---
title: "The Bigger the Headquarters, the Bigger the Problems"
description: "Author: Liu Chunxiong | Source: Teacher Liu's Forum (ID: liuchunxiong1964). In Journey to the West, most demons are escapees from the 'headquarters,' while only the White Bone Demon is a wild one. Sun Wukong cannot defeat demons, but those headquarters leaders can easily 'subdue' them without lifting a finger, simply because they hold 'magic tools' in their hands. A strong headquarters is a product of a centralized system. Regardless of rank, headquarters staff always feel a sense of superiority over frontline personnel, as if they are 'half a grade higher.' Chinese people prefer working at headquarters because, although the pay is not high, it is respectable. Headquarters functional departments have an innate sense of superiority over frontline staff, which breeds not only bureaucracy but also 'soldier-ocracy.' Although 'soldier-bureaucrats' have no power, they can manipulate processes. Some even boast, 'I may not be able to make things happen, but I can easily ruin your plans.' In short, the headquarters has become the 'problem that creates problems' and must be surgically reformed."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2017-04-13"
language: "en"
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# The Bigger the Headquarters, the Bigger the Problems

> Author: Liu Chunxiong | Source: Teacher Liu's Forum (ID: liuchunxiong1964). In Journey to the West, most demons are escapees from the 'headquarters,' while only the White Bone Demon is a wild one. Sun Wukong cannot defeat demons, but those headquarters leaders can easily 'subdue' them without lifting a finger, simply because they hold 'magic tools' in their hands. A strong headquarters is a product of a centralized system. Regardless of rank, headquarters staff always feel a sense of superiority over frontline personnel, as if they are 'half a grade higher.' Chinese people prefer working at headquarters because, although the pay is not high, it is respectable. Headquarters functional departments have an innate sense of superiority over frontline staff, which breeds not only bureaucracy but also 'soldier-ocracy.' Although 'soldier-bureaucrats' have no power, they can manipulate processes. Some even boast, 'I may not be able to make things happen, but I can easily ruin your plans.' In short, the headquarters has become the 'problem that creates problems' and must be surgically reformed.

Author: Liu Chunxiong
Source: Teacher Liu's Forum (ID: liuchunxiong1964)
> In Journey to the West, most demons are escapees from the 'headquarters,' and only the White Bone Demon is a wild one. Sun Wukong cannot defeat demons, but those headquarters leaders can easily 'subdue' them without lifting a finger, simply because they hold 'magic tools' in their hands.
A strong headquarters is a product of a centralized system. Regardless of rank, headquarters staff always feel a sense of superiority over frontline personnel, as if they are 'half a grade higher.' Chinese people prefer working at headquarters because, although the pay is not high, it is respectable. Headquarters functional departments have an innate sense of superiority over frontline staff. This superiority not only breeds bureaucracy but also 'soldier-ocracy.' Although 'soldier-bureaucrats' have no power, they can manipulate processes. Some even boast, 'I may not be able to make things happen, but I can easily ruin your plans.'
In short, the headquarters has become the 'problem that creates problems' and must be surgically reformed.

**The headquarters is always far from the terminal**
* **Case:** While consulting for a company, we found it extremely difficult to communicate with the boss, mainly due to differences in basic understanding of the market. So we urged the boss to join us in inspecting the terminals. From the distributors, we learned that this was the boss's first 'personal expedition' to inspect the market, even though the company had been operating for over a decade, with its main market in the province. For this boss, the market was close at hand but seemed far away. After the market inspection, the communication barriers between us and the boss naturally disappeared.
* **Diagnosis:** Because the headquarters is far from the terminals, headquarters and grassroots marketing personnel often cannot communicate in the 'same language.' Some call this phenomenon 'the boss speaks bird language in the sky, while subordinates do pig work on the ground.'
For enterprises, the 'thrilling leap from commodity to currency' occurs at the terminal; the distribution channel is merely a transfer of warehouse stock. However, the voices heard at headquarters rarely come from the terminals; the strongest voice is that of distributors, who act as an 'insulator' between the boss and the terminals. When I worked at a company, I initially inspected markets by first meeting distributors and then checking terminals, only to find that most of my time was taken up by the distributors' 'enthusiastic hospitality.' Later, we realized that **distributors are most interested in sales policies rather than terminals, while manufacturers are most interested in terminals rather than sales policies**. This difference in starting points makes distributors a natural 'insulator' between the boss and the terminals. So we changed our market inspection method: first check terminals, then meet distributors. This way, we truly understood the market conditions and realized that what we 'saw' under the guidance of distributors was not necessarily 'real.'
As market focus shifts downward and distribution channels flatten, the headquarters seems closer to the terminals, but the reality may be the opposite. While channels flatten, the internal management levels of enterprises have increased. Previously, the marketing system had only 1-2 management levels, but now it commonly has 3-4 levels. The more marketing management levels, the farther the boss is from the terminals, and the enterprise's marketing system again plays the role of an 'insulator' between the boss and the terminals.
Some may question: the headquarters has important matters to handle, why should it care about terminals? We believe that the direction of marketing and major policies are usually held by the headquarters, and **terminals are the source for determining marketing direction and policies**. In most cases, the headquarters must understand terminal information through formalized information transmission, but no one in the marketing system can influence marketing direction and policies as much as the headquarters. Moreover, China's terminals undergo major changes every so often, requiring the boss to personally experience them.
The distance between the headquarters and terminals is not related to spatial distance but mainly to psychological distance. The closer the psychological distance, the closer the spatial distance. We do not require all bosses to spend over 200 days a year in the market like Zong Qinghou of Wahaha, but the headquarters must at least genuinely care about terminals. The management system works like this: whatever the boss cares about, the management system will selectively report. If the boss ignores terminals for a long time, the management system will not bother the boss with terminal issues, except in two cases: when there is major 'good news' to claim credit or major 'bad news' to ask for help.
Management scholars have long known that corporate bureaucracy inevitably produces 'systematic errors.' They designed an exception under the normal command and reporting system: superiors can skip levels to inspect subordinates' work. For China's rapidly changing market, if bosses want to keep pace with the market, they **'can and must skip levels to inspect terminal work.'** Because the characteristics of the Chinese market determine that the closer the boss's heart is to the terminals, the closer they are to success.

**The headquarters always uses execution as a scapegoat**
* **Case:** 'No Excuses' is one of the best-selling finance books. Some companies give a copy to every salesperson, and others organize study discussions. Along with the earlier 'A Message to Garcia,' some bosses finally found an excuse for poor performance: salespeople are not like Rowan who delivered the message to Garcia.
* **Diagnosis:** The popularity of 'No Excuses' and 'Crossing the river by feeling the stones' is a tragedy for Chinese management, as it provides an excuse for incompetent managers. When headquarters managers make a target with no basis by patting their heads, they always say to subordinates: 'No excuses!' Then salespeople have to 'cross the river by feeling the stones.'
Successful companies do not recruit a large number of 'capable' salespeople through a process of elimination, but first find a marketing model that solves the company's marketing problems, and use this model to gradually enable average-quality personnel to operate it. If they hope every salesperson can create their own model and let them 'cross the river by feeling the stones,' most will end up falling into the river. Therefore, successful companies first have 'excellent models that create excellent salespeople,' and then 'excellent salespeople that create excellent companies.' **What can a company that does not provide a support platform for its salespeople offer them? Only products with unknown promotion methods and endless pressure.**
What kind of salesperson has the required abilities? They must have market planning and entrepreneurial abilities. What a high requirement! This is not a requirement for salespeople; it should be for startup bosses. If salespeople truly had such abilities, companies might not be able to retain them.
**Excellent companies require salespeople to be creative to 'add icing on the cake,' not to 'provide fuel in snowy weather.'** Companies should provide salespeople with a mature marketing model; as long as they operate according to the model, the market will not have problems.
Marketing models do not fall from the sky, nor can they be copied from other companies. They require the headquarters to fully mobilize internal marketing resources based on market possibilities or opportunities, plan a marketing model with the company's characteristics, and have the ability to help salespeople run it. This task can only be undertaken by the headquarters or decision-makers.

**The headquarters' policies always change drastically by the time they reach the frontline**
* **Case:** A food company conducted thorough research and planning to promote an important new product. At the new product promotion meeting, experts and marketing management gave a comprehensive explanation of the significance and procedures of the new product promotion and answered various questions from attendees. After the meeting, marketing personnel entered the market with the 'New Product Launch Execution Manual.' When the promotion meeting ended, all headquarters staff breathed a sigh of relief, waiting for good news from the market.
* Ten days later, the marketing manager made a special trip to the target market and found that the originally flawless new product promotion had been executed with many loopholes. When the marketing manager visited distributors, he discovered that the regional marketing supervisors who attended the meeting had not conveyed the meeting's spirit to salespeople, let alone to distributors. The regional supervisors only conveyed a simple message to distributors by phone: the factory has launched a new product, priced at XX. The meeting spirit and the 'New Product Launch Execution Manual' were all 'embezzled' by the regional supervisors.
* **Diagnosis:** The failure to convey headquarters' policies and spirit seems to be the responsibility of regional managers, but the root cause lies in the headquarters.
During channel flattening, we found that manufacturers' sales management systems have become multi-layered. Previously, the typical sales management system was: headquarters → provincial (or regional) salespeople. Now the typical system is: headquarters → regional manager → provincial branch → municipal office → county-level salesperson. **While the channel structure flattens, the manufacturer's sales management system becomes hierarchical; this is the 'flattening trap' of marketing.**
According to our observations, the management penetration of Chinese local enterprises is usually only 1.5 levels, but the typical sales management system now has 4 levels, far exceeding the management capability limit of Chinese local enterprises. Therefore, if marketing policies and meeting spirit cannot be directly conveyed to salespeople and distributors but rely on the management hierarchy for layer-by-layer transmission, policy distortion is normal. Not only do headquarters policies get distorted when transmitted downward, but frontline information also gets distorted when reported upward.
This confirms our long-held conjecture: only companies with strong management capabilities can effectively implement channel flattening. We believe that many companies' collapse is actually the result of over-expansion and over-flattening, leading to management failure. We find that industry leaders that withstand the test of time have a competitive advantage not in marketing strategies but in management penetration. **Our conclusion is: marketing breakthroughs rely on marketing strategies, but ultimate marketing success relies on management penetration.**
Some marketing experts are puzzled why many small and medium-sized enterprises (SMEs) in China can thrive. In fact, this is the result of the flattening trap of strong industry players. For SMEs, both channels and sales management systems are flat. For strong players in the industry, only one level can be flat. Thus, effective management measures from the headquarters of strong enterprises, after being attenuated layer by layer through the sales management system, become a spent arrow when they reach salespeople. If the flattening trap is not resolved, strong enterprises may not be more competitive than SMEs in grassroots markets.

**The headquarters always knows only 'cutting the feet to fit the shoes'**
The vastness of the Chinese market and the huge differences between regional markets far exceed the imagination of headquarters managers who sit in offices all day. Yet most headquarters staff still sit in offices and command frontline marketing personnel based on imagination.
Chinese enterprise marketing headquarters generally dare not delegate power because 'once delegated, chaos ensues' has been proven countless times. Therefore, centralization is sometimes necessary. However, centralization cannot be an excuse for headquarters to require frontline personnel to 'cut the feet to fit the shoes' to adapt to the headquarters.
The relationship between Chinese enterprise headquarters and regional managers is like bargaining in a business deal. Headquarters has two typical approaches: one is to produce a 'unified plan' and require each region to 'cut the feet to fit the shoes'; the other is that, because the headquarters does not understand regional market conditions and cannot provide specific policies, it delegates the task of formulating policies and plans to frontline managers. But the headquarters does not trust frontline managers, so it starts 'asking for the sky and bargaining down to the ground.' The headquarters always responds to regional managers' requests with 'not agreeing at first, only giving when pressed,' and 'cutting in half when meeting.' As a result, they often miss the timing and intensity for market action.
A strong headquarters is a product of the era of mass products, network distribution, and advertising pull. **Facing highly differentiated regional markets, strategic regional markets become inevitable.** Therefore, the outcome must be the virtualization of the headquarters, with market decision-making shifting down to strategic regional markets.
For companies that have achieved seamless market coverage, this is a real challenge. But few companies truly realize this.

**The headquarters always finds faults rather than experiences**
Almost all companies lament that marketing innovation is difficult, but at the same time, there is a large amount of marketing innovation at the grassroots that is not 'discovered' by the headquarters, resulting in a situation where the headquarters suffers from innovation poverty while grassroots marketing innovation flourishes.
Innovation at the individual salesperson level is usually unconscious behavior; even when innovation has taken shape, the salesperson may not realize they have made an innovative 'feat.' Individual salesperson innovation may be a flash of inspiration to solve a difficult problem, an accident, a result of pressure, derived from the salesperson's unique experience or knowledge, from a new understanding of consumers, or even the result of a mistake.
The biggest problem is that salespeople rarely recognize the significance of their own innovation. Misled by wrong concepts for a long time, they think innovation is a 'great' thing, a 'patent' of certain professionals at the headquarters, and that their small deeds are not worthy of being called innovation. Therefore, a large amount of valuable innovation is ignored by salespeople.
**Innovation at the organizational level of the headquarters is by no means the result of marketing managers sitting in offices and thinking hard, but comes from discovering salespeople's innovations. Elevating partially successful innovations to a global level is the responsibility of the headquarters.**
**Marketing innovation at the individual salesperson level is usually a tactical measure to solve specific problems.** However, if headquarters management discovers the value of salesperson innovation and promotes it on a larger scale, it is equivalent to elevating innovation from the individual tactical level to the corporate strategic level.
The headquarters precisely lacks such a discovery mechanism. As a result, individual salesperson innovation remains only a small-scale local effort, without recognition and elevation from the headquarters. And corporate-level innovation, lacking a source, forms a situation of innovation poverty.
As long as sales meetings are held at the headquarters, they are always 'complaint sessions' and 'policy-request sessions.' If headquarters personnel could condescend to visit the grassroots and summarize experiences and lessons, marketing innovation would be easily discovered.

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