Huiyuan Juice Group Limited announced on May 19 that its chairman and major shareholder Zhu Xinli increased his shareholding by 5,350,000 ordinary shares at an average price of HK$4.3209 per share on May 14 through his wholly-owned Huiyuan Juice Holdings Limited. This raised his stake from approximately 53.31% to 53.58%. Zhu Xinli indicated that he does not rule out further increases in the future. This demonstrates the major shareholder's strong confidence in the company's future development prospects. Consequently, rumors about Huiyuan founder Zhu Xinli's "return to the forefront" and "strong comeback" have been widespread.
Where Did Zhu Xinli Go? Since we mention a strong comeback, we need to explore where Zhu Xinli had been. It turns out that in July last year, Zhu Xinli stepped down from the position of president of Huiyuan. At that time, media commented that Zhu Xinli was following the trend of stepping back to the second line. This so-called trend is indeed a wave among first-generation entrepreneurs. For example, Lenovo's Liu Chuanzhi handed over the helm to Yang Yuanqing; Wang Shi handed over the heavy responsibility of Vanke to Yu Liang; Ma Yun also retired last year and passed the CEO position to Lu Zhaoxi... At the time of Zhu Xinli's retirement, besides Ma Yun, Shi Yuzhu, Liu Yonghao, and others also retired one after another, and a "retirement wave" began to spread across major enterprises. As first-generation entrepreneurs, it seemed almost abnormal to still hold their original positions. Whether influenced by this trend or not, Zhu Xinli chose to follow the same path as China's first-generation entrepreneurs, no longer intervening too much in daily management, but focusing mainly on corporate strategy. Thus, he announced his retirement decision. He stepped down as president but remained as executive director and chairman. The new president was Su Yingfu, the former CEO and board member of Lee Kum Kee Sauce Group—an "airborne" (external) appointee. After the new president took office, Zhu Xinli focused more on strategic planning and also served as the dean of the internal management academy that Huiyuan was preparing, mainly for employee training. This division of labor seemed reasonable, just like Zhang Ruimin of Haier described his role: "I play two roles in the enterprise: one is designer, the other is pastor. The designer's role is to formulate development strategies and ensure the company moves in the right direction; the pastor's role is to preach, and that doctrine is Haier culture." For Zhu Xinli, strategic planning is the chief designer, and the dean is the pastor, preaching, teaching, and cultivating talent.
Zhu Xinli's Year of "Retirement" Obviously, Zhu Xinli was not suited to these two roles. It wasn't that he couldn't handle them, but that they couldn't "satisfy" a workaholic like him. Zhu Xinli's typical workaholic traits are well-known in the industry. There has always been a saying, "In Huiyuan, everyone is a workaholic," mainly because the chairman works so hard that everyone else has no reason to rest. Once, Zhu Xinli even crashed through the floor-to-ceiling glass door of his office. The glass shattered, but fortunately he was unharmed. Another time, while walking in the factory during the day, he was so focused on discussing work with a colleague that he accidentally fell into a sewer over a meter deep. He encountered danger several times, showing how much was on his mind. Because he had so much on his mind, it was impossible for him not to secretly watch and observe the new "airborne" president. It should be said that Zhu Xinli must have had some expectations when he brought in Su Yingfu. Before joining Huiyuan, Su Yingfu served as President of Campbell Soup Asia, President of Lee Kum Kee, and held executive positions at multinational companies such as Philip Morris Tobacco and Kraft Foods. His management style was known for "killing bureaucracy," and he had ample experience in de-familization. Previously, at the family-owned Lee Kum Kee, he built a Western-style contractual system that made management more rule-based. Perhaps this was the main reason Zhu Xinli chose him—to use the new professional manager's style to accelerate reform at Huiyuan. But this reform was quite challenging. It's important to note that Zhu Xinli's elder brother, younger brother, son, daughter, and son-in-law all hold key positions at Huiyuan Juice. Additionally, Huiyuan's management was typically decided by Zhu Xinli alone, and 70%-80% of employees and management are from Shandong, his hometown. These factors posed clear challenges for the external "airborne" appointee.
Success for a Top "Airborne" Appointee Is Not Easy In recent years, I have observed various old-new pairings in enterprises and found that most successful "old retires, new takes over" combinations involve the "new" being a trusted follower who has fought alongside the "old" for many years. For example, Lenovo's Liu-Yang pairing (Liu Chuanzhi and Yang Yuanqing), Vanke's Wang-Yu pairing (Wang Shi and Yu Liang), Midea's He-Fang pairing (He Xiangjian and Fang Hongbo), Alibaba's Ma-Lu pairing (Ma Yun and Lu Zhaoxi), and Giant's Shi-Liu pairing (Shi Yuzhu and Liu Wei), among others. As first-generation founders, they tend to hand over their hard-earned business to a loyal subordinate who has been with them for years and shares a bond of battle. For instance, Liu Wei of Giant Interactive was one of Shi Yuzhu's earliest employees, serving as secretary, HR director, vice president, and president, and was eventually promoted to the top position after Shi Yuzhu retired. Fang Hongbo of Midea entered Midea in 1992 and fought alongside He Xiangjian for 20 years before becoming chairman in 2012. The others mentioned above—Yang Yuanqing joined Lenovo after graduating in 1989, Yu Liang joined Vanke in 1990, Liu Wei joined Giant in 1992—all share the common trait of having been with their founders for over 20 years. This long-term cooperative bond, akin to comradeship, father-son or teacher-student affection, and high alignment of values, cannot be easily shaken by an external professional manager. Therefore, considering Zhu Xinli's retirement, it carried certain risks. This kind of retirement can be categorized as one that is hard to feel at ease about. The final result is that the person retires but the heart does not. Although Zhu Xinli might have wanted to de-familize, learning from Lee Kum Kee by heavily relying on an external CEO and professional management team to optimize the corporate structure and improve performance, he forgot one thing: the emotional foundation built over time. Without an emotional foundation, only interest-based relationships, this retirement also laid the groundwork for the failure of the top "airborne" appointee. Imagine, as mentioned earlier, many of Zhu Xinli's family members are in the company, and the hometown group is mainstream. It's certain that almost everyone has more "seniority" than the new boss. And the new boss came with the halo and sword of "killing bureaucracy" and "de-familization," clearly targeting the "old guard." This will inevitably lead to conflicts. Even if Zhu Xinli is exceptionally wise, he cannot withstand the constant whispering from relatives, founding veterans, and hometown folks whose interests are harmed. This almost guarantees that Su Yingfu's success as a top "airborne" appointee would not be easy.
Huiyuan Is Different from Lee Kum Kee In fact, judging from the recent management structure adjustment at Huiyuan Juice, Zhu Xinli's role has changed. He not only manages strategic planning but also handles industry mergers and acquisitions and food business integration. This means Zhu Xinli has moved from behind the scenes to the forefront. It seems the old general is coming back into action. This seems to confirm my earlier conclusion that an "airborne" top appointee rarely succeeds. Of course, some may argue: Zhu Xinli hired Su Yingfu because Su had successful experience at Lee Kum Kee. Why can Lee Kum Kee succeed but Huiyuan cannot? There are several key differences. First, as mentioned, is the emotional foundation. Su Yingfu did not start as the top leader at Lee Kum Kee; he became General Manager of Southeast Asia in 2005, then President of Lee Kum Kee (China) in 2007, and was promoted to Global CEO in early 2009. In other words, Su had a cultivation period at Lee Kum Kee. Second, the Lee family's attitude towards professional managers is clear. As early as 2005, the Lee family decided that the future manager of the company need not be a family member; they could hire an external CEO and select a family member as chairman. Based on this consensus, the final arrangement was that the Lee family determined the board members, and the board selected the CEO, giving full trust to the external appointee. Third, and most critically, is corporate culture. Lee Kum Kee has always adhered to the "automatic wave" management model, advocating intangible management and promoting traditional culture such as "considering others' interests" and "harmony in the family brings success." This culture creates a high-trust atmosphere, which is the best soil for professional managers to add value. In contrast, at Huiyuan: First, Zhu Xinli and Su Yingfu lack a period of emotional foundation. Second, the Zhu family may not have the same thorough understanding and consensus as the Lee family. Previously, Zhu Xinli planned to have his son Zhu Shenghua take over, but after only a year in the family business, Zhu Shenghua lost interest and switched to playing golf. Zhu Xinli then placed the succession responsibility on his daughter Zhu Shengqin, indicating a clear intention for family succession. Thus, the professional manager's rise is merely transitional. Third, unlike Lee Kum Kee's advocacy of "automatic wave" management, Huiyuan itself is a culture of patriarchal management and kinship-based governance. This cultural system lacks an environment conducive to professional managers' integration and performance, so this cultural inertia also destined Zhu's eventual return. In summary, regarding the public's various speculations about Zhu Xinli's return—whether it's Zhu's worry or Su's excessive ambition, whether Zhu is taking back power or Su's performance is mediocre—I believe these are superficial conjectures. If we think deeply from the perspectives of emotional foundation, family consensus, and corporate culture, Zhu Xinli's return may be inevitable, or perhaps a matter of helplessness.
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