Huawei’s 1st Principle: Human Capital Over Financial Capital
In 1998, Huawei’s founder Ren Zhengfei established the company’s foundational document, the “Huawei Basic Law,” which emphasized the importance of human capital over financial capital. This principle has been a guiding force for Huawei’s success over the years.
Ren Zhengfei recognized that talent is a company’s most valuable asset and that investing in human capital is crucial for long-term growth. He believed that without a strong foundation of talented individuals, a company cannot sustainably expand.
While this principle may seem obvious, many companies struggle to implement it effectively. Talent management is a long-term investment that may not yield immediate results. As a result, companies often prioritize urgent matters over important ones, leading to a lack of investment in human capital.
However, Huawei is not just paying lip service to this principle. In 1999, when the company faced financial pressure due to China Telecom’s mobile business split, Ren Zhengfei insisted that the company’s investment in talent development should not be cut. Despite the budget cuts in other departments, Huawei continued to invest in training and development.
This commitment to investing in human capital has paid off for Huawei. The company has become a global leader in telecommunications and technology, with a workforce of over 194,000 employees in more than 170 countries.
Huawei’s success can be attributed to its investment in talent development and its ability to attract and retain top talent. The company offers competitive salaries and benefits, as well as opportunities for career advancement and professional development.
In addition to investing in its employees, Huawei also prioritizes innovation and research and development. The company spends a significant amount of its revenue on R&D, which has enabled it to develop cutting-edge technologies and products.
However, Huawei’s success has not come without controversy. The company has faced scrutiny from governments around the world over concerns about national security and espionage. The United States government has banned Huawei from selling its products in the country and has pressured other countries to do the same.
Despite these challenges, Huawei remains committed to its first principle of investing in human capital. The company continues to prioritize talent development and innovation, which has enabled it to remain competitive in the global market.
In conclusion, Huawei’s first principle of human capital over financial capital has been a key factor in the company’s success. By investing in its employees and prioritizing innovation and research and development, Huawei has become a global leader in telecommunications and technology. While the company faces challenges from governments around the world, its commitment to talent development remains unwavering.
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