Gree Electric: There is no limit in the professional field

In May 2012, Dong Mingzhu officially took over Zhu Jianghong as the chairman and president of Gree Electric Co., Ltd., and Gree officially entered the Dong Mingzhu era.

The 2013 financial report showed that Gree Electric Appliances achieved sales of over 100 billion yuan in sales throughout the year. This is the only company in China’s home appliance industry that has achieved annual sales of over 100 billion yuan.

In the past year, what changes did Dong Mingzhu, who alone took on the company, brought to Gree Electric? Dong Mingzhu, who has always advocated industrial spirit and technological innovation, will also take Gree to where? Recently, the "China Business" reporter interviewed Dong Mingzhu at Gree Electric Appliances' Zhuhai headquarters.

There is no crisis in the long term

“China Business”: In the past four years, the global financial crisis has had a huge impact on China’s manufacturing industry. However, Gree’s impact has been small, and it has consistently adhered to the development of the real economy. How does Gree achieve this?

Dong Mingzhu: Since the financial crisis, many manufacturing companies have shouted that "the real economy has no way to survive." Gree has a different understanding of this, and the influence of the external environment will never be the most important. In my opinion, in this context, what is more important is the strategic positioning of the company itself.

The harder the external environment is, the more we need to know where our long-term development goals lie. The social responsibility that the enterprise must undertake determines the choice of the enterprise. As a company, it cannot be eager for quick profits and instant benefits. It cannot be profit-seeking and can not simply separate the enterprise and the society. In the financial crisis, many companies made massive layoffs, and Gree’s first promise was not to lay off employees.

"China Business News": As a result of the financial crisis, labor costs have increased. Many manufacturing companies feel that they are not making money and are beginning to search for better development space. Some companies have moved their factories to places where labor costs are lower. Some have gone to finance. Some have gone to invest. Some have set foot in real estate. However, Gree still insists on breakthroughs in the technological field and takes the path of specialization. Why?

Dong Mingzhu: Since it is a Chinese company, it is necessary to link the development of the country with itself. Gree hopes to change the lives of others by creating value, or bring more life improvement to others because of the value we create. Therefore, we must Combining corporate development with the development of the country and the world.

Perhaps it is because of this understanding that we have always stressed the need to go professional and achieve breakthroughs in core technologies. I think the most useful value for a person is not how much they get, but what changes they can make to others. The same is true of companies. Many small businesses collapsed during the financial crisis, but many of the upstream small businesses supporting Gree Electric Appliances almost did not fall and lived well. When it is difficult, the responsibility of large companies is greater than that of small businesses and they should take the initiative.

This year Gree’s per employee’s salary is increased by 600 yuan/month, and 80,000 people. How much will it cost in a year? When I saw the report, I was shocked by myself, but it must be added. Because one of the goals of corporate development is to make employees live better. Gree is not a simple processing investment. The sustainable method is to cultivate every employee and make them feel that life value can be reflected. This is the greatest cohesion. "Integrity and win-win" is the fundamental of Gree's work.

"China Business": You mentioned that Gree will never reduce costs by cutting corners. In the Chinese air-conditioning industry where competition is so full, how does Gree perform cost control and can capture the domestic air-conditioning market at a relatively high price in the market? Market share?

Dong Mingzhu: In terms of cost control, Gree Electric Appliances has implemented the company's actions in a down-to-earth manner. Our company has always advocated the management of a piece of paper and a drop of water. Gree stipulates that a piece of paper must be used on both sides. If it is useless to use the front side, I did not hold you today. If you find it past, if you discover it, the punishment you face is fired. This is very strict management. At the same time, Gree has provided infinite care to employees. Gree’s goal is to provide front-line staff one-to-one-room, which is to hope that some excellent elites will be trained through the improvement of the environment and have the space of self to continuously create something new. . I never think of which company is my competitor. Competitors only have no one else. The business is not being smashed by others, but the market will no longer vote for you.

There is no limit to the professional field

“China Business”: Over the years, Gree has been focusing on air conditioning and compressors. We can see that in Gree's showrooms and professional stores, Jinghong refrigerators are placed in a very important position. You also praise Jinghong refrigerators yourself. There is plus. Gree now supplies compressors for Jinghong refrigerators. Will Gree make its own refrigerators in the future? You said that Gree’s sales will reach 200 billion yuan in the next five years. How will it be achieved?

Dong Mingzhu: Gree will not make refrigerators on her own, because Gree is taking a professional path. In the field of refrigeration, especially with air-related things, there are still many worthwhile studies, including many issues that need to be resolved in the environment of environmental pollution, greenhouse effect, and ozone depletion. This is infinite. We want to force ourselves to be more solid on this path, which is also a challenge to our own limits.

"China Business News": Gree's profit target in the new fiscal year should reach 8%, which is a very good profit curve in the home appliance industry. It is definitely a model of management effectiveness. Then, in the next three years, will Gree still maintain such a profit curve?

Dong Mingzhu: Regarding profit considerations, I think a good listed company must first be responsible to employees, second must be responsible to consumers, and third must be accountable to shareholders. Only by protecting the interests of consumers and employees can companies develop well and talk about their responsibilities to shareholders.

I have always stressed that listed companies must be accountable to shareholders and insist on paying dividends every year. The real investment returns are dividends, not speculation. Responsible for investors who have long held Gree stocks, not for speculators. Last year, Gree sent 10 to 10, one share to send a dollar, is rarely seen in listed companies. If you bought 10,000 shares of Gree that year, it is now 18.7 million yuan. In terms of profit guarantees, we have always had high demands on ourselves. Today our goal remains unchanged and our profits must reach 10 billion yuan.

One of our profit growth comes from management benefits, and one is design, which comes from the benefits of our technological innovation. For example, the Almighty King series of air-conditioning, in addition to Gree all over the world no one, the company obtains technical value at the same time, consumers also get practical benefits. Therefore, we are optimistic about the profit forecast for the next three years.

"China Business News": Gree's management is in the hands of Dong Mingzhu. Once there is no Dong Mingzhu, how will Gree develop?

Dong Mingzhu: It is impossible for a leader to have no influence on the company. I hope to have a correct influence. I have always emphasized responsibility and dedication. After serving as the chairman of Gree, I was more decentralized. After the company became bigger, it required openness and transparency. The more open and transparent, the smaller the leadership's power, and the bigger it can be said. Big and small depends on where this power is used. If you serve others, you can be infinitely large, but you are infinitely small.

In the past, speaking about the general manager is a matter of management. Regardless of the small things, I am the opposite of others. I think that the general manager is to manage small matters regardless of major events. If a company cannot do anything small without a major event, I am more focused on detail management. It needs to constantly challenge itself and whether it can excavate and put an end to problems in a meticulous management process. I also do not deny that I have been self-challenging for a long time. As others have said, Gree is a bit masochistic. I think this is a strict requirement of self-discipline. If you do not have strict requirements on yourself, indulging yourself is abusing others, especially as a manufacturing industry, you should have such a spirit.

I didn't take a holiday in Gree for 23 years. In 23 years of paid leave, I said that at least I should be compensated for two years. I travel for 20 days and will not affect the operation of the company. The big strategic direction is set, and cadres have an assessment mechanism. They will consciously or unconsciously do a good job. This may be a big bright spot for Gree at present. I feel it is very good now. In the past, many cadres did not know what they should do. Now everyone knows clearly what I have to do and what I must do. This is a big change.