“If you have experience managing an overseas office for Huawei or Lenovo, your résumé is as good as gold right now.”
That’s what a Chinese headhunter specializing in North American executive recruitment for Chinese firms recently told me, adding, “It seems like every Chinese tech company is planning for a global expansion these days.”
A friend of mine who has spent her career working for different Chinese tech firms and now works in HR at one of the BAT giants (Baidu, Alibaba, Tencent) says of their global pushes, “Right now, the big question with many of these companies is: Are they going to go the Lenovo route or the Huawei route?”
There is good reason for the Chinese tech world’s hyperfocus on Huawei and Lenovo: While Baidu, Alibaba, Tencent, and a few newer players like Didi Chuxing dominate their sectors in China, Huawei and Lenovo have succeeded in foreign markets. Earlier this year, global advertising giant WPP ranked Lenovo and Huawei as China’s first and second most powerful global brands, respectively. Lenovo has over 52,000 employees worldwide and ranks 226 on Fortune’s Global 500 list. If Lenovo is big, Huawei is downright colossal, with over 180,000 employees, ranking 83rd on the Global 500. Both companies bring in a majority of their revenue from overseas business — 70 percent and 60 percent for Lenovo and Huawei, respectively.
However, when looking at the corporate cultures, worldviews, and globalization strategies of both firms, the two display striking differences. As China’s tech firms expand globally, which model they choose to follow will drastically impact not only how individual companies approach global markets, but also how Chinese business as a whole presents itself to the world.
For companies or individuals considering collaborating with or working for Chinese companies, the big question should be: “Are they a ‘Lenovo’ or a ‘Huawei’?”
There has been much written highlighting the achievements of each company in building their respective corporate cultures, and rightfully so. 2014’s The Lenovo Way, by executives Gina Qiao and Yolanda Conyers, and 2016’s Huawei: Leadership, Culture, and Connectivity, by Tian Tao, David De Cremer, and Wu Chunbo, tell the stories of how each company achieved global success through developing strong cultures.
However, when engaging with the employees themselves, a more complex picture of these two cultures emerges. In preparation for this piece, I spoke with 27 current and former Huawei and Lenovo employees, four of whom had experience at both companies. The majority of my respondents only agreed to speak off the record or on a condition that their identities not be revealed. Additionally, information was taken from anonymous online employer review forums such as Glassdoor, Indeed, and Quora. In an attempt to assure accuracy and reliability, such online forums were used to identify patterns or trends, rather than a few disgruntled individuals.
Nice at Lenovo
Employees of both firms seemed to describe Lenovo’s culture and general view of its people in a more trusting and optimistic way, while Huawei’s general perspective seemed to be one of mistrust of its people. “People learn not to trust each other at Huawei,” said a former Huawei and Lenovo employee. “At Lenovo, it’s quite the opposite, very trusting. It is a very comfortable place to work. At Lenovo, the assumption is that everyone is trustworthy until they prove otherwise, while at Huawei, everyone is assumed to be untrustworthy until they prove to be worthy, and even then, people will be skeptical of you.”
“What I like about working here is the emphasis on polite behavior. In other Chinese tech companies, you hear stories about people screaming at each other in meetings if they disagree, but I rarely see that here. Of course people disagree, but they are encouraged to do it politely and respectfully,” a Chinese Lenovo employee told me. Lenovo also focuses heavily on planning and process in getting things done. “If we have a project, we will carefully plan, get the resources, put the team in place, and then execute carefully according to each step of the plan… Following the process is very important,” said a Chinese-born Lenovo employee currently working in the U.S.
Boot camp and wolf culture
In contrast, Huawei, with its military background, tends to have a culture that can encourage a battlefield-like mentality. This culture is often referred to at Huawei as “wolf culture,” a relentlessly aggressive approach, which one former employee described this way: “In Huawei, ‘wolf culture’ means you kill or be killed. I think the idea is that if you have everyone in the company competing fiercely with one another, the company will be better at fighting and competing with external threats.” If this seems like an unpleasant work environment, that partially seems to be by design. The former employee explained, “I don’t think Huawei seems to be very interested in making work ‘fun’ or ‘enjoyable.’ What Huawei looks for when recruiting is young, skilled people from fourth- or fifth-tier cities looking for their ‘first pot of gold’ [第一桶金 dìyī tǒng jīn],” using a phrase meaning the first opportunity that a person receives to make a lot of money, or to move into the middle class.
Huawei wants people who are hungry, works them hard (it is said the average Huawei employee works a 12-hour day), but also rewards them with good salaries and quick promotions if they achieve results. And those results are prioritized above all else at Huawei, creating an intensity that produces the high-speed, low-cost deliverables that the company is famous for.
This approach, while it can sound unpleasant, can work well for the right kind of person. “I get a lot of satisfaction from completing a project. I’ve worked building telecoms infrastructure in remote, poor places, and I’m proud to know that my work has connected those people to the world,” said a 16-year Huawei veteran who claims to have worked for the company in 50 countries.
Get a divorce!
There is a famous story about Huawei founder and CEO Ren Zhengfei that was shared with me a few times in researching this article. While the details differ depending on who tells the story, the main gist is the same. A Huawei senior executive approached Ren, telling him that he needed to relocate from the company headquarters in Shenzhen to Beijing to be with his wife and family. “Can’t your family move to Shenzhen?” Ren asked. When the executive explained that his family situation made it nearly impossible for his family to leave Beijing, Ren is reputed to have said, in all seriousness, “Well, then get a divorce.”
While it is nearly impossible to entirely confirm whether this interaction actually took place, the fact that this story has so much resonance with those close to Huawei demonstrates the level of loyalty and commitment that is expected from Huawei employees. Most employees who go on to find success at Huawei begin with a notoriously challenging “boot camp” experience and sign a document that in English can be called a “striver agreement,” in which the employee voluntarily surrenders their rights to claim annual leave and overtime pay.
It is from this club of “strivers” that the vast majority of Huawei’s key talent and decision makers are composed. It is not unusual for these strivers to spend decades-long careers at Huawei without ever working anywhere else. This creates a very strong central culture, but also a very clear in-group/out-group dynamic that makes it very difficult to succeed as an outside hire at the company. “It’s kind of like moving to a small town, where all the inhabitants have lived there their whole lives,” explained an ex-Huawei employee. “Even if you live there five or 10 years, you will still be viewed as an outsider because your family isn’t from that town. That’s what Huawei is like.”
This culture of striving is reinforced through both carrots and sticks. Those who build careers at Huawei are enrolled in a share program that increases over time, regularly providing dividends. This means that after taking the dividend income into consideration, it is entirely possible for a longer-tenured, lower-ranking employee to be bringing in more income than a shorter-tenured, higher-ranking employee. However, Huawei makes it clear that if an employee leaves, they are gone forever. “In general, former Huawei employees are not welcomed back,” said a former Huawei HR professional. “In rare cases, exceptions are made, but that is very unusual.”
This is in stark contrast with Lenovo’s approach to hiring ex-employees. “It often happens where employees will leave the company, due to family reasons, or a higher salary or new opportunities elsewhere,” a senior Lenovo HR leader explained. “In many of these instances, we find that after being away for a few years, they realize how great Lenovo is, and they want to come back. That is often okay with us.”
Global organization vs. Chinese company with international business?
When it comes to how the two companies operate internationally, there was also a clear difference in how these two companies were characterized. “Lenovo is, in many ways, a truly global company. Huawei is a Chinese company that does business overseas,” was a statement I heard from nearly everyone with substantial knowledge of the two companies.
Lenovo CEO Yang Yuanqing 杨元庆 is famous for strongly emphasizing the company’s goal of a global identity. In a 2014 interview with Harvard Business Review, he was asked what Chinese companies could learn from American companies, and what American companies could learn from Chinese companies. Yang responded, “I think both kinds of companies can learn from Lenovo,” emphasizing his concept of Lenovo as a company with a global identity, rather than a national one. Indeed, those working for Lenovo’s Beijing headquarters have expressed that referring to the company as anything other than “global” in its identity can be a bit taboo.
Lenovo is quick to emphasize its localization-focused approach to overseas business. It is reputed to send relatively few of its employees on foreign assignments, opting rather to trust locals to manage their own markets. “Our global-local model balances local empowerment and responsiveness with global learning and innovation and scale of production,” says Lenovo chief diversity officer Yolanda Conyers. “We believe it’s far more effective in building a consistent company culture and motivating employees, which, in turn, results in higher-quality products and helps us to better meet the needs of our customers.”
With Huawei, all business seems to orbit around the company’s central headquarters in Shenzhen, and for the company’s overseas business, it relies on sending employees abroad on a massive scale. It is notoriously untrusting of local staff. “If someone works at Huawei and they are not Chinese, regardless of their title or salary, I guarantee you, they have very little real power or authority, even if they are based in their home country,” said a former Huawei employee. Another former Huawei employee told me, “When we’d work overseas, the Chinese staff would discuss an issue privately, and then agree on how we would communicate that issue to the local staff. Often the message we would give the local staff was very different from the reality of the situation.”
Another industry expert said bluntly about Huawei, “I cannot think of another company in the world that has such a global presence, but pays so little attention to localization and integration.”
Acquisitions vs. organic growth
Much of this difference can be traced back to how the companies expanded globally in the first place. While Lenovo grew largely through acquisition of established international brands, most prominently the purchase of IBM’s ThinkPad brand of laptop computers in 2005, Huawei expanded country by country, replicating practices established in Shenzhen. For Lenovo, acquisitions meant the cultural integration aspect was an urgent issue upon which the company’s success would hinge. “They couldn’t avoid the culture issue. It was staring them right in the face,” said a former Lenovo employee involved with the ThinkPad acquisition. In response, Lenovo prioritized managing cultural challenges and developed a program for cultural integration that is a reference point not only for Chinese companies, but also for any company looking to develop a global corporate culture.
Huawei, in contrast, has expanded step by step into new markets, often developing markets, where it worked on telecoms infrastructure. In these cases, adaptation to local culture may have been somewhat important, but not urgent. “Huawei has preferred to take an approach like a steamroller to the culture issue,” said an American entrepreneur who has worked with Huawei on language and culture training. “They don’t really believe in adjusting to overseas cultures, but just overwhelming projects with resources until they get it done. To Huawei, cultural issues are distractions from urgent short-term goals, rather than a long-term challenge to handle.”
This approach has been successful for Huawei, but it has also created reputational problems for Huawei’s brand as an employer, especially in developed countries. Take, for example, ratings on Glassdoor.com, a popular HR site, where employees give their companies one to five stars. Lenovo has received roughly 1,000 reviews, while Huawei has received around 3,000. While neither received the four-plus star rating of world-class employers like Google and Hilton, the difference in trends between the two were interesting. In developed markets in particular, while Lenovo performed on a par or slightly better than comparable companies, Huawei’s performance was subpar:
In nearly every developed country, Huawei scored under three stars as an employer. In many, it scored far less. Even in the one exception of Sweden, where employees enjoyed higher-than-average salaries and opportunities to display their competence and work ethic, those employees complained about the same issues common throughout Huawei’s reviews from all over the world: lack of respect for local culture and laws, communication issues due to language, and a perceived two-class system, in which Chinese expats routinely received responsibility, information, and opportunities that local staff did not.
In Lenovo’s reviews, employees criticized the company’s strategic direction, internal politics, and some inconveniences due to cultural and time-zone differences working in a global company. However, the strong language and sharp accusations made consistently in Huawei’s reviews are hard to find in Lenovo’s.
When looking at developing and middle-income countries, however, it is a different story. Huawei’s scores, while not stellar, noticeably improved, while Lenovo’s were slightly lower:
What is the cause for the differences in scores between developed and developing markets? While difficult to say for sure, a few theories were offered by people familiar with the situation. One is the “first pot of gold” effect: that employees in developing countries, like those who Huawei prefers to recruit in China, often come from poorer backgrounds and are looking for a way to break into the global middle class. In many of these countries, well-paying jobs can be hard to find, and the opportunities Huawei offers seem to be more worth the difficulties. In contrast, those hired in developed markets are often well settled into the middle-class and have a larger variety of employers to choose from, making a job at Huawei seem less appealing.
Even in developing markets, Huawei has struggled in handling local staff and complying with local labor laws. In 2016, the Sahara Reporters noted a series of improper practices at Huawei’s office in Nigeria, alleging that the company was evading local taxes, violating the country’s expatriate employment quota, keeping Chinese employees in the country long after their employment visas had expired, and refusing to keep and train Nigerian understudies, which is required by law. In 2010, Huawei reportedly came under investigation by Indian authorities after it was alleged that only the first two floors of the company’s Bangalore R&D center were accessible to local employees, and that for all other floors, only Chinese employees had authorization. Chinese employees in India were also investigated for overstaying their work visas as well. In May of this year, over 300 local employees protested outside of Huawei’s Johannesburg office, leading to 30 arrests, after Huawei had reportedly unceremoniously fired hundreds of contract employees via text message.
Huawei’s struggles in managing non-Chinese staff seem to be hardwired: Since most Huawei positions are filled internally, often by the “strivers” who have spent their entire careers at Huawei, there tends to be a strong in-group/out-group dynamic. “It’s not just foreigners who have a difficult time at Huawei. It’s anyone who hasn’t been there from the beginning, including Chinese,” said a Chinese former Huawei employee who joined the company mid-career.
Another factor lies in how Huawei expatriate employees are circulated in their overseas work. In order to maintain a focus on results within their employees, managers are reportedly sent on assignment for no longer than three to four years at a time so that they “can’t set down roots and build too many relationships” with locals. With high pressure for results, these expatriate managers will often prefer to rely on bringing Huawei employees from Shenzhen with whom they have worked in the past. “There isn’t much room for local staff in that equation,” said a former Huawei manager.
The attitude from Huawei employees toward how their company is perceived as an employer internationally differs depending on whom you ask: Younger and more international employees often acknowledge that it is a problem, which the company is attempting to address. Some older and longer-tenured employees respond by referring to the positive cross-cultural experiences that they have personally had at the company, while others react defensively, or dismiss the idea altogether, with one person referring to the idea of the importance of cross-cultural collaboration and integration as a “myth.”
The difference in how Lenovo and Huawei manage cultural integration also comes from the personal experiences of those in charge. When looking at their boards of directors, their makeup looks quite different.
According to the company’s official website, of Huawei’s 17 board members, none have joined the company any later than 1997, none have experience working for non-Chinese firms, and no degrees from any foreign university are mentioned in any of their profiles. Lenovo’s board, however, has far more global representation:
In addition to a globally diverse management team, the Chinese leaders at Lenovo have been remarkably open about the value and challenges of managing across cultures. “Both YY (Yang Yuanqing) and Gina (Qiao Jian) are global leaders. They have a genuine curiosity for learning about other cultures, new experiences, and getting out of their comfort zones. They truly are global leaders of an international company with Chinese roots,” said Yolanda Conyers.
One former leader at both companies also spoke highly of long-time Lenovo executive Gina Qiao, explaining his view this way: “With any international business, cultural differences are like a bridge. While it can certainly be debated how much each side should walk across the bridge in each situation, they must meet somewhere on the bridge. At Lenovo, Gina has shown a willingness to be one of the first people on the bridge. When others have seen her get on the bridge, people from all other sides start to get on that bridge as well. It is very helpful in bringing people together.”
In contrast, when I asked a former senior Huawei manager about the approach of the company leaders to learning and integrating global cultures, he responded, “I don’t think they really care much about that at all.”
Huawei more admired as a business in China
Despite their vastly different reputations outside of China, when speaking with businesspeople inside of China, it is Huawei, not Lenovo, which surprisingly is often talked about as a model to follow for globalization. This may simply be because of recent performance:
The 2005 IBM ThinkPad acquisition resulted in Lenovo becoming the world’s leading PC brand, but the company has struggled to achieve consistent profits in recent years. In 2015, Lenovo recorded its first loss in six years, and while it returned to profitability for 2016, as the global PC market continues to shrink and with its server and smartphone businesses not yet making a profit, Lenovo is in a difficult position.
When asked to put a finger on the relative ascendency and fall of the two companies, their employees, while strongly defending the respective cultures, seemed to point the finger at long-term strategic moves, influenced by the differing governance structures. “Lenovo is a public company, and because of that, there is a lot of pressure to impress shareholders with good numbers,” said a Lenovo employee. “That means Lenovo has been less interested in investing in long-term projects and technology development.” Huawei, on the other hand, is privately held, which allows its leadership to focus on long-term investments and R&D, rather than on simply quarterly and annual profits.
Those close to Lenovo have also mentioned that some political infighting and waste have been a hindrance, and that, ironically for a company that prides itself on cultural integration, bringing on the Motorola business unit did not go as smoothly as hoped.
Huawei, on the other hand, has looked a bit better as of late: Its overall revenue in 2016 jumped 32 percent at the same time as consumer awareness of Huawei’s brand has grown while Lenovo’s presence decreases. In China, Huawei’s high-end phones are attracting customers away from Apple and Samsung, while its low-end Honor line challenges the likes of Xiaomi and Vivo. Huawei phones seem to be everywhere in China, while Lenovo’s phones, and those of its Motorola business unit, are rare sightings. This growth in China, as well as abroad, has propelled Huawei to surpass Apple as the world’s number two smartphone maker.
The striking success of homegrown Huawei to become a strong competitor of Apple and Samsung, in the end, may be the deciding factor of many people’s perception of this brand. One Chinese executive told me, “I feel proud to know that a company from China makes a top-quality smartphone.” A Chinese colleague of mine added, “Huawei has built its brand from the ground up, but Lenovo just bought IBM’s.”