarifying the fundamental contradiction, it's impossible to solve the problem once and for all. There are four layers of logic here: surface phenomenon—underlying cause—deep-seated problem—fundamental contradiction. Our ancestors were actually best at discovering fundamental contradictions, but in modern times, we have abandoned their practices and increasingly lost ourselves. Take traditional Chinese medicine (TCM) as an example: it's a very scientific system, though modern technology cannot explain some aspects. Those who believe in TCM know that the biggest difference between TCM and Western medicine is systematic thinking. Sometimes a headache is treated by treating the feet, and foot pain by treating the head. In other words, our ancestors used systematic thinking to trace the root cause, discover problems behind surface phenomena, find the fundamental contradictions causing illness, and solve problems by resolving those contradictions. It's no exaggeration to say that TCM's "treating the disease before it occurs" theory is far ahead of Western medicine's "treating the disease when it occurs." The former is preventive and forward-looking; the latter is reactive and post-hoc. Second, clarify the goal. What problem does the decision aim to solve? What expected results are to be achieved? The goals and objectives must be discussed clearly and consensus reached within the management team. This requires skills and methodology. Why do many Chinese companies not know how to hold meetings? Because they haven't learned how. They often discuss without deciding. Remember, decision-making is definitely not a one-person affair, nor is it about whoever has the highest rank. It requires discussion and collective decision. After all, one person's intelligence is limited. Even if someone thinks correctly and shrewdly, they need to persuade others. Enterprises are not armies; they cannot require employees to act on orders, otherwise employees become mindless tools with little value. To stimulate employees' potential, they must participate in decision-making and understand the logic behind decisions. Only then will they execute willingly and strive from the heart. Additionally, decisions must be based on evidence. Know what results and problems a decision will lead to. Major decisions should undergo sandbox simulations and rehearsals. Many things are interconnected; every decision affects other aspects, so the logical relationships among all aspects must be clarified. Third, implement democratic centralism. Democratic centralism means involving those who execute decisions and those who may be affected by them in the decision-making process, listening to their opinions, fully discussing, debating, challenging, and questioning before deciding. Listen to opinions from different levels and functions, from different angles and positions, and have positive and negative sides PK. Deliberately form an opposition group to find faults and hear different voices, especially opposing ones. This helps discover potential problems and balance the interests of all parties. However, it must be emphasized that soliciting opinions is essential, but the final decision may not necessarily follow the majority's opinion, because sometimes truth is in the hands of a few. Many problems cannot be seen through by ordinary people. Don't assume democratic decision-making means majority rule. Also, don't go to the other extreme where the boss holds all decision-making power, viewing decision-making as a symbol of power, doing whatever they want without consulting others. The result will inevitably be "policies from above, countermeasures from below." At best, subordinates are passive and feign compliance; at worst, they resist, sabotage, and undermine to prove the boss's decision is wrong. In short, be democratic before the decision, and autocratic after. Fourth, the decision-making process must be scientific. Bosses should not set the tone at the beginning of a meeting, otherwise they deceive themselves. Everyone knows the boss has already made up their mind, and the discussion is just a formality to prove the boss is right. Don't follow Chinese-style management games where everyone guesses the boss's thoughts—guess right and get promoted, guess wrong and suffer. Those games are only suitable for officialdom, not enterprises. They are the dregs of Chinese culture, not the essence. A scientific decision-making mechanism is for the boss to speak last at meetings. Only then can you hear genuine voices and truth, and not be deceived or fooled by subordinates. A good boss tolerates those who contradict them, listens to different opinions, and understands opponents' views. When possible, invite external people to participate in decision-making, bringing fresh eyes to the world. This method has been successfully applied in product concept testing, focus group interviews before new product launches, and target customer research. Fifth, decision-making must have methodology. Decades ago, Western companies began using the SMART principle for decision-making and task assignment. SMART stands for: S: Specific and clear goals. Many people rush to do things without clear goals. Subordinates think they understand the boss's meaning and act on their own assumptions, often going astray. Foreign company employees, having generally received SMART training, always clarify and confirm goals before doing anything. M: Measurable and quantifiable. Whether a task is measurable and quantifiable determines its execution level. Unmeasurable things often fizzle out—you can say it's done or not, ambiguous. A: Achievable and actionable. Any project or task must start with a verb, be a specific behavior or action, to be operable. Also, don't set goals too high or too low; they must be achievable through effort to be motivating and challenging. But don't make what a few people can do under specific circumstances a universal requirement. R: Realistic and relevant. Task or project settings must be realistic, not overly idealistic. Consider whether the person executing has the relevant skills, experience, or methodology, and whether they are the right person. Remember, overly high goals can crush employees. T: Complete within a specified time. Every decision must have a clear completion time, so every executor remembers it and knows what must be done by when. Especially for major projects requiring long completion times, break them into several stages with milestones to ensure overall progress. ◎ Management Model: From "Extensive Management" to "Refined Management" Because the Chinese market has maintained high growth over the past 30 years, there have been too many opportunities. As long as small and large enterprises could seize opportunities, they could succeed, and as long as they didn't make childish mistakes, they could survive. High growth masked many operational and management problems. When market growth slows, operational difficulty naturally increases, and problems in all aspects of enterprise management begin to surface. What was acceptable before will cause trouble in the future. The reasons for yesterday's success will become the roots of tomorrow's failure. The old extensive management model cannot continue. Now is the critical moment to demand benefits from refined management, solve internal problems through refined management, and achieve enterprise transformation and upgrading as soon as possible. It can be said that the extensive management model was understandable in the first stage of China's reform and opening up. Fast fish eat slow fish; speed is the hard truth, so rushing was important. But after 30 years of high growth, China entered the second stage of reform and opening up, with gradually slowing development speed. Now it's about quality; quality is the hard truth. Quality here refers not only to product and service quality but more importantly to management quality—solving problems in the most efficient way. Where does management quality start? Everyone has heard of PDCA (Deming Cycle). I think it's better to turn it into PACR (Figure 3-5) because China's national conditions differ from Western countries, Chinese thinking differs from Westerners, and Chinese enterprises are at a different development stage than Western companies. Figure 3-5 PACR Cycle First, let's look at the specific definitions of PACR elements. P (Plan) is planning. A good plan must include work objectives (what goals to achieve, what effects to achieve), completion standards (what counts as 3 points, what counts as 5 points), responsible persons (who is the primary person 100% responsible, who are related responsible persons), completion time (specific year, month, day, and time), and inspector (who evaluates results, who has the final say). China had a planned economy for decades, but most people don't know how to make plans. Western countries have had a market economy for over a century and emphasize planning. Whether at work or in life, without a plan, you can't move an inch. Many say plans can't keep up with changes, making excuses for not planning. In fact, a good plan must anticipate various changes. A plan that doesn't consider variables isn't a plan at all. Who has heard of making a battle plan without considering the enemy's countermeasures, counterattacks, and possible variables? So regardless of the size of a matter, once you have planning awareness, you'll act according to this logic. A (Action) is action. Descriptions must start with verbs—break a big goal into specific actions. Complete all actions, and the goal is naturally achieved. When I consult for enterprises, I usually break a task into 17 steps, each starting with a verb, each with deliverables—what the result is, what marks completion. For example, conducting market research requires submitting a market research report; visiting target customers requires submitting interview records of how many customers visited; convening personnel communication requires submitting feedback forms from the communication meeting, noting which conclusions everyone agrees or disagrees with, and specific suggestions; summarizing implementation effects—after a period of implementation, summarize and analyze problems and deviations, find root causes, make correction plans, and notify relevant personnel. Every sentence must start with a verb. Only then is it easy to judge whether an action is complete. Look at slogans on many company walls—most are empty, big, and false principles that cannot be implemented. People still don't know what to do or in which direction to strive. C (Check) is supervision and inspection. Assigning tasks is just a good start. Responsible persons must clearly know the follow-up inspection mechanism—how often to check, what to check each time, and responsible persons must report progress weekly (or every 10 days). One more thing: the traditional Chinese way is not to report if there's no progress, only telling others when there's a result. This leads to much suspicion and misunderstanding. The correct approach is "no progress is progress." In other words, even if there's no progress, tell relevant people, let everyone know what problems arose, and the revised timeline, so leaders and relevant personnel can intervene and help. This is also a concrete manifestation of giving everyone the right to know. But in China, many like to hide the truth. No matter what problem arises, even a small one, they like to cover it up, hoping to handle it themselves, unwilling to let others know what's wrong behind the scenes. Eventually, hiding and not reporting has become a culture in Chinese society, and everyone takes it for granted. R (Result) is result orientation. Whatever you do, there must be a result. It's not enough for the responsible person to try hard; the task is complete only when the goal is achieved. Unfortunately, Chinese schools only teach knowledge, not how to behave and work. So from childhood, responsibility awareness is not established, making it impossible to form a responsibility culture. People are unwilling to take responsibility. They like to emphasize reasons and find excuses. Whoever fails to complete a task will find many objective reasons to explain, proving it's not their fault. There are two ways to solve this: First, use numbers to speak and implement quantitative management. If numbers are clearly written in the plan, responsible persons will feel pressure. Just like when bidding for the Olympics, promising a certain number of blue-sky days per year—with a clear number, the parties involved will go all out. Remember, no pressure, no motivation; no emphasis on results, no execution. Second, emphasize subjective reasons. If deviations occur, when summarizing, first talk about subjective reasons, then objective reasons—first find your own problems, then others' problems and environmental problems. Only then can there be results. ◎ Focus: From "Visible Costs" to "Invisible Costs" Facing increasingly fierce competition, every entrepreneur and senior manager focuses on reducing costs and increasing product added value. The former emphasizes cutting expenses, the latter increasing revenue. Increasing product added value depends on the enterprise's value proposition, product innovation capability, market understanding, and talent. It's a tough bone that many enterprises are unwilling to gnaw. Reducing costs seems more feasible and immediately effective. But simply reducing or cutting costs can bring fatal problems because some costs cannot be arbitrarily lowered; once lowered, they trigger a chain of negative reactions. So, is it possible to reduce costs without affecting product added value, achieving "having both fish and bear's paw"? The answer is yes—this is the wisdom of management. As far as I know, over the past 30 years, everyone has focused on "visible costs" while ignoring "invisible costs." The latter should be the focus because invisible costs far exceed visible costs, and the harm they cause is also far greater. As we all know, costs visible on financial statements are explicit costs. Everyone tries to reduce them. But costs not visible on financial statements are ignored. This is like an iceberg: only the tip is above water, while the underwater part may be larger. So in most enterprises, invisible costs are usually far greater than visible costs. And in terms of management complexity and problem-solving difficulty, managing invisible costs is more challenging. Therefore, entrepreneurs and managers must "see through the clouds to see the sun" by diving to the bottom, understanding and mastering the causes and structure of the iceberg—deep-seated issues—to fundamentally reduce costs, not just do surface work, and certainly not harm normal operations by cutting costs. Blindly reducing costs often brings side effects because although costs come down, the enterprise's foundation is shaken. Like taking medicine, sometimes fast-acting drugs have greater side effects, curing one disease but causing another. So rather than focusing on visible costs, it's better to focus on uncovering invisible costs. The High Cost of Low-Wage Workers In today's China, the demographic dividend is largely over. Many manufacturing enterprises face a shortage of skilled workers. The labor market is shifting from a seller's market to a buyer's market. I remember consulting for a private enterprise a few years ago and encountering this problem: after the Spring Festival, nearly 20% of workers didn't return. Despite recruitment ads, there weren't enough applicants. On the surface, suppressing wages seems to save money for the enterprise, but the actual result was the opposite. Workers couldn't be recruited, affecting production. The enterprise had to invest in training new employees, wait for them to gradually become familiar with products and processes, and during this process, many defective products appeared, affecting product quality and stability. The result was a big loss. This problem had been troubling the boss. So I asked the HR manager why they couldn't recruit qualified workers. Was there no qualified talent in the area? The answer was that there were many workers, but they didn't want to come. I asked why. They said because wages and benefits were too low. I asked why wages and benefits were low. They said because company profits were low, so they couldn't afford high salaries. I asked why profits were low. They said because products lacked competitiveness. I asked why products lacked competitiveness. They said because product quality wasn't good enough. I asked why quality wasn't good enough. They said because personnel quality wasn't high enough and the workforce was unstable. I asked why personnel quality wasn't high and unstable. They said because wages and benefits were low. And so it circled back. This is a common problem in many Chinese enterprises today, like a dog chasing its tail—working hard every day but never achieving, the problem persists. So I asked: If others recruit at 2,000 yuan, and you recruit at 4,000 yuan, what would happen? The answer was that there would definitely be a long line outside the company. If you need 100 people, maybe 1,000 would apply. I then asked: Among those 1,000, can you pick the best 100? The answer was definitely yes. But the HR person immediately said: If we recruit workers at 4,000 yuan, the company would lose money! This is the first reaction of most enterprises, a reflex without any basis, thinking higher wages mean losses. Is that really true? Absolutely not! Higher wages attract the best workers, and excellent workers are willing to take on more responsibility, capable of making better products, and create more profits for the enterprise. Workers' salaries come from the performance they create. Without performance, there's no high salary. The enterprise doesn't pay extra costs upfront. Unfortunately, most enterprises don't understand this simple truth and are unwilling to accept this fact. The Cost of Employee Turnover Although employee turnover affects normal operations, many enterprises have no countermeasures and haven't calculated the huge cost of turnover. It seems like one person leaves, another comes, and costs don't change. But that's not true. First, after an employee resigns, managers (even the boss) must spend time interviewing and recruiting new employees. The time and energy occupied are a huge opportunity cost. Second, new employees are basically inefficient at first. In the first three months, they often create negative value (because the enterprise spends time and money training them, and old employees must teach and mentor them). Third, when managers or excellent old employees leave, it not only affects customer satisfaction, making customers feel uneasy (confidence declines), but also negatively impacts those who remain. But many bosses, besides feeling helpless, don't care about employees leaving. Some even say: "I'm not afraid of anyone leaving; there are plenty waiting outside!" Such angry words make many feel the boss doesn't cherish talent and treats employees unequally. In an era of labor surplus, thinking and speaking this way might not be a big problem. But in an era of labor shortage, problems arise. If salespeople leave maliciously, there's also the cost of taking customers away. They might tell customers about internal problems (product, management, personnel, etc.), making customers feel deceived or worried, even refusing to buy again. If R&D personnel leave maliciously, there are risks of taking technology, product designs, development plans, etc. This information is what competitors want most. Once leaked, at best the company takes a long time to recover; at worst, it loses competitive advantage, and years of R&D costs go down the drain. The Cost of Employees Not Going All Out Whether employees fully devote themselves to work makes a completely different result. Some white-collar workers never arrive late or leave early, but they don't put their hearts into work. They're in a state of going through the motions—not making mistakes, not violating rules or laws, but just putting in time without effort. This is a huge cost that many enterprises cannot calculate. If you say they don't work, they work every day. If you say they work, they don't go all out. If only a few people do this, it's not terrible. But this disease is contagious. Others see it and gradually follow suit, not working hard either, because doing well or poorly is the same, and you can still coast along without going all out. This situation spreads like cancer cells throughout the body. Healthy cells gradually deteriorate and become malignant, not only greatly reducing efficiency and quality but also directly affecting employee morale, which in turn affects performance and raises costs. Why do good employees turn bad? Many people are puzzled. In fact, most employees enter a company with the intention of doing well and achieving something. But after observing for a while, they adjust themselves based on the situation. They look at how the enterprise treats employees, including those who are motivated, those who achieve results, those who don't work hard, and those without performance. If the enterprise treats employees like family, they treat the enterprise as their second home. If they find the enterprise is just using them and not treating them as insiders, they adopt a "you're unkind, so I'll be unjust" attitude and enter a coasting state. Those with ability and conscience may choose to leave, while those without ability or conscience choose to "coast." The result is a lose-lose situation. Digging deeper, we must answer a fundamental question: For whom do employees work hard? Why do employees work hard? This is an unavoidable core question, but many managers haven't seriously thought about it, let alone formed a standard answer. In a market economy, equal exchange of interests is emphasized. Every employee strives for their own personal interests. A good enterprise links employees' personal interests with the enterprise's long-term interests, allowing employees to contribute to the enterprise while working for their own interests, achieving a win-win. This is the true essence of management that I repeatedly emphasize. Good enterprises have undoubtedly figured this out. So what's the solution? To make employees go all out and work hard, you must understand what employees want. This is the most basic action of "people-oriented" management. In fact, what employees want is simple: to learn things, to progress continuously, to earn more money than peers, to be promoted based on ability if they work hard, and to gain respect and trust from superiors and bosses. So managing employees isn't difficult, and motivating them is easy. The key is to learn to "study people," specifically to win hearts and manage hearts. I remember many years ago, an employee of a private enterprise, dissatisfied with the boss and superiors, did something before resigning: he was a quality inspector responsible for inspecting suits. To vent his dissatisfaction, he cut a slit in the armpit of each suit in a batch. The goods went from the factory to the distributor over several months, then to stores, and finally to users. When users put them on, they found slits in the armpits, leading to massive returns. This caused huge losses to the enterprise and damaged its image and reputation. By the time the enterprise learned of this, the person had already left months ago and couldn't be found. The Cost of Employees Lacking Work Skills As the saying goes, "Jade requires carving to become a vessel." The same material, processed differently, becomes different products. A stone may become a priceless treasure or an ordinary worthless stone. Chinese enterprises can mass-produce world-class standard products, but they don't know how to mass-produce world-class standard talent. Because in the past, we didn't invest in this area. Most enterprises adopt a "take it as is" approach, and very few are willing to spend heavily on training employees. Everyone wants to take shortcuts, poaching from other companies in the same industry. But after poaching, they find there aren't many qualified talents—only experience, not professional skills. Some say: "If I spend money training employees, they'll learn and leave. Isn't that making wedding clothes for others?" This is the most common thought, but also the most wrong. Training employees and preventing turnover are two interrelated things. Training employees, first, improves their skills and teaches them how to behave and work; second, increases stickiness, making them settle down and work well; third, increases loyalty—once employees adapt to the corporate culture, they won't want to leave. Enterprises with good training have high-quality employees, good performance, and lower turnover rates. So enterprises should work on centripetal force, find ways to increase attractiveness, and make employees reluctant to leave. Over the past years, only multinational companies and excellent large domestic enterprises have trained a batch of qualified professional managers and professional white-collar employees. Other enterprises haven't done enough in this regard. Many SME bosses focus on their own learning, further education, and improvement. They like to attend activities that update concepts, listen to celebrity speeches, and enjoy entertainment-style experiences. Whether they learn real skills is another matter. Although SME bosses like learning, they are unwilling to spend money on managers and frontline employees to improve their work skills. This market demand has led to the abnormal development of China's training industry: too many concept-spreading activities, too few skill-focused ones. Many trainings are not really training but seminars, because training requires participation, practice, and real combat drills, not just sitting and listening or discussing. In fact, cultivating employee skills is the top priority of the training industry. Only when employees have work skills will enterprise efficiency improve. Think about it: what would happen if you sent untrained soldiers directly to the battlefield? Needless to say, casualties would be high, which would demoralize the entire team and make the army lose confidence. Not training employees seems to save money, but it's actually a huge waste because employees lack the necessary skills, leading to many low-level problems that recur, causing huge losses. We know that whether it's high defect rates or shipping errors, they erode the enterprise's limited profits. It's understandable to poach some talent when urgently needed, but you can't rely solely on that. Enterprises must cultivate their own talent, recruit inexperienced college graduates, and teach them skills to become qualified employees. But many enterprises think poaching is faster and don't want fresh graduates because they lack work experience. If everyone refuses these graduates, where will they accumulate experience? Many "paratroopers" (external hires) initially feel a deep connection with the boss, who entrusts them with important tasks. But soon problems emerge. Once the poached person falls out with the superior (boss), it's inevitable that "people leave and tea gets cold," harming both sides and making subordinates lose hope and work less hard. The Cost of Interdepartmental Bickering and Passing the Buck In the past few years, many enterprises have tried to change managers' and employees' mindsets through training (or rather, seminars) to improve execution. Because many good ideas go astray during implementation, and tasks may not be completed as planned. At this point, people start making excuses, departments blame each other, and shirk responsibility. This hinders business, wastes precious time, fails to deliver on promises to customers, and creates massive internal friction. This cost is hard to measure precisely, but it's very high. Why does this problem occur? The reason is unclear division of labor and unclear responsibilities. Modern market economy emphasizes division of labor because one person can't do everything. You must cooperate with others to complete a task. But how to unify everyone's thinking and foster teamwork isn't just about persuasion and ideological work; it must be solved from the perspective of interest-driven mechanisms. First, design dynamic job responsibility statements. Clarify the "handshake relationship" between a position and related functions: which departments am I responsible to, what results do I need to output regularly, what services do I provide, what materials do I deliver, etc. At the same time, what input, services, and materials do I expect from relevant departments? This way, all functions in the company can be linked together with dynamic job responsibility statements, forming a complete system, streamlining business processes, and letting employees work according to job standards—"prescribed actions"—minimizing arbitrary actions based on personal preferences, avoiding various "optional actions." Over the years, I've helped many enterprises design such dynamic job responsibility statements, but I only do the director level. Once I finish the director's statement, I've taught the director how to do dynamic job responsibility statements, and they do it for their direct subordinates—department managers—who then do it for each employee. Many enterprises actually have job responsibility statements, but when you look at them, they're static, only describing what the job should do, very general, not assessable, and unclear about commitments to other departments or who evaluates each task. Transitioning from static to dynamic job responsibility statements is key to enterprise transformation and upgrading. Once implemented, it can solve many cross-departmental cooperation problems and reduce "chain-breaking" incidents. But enterprises shouldn't cross the river by feeling the stones again. The first time, they must hire professional consultants to assist in design. After learning, they can do it themselves next time. However, some enterprises, to save trouble, hear a good suggestion and try to implement it on their own, often paying a significant price. The Cost of Unsold Products Whether it's clothing or electronics, once products become unsold, they lead to losses because these products have timeliness. Once outdated, they become low-value seasonal leftovers. So inventory consumes a lot of enterprise profits. Although clothing and electronics may have high returns, they cannot compensate for losses from unsold products. So avoiding unsold products is key to reducing costs. How to develop best-selling products? First, copying and imitating others won't work. Chinese thinking is completely different from Westerners. Chinese often see what others sell well and follow suit. Westerners see what others do and avoid doing it, each thinking about how to make a unique product, never following others. This Chinese mindset drives all industries toward meager profits, disrupting industries that could be comfortably profitable. So for Chinese enterprises to conquer the world, they must first change their thinking, learn to survive through differentiation, and never follow others again. The world is fair. If you don't invest in studying consumers and developing products that satisfy or even delight them, you can't win their favor. Why should you make money without effort? The era of making money with eyes closed is long gone. Once thinking changes, it's a matter of methodology. Develop products according to the logic of "slow first, fast later," doing thorough market research. Some say market research takes too much time; by the time it's done, the opportunity has passed. This is a thinking trap: many focus on the present, targeting products already selling well, so there's time pressure. By the time your product is ready, the market opportunity window has closed. The "slow first, fast later" logic requires lead time—research products that will sell well in three to five years. When the product is developed, it just catches the market's upward trend. This is the focus of marketing: sales manages the present, marketing manages the future. Everyone likes Apple products. Know that Apple products often take five years from project initiation to launch. The product you see today started five years ago. Not just Apple—most multinational companies do this. That's why products gain market recognition when they come out. Besides following trends, Chinese enterprises commonly use extensive coverage, broad but shallow operations, shooting without aiming, hitting targets by chance and making a fortune like winning the lottery. But this approach wastes resources and is a high-cost game. Suppose you develop ten products, only one is popular and sells well. The enterprise can only profit from that one product. Imagine the risk. The other nine unsold products waste a lot of manpower and resources, affect R&D team morale, make most R&D personnel unable to earn money, lack a sense of achievement, and also reduce customer satisfaction. So what's the solution? Use scientific methodology for product innovation, from product concept to product definition to prototype design, all with scientific methods, not arbitrary. Two years ago, I helped a domestic enterprise with product innovation system consulting, teaching them a complete methodology. If strictly followed, the enterprise would build a product innovation pipeline, continuously producing competitive products, rather than relying excessively on one person's ideas or creativity. Of course, there's a shortcut: hire external help—the world's best R&D designers. Only first-class designers design first-class products, sell at first-class prices, earn first-class profits, and build first-class brands. Unfortunately, many enterprises don't understand this, reluctant to spend heavily on external talent, thinking it's costly. But the result is the opposite. This mindset has permeated all industries in China, and low-price bidding has accelerated many enterprises' decline, trapping them in price wars. The Cost of Inefficient Field Salespeople When an enterprise reaches a certain size, it sets up branches, offices, or sends salespeople to live in certain cities. They prefer recruiting at headquarters and sending people nationwide rather than hiring locally. This has many drawbacks. How to remotely manage these field personnel is a headache for many enterprises. Whether they work hard, visit customers as required, conduct business according to company rules, and remain honest is difficult to monitor and evaluate. Because field personnel are often shrewd salespeople. In an environment without rules, without a scientific management system and strict supervision mechanisms, these people easily go bad. Once employees go bad, it's not only a loss to the company but also to their long-term interests. As competition intensifies, field personnel expenses increase. They can find various reasons to convince superiors that money should and must be spent. Budgets often exceed, but performance is hard to guarantee. Field personnel's food, housing, and transportation all cost money, and what they do every day is hard to control. Many enterprises make good plans at the beginning of the year, allocating resources and expenses based on high sales targets. But due to lack of monitoring and contingency mechanisms, expenses are spent, performance isn't achieved, and at year-end, it's a losing deal. So how to transform? First, the boss should change employment methods, hiring locally as much as possible. This saves a lot of money on food, housing, and transportation. Also, local employees have more resources and are less likely to jump to other cities, increasing stability. Second, have clear job responsibility statements and specific requirements: how many customers to visit daily, what to report to superiors, how to evaluate processes and results, creating deterrence. Third, use a sales funnel for remote monitoring. Sales managers should set aside dedicated time weekly to communicate with each salesperson, check funnel progress, review customers in the funnel, know what the employee did this week, progress, problems, and formulate next action plans. Fourth, link plans, budgets, and performance. Don't do things without plans, don't spend money without budget, and when performance targets aren't met, expense targets decrease accordingly—dynamic management. Teach employees to make plans and budgets, not just go with the flow and leave things to fate. The Cost of Complex Performance Appraisal Many enterprises recognize the importance of employee motivation and hope to objectively evaluate each employee's performance through a scientific performance appraisal system. This thinking is correct and progressive. But performance appraisal must not be too complex, nor a mere formality, otherwise it becomes distorted. I've encountered enterprises where the boss doesn't know what a performance appraisal system should look like, so they hire management consulting firms to design a perfect system, trying to replace subjective evaluation with quantitative indicators and use computer systems for appraisal. The result is that people seriously do what's assessed, but no one does what's not assessed. Over time, everyone gradually loses their sense of ownership and becomes slaves to appraisal. Appraisal cannot be completely objective, nor can it divide employees into grades through a series of indicators. Many behaviors cannot be quantified, and many ideological issues cannot be measured by indicators. On the surface, using indicators seems to make employees convinced, but this appraisal is just coercion; it doesn't make employees genuinely identify and accept. The "one-size-fits-all" policy is popular in China because the parties involved are unwilling to take responsibility, shifting it to superiors, the company, policies, and systems. These people can say to subordinates: "It's not that I don't want to give you a high score, not that I don't want to raise your salary, not that I don't want to promote you, but your score isn't high enough." This approach makes it easy for the parties to absolve themselves but disappoints truly excellent employees, even driving them to leave. So in most multinational companies, subjective evaluation is primary. Why? Because people are not machines; they have flesh and blood, thoughts and feelings. You can't simply score them with a performance appraisal system, otherwise it leads to "policies from above, countermeasures from below." We say "evaluation standards determine behavior." What kind of appraisal system leads to what kind of work style and results. Because people are very complex animals, emotional animals. Their motives and behaviors are influenced by the surrounding environment, especially superiors' behavior and management style, which greatly affect subordinates. Complex appraisal systems seem scientific but are actually absurd. ◎ Work Mode: From Doing "Application Problems" to Doing "Multiple-Choice Questions" In China's big environment, most people are accustomed to top-down command, resulting in bosses and executives being very tired because they face numerous difficult problems daily, solving countless application problems—today solved, tomorrow more come. In fact, frontline employees know the market, customer needs, and competition best. They know where the crux of problems lies. As long as their interests are aligned with the company's and strict requirements are placed on them, they will come up with countless good solutions. Letting those who know best propose suggestions and plans is the right way to solve problems. So good decisions should be bottom-up, not top-down. If an enterprise is accustomed to top-down decision-making, employees become dependent, waiting for superiors or bosses to make decisions. If employees know a boss's or superior's decision is wrong, they won't proactively speak up. Some are afraid of embarrassing the boss; others wait to see the boss make a fool of themselves, proving through practice that the boss is wrong. Generally, companies often hold meetings, but meetings aren't as simple as people think. How to hold meetings is also a skill. Efficient meetings are well-prepared in advance, equal consultation during, and consensus after, not endless discussion without decision, nor endless debate on a topic. If attendees come with solutions, meeting efficiency improves, quickly entering the topic, and reaching consensus through discussion. I believe many wisdoms come from collision. After the meeting, a memo must be formed and sent to all attendees, clarifying which tasks they are primarily responsible for, which they assist with, and the completion standards and dates for each task. This improves execution. At the next meeting, first review the previous memo, see which tasks were completed successfully and which deviated. For deviated tasks, have the responsible person explain and provide a revised implementation plan, entering the next cycle. I've read "Come to Me with Answers," a book for enterprise employees, clearly telling them to keep problems to themselves and submit answers to leaders. But the premise for employees to be "answer-type employees" is that bosses are "answer-type leaders." Specifically, for bosses to shift from doing application problems to multiple-choice questions, they should adhere to several principles: First, speak last at meetings. Let attendees clearly express their views on a specific issue. The boss must not set the tone or express their own views first, enduring the silence. Second, the day before the meeting, notify attendees of the topics and problems to be discussed, letting them think and prepare in advance, and come with solutions. Avoid arriving at the meeting only to find out what's being discussed and then start thinking. Third, listen to both sides. If subordinates propose several viable plans, let the primary responsible person integrate different opinions, combine strengths, refine, and form a unified plan. Alternatively, have two or three people with promising solutions independently refine their plans, then discuss and decide which to choose a few days later. This is doing multiple-choice questions. This approach greatly stimulates subordinates' sense of ownership and awareness because the suggestions are theirs, so they'll naturally work hard to prove their suggestions are right. As the saying goes, "Don't worry about not knowing goods; worry about comparing goods." Even if the boss or superior doesn't know how to solve the problem beforehand or doesn't understand the specifics, after hearing several plans from different people, they'll basically understand. Just choose the one that suits them best. So doing multiple-choice questions is far easier and smarter than doing application problems. Through this method, the boss can also observe calmly, examining each subordinate: who views problems from the company's standpoint, who from the department's; who put more thought and preparation into this, who didn't prepare seriously; who dares to speak the truth, who likes to speak grand but empty words, even always-correct nonsense. Since the boss doesn't set the tone in advance, subordinates won't guess the boss's meaning, won't need to decipher "between the lines," and won't follow the boss's thinking. This fundamentally eliminates flattery. Remember, the most terrible thing in an enterprise is flattery. Although everyone likes to hear good words, often good medicine tastes bitter and loyal advice jars the ears. The boss must listen to different opinions, especially those different from their own, letting everyone speak freely. Whoever has ability tries to persuade others; whoever can't persuade accepts others' opinions, creating a positive, equal communication atmosphere. Besides meetings, bosses should also adjust communication methods, gradually forming corporate culture through this adjustment—teaching everyone to come to superiors with solutions. For example, when a manager or employee encounters a difficult problem, unsure or clueless, they bring it to the superior and ask what to do. If the superior has experience, analytical ability, and knows the solution, without professional training or clear company requirements, they often directly tell the subordinate what to do. This is very common and the most efficient way. But it does more harm than good. Over time, subordinates lose thinking ability, problem analysis and solving skills. Whenever they encounter a problem with some difficulty, they hand it up as a reflex, either asking for support or simply following orders without thinking. Why do many bosses feel employees aren't proactive enough, lack dedication, and don't think seriously? Why do many grassroots managers lack initiative as companies grow? Why do they prefer following rules without innovation? Why do they only report problems but not solve them? Like a middle schooler who can't take care of themselves, this is mostly because parents spoiled them. Many enterprises, by not imposing strict requirements on employees and managers, have caused their abilities to degenerate. The correct approach is: even if the superior knows the answer, don't immediately tell the subordinate. Encourage them to think actively, find ways to solve problems, stimulate their interest in solving problems, and gradually improve their problem-solving abilities. At most, the superior helps clarify their thinking. In the future, when subordinates come with problems asking what to do, the superior should ask back: "What do you think should be done?" If the subordinate says they don't know and that's why they came, tell them: "Don't come with problems; come with solutions, preferably 2-3 different ones." This trains subordinates to think from different angles and understand the pros and cons of different solutions. Some may ask: Won't this delay things? What about emergencies? In fact, once subordinates learn correct thinking, there generally won't be particularly urgent situations. Once subordinates know problems can't be handed up and they must think of several solutions before seeing the superior, they'll think seriously when first receiving tasks, consider many things thoroughly, and rarely face emergencies. I believe many things become urgent because subordinates didn't think ahead, didn't plan and prepare, didn't anticipate unexpected and potential problems, adopting a "cross the bridge when you come to it" attitude. When actually doing it, or halfway through, they discover many problems weren't considered in advance, causing panic. It must be emphasized that the "plan" here refers to a thorough plan, not a preliminary, rough idea. Teach subordinates to "look from the back to the front." Only by rehearsing the solution from start to finish in their minds can they know if it's feasible and workable. Once subordinates get used to this way of working, the boss becomes relaxed because each time subordinates don't come with application problems (and difficult ones at that) for the boss to solve, but with 2-3 solutions for the boss to choose. After hearing the pros and cons of each plan, the boss can comment or make a conclusion immediately. Of course, the best method is to let subordinates make a second judgment based on the boss's opinions and feedback. This way, they feel they made their own judgment after consulting the superior, strengthening their confidence, feeling better, and working more diligently and earnestly. -------------------------------------- Like this article? Feel free to click the top right corner to share to your circle of friends; About us: WeChat Name: FMCG Distributor Professional Consulting and Management Account Introduction: 20 years of FMCG distributor operation and management experience, professionally matching distributor department management: Senior marketing teachers help your enterprise develop. Learning and Communication QQ Group: 344257092 -----------------------------------------