*This article is reproduced from the autocarweekly official account.
Author: Jiang Xiaohua
Before the exclusive interview with Geely Automobile Group’s young new CEO, Gan Jiaye, I took the rare opportunity to do some psychological preparation. With years of experience in the automotive industry media, wearing a hoodie and jeans, sitting conspicuously upright, and trying to appear courteous, I actually had no psychological burden in talking with senior executives of the older generation who were eight levels away. But talking with a rare post-80s trader in our industry made me a little nervous, afraid that a few words would make me look like an old man. After all, this young commander is two years younger than me, which is the huge pressure of someone who is more successful and younger than you.
In order to resolve my rare midlife crisis, after a brief greeting when we met, the first question was straightforward: Geely Automobile’s sales volume in March, ranked second in the field of independent passenger cars, this is the first time that Geely has lost the monthly national sales crown in nearly four years, and it’s also the first month when you took over as CEO of Geely Automobile Group. What do you think of this change in numbers?
Quality first, numbers second
Gan Jiaye’s response was surprisingly direct: I don’t think it’s a big deal, and if it is, I view it as a good thing.
You may know that I have been working in finance at Geely for many years. Since joining Geely Automobile in 2003, I remember the monthly sales figures, costs, and profits of Geely, so I am very clear about the ups and downs of the enterprise behind each number, which is a crisis or opportunity. Numbers are the results, and the content they reflect, which is our development quality, is the core. I can responsibly say that in Geely’s recent numbers, I see a new round of potential energy building up.
Geely’s development from the 1.0 era to the current 4.0 era is a process of spiral rise. The numbers we see today are actually a reasonable reserve force for Geely’s upgrade from the 3.0 era to the 4.0 era. In fact, this process of reserve force was mainly in 2019 and 2020, so you see that we did not develop as fast as we did from 2016 to 2018 in the past two years.
In 2021, Geely will usher in the outbreak period of 4.0 products. The first sedan, StarRui, has a main selling price of around 140,000 yuan and has an average monthly sales volume of more than 10,000 units five months after its launch. It is the highest-priced product among the sedans in China with a monthly sales volume of over 10,000, except for the Lynk & Co 03.This means that it is also the highest quality product among similar car models, and in cost-effective enterprises, the quality and price of independent brand products are proportional. High-quality strategy is Geely’s established strategy, and high-quality products and rapid upgrades are the fundamental judgments of Geely’s demands for the Chinese and even global markets, and this strategy will not change. This is why we were able to achieve sales in the first quarter of this year that exceeded strong joint ventures such as SAIC Volkswagen and Dongfeng Nissan, and competed on an equal footing on the same platform.
Geely has benefited greatly from this strategy over the past five years, which also requires Geely not to cling to simple numbers, accelerate the elimination of old products with large sales, such as all 2.0 products will gradually exit the market at the beginning of the 4.0 product era. This will have some impact on the numbers, but it is in line with our strategy. Quality first and numbers second are the basic values of user-oriented enterprises, and high-quality development benefits users.
However, our independent car enterprise partners and competitors have also given all Geely employees a reminder by their excellent performance. It is that even when the annual sales volume has increased from over 400,000 to 1.5 million, Geely has not yet reached a time for celebration. Under the high-quality strategy, continuing to improve development efficiency should still be the long-term consensus of all Geely employees.
During the Spring Festival this year, Mr. An Conghui, the current president of Geely Holding Group and chairman of Geely Automobile Group, delivered a New Year’s message “Youthful years, do not set limits for yourself.” This is a declaration for Geely Automobile to enter the 4.0 era of technological explosion, product upgrades and business model fusion. My mission is to inject higher development efficiency into the enterprise with an unlimited breadth facing the new era of car travel.
How to improve efficiency? Just eight words, learn from the advanced and maintain culture. Specifically, in manufacturing, we need to learn from Toyota; in management and user operations, we need to learn from Huawei; in hard work and innovation, we always maintain Geely’s entrepreneurial culture, while giving the entire organization suitable internal governance tailored to its scale and development stage.
Geely is China’s No.1 new force in the automobile industry
When it comes to strategic issues, we see that in recent years, the current situation and future of the automobile industry have shown an unprecedented situation of changes, with the rise of new forces, the establishment of new technological routes, and the entry of non-automotive companies. Will traditional strategies still be as accurate and effective as before?
This is a question that I have been skeptical about, including the grand electrification strategy recently announced by Volkswagen. I always feel that under the strategy of electrification, there is still a smell of the era of internal combustion engines that cannot be dispelled.## Gan Jiayue laughed and said that good strategy has two basic elements: first, it must conform to the rules, and second, it must meet the needs of users. If these two points are effectively achieved, the strategy will not be affected by the confusing changes and will enable the company to steadily move forward in the constantly changing industry.
I have worked at Geely for 18 years and I want to share two things I have experienced with this company.
Firstly, this is the most strategically determined company in the industry as far as I can see, and it is also a car company that has reached this scale relying solely on its strategy.
At its founding, Geely’s initial strategy was the Chairman Li Shufu’s handwritten sign in front of the Ningbo factory gate: “Build good cars that ordinary people can afford to buy.” In the days when Xia Li cars had to sell for more than a decade, Geely’s initial commitment was to let the Chinese people buy a good car at a reasonable price.
Like any new entrant in the industry, Geely has made mistakes, but Geely has never abandoned its promise to its users. If they cannot make cars, they learn to make them, and if they do not have the technology, they accumulate it bit by bit.
Up to this day, Geely has become a world-class architectural technology, has five global styling centers, has the most advanced electronic and electrical architecture, and this promise is still being practiced by providing users with state-of-the-art technologies in all mass-produced products, and selling them at the most friendly and reasonable prices. This strategy is also a promise that will not be abandoned for Geely Automobile.
In 2007, when the low-quality and low-price route no longer met the real needs of users, Geely published the Ningbo Declaration in Ningbo, which profoundly affected the industry, declaring that Geely Automobile does not engage in a price war and fights a technology war, a quality war, a brand war, a service war, and an enterprise moral war. This was a very difficult period for Geely, with independent brands in a collective trough, shrinking market share, and a price war becoming more and more intense, while users were becoming increasingly unwilling to pay.
Geely’s declaration did not immediately resonate with the independent car public. This means that the establishment of Geely’s quality strategy was difficult in the background of opponents sparing no effort to compete on price. With the launch of the Emperor Hao in 2009, Geely relied on this quality-star model to get through the most difficult stage of enterprise development. The fact that the Emperor Hao has been able to sell like hotcakes to this day and become the largest-selling sedan in China is thanks to the value strategy that supports it.
Not engaging in a price war, of course, is a painful thing. It requires overcoming a much larger circle and costing much more effort than the difficulties that seemed to be passed by just loosening one’s financial fingers.
For example, purchasing Volvo in the midst of unfounded doubts and criticisms. At the most difficult moment, the outside world said that Geely was a snake swallowing an elephant. When the results were evident, there were many voices saying that Geely had taken shortcuts by acquiring other companies.
Actually, the acquisition of Volvo, including a series of subsequent acquisitions by Geely, is one of the measures taken by Geely to implement the Ningbo Declaration. At the same time as the acquisition, Geely invested heavily in research and development, while digesting and integrating, and innovating and developing. Our annual R&D expenditure is already higher than that of mainstream joint venture brands.
What is strategy? Actually, it is a commitment. A commitment to what I won’t do, what I will do, it is the values of the company behind it. Therefore, a good strategy is something that can always be upheld. We are still committed to making good cars that ordinary people can afford, not engaging in price wars, pursuing high quality, and not following the old rules of delaying the introduction of new technologies, and we will continue to do so in the future. These things will not change due to changes in the industry.
Secondly, I believe that Geely Automobile is the first new force in the Chinese automobile industry, both in terms of time and corporate culture since the day I joined Geely until now.
What is a new force? I think the most fundamental two points, other than those dazzling contents, are to break, to break the unreasonable status quo that makes users dissatisfied; and to establish, to establish products and experiences that make users satisfied and surprised.
Breaking and establishing have always been difficult.
In 2003, when I joined Geely, my impression of Geely Automobile before that was a famous saying from the chairman: “Give me a chance to fail!” At the time, I was very encouraged.
After joining Geely, I learned about the background of the chairman’s statement. Geely was the first privately-owned automobile company in China, and there were no real independently-branded cars before Geely Automobile.
At that time, Geely was just hitting a brick wall everywhere. It was founded in 1997, and it wasn’t until 2001 that it got the “Provisional Certificate of Compliance.” The outside world scoffed at Li Shufu for using 500 million yuan to make cars.
Compared with today’s confidence in manufacturing, when Geely was born, it was precisely during the period when China’s high-end manufacturing was the most self-deprecating. From the inside out, there was a general aversion to Chinese private enterprises making cars, and the barriers to entry into the car manufacturing industry for international car companies always hindered the Chinese.
The chairman’s statement was his way of inspiring the almost desperate Geely founding team. The mood was like “all reactionaries are paper tigers.”
Whenever Geely people hear this sentence, they will be inspired. In the eyes of Geely people, this is the most inspiring aspect of Geely Automobile’s culture: there is nothing difficult, just do it.
What to do? It is to do things that others say I cannot do, or that cannot be done, the direction depends on whether what you are doing is what users expect. More than 20 years ago, our 50,000-yuan sedans were like that; more than ten years ago, we did our best to develop the Emgrand; today, we are shaking up the hatchback market with the StarRui. At the same time, we have invested huge amounts of funds and manpower to start from the bottom-level technology and build the Geometry, to meet the intelligent era of automobiles.
As An says, Geely Automobile has no limits, and without limits, there is no need to consider any difficulties. Set the direction, and just do it. This is the definition Geely as China’s leading new energy vehicle manufacturer has for new energy vehicle development. Don’t expect the wind to take you to your dream destination easily, but don’t let technological choices hinder your efforts to developing new energy vehicles. To succeed in manufacturing cars, one must fulfill commitments and fear no obstacles.
Recently, Xiaomi’s entry into the auto industry received great attention and support despite having no specific information about its plans. Why? Because Xiaomi founder Lei Jun has achieved a key success factor: gaining customer support and followers just as any successful company has done.
Strategy for Recruiting Talents is the Key to Breaking Through
As the new operator of Geely Automobile, what is your plan to lead Geely into a new era of intelligent electrification?
According to Gan Jiayue’s view on Geely, it is the same as that of “the elders” of Geely. Many people attribute Geely’s unconventional approach to Li Shufu’s gambling spirit. However, if the only way to get where you are today is by gambling, this is no different from winning ten times in a row at a gambling table—an unsustainable method in the automotive industry, which requires huge investments, complex technology, and long industrial chains. Gan believes that Geely is adhering to some promises deemed correct but not many people care about them, and is always ready to take risks for this purpose.
So how can Gan Jiayue, a native of Geely, lead Geely to continue to fulfill its promises amid major changes in the industry?
Gan Jiayue’s answer is simple: do two things well. One involves customers, and the other involves employees.
He thought for a moment and continued, or it can also be said that it’s about doing one person’s job well, that is, being a partner. Customers and employees are both partners who walk with Geely.
On this point, I am very radical.
First, Geely Automobile must work with scientists. Our research and development partners must establish a culture of scientists.
Cars have evolved from simple means of transportation to the third space of the network age, and the arrival of the era of software-defined cars means that cars have entered the forefront of basic scientific applications of mankind. As a leading automotive company committed to staying ahead, Geely Research Institute must become Geely Science Academy, which is a new proposition for all Chinese automakers.
This is a proposition that will inspire the auto industry. In fact, the industry revolution led by intelligence has made the auto industry a battlefield where human advanced technology is highly aggregated. As a leading automaker, Geely can participate along with other leading companies; it is a responsibility and honor. Geely’s future R&D investment not only pursues stronger technological capabilities but also establishes a targeted culture of scientists.
Second, implement the “Great Employee” strategy.What is the “Big Employee” Strategy? In spirit, it is Geely’s talent development concept of not limiting its employees.
Traditional manufacturing management emphasizes assigning one role to each employee, and treating every employee as a screw that needs to be tightened. However, with Geely being a rapidly growing automotive enterprise with millions of users, it is necessary to have a talent policy that meets the need of the times where it is getting closer to the users.
Geely’s employees are divided into three levels: team leaders, directors, and decision-makers. Team leaders are Geely’s working units, while directors are responsible for coordinating resources, passing on experience, and supporting team leaders’ work. As for me and the decision-making team of Geely, we are responsible for overall corporate strategic planning, and provide logistical support for team leaders.
Adhering to the principle of not limiting employees’ abilities, incomes, or resources, Geely is now moving towards a flat management structure and encourages the growth of “Big Employees.”
I think there are several key words in this strategy. Firstly, reasonable and full authorization. Facing users, “Big Employees” should play multiple roles as a friend, interact with and give users better experiences, and provide other attentions beyond driving, in which “Big Employees” are authorized to move resources independently. Secondly, full support is provided to help employees to be able to demonstrate their abilities independently and accumulate experience quickly. Additionally, their strengths are fully released through learning and guidance. Finally, efficiency is prioritized to ensure that resources are allocated to employees with strong abilities, excellent performance, and a replicable working model.
The core of implementing the “Big Employee” strategy is to make the talent team younger. The key to success is to follow nine words: choose the right path, utilize the right people, and distribute money fairly. The breakthrough point of this work is to break down bureaucracy. While Geely is a large corporation with relatively low bureaucracy, Geely still needs to completely transform into a customer-oriented and “Big Employee” enterprise and continue breaking down bureaucracy.
I look forward to a future where, when people talk about Geely, they think of the “Big Employees” who accompanied them and devoted themselves to making their lives more comfortable and enjoyable, rather than just the Chairman or CEO.
The second major strategy is the implementation of the “Big User” strategy. There are several key dimensions to this strategy. Firstly, we need to get closer to our users. The closer we get, the larger our user base. We rely on modern communication technology and the increasingly convenient Internet, but in the end, we rely on people to eliminate distance. Although Geely has a limit to the number of employees it can hire, as long as we eliminate the distance between us and our users, our partner network is infinite.- The second thing is that we need to engage more closely with our users. How? By relying on a stronger shared set of values. Geely has always been an automotive company that values its promises, and in the era of the Internet, we need to further unite with users to jointly uphold Geely’s promises. We need to establish a common pursuit in terms of spirit and social contribution with our users, and work closely together, sharing joys and sorrows.
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Thirdly, we need to achieve targeted and in-depth experiential optimization for different users at multiple levels such as region, population, and circle. In the past, when we talked about user service, we usually referred to user policy, which represented the industry’s way of classifying users based on the products they purchased rather than the type of people who purchased the car. This approach is crude, especially in contemporary times where personalization and small-circle identification are becoming increasingly clear. Geely will focus more on people, improving the user experience by standing on the user’s perspective.
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The idea you mentioned is actually very consistent with the management philosophy of many Internet companies. However, for manufacturing companies, it can almost be regarded as a revolutionary transformation. Can Geely do it?
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In fact, the biggest and only disadvantage faced by a large-scale enterprise when facing industrial reforms is the difficulty to make institutional changes. New enterprises can attack the crucial points directly, while large enterprises tend to struggle, affecting their overall operations. This not only appears in the automotive industry, but is apparent in many industries during the upgrading period. Nokia in the mobile phone industry is the most famous example. There’s a saying that they seemingly did nothing wrong, but still failed, which perfectly captures the difficulties of a large enterprise turning around. Can Geely, with a scale of 1.5 million, make a smooth transition?
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For Geely, this is not a turnaround. Ganyaue believes that in Geely’s twenty years, they have steered in the right direction, changed with the times, and had never faced internal obstacles. Perhaps Geely might stumble or become busy in attempting new ideas and perspectives, but the soil from which they grow has never rejected or feared change. We will only keep trying and adjusting until we find the right way.
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Without such enterprise culture, Geely wouldn’t be able to form effective cooperation with international giants such as Volvo and Daimler, nor would they choose a strategy of value over price wars, which is sustainable but very bumpy.
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What you said was right, Geely’s development to this point, and the development of the industry to this point, isn’t easy. Easy things were done by those who came before. Just like today’s Tesla, NIO, and Xiaomi, Geely faced historic opportunities when they started, but also faced various historic difficulties from day one. Every step required them to overcome a pit that their predecessors had not seen before, and climb a slope until they reached the height they are today. I am very fortunate that Geely people share a consensus, and we are still on the upward path.# Chat with Gan Jiayue
During the over two hours of conversation with Gan Jiayue, the most profound impression is that this talented person in Geely’s talent system has both an active and radical thinking and a firm and calm trait which are rarely presented in one person. Whenever it comes to development strategies, he always appears very bold, unlike many leaders of other car companies who seek change based on the current situation. When discussing specific paths, Gan Jiayue never seems to consider avoiding difficulties, but instead he thinks about how to make the most realistic progress in a very detailed manner, even if it is step by step.
This is a typical entrepreneurial mindset, find the right direction, and move towards that direction without considering difficulties.
At the end, when exchanging WeChat accounts, I saw that his WeChat name was “Agan & Gan Jiayue”. This is the name of the protagonist from the greatly influential movie “Forrest Gump” for our generation. Gan Jiayue said that the boy with an IQ of only 75, a physical disability, and who suffered various pains, but always found the right direction was his favorite movie character.
Most of the time, we spend a lot of time thinking about why we do something, what we aim to achieve and whether it’s worth it, whether it’s difficult or not. We usually also tend to think about others’ behavior in this way. But Forrest Gump may be able to run the farthest because he never thought about these things, he simply did what he thought he should do, fulfilled his promises to his partners and himself, ran the road he wanted to run, and did not let people who laughed at him hinder his steps. Looking back, more people are running with you.
Gan Jiayue laughed and continued to say: “Don’t you think Geely is a bit like Forrest Gump? Don’t worry about why, just run. This is the best way for a company to cherish the opportunities of the times.”
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.