“Bosses really have a hard time,” she glanced at the ceiling and repeated, “especially a hard time.”
When we met Wang Xi, she was still holding a test computer. We went straight into the meeting room next to the front desk, where there were scattered equipment and sundries that were usually used for testing. Her profession is a test engineer in the ADAS department at NIO Shanghai.
In 2019, NIO, which had been in a state of rapid expansion and progress for the past three years, is becoming more and more like Tesla, with negative news one after another and the company’s morale in tatters. Although delivery data is still acceptable, it is far from the sales guidance set by the management. The financial situation is clearly under pressure, and reorganization and optimization are becoming more frequent.
The young people working at NIO have also been caught up in the center of public opinion as the star company undergoes corporate adjustments. Would NIO become the next Mobike or the next Tesla? What are the opinions of these employees who are involved in the automobile industry, the smart electric vehicle market, NIO, and Li Bin?
What made them choose to stay at NIO?
Reorganization
“Layoffs are good news. If I had to evaluate, it was done too late, and the effort was not enough.”
Sophia is the first product manager in the digital product department at NIO. When she joined NIO in 2016, NIO didn’t even have an app, let alone cars. From Anting in Shanghai to WeWork, and now to Caohejing, Sophia witnessed NIO’s expansion from a few dozen people to a peak of 9,900 people in just three years.
Sophia sees NIO’s problem as “focus on strategy and expansion, and neglect organization and management.” So when she received the full staff letter issued by Li Bin, her first thought was not “I will be laid off,” but “it’s finally starting.”
At the fastest pace, more than 100 new colleagues would join every week, which made Sophia feel slightly uneasy. What had really been troubling Sophia was the conflict between the Shanghai IT department and the Beijing IT department.
“Just as a company cannot have two CTOs, it is uncomfortable when our underlying software architecture is not unified,” she said. As the company grew, Li Bin began to focus on this issue and began to resolve it. In an internal letter on March 22, Li Bin mentioned that one of the tasks this year was “organizational efficiency optimization”:
After rapid development, some departments have duplicate settings, unclear work tasks, unclear responsibilities, and some job positions are not fully utilized. These are the management efficiency optimization tasks we need to solve this year.
Several months later, NIO’s vice president of software in China, Zhuang Li, “left the company for personal reasons.” The software engineering teams in Beijing and Shanghai, each with three to four hundred people, were unified under the leadership of NIO’s vice president of corporate development, Zhou Xin.When it came to the issue of NIO, Zhang Ruijie, a Fellow at NIO Shanghai, also pointed out the problem of redundant departmental setup: “Some departments should not even exist. The downside of unreasonable expansion in the user service department is not only internal friction, but also a certain degree of reduction in user experience due to larger number of people, and for us, work efficiency is also reduced.”
Yang Jiabin from NIO’s Electric Powertrain Engineering Department, on the other hand, had a different perspective. When NIO was doing well in 2018 and even in 2017, the company planned many models and projects for NP1 (NIO Platform 1) and NP2. Now that the company’s financial situation is not as good as before, it is just making some project adjustments, “all approved mass production projects are not affected.”
For outsiders, there is an obvious flaw in the “project adjustments” here: at the Shanghai Auto Show in April, NIO announced that the first pure electric sedan ET7 on the NP1 platform, which was originally scheduled to be launched at the end of 2019, was changed to the NP2 platform. Considering the complexity and long cycle of the development of the entire vehicle platform, this means that the ET7 has lost the chance to be launched on the NIO Day in December this year.
“We are restructuring and optimizing, not laying off people,” said Lucas, an App interaction designer at NIO, confidently. Lucas admitted that some people had left his department, but at the same time, some new people had joined. The size of this small team has increased.
What is more important than the size of the team is that “since the restructuring, the working methods and culture of the User Digital Product Department have been greatly improved.” In addition to work content, the team has begun to put more effort into team culture building. Another subtle change is that some people who previously couldn’t keep up with the progress were “optimized” in this restructuring, and some excellent new colleagues made rapid progress in project promotion.
“This conclusion may not be universal for the entire company, but for us, the optimization effect is very good.”
Comprehensive adjustment
Nothing reflects a start-up company’s survival instinct trapped in difficulties more than successive layoffs.
On March 22, Li Bin issued the first all-employee letter, announcing that “the total number of employees will be controlled within 9,500 in the first half of this year, which is about 3% better than the current situation.”
Five months later, NIO’s layoffs increased from 400 people to 1,200 people, because “there have been significant changes in the internal and external environment of the company.” In addition, Li Bin also warned that “everyone should be prepared for more difficult challenges and setbacks.”
Li Bin’s motto
Li Bin has a motto: “It is unrealistic to pay a salary of 5000 yuan to recruit the best engineers in the world. This is not practical.” At NIO, this statement was carried out excessively in the employee welfare and benefits expenditure. NIO’s early travel standards once shocked Sophia, who used to work at Alibaba, a global top 5 internet giant with a market value of over 400 billion US dollars. The travel standard in Beijing, Shanghai, and Guangzhou was 500 yuan, while NIO’s standard of 900 yuan was close to double.
In the eyes of the NIO House commissioners, NIO is close to impeccable in its treatment of employees. If there has to be an adjustment, it is that the early benefits were too good. “It doesn’t seem necessary to be so good, it’s not real.” In a series of adjustments this year, NIO’s travel standard has finally been reduced to the average level of first-line internet companies.
On the other hand, one side of concentrating resources on core businesses is to “close and merge” non-core businesses. One reason why Sophia thinks the layoff is not big enough is that “NIO did not cut off the business, we are optimizing redundant personnel and duplicated organizations.” However, just last month, NIO sold its FE (Formula Electric) racing team to Lisheng, disposing of this asset in the form of retaining naming rights while giving up ownership.
In 2014, NIO participated in the FE event under the team name “NEXTEV” and won the total championship in the 2015 season. This was a key step for NIO to enter the peak of new car manufacturing and even Chinese domestic brands. In the current situation of the pressure on the financial sector as two production cars are gradually being launched, the FE racing team that completed its historical mission has become the first piece to be sacrificed in the large-scale reorganization of NIO’s business.
More indicative than selling the racing team is NIO’s attitude towards its controversial energy service system, NIO Power. NIO Power is a comprehensive energy supplement system that includes NIO’s battery swapping stations, mobile charging vehicles, supercharging piles and one-click charging services, and is seen as one of NIO’s core competitive advantages.
Since 2019, although the number of NIO cars continues to grow, the NIO Power service system has not expanded significantly. Even the new energy supplement product, NIO Power Charger, has not seen any new expansion sites since it was launched in April at NIO’s Suzhou delivery center.
NIO’s approach to the NIO Power department does not stop at “meet the growing user demand with existing resource allocation.” On July 16, several media outlets reported that “NIO will split its energy supply service NIO Power and seek independent financing with a scale of several billion yuan in Q4 this year,” but the report has not been confirmed by NIO.
Meanwhile, in the crucial component of the user experience, NIO House, NIO is also exploring a more lightweight operation model.# NIO House
NIO House is a multi-functional user center of NIO, incorporating theatre, offices, reading areas, children’s zones, resting spaces, and brand exhibition areas, located in landmark buildings in major cities. This is another key feature of NIO’s differentiated competitiveness.
In Changning District of Shanghai, NIO opened its fourth NIO House in Nanfeng City, which is different from the previous three in that it only retains the brand promotion and sales conversion function of the Gallery (brand exhibition area) by cutting off all other functional areas.
The store manager of Nanfeng City NIO House, Sisi Si, said that the expansion of NIO House is still strongly related to traffic volume, economic strength, and the regional popularity of NIO brand. The reason for keeping only the Gallery is that “the operating cost is relatively low, and the user service side remains normal.”
The Desirable Brand
Before joining NIO, Ruijie Zhang had worked for two and a half years in sales at Tesla. Contrary to the rumors about “NIO offering twice the salary to lure Tesla sales staff”, even in the strong year of 2017 when NIO was thriving, Ruijie Zhang still took a pay cut to join NIO.
Even after being promoted later, his salary was only “slightly higher” than his time at Tesla.
From joining in May 2017 to today, Ruijie Zhang’s conclusion is that NIO is a company with a high degree of tolerance. Tesla had performance pressure, targets, and was highly result-oriented, but sales was a highly uncertain job, and any policy changes or market changes could impact the final results.
NIO’s comprehensive assessment mechanism for the sales team and its value of “customer-centricity” have deeply resonated with Ruijie Zhang. After the interview ended for 5 hours, Ruijie Zhang felt that he “didn’t perform well” and sent a message on WeChat: “I don’t know what will happen after NIO, and it’s not up to me. But if NIO needs me, even if I don’t get paid, I’m willing to stay with NIO.”
Yiyi’s feelings for NIO are even more complex. When she joined NIO, NIO was still in a very early stage. Her interview location was in the lobby of a hotel in Zhengzhou. At that time, NIO didn’t even have an HR in Zhengzhou, and the general manager of NIO in Zhengzhou came downstairs to the lobby of the hotel to conduct Yiyi’s interview.
In the next three months, Yiyi played a pioneering role in NIO by doing outreach, organizing events, and participating in the Beijing auto show according to the arrangements of the headquarters. “This gives her a sense of honor and mission,” and “even if we have to leave, it should not be now. Many of our users are giving feedback on NIO’s goodwill through their actions, and we should also work together with NIO to overcome challenges.”
NIO’s first employee and the father of NIO’s AI voice assistant NOMI, Ted, also shares a sense of mission and participation. “NIO is not just about William Li. I’m also starting a business at NIO.” He was NIO’s first employee and has developed his skills in product, market, sales, service, and even as a general manager in different positions.In Ted’s opinion, the idea that “Li Bin cannot see the crisis of NIO he is in” is a typical misreading. “The management has sufficient determination to deal with the deteriorating internal and external environment. From strategy to execution, organization, and personnel configuration, for NIO, this is the most profound moment for resource reconfiguration.”
Ted is full of confidence in NIO: “We have the right people, the right work DNA, and the ability to self-adjust. There is no reason not to succeed.”
Lucas’ feelings towards NIO are even more pure. NIO is one of the few high-quality brands, which was the main reason he chose to join NIO. “A Chinese company with the determination to create a high-end and high-profile quality car brand is a very rare thing.” In his eyes, NIO, Mobike, and DJI are all high-quality brands that originate from China and represent a certain culture and value.
In addition, NIO’s business logic of focusing on user experience also touched Lucas. He was especially disgusted with the complex and calculating consumer-oriented business models in traditional businesses, which is the exact opposite of NIO.
These young people choose to stay at NIO for various reasons.
“The bosses are not easy”
NIO has a talent development program called “Super Charging Power,” where senior directors and management above VP level take 2-3 new colleagues to train decision-making and understanding of the company’s various business operations.
The mentor for Sisi is Li Bin, and she is deeply impressed by Li Bin’s strong energy. Once, she flew back to Shanghai with Li Bin from Shenzhen, and it was already one or two in the morning when they landed. Li Bin said he still wanted to follow Keep to do some exercises to maintain his physical fitness before going back to the hotel. And the next morning at 7 o’clock, a new meeting was waiting for Li Bin.
“In terms of treating users, Li Bin is somewhat facing the same loneliness as Lei Jun in insisting on the ultimate cost-effective strategy. All sales and service policies Li Bin will execute with a user-first mindset. Both Lei Jun and Li Bin face advice from management and even users.”
Today, the NIO app has become a massive community with 1.2 million fans and 300,000 daily active users. As all users’ problems will be @Li Bin, Li Bin’s personal NIO app takes 10-15 seconds to open every time. In addition to enduring the unique card login app to reply to every user’s questions, “Li Bin will steadfastly tell everyone where he is and send good night red envelopes to everyone in the app’s car friends group every night at 10 o’clock. And Li Bin has hundreds of such groups.”
Another trait of Li Bin is “sharp perspective on problem viewing” and “good at capturing the essence of the problem and expressing it in concise words.” He is accustomed to asking, “Do you still need to think about this? Do you understand this logic?”# Lucas shared a story: a group of interaction designers discussed what logic and tools to use to make NIO App’s user service group more user-friendly. Li Bin walked over and said: “We should make the service group like Siri, where we help users achieve tasks with their next command.” With this very concise definition, many complex things fell into place and the problem was solved.
NIO’s VP of user development, Zhu Jiang, is considered another dedicated executive. The User Development Department is a very complex business, in addition to dealing with NIO’s constant negative news, Zhu Jiang is also responsible for NIO’s media, communication and various activities. In addition, the two sessions of the “NIO Spring Festival Gala” NIO Day in the past two years were both coordinated and promoted by Zhu.
Zhu Jiang’s job at the 2019 NIO Day will be more challenging: “This may be the first cost-conscious NIO Day in NIO’s history.”
Due to early project delays and this year’s recall event, the emotions of NIO’s technical department towards the management are more grateful.
The automotive test site in Lianyungang Donghai does not belong to NIO, but it is one of Wang Xi’s important workplaces. In 2013, Bosch, an automotive supplier, spent 590 million RMB to build this high-standard test site. With the launch of NIO ES8, the R&D, testing and delivery of NIO Pilot team became increasingly urgent.
On June 10, 2019, NIO released seven key features of NIO Pilot, exactly one year after the first batch of ES8 delivery. It is impossible to have no pressure. But “Li Bin’s pressure won’t be passed on to me. All the pressure is borne by the bosses.” Wang Xi recalled the NIO Pilot’s battle for ES8.
“The recall caused us a lot of pressure, especially for the bosses.” Yang Jiabin, an EP (E-Powertrain) engineer at NIO, reviewed the company’s decision-making process about the recall. During the meeting, management quickly reached consensus on the recall. So much so that many director or VP-level executives learned of their ES8 battery recall through the announcement.
In addition to the recall itself, NIO traced the development process and concluded that “in the previous development process, NIO invested several times more resources in testing and verification than other companies, but did not find any problems with the battery pack.” Given the complex cause of the accident, management did not conduct investigations or disciplinary actions.
For the future, Yang Jiabin believes that NIO will further balance differentiation competitiveness and safety and reliability. “I can only say that the EP team is an absolutely loyal team.” Yang Jiabin said.
Why choose to stay at NIOThe negative news about NIO has caused a stir. One day, while taking a shower, Lucas suddenly asked his wife, “Can our family afford me losing my job? Can I stay in this company (NIO) until it goes bankrupt?” His wife replied, “Sure, we can handle it.”
One of the reasons Lucas chose to stay at NIO is due to the long-term spread of negative self-media online, which he calls “black forces.” He strongly identifies with NIO’s brand and when NIO encounters unjust evaluations or even slanderous attacks, his fighting spirit is ignited and he wants to stay at NIO to continue the fight.
Lucas’ work will influence NIO’s future, which is the second reason why he stayed. Staying in a company that is at risk and gradually influencing its direction with his own efforts, waiting for the moment when things take a turn for the better, is a very challenging thing for him.
Sophia’s reason is more straightforward: how many giants such as Alibaba, Tencent, JD.com, and Xiaomi have experienced moments of salary delays or hanging by a thread? NIO’s situation today is not as bad as those. In fact, NIO in 2019 gave Sophia a sense of “entrepreneurship.”
Regarding the controversial issue of losses, Sophia chooses to believe in Li Bin. “Although Li Bin can spend money, he also has a strong ability to raise funds. He should have been prepared for this kind of spending.” Some patterns and logics may not work when implemented, but the management can adjust quickly.
“If it gets really tough, we may have to cut off some businesses to survive, but we are not there yet.”
For ADAS engineer Zhang Qi, the reason for not leaving NIO is consistent with colleague Wang Xi: the bosses shoulder the pressure, so he doesn’t need to think too much about the company’s difficulties but focus on solving the immediate problems. He is concerned that NIO recently pushed a key ADAS function he is responsible for, but the user experience is not good enough. Although this is within Zhang Qi’s expectations, the feedback still stimulates his motivation to work.
“We need a Long March and win a comeback next year.” From a different perspective, Zhang Qi is the kind of employee who listens to Li Bin the most: “You just need to focus on your own work, and do not worry about money matters.”
Looking back on the history of the automotive industry over the past century, many car brands have experienced poor management, strategic reorganization, acquisition, or even complete extinction. Five years ago, the NIO management team established a high-risk high-reward, all-around strategy. Today, this strategy has directly led to NIO’s exponential increase in management complexity.
In the past three years, these young people have come to NIO for various reasons. Today, they are experiencing the most fundamental and ruthless question in the history of entrepreneurship: survival.
(Note: The names Wang Xi, Sophia, Zhang Ruijie, Yang Jiabin, Lucas, Yi Yi, Si Si, Zhang Qi in this article are pseudonyms upon the request of the interviewees.)“`
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This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.