Ding Wei guest North Business Class | decryption A.O. Smith's success

On the evening of December 4, Ding Wei, senior vice president of USA AO Smith Group Corporation and president of China Company, visited National Institute of Development of Peking University (hereinafter referred to as "Peking University National Development Institute") and was invited to attend the class of Peking University Business School. He made "innovation as the core Corporate Culture Building - From Slogan to Action 'topic lecture.

Dr. Peiyu Gu Qifeng, executive director of BiMBA School of Business at PKU said in his speech that Peking University's National Development Institute shouldered the mission of promoting social progress and fostered future business leaders. Since last year, many well-known domestic and foreign entrepreneurs have been invited to attend lectures. Mr. Ding Wei, President of AO Smith China, was invited to the class to tell Peking University students how this 143-year-old American enterprise has continuously achieved an average annual growth rate of 20% in the highly competitive home appliances market. What is the successful password? How to achieve the localization of China's innovation?

AO Smith maintained rapid growth in recent years, the current market value of the company has successfully exceeded 10 billion US dollars, the inclusion of the S & P 500 constituent stocks, among the "well-known American corporate club." The company is not only invisible champion water heater, has also been extended to water purifiers, Air purifier, etc. Ding Wei has been in the company for 20 years. For 20 years, he has made almost unknown U.S. brand to almost every household in China. The market share of the entire water heater has reached 27.46%, occupying the first place in the industry A; water purifier sales market share of 29.1%, also ranks first in the industry, the company thus became the leading brand in China's home appliance industry. He himself also won the 'Chinese home appliance meritorious service', 'Top Ten Influences of China's kitchen and bathroom industry Power figures', 'China's Best Business Leader Award' and many other honors, as China's home appliance industry can not be a low profile man.

Dare to change, change, embrace change

At the opening of the lecture, Ding Wei said: 'AO Smith does not like the unicorn companies such as Facebook and Google. Its business scale was less than 3 billion US dollars last year. It is not one of the largest in the home appliance manufacturing industry, but it is such an enterprise In last year's selection of FORTUNE Global Business Leaders 50, Ajita was listed with Fortune magazine on the Top 50 list of CEOs along with CEOs of iconic companies such as Facebook, Apple, Amazon and Microsoft. AO Smith is the only home appliance brand to be listed on the list. The rationale behind this lies not in scale, in mode, nor in reliance on our business strategy.

'Everyone understands that if you bought a house in Beijing ten years ago, you would certainly add a lot of value. If you buy AO Smith's stock ten years ago, you will not appreciate any faster than you bought a house in Beijing. From 2008 till now, our shares have risen 20 times Ding Wei said: 'It is exactly this set of very robust management that we have come to China for 20 years because of our growing sales and industry influence.'

So after a century of companies can easily be mistaken for stick to the rules, in fact, AO Smith is not conservative at all, more than a hundred years ago, AO Smith has the ability to innovate, we first lead into the concept of assembly line. Then boldly sell the core business instead Into the great potential of the pressure vessel industry, such a bold innovative change like this, we have done a lot, dare to enter, dare to quit, always maintain the sensitivity of changes in the industry.AO Smith is a 'dare to change, to change, to embrace change' AO Smith (China) also inherited the business tradition.

Occupation of technological high ground Localization of innovative research and development

Another element of success for AO Smith is its emphasis on research and development. "We entered the market in any one industry, not through low-cost strategies or on the cutting edge, but at the commanding height of technology. We dared to enter new categories in the development of China, If we evaluate that it is a sunrise industry and we have the power to occupy the commanding height of technology, we will do it. "

In the history of the company, from car chassis to oil pipelines, pressure vessels to water heaters ... A.O. Smith is very flexible, but regardless of which industry to enter, are dominated by technology market, if there is no core technology, we would rather not enter.

AO Smith real money to do research and development in China's R & D center in accordance with the international construction, basically every three years to conduct an expansion. 'We have the money to R & D engineers, rich built R & D center, which is business philosophy, Business, we must do this because we rely on technology to occupy the market. 'Ding Wei added that' a lot of multinational companies R & D in China is very weak, relying on local research and development, the products to the Chinese market to sell. And AO Smith Corporation Less than 700 R & D personnel, over 500 people in China, so highly valued the Chinese market, a high degree of allocation of research and development, it is difficult for many multinational companies to do.

'In China 20 years, our R & D is the product innovation, original technology, truly solve the industry problems.' Forcing 'R & D engineers to do high value-added, truly market-influential original patents, this pattern Of the business is not much.From electric water heaters to gas water heaters and then to the water purifier, AO Smith is far ahead in foreign brands, has created one industry after another, is also validating the correctness of our localization of innovative research and development, our Products are constantly developed for the characteristics of China, continuous iteration upgrade.

AO Smith in the field of air purification independent research and innovation more typical.United States without the accumulation of air purification technology, many European air purifier is pollen allergy problem, in the face of China's heavy haze, AO Smith's R & D engineers first proposed 'For heavy pollution design', PM2.5 efficient and long-term solution to the hazards, in order to better consumer experience, so that the purification effect is visible, an increase of PM2.5 accurate digital display, more lasting, more accurate, to experiment Room level. 'No one in the industry to do, we take the lead.'

'From the slogan to action' to promote 'four satisfaction' values ​​landing

If we say that the paranoid of R & D is the hard power of steady growth of AO Smith in China and is the open engine of AO Smith in the complicated market competition, then the enterprise value of "four satisfaction" is To protect and play a powerful engine core system.

AO Smith has always insisted on the construction of corporate culture, is different from most companies stay on the paper's values, AO Smith more emphasis on implementation, and perseverance. Customer satisfaction, social satisfaction, shareholder satisfaction, employee satisfaction, 'four Satisfied 'through the institutionalized design, the implementation of each and every detail of the implementation of corporate day-to-day behavior.It is the firm implementation of the four satisfaction, only AO Smith has been steadily growing since its entry into China.

How to achieve these four satisfaction? AO Smith through the institutionalized to ensure the implementation of the satisfaction of employees, for example, AO Smith formed a pay and benefits protection system, the team leader election system, internal competition system, communication system.For example, in order to ensure that customers Satisfied, but also formed a quality assurance system, consumer service system, dealer service system.

Ding Wei said: 'We do not talk about theory. We do business activities twice a year. We spend seven or eight million yuan each time to promote values ​​and put these values ​​into practice. In our company, this is called' From slogans to actions. ' Every year we collect tens of thousands of employees' nomination of the values, conduct the selection and set up many very effective rewards, such as the ten-day Asian tour, the ten-day tour of the United States, and the average per capita income of 25,000 yuan.

Wonderful interaction

Question: A.O. Smith started as a water heater, and now a lot of water purification, air purification equipment, it is from a single category to gradually diversify. So, the brand redefined, how do you think?

Ding Wei: Diversified development is a challenge for us. AO Smith's development is to emphasize the courage to change, do not stick to the rules, from the corporate genes, cross-category development, to seize the business opportunities is right.We enter each area, Have the confidence to occupy the commanding height of technology, in which category, we really are the best, it is indeed a technical content, is indeed able to solve the problem. Business management is not a problem, but the enterprise's brand management is challenging It is our challenge for consumers to re-recognize the brand, make it audible to consumers, and remember to live.

Question: Now everyone is talking about the Internet of things, talk about the new retail, A.O. Smith, the future development of any ideas in this regard?

Ding Wei: Internet of Things We are also very concerned about these trends. AO Smith has never been conservative. We are highly sensitive to changes in the industry's external environment and the industry. We do not want to simplify the collection, analysis and discussion of information. Follow the trend, for example, how to make our products more intelligent, or in the gas water heater to do a network switch.We look at the specific value to the consumer, like the gas water heater out of the box, without the network switch, we are concerned about Is how long it takes to get hot water after the gas water heater is turned on. This kind of research and development may be more important than engaging a network switch. Our engineers should give priority to solving the industry's pain points and pay attention to the development of these new technologies.

Question: Today, seven of our colleagues came to hear your lecture, and we are very impressed with today's sharing. We are a typical small and micro enterprise with 50-60 people, and the annual production value is less than 20 million. For the typical small and micro enterprises, what is its development direction? From an innovation point of view, its focus is where?

Ding Wei: the management of the company is not so difficult, as long as this business really has technology, really specialized management in this plate, find professional counselors, professional management, from thirty two to twenty million can do To 200 million of the scale, the key is that you really have the core technology, the other, the team must be professional.

Question: After hearing your share, I know that A.O. Smith has been in China for 20 years. I believe that 20 years may not be smooth and what is the greatest hardship and obstacle you have to overcome. How did you overcome this?

Ding Wei: The first impression we have had in these 20 years of development is that it is a smooth one, but the smooth and not-genuine is a smooth sailing and there have been crises in the process, but each time we spend peacefully, we have not affected our sales. Because it is a kind of accidental injury or unfair competition, we can always resolve the problem by the high quality of the product itself.

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