Author: Zhang Yi
After the first working day following the Spring Festival in 2023, Li Xiang, CEO of Li Auto, released an internal letter.
The letter started with: “Become the new force with the fastest monthly delivery of more than 20,000 vehicles. Li Auto’s two models, Li One and Li Xiang ONE, made us achieve four firsts in December 2022: the first sales of SUVs priced between RMB 300,000 and 500,000, the first sales of new energy vehicles priced between RMB 300,000 and 500,000, the first sales of large SUVs, and the first sales of midsize SUVs.”
In the following contents, Li Xiang talked extensively about the mission, vision, values, and behavior standards, with a strong and logical style of writing. In this internal letter full of rationality and acumen, anyone could feel Li Xiang’s calmness and composure when facing the great era, as well as his devoted efforts that no one can match both inside and outside the company.
However, it didn’t take long for Li Xiang to be “slapped in the face” by “his own people.”
Recently, some employees of Li Auto complained on a certain social platform, saying that Li Auto “claimed to be the first in various sales… PUA employees internally, and made everyone sell and deliver cars like crazy with empty promises. Finally, they told us that if the sales target was not met, year-end bonuses would be discounted.”
The employee further said: “When we joined the company, they said we could get 14-16 months’ salary, and the stocks could be cashed out for hundreds of thousands of yuan each year. Now, even the 13th month’s salary was not given.” Because of this, many Li Auto employees were disappointed with the company and ultimately chose to resign. Currently, several departments of Li Auto, such as autonomous driving, intelligent cockpit, chassis, and procurement, have employees leaving the company.
It is reported that if Li Auto’s employees want to receive a full year-end bonus, the company’s sales target must be achieved first, and then personal performance can be evaluated.
Li Auto’s annual sales target for 2022 was 170,000 vehicles, but the actual sales volume was only 133,000, far from the target. It seems reasonable to not pay the year-end bonus, and even to require everyone in the company to reflect on themselves.
However, in 2022, a series of crises triggered by the epidemic broke out one after another, and various industries were devastated, while the number of new energy vehicle companies that could achieve their annual sales targets was extremely limited.# Little Peng Auto has only achieved 120,000 units of sales against the annual sales target of 250,000~300,000 units. However, they still managed to distribute year-end bonuses.
Ideal Auto, on the other hand, although did not meet the annual sales target, achieved a 50% increase in sales compared with last year. Both L9 and L8 have received positive market feedback. In December, they both achieved sales of over 10,000 units. In January, the number of deliveries reached 15,141 units, aiming for the first place in the new energy vehicle market. Moreover, Ideal Auto’s stock price has gradually recovered. Though the gap compared to the peak period remains large, the trend is obviously turning the tide.
From the perspective of money, Ideal Auto’s losses have been increasing year by year. Nevertheless, withholding year-end bonuses did not help mitigate the loss. When accepting an interview from “China Entrepreneur” magazine recently, Li Xiang said, “Why we can reform now, first, the enterprise is developing healthily; second, we still have money.”
When the market and Ideal Auto are both optimistic, Ideal Auto failed to fulfill its promises of year-end bonuses to employees and disregarded their year-long efforts solely because the company has not met the annual sales target. Isn’t this heart-wrenching for the employees?
Ironically, Li Xiang also said in an interview with “China Entrepreneur” magazine, “The organization is the internal product, and the business is the external product. I think these two must be resolutely defended.”
What Li Xiang defended, however, has now become what some of his own employees have abandoned. Shouldn’t he reflect on it?
Perhaps, for Li Xiang, Ideal Auto is undergoing an organizational transformation. The matter of year-end bonuses serves as an opportunity to test employee loyalty. However, is it appropriate to make the cost of testing organizational loyalty the source of employees’ livelihoods?
In the past, Li Xiang often spoke out of line and left a mess for the public relations department to deal with. It seems that this time not only the public relations department is suffering, but also the HR department.
Li Xiang likes Toyota’s TBP working method. TBP is divided into 8 steps, including clarifying the problem, breaking down the problem, setting goals, grasping the root cause, setting strategies, implementing strategies, and evaluating the results and processes, and consolidating the achievements. In the first step of clarifying problems, a critical point is visualizing the gap between the current state and the ideal state, namely quantifying it.
In “The Underlying Logic”, Liu Run made an interesting analogy.
He said that a thief stole a painting worth 1 million dollars, and if the thief wants to sell it, due to the information gap between the buyer and seller, there is often a significant trust barrier, which needs to be filled by the black market intermediaries.
According to the rules and the market, this painting, worth 1 million dollars and stolen by the thief at great risk, can only be sold to the black market intermediary for 50,000 dollars, and the remaining 950,000 dollars all fell into the hands of the black market intermediary, which is the price of credit given to the intermediary by the black market.
I wonder how Li Xiang, who has always been strict about cost control, would put a price tag on the hearts of people who have been scattered for a bad thing? Would he still remember the sentence he revered as a canonic, “When we spend a dollar we shouldn’t, we need to spend three dollars to make up for the possible problems later?”
In TBP, there is also an important concept of “Material on Site”.
From most of Li Xiang’s speeches and interviews, one can find that Li Xiang is a person who is very good at macro thinking and expression. For some more abstract things like the future, culture, strategy, he often speaks fluently.
However, the more one focuses on these macro and abstract things, the more one will ignore some concrete people or things. Sometimes it is inevitable that people will love and hate, just like Rousseau, who, busy loving all mankind, sent his own child to the orphanage by his own hand.
I believe that no matter how these abstract concepts are eventually realized, people cannot and should not lose their central position in them. Although Li Xiang is busy with so-called “big things” every day, the thoughts and demands of employees cannot be ignored forever.
Li Xiang really shouldn’t arouse employee dissatisfaction by giving less annual bonuses to them inside while taking a strong stand outside to defend the organization; or criticizing sales for being below the standard inside while acting as both referee and player outside, claiming all kinds of firsts.
Thinking needs to remain rational, but management cannot lose warmth.
On February 8th, the day the Ideal L7 was released, Li Xiang wrote: “The most worthy entrepreneurs for us to learn from internally are: Huawei’s Ren Zhengfei, BYD’s Wang Chuanfu; Apple’s Steve Jobs, Tesla’s Musk, Microsoft’s Nadella.”
We always say that what we compete for in the second half of new energy is systemic competitiveness, but ultimately it is competition between people. I hope Li Xiang will pay attention not only to those well-known figures but also to the employees who are unseen but are equally worthy of attention and respect, who support Ideal Auto to continue moving forward.
这是一个标题
这是一段普通的文本，直接换行后面加两个空格即可
在一行结尾加上一个字符：
这是另外一段普通的文本。
我的优点是：
- 我很可爱
- 我很聪明
- 我很努力
我的缺点是：
- 我有点自闭
- 我常常失眠
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点击进入百度搜索
下面是一个引用：
Stay hungry, stay foolish.——Steve Jobs
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.