A new era for Huawei after CEO Ren Zhengfei shares succession planning

Huawei Technologies, a $28 billion telecom equipment
maker, has initiated a system this year to allow top executives to take turns
to act as the firm’s chief executive, its founder and CEO Ren Zhengfei said in
a year-end message.

The rotating CEO system is aimed at paving the way for a management handover
from Ren, though it is unclear when Ren intends to retire.

Huawei is jointly owned by its employees and is not listed.

“The rotating system is better than sole reliance on a single person for
the success of the company,” Ren wrote in a year-end message to its
130,000 employees.

The new structure requires a number of top Huawei executives, including vice
chairman Guo Ping and several executive directors of its board to act as chief
executive for six months at a time.

Ren, who revealed in the message that he twice underwent cancer surgery a few
years ago, hopes the new system will help strengthen corporate governance as
Huawei seeks to grow globally, according to a report in Economic Times.

Huawei’s sales grew 11 percent to 98.3 billion yuan ($15 billion) in the first
half, with the company on track to hit its full-year sales target of 199
billion yuan.

 

Huawei is increasing its presence in enterprise business.
Huawei Enterprise‘s contract sales revenue increased
by 80 percent in H1 2011 compared to the same period last year.

 

The business group is on track to double its global
contract sales to $4 billion this year as it expands its global market share in
the enterprise space and achieves significant growth in strategic markets such
as North America and Europe. Huawei Enterprise also plans to strengthen its
leadership position in Asia and place strong emphasis on markets such as the
Middle East, Russia and Brazil.

 

Huawei’s Chinese base is posing challenges for the
company in the US and the Middle East.

 

Recently,
United Against Nuclear Iran (UANI), an independent agency, urged Huawei to end
its business in Iran. UANI alleges that Huawei provides Iranian regime with
cellular and electronic technology that it has used to conduct surveillance on
its citizens, and track down human rights activists and dissidents.

 


Huawei is reported to have 1,000 employees in Iran and offices in six Iranian
cities. It also partners with Iranian firms which work directly with Iran’s
military and intelligence services, including the Islamic Revolutionary Guards
Corps elite special-forces unit.

 

Huawei is also keen to expand its enterprise and telecom
equipment business in the U.S.

 

U.S. legislators’ recent probe into Huawei
is likely to assist the company to prove its points to the telecom world. The
U.S. House intelligence committee’s probe is happening amid growing concerns
over cyber espionage. The investigation would look into whether the expansion
of these firms in the U.S. posed a security threat.

 

The CEO succession is likely to assist the Chinese
equipment maker to clear the doubts about its association with Chinese
military.

 

By Baburajan K
[email protected]

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