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PO CHI WU
WARREN LEE

DJI Innovations: Managing the Human Capital in a

High-Flying Company

People manage people at DJI not for the sake of management but for organizing others
to come up with great products.
- Frank Wang Tao, CEO and CTO, DJI Technology Co., Ltd. 1

Frank Wang Tao began his undergraduate studies at the East China Normal University, but soon
realized that his intellectual curiosity was somewhat suppressed by the style of teaching in China. At
the age of 23, he decided to pursue his dreams of developing research ideas and transferred to the
Hong Kong University of Science and Technology (HKUST), where he entered as a freshman again.
He quickly led the HKUST Robotics Team to come first in Hong Kong and third in Asia in the Asia-
Pacific Broadcasting Union Robot Contest (ABU ROBOCON) in 2005.

DJI Technology Co., Ltd. (DJI) evolved from being his master of philosophy research thesis
project at HKUST in 2006 to becoming one of the world’s leading developers and manufacturers in
unmanned aerial vehicle (UAV) autopilot systems in six short years. 2

The number of employees at DJI rose a staggering 209% over a period of 12 months, from 75 in
2011 to 232 in 2012, and was projected to double in 2013. As the founding CEO, Frank was actively
involved in all aspects of the company, particularly in the daily management and individual
performance appraisal of the 71 engineers in the R&D department. But as the company grew, he
found it increasingly difficult to keep up this level of interaction and was hence seeking a more
efficient and effective way of managing human capital at DJI.

1
Frank Wang, interview by author, Shenzhen, June 21, 2012.
2
Ibid.

Warren Lee prepared this case under the supervision of Professor Po Chi Wu solely as a basis for class discussion. The authors have
disguised certain data to protect confidentiality. Cases are written in the past tense; this is not meant to imply that all practices,
organizations, people, places or facts mentioned in the case no longer occur, exist, or apply. Cases are not intended to serve as
endorsements, sources of primary data, or illustration of effective or ineffective handling of a business situation.

To order copies or request permission to reproduce materials write bmcase@ust.hk or visit www.bm.ust.hk/cbcs

© 2013 by the Hong Kong University of Science and Technology. This publication may not be digitized,
photocopied or otherwise reproduced, posted, or transmitted without the permission of the Hong Kong University
of Science and Technology.

Last edited: 7 May 2013

HKUST Business School Thompson Center for Business Case Studies

DJI Innovations
A graduate of the school of engineering and a UAV helicopter enthusiast, Frank founded the
company with only three engineers in 2006. Headquartered in Shenzhen—situated immediately north
of the border with Hong Kong and a special economic zone of the People’s Republic of China—DJI’s
quick rise to success was rooted in Frank’s passion for its products, which inspired him and his team
of engineers to develop technologies that constantly surpassed industry standards. Its first product,
which hit the market in 2008, was a control unit that integrated the functions and technologies of
several pre-existing stabilizing devices in the market. As a result, flying a UAV helicopter was made
much more accessible with the technology of DJI’s control unit, and hence drastically reduced the
training of UAV helicopter pilots from several months to only a few days. Its first product allowed
the company to gain a foothold in the high-end professional and industrial markets and opened the
doors for new product lines and an entry into the hobby market.
Right from the very start, Frank knew exactly what he wanted: better products for a better flying
experience. He also aspired to build a company that could be proud of its “Made in China” brand and
products. As DJI was a technological company, Frank understood that people were his biggest asset,
and creativity and taste needed to be nurtured and encouraged. This explained his spending of up to a
quarter of his time in the office interacting with each and every engineer up until 2012.

Competitive Landscape
DJI began selling its first product to high-end commercial and industrial customers in 2008, for
such usages as real estate advertising, surveying, and fire prevention. With technological
advancement enabling its control unit to be only one-eighth of the size and weight of its previous
version, DJI rolled out a new, improved unit, targeting the high-end model market in 2010. By 2011,
four more products were added to the portfolio, which extended the company’s reach to the mass toy
market. By the end of 2012, DJI boasted a portfolio of 15 products in seven different product lines
ranging from autopilot systems to ready-to-fly kits, as well as a series of products and accessories for
hobbyists [see Exhibit 1]. 3

Not only did DJI’s product range provide superior capabilities, but also its products came
with comprehensive manuals and user-friendly software, greatly reducing the time required to
assemble the various components that made up the helicopter or multi-rotor and allowed it to
fly. DJI dominated the high-end controller unit market, reportedly controlling 80% of the
world’s market share, and approximately 50% of that of the high-end multi-rotor controller. 4
By selling directly to customers in China and the rest of the world, DJI exerted significant
control over its distributors. At the same time, the large quantities of shipments ordered from
suppliers allowed DJI to negotiate favorable payment terms.

One of DJI’s main competitors was Draganfly Innovations Inc., based in Saskatoon,
Saskatchewan, in Canada. Draganfly’s product range encompassed mostly ready-to-fly
helicopters for government agencies, corporations, and public institutions. 5 Another competitor,
Hoverfly Technologies, Inc., based in Florida in the United States, sold similar aerial systems
and controllers. 6 Frank did not feel too much of a threat from DJI’s rivals due to the superior

3
Company website.
4
Frank Wang, interview by author, Shenzhen, June 21, 2012.
5
Draganfly Innovations Inc., “Our Customers,” http://www.draganfly.com/our-customers, accessed December 2012.
6
Hoverfly Technologies Inc., “Products,” http://www.hoverflytech.com/products_E2LP.html, accessed December
2012.

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cost advantage DJI achieved. With the costs of labor and operations in China also comparatively
cheaper than elsewhere in North America, where its competitors operated, DJI was able to
achieve high double-digit profit margins on products sold at one-third of the price of its
competitors. “They simply price themselves out of the competition,” said Frank. 7

New entrants to the market were also unlikely because of the number of proprietary
technologies involved. DJI held 39 patents worldwide by the end of 2012.

Moving Ahead
In spite of DJI’s attractive bottom line and domination in the current markets, Frank was not
prepared to rest on his laurels. He predicted that the hobby and professional markets would become
saturated around 2015 or 2016. Hence, he was constantly at his drawing board as he prepared to steer
his company to other market opportunities.

Frank boldly predicted that DJI would be in a position to sustain its 200% to 300% growth in
revenue per year from 2013 to 2018. Though an initial public offering was within reach, Frank was
not pursuing it actively just yet. When asked what challenges stood in his way for his ambitious target
to be realized, he cited the unpredictable nature of regulations and government policies in China as
one of the potential risks, but stated that it was one that he had no control over. The other challenge,
one which he would like to have control over, was the management of his company’s most prized
asset—people.

Managing the Human Capital at DJI

DJI’s People
Serving the dual role of both CEO and CTO of the company, Frank supervised a team of 232
employees across four departments: research and development, marketing and sales, production, and
administration. The size of the company was quickly matching that of listed companies in the
technology industry, 8 and the company had grown steeply since 2010 [see Exhibit 2] and even within
the calendar year of 2012 [see Exhibit 3].

Joining Frank in senior management at DJI was CMO Swift Xie and CFO Henry Lu. Swift joined
DJI in 2009 after working in Europe for eight years and initially served as the supervisor of the R&D
department, but switched his focus to marketing and sales in 2010. Henry held a master’s degree in
finance and management from a university in the United Kingdom and joined DJI in 2007. In the
weekly Monday management meetings, the chief R&D engineer joined the trio. Frank admitted that
he still made the majority of the decisions, especially about the products.

Though Frank preferred to describe DJI’s organization [see Exhibit 4] as one that was horizontal
rather than hierarchical, employees were nonetheless graded from one to four, where the chief
officers belonged to grade one. The CEO was positioned yet above the top grade. The engineers in the
R&D department had an average of two to three years of prior work experience, and all belonged to
the same grade in the organizational chart. Frank also pointed out that the marketing department had

7
Frank Wang, interview by author, Shenzhen, June 21, 2012.
8
Perception Digital Holdings Ltd., 2012 Interim Report, p. 19,
http://www.perceptiondigital.com/themes/customer/en/investor_files/12_Sep_2012/ew_01822IR_31082012.pdf , accessed
December 2012.

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twice as much capacity as necessary, which allowed the department to filter out the misfits. “The
number is easy to get, but the right people aren’t,” Frank admitted.9 The average age of employees in
the marketing department was 28,. The average age of employees in the rapidly expanding production
department was 25, and most worked as operators at electronics factories prior to joining DJI. Despite
the steep growth in this department, the turnover rate remained relatively low at 3.25%.

Wendy Wang, human resource manager, was tasked with the management of these relatively
young DJI employees—with an average age of 26. She worked as a schoolteacher for one year and in
corporate management for another two years before joining DJI in 2010.

Believing that the best products were not designed based on customers’ needs but rather were the
result of the “bright thinking of engineers,” Frank deemed it his priority to recruit the smartest and the
most creative engineers. The R&D department had made up no less than half of his company until
2011. The average age of the engineers in the R&D department was 25.5. One-third of them held
master’s degrees, and all had at least a bachelor’s degree in either electrical or mechanical
engineering. DJI's starting salaries were on par with the industry standards, with salaries for engineers
typically higher than for other departments.

Recruitment
While head-hunting from other companies was common to fill positions, especially in the
marketing and sales department, Frank preferred to recruit engineers directly out of select Chinese
universities.

Curricula vitae were typically collected, and potential candidates were sent to the chief engineer
for screening. He would then interview a shortlist of candidates and evaluate them on their technical
competencies as well as their logical, analytical, and reading comprehension abilities by means of a
general aptitude test devised by an external consultant. Those proceeding to the final interview would
meet with Frank, at which time interpersonal skills would also be considered. Yet, Frank’s first and
foremost expectation of his engineers was still technical prowess and the initiative to conduct
research on their own.

Company Culture
It had always been Frank’s vision to build a company that thrived on creativity, one that
generated ideas from within rather than stealing or borrowing them from elsewhere. Self-described as
a results-driven and demanding leader, Frank loved to conquer challenges. He was not shy about
criticizing poor design and taste, but at the same time, he promoted cool design and clever ideas.
Though some might find his approach aggressive and unkind, his track record of developing superior
products and predicting market trends over the years had made him a well-respected leader within the
firm.

With the high number of recruits each month, basic training was given to all new employees,
though only of an orientation nature. As a measure to facilitate the integration of new recruits with
existing staff, the company introduced a mentorship program in 2012, where longer-serving
employees were assigned to communicate with new staff members once or twice every week. Despite
the good intentions, some mentors, themselves still relatively new to the company, were reluctant or
felt as though they were at a loss, as they lacked the experience and skills to be a mentor.

9
Frank Wang, interview by author, Shenzhen, June 21, 2012.

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Through internal departmental meetings, Frank often reiterated that the success of the company
was based on the work done by the R&D department. Historically, employees in the R&D department
received more bonuses on average. Frank was alerted that this might cause a rift among the
departments, especially because the R&D department had also moved to a new building away from
the other departments in 2012. In an attempt to cultivate team building and bonding among staff
across departments, the company introduced an entertainment room that was open during lunch hour
and between 6:00 p.m. and 7:00 p.m., and also sponsored basketball and badminton games and
organized internal competitions after work.

Appraisal and Reward

All employees of DJI were remunerated monthly on a base salary, above which a floating bonus
might be given dependent on an appraisal carried out each month. Considerations were given to an
employee’s job performance outcome, overtime, and rank (importance of position to the company);
the bonus could be as high as 30% to 40% of the base salary. Up until 2012, department heads were
responsible for these evaluations and Frank appraised all the engineers on a monthly basis, with all
such efforts documented on comprehensive reports with both quantitative and qualitative indicators.
The employees were handed their own reports and had the right to argue their cases in front of Frank
if they wanted to dispute the scores or findings. Frank believed that through such debate, the
employees would know more about the company’s expectations. The final performance indicator
scored each month was cumulative over a calendar year, upon which the year-end bonus would be
calculated. At the other end of the spectrum, underperformers often felt left out in these bonuses and
most would eventually resign on their own accord. One of the challenges of this appraisal system,
which had been in place since 2010, was that Frank and the department heads needed to know the
staff and their work very well to ensure fairness across the board.

Stock options were also given to those who Frank described as “core” employees. There were 20
recipients in 2012, and they were hand-picked solely by Frank on a case-by-case basis.

In Search of Product Managers

Frank expected to double the number of staff on his payroll in 2013, and the growth would be
particularly apparent yet again in the R&D department. He knew very well that he would no longer be
able to be as involved in the management of his engineers, though he was not yet ready to relinquish
or delegate either of his chief officer roles just yet.

Frank felt that the answer to his most pressing resource management issue was the appointment
of a layer of middle management, in the form of product managers. Frank envisioned that DJI would
need at least four or five managers, and they would each be assigned to manage one or two products,
where engineers from across different functions were to be led on a project level. Product managers
would be empowered to assign bonuses to their subordinates, and would themselves be entitled to
extra compensation for their management responsibilities. A set of key performance indicators had
been developed for this position [see Exhibit 5].

Frank singled out four main qualities, in order of perceived importance, that a product manager
should possess: (1) passion for and knowledge about the products, (2) technical skills, (3) persistence
and determination to push ideas forward, and (4) people and project management skills. Since
knowledge about the products ranked the highest of the four, it was expected that the product
managers would be internally hired rather than externally recruited. Frank had observed that the

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engineers at DJI generally lacked the will to push others, and were often too courteous in fear of
upsetting their colleagues.

Strategizing the Human Capital at DJI

As the human resource manager shared her concerns about the various human resource
management issues that she faced—communication among departments, the lack of mentors, and
transfer of knowledge, just to name a few—Frank, on the other hand, was quietly confident that
having a capable team of middle management staff would empower him and his high-flying company
to take on greater heights. What an engineer would ask next is “how,” and a series of “what ifs.”

How could leadership be encouraged further in the company? Would the product managers be
given adequate professional development in management and leadership to cope with the growth of
the company and what would be expected of them? Were enough incentives given? How could the
culture of the company be developed, communicated, and sustained in 2013 when the ratio of new
recruits to existing staff was projected to be one to one?

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EXHIBIT 1: DJI PRODUCT PORTFOLIO

Retail Date of
Product Line Product Description Market Price Product
(in USD) Launch

A GPS-based helicopter autopilot system that combines the highest

level of positional data from GPS satellites, a 6-DoF inertial
measurement unit, a magnetic field sensor, and a barometric altimeter
Ace One with the most robust algorithms in automation control theory. From $3200 Oct-10
aerial filming and surveillance to wide-area surveying, Ace One’s
exceptional performance excels in the most demanding industries and
environments.

Ace Single Waypoint has many of the same features that make the Ace
Waypoint system the most sought after autopilot system in the
industry. It is the perfect solution for short-distance (within radio range
and visual contact) and/or high-altitude aerial photography work. The
Ace Single
system includes a ready-to-install data link (on-board helicopter $8,000 Jun-11
Waypoint
transmitter and ground receiver). The pilot and ground crews can view
Helicopter Autopilot valuable real-time telemetry data during a flight, including helicopter Commercial
System orientation, heading, altitude, receiver battery voltage, pitch, roll, and
path tracking.

DJI Ace Waypoint is based on DJI’s 4th generation autopilot system for
total autonomous flight. It is designed with high-end commercial and
industrial RC helicopters in mind and is targeted at Beyond Visual
Range (BVR), aerial photography, exploration, geographic mapping,
agriculture, transmission line inspection, and many other industrial
Ace Waypoint applications. Ace Waypoint ensures stability and flight safety, while $11,200 Jun-11
allowing the pilot to monitor mission objectives using the Ground
Control System. The system interfaces with a wide variety of VTOL
platforms, from bi-blade to multi-bladed helicopters, with or without
flybar, 3 or 4-servo CCPM, and electric, gasoline, or turbine power
plants.

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EXHIBIT 1: DJI PRODUCT PORTFOLIO (CONT’D)

Retail Date of
Product Line Product Description Market Price Product
(in USD) Launch

WooKong-M is a complete flight control system for all commercial,

industrial, and professional multi-rotor platforms. WooKong-M utilizes
high-quality components precisely calibrated with temperature
compensation in all gyros and sensors, industry-renowned flight
algorithms, and an IMU damping system rated for gas engines.
Woo-Kong M WooKong-M makes flying a multi-rotor aircraft easier than ever; for $1,200 Aug-11
the first time, inexperienced R/C pilots can learn to fly a multi-rotor in
a matter of hours. From the incredibly predictive flight characteristics
to the uncanny stability in windy conditions, there are many reasons
that WooKong-M is the most popular multi-rotor flight controller in the
industry.

Through the use of a Ground Control Station (GCS), WooKong-M Single

Waypoint allows the pilot to monitor key flight information in real
time. In addition to your position on a 3-D map, you can easily view
your current altitude, GPS coordinates, air speed, angle of the aircraft,
Multi-Rotor Autopilot
Woo-Kong M signal quality of the wireless data link, and on-board battery voltage. Commercial
System $1,500 Dec-11
Single Waypoint Additionally, the Click & Go mode allows you to choose a point on the
map, specify the altitude and flight speed, then simply “click to go”
there! While you are monitoring the route on the GCS, you can easily
change the altitude, flight speed, or even the destination point “on the
fly.”

The WKM Waypoint takes the capabilities to a new level. Pilots can
pre-program a flight, including up to 50 unique waypoints with custom
parameters for speed, altitude, type of turn between waypoints, and
even custom robotic servo actions to be completed at each waypoint.
The craft will automatically take off, complete the entire mission
Woo-Kong M
(including any servo actions), return home, and finally land itself right $3,000 Dec-11
Waypoint
back where it took off! Rest assured there are many fail-safes in the
software to account for human errors like a flight duration that is too
long or an altitude that is below ground level. You also have the ability
to change any and all flight parameters on the fly, during the actual
flight.

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EXHIBIT 1: DJI PRODUCT PORTFOLIO (CONT’D)

Retail Date of
Product Line Product Description Market Price Product
(in USD) Launch

DJI’s Spreading Wings S800 is a hex-rotor aircraft developed for aerial

photography, search and rescue teams, and surveillance. Rapid
Deployment…redefined. From “in the box” to “in the air” is less than 5
Multi-Rotor Ready-to-fly
Spread-wings S800 minutes! All electronics, motors, and propellers are fully integrated Commercial $1,900 Apr-12
Kits
into the molded composite arms; swapping out an entire arm assembly
(including arm, ESC, motor, and propeller) can be done without tools in
a matter of seconds.

Through the use of 3 axis gyros, inertial measurement unit feedback,

and special 3-DOF servo drive modules, the Zenmuse line of camera
gimbals achieves sub-pixel stabilization. This performance was
Gimbal Zenmuse previously only achieved in the most expensive full-scale helicopter Commercial $3,500 May-12
gimbals, most of which cost upwards of $500,000. Now, for less than
1% of that cost, you can achieve perfectly stable footage during every
flight, even in windy conditions.

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EXHIBIT 1: DJI PRODUCT PORTFOLIO (CONT’D)

Retail Date of
Product Line Product Description Market Price Product
(in USD) Launch

DJI iOSD is specially designed for the DJI autopilot system during the
FPV flight or other aero-modeling activates. DJI iOSD can transmit
iOSD (On Screen video and iOSD information in real time. Aircraft status information,
Commercial $200 Oct-12
Display) such as power voltage, flight velocity, height, distance from home
point, horizontal attitude GPS data, etc., can be obtained during a FPV
flight.
Accessory Product
The retractable landing gear is designed for the S800 frame in order to
provide a better perspective in aerial filming/photography work. By
S800 Retractable using a 2-position switch channel on the R/C transmitter, you can
Commercial $1,100 Nov-12
Landing Skid control the landing gear to retract remotely. The retractable landing
gear will not block the view of the camera lens, making possible
smooth shooting in all directions.

The first stabilization system built for scale/hobby helicopter

enthusiasts. WooKong-H will deliver a sense of accomplishment every
time you take it up into the big sky in conditions that will cause others
Woo-Kong H $1,200 Jun-11
to wait on the sidelines. Nothing flies more beautifully in a controlled
manner. WooKong-H will turn a novice into a good pilot, and a good
one into a great pilot in a short time.

The Naza-H autopilot system is a new platform designed for the

Hobby Hobby
helicopter model enthusiast. It inherits the Naza series’ All-in-One
design with an inner damping and many other built-in high-
performance functions (tail gyro, flybarless, and multiple flight control
Naza H modes) and it also supports D-BUS. With the optional GPS module, $260 Nov-12
stability is no longer a problem. From novice to aggressive 3D, the
Naza-H perfectly meets the needs of different flying styles. It is not just
another FBL controller; it is the best choice for the discerning model
helicopter pilot.

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EXHIBIT 1: DJI PRODUCT PORTFOLIO (CONT’D)

Retail Date of
Product Line Product Description Market Price Product
(in USD) Launch

NAZA is a lightweight multi-axis control platform, specially designed for

Naza M aero model hobbyists. It is a small all-in-one module. It has D-Bus $200 Dec-11
support, firmware upgrade support, and an extendible data port.

The DJI Phantom Quadcopter is DJI’s first small-size Ready-to-Fly VTOL,

an integrated multi-rotor aircraft for aerial filming. Encased in a lovely
shell, its compact size (330mm) is coupled with a built-in Naza-M + GPS
multi-rotor autopilot system, giving a stable and reliable flight
experience. The Phantom Quadcopter also comes with its own
PHANTOM dedicated R/C controller (2.4GHz). Flight parameters and functions N/A Not yet
Hobby have been pre-installed and set up by DJI engineers before delivery, so Hobby
you can fly your DJI Phantom the moment you receive it. It is so easy to
operate and stable, which makes aerial filming a breeze. Moreover,
you can mount a GoPro or other light and handy cameras on your
Phantom to shoot some footage from the air.

Flame Wheel 330/450/550 is a series of multi-rotor flying platforms

designed for all pilots for pleasure use or amateur AP. With the DJI
Flame-wheel WooKong-M or Naza-M autopilot system, such actions as hovering,
$230 Feb-12
Multi-rotor Kits cruising, and even rolling and other maneuvers can be achieved. It can
be applied to pleasure use, aerial photography, FPV, and other aero
modeling activities.

Source: Provided by company, edited by authors.

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EXHIBIT 2: SIZE OF DJI BY NUMBER OF EMPLOYEES (2009–2012)

Source: Provided by company.

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EXHIBIT 3: SIZE OF DJI BY NUMBER OF EMPLOYEES (2012)

Source: Provided by company.

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EXHIBIT 4: ORGANIZATIONAL CHART OF DJI

Source: Provided by company.

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EXHIBIT 5: KEY PERFORMANCE INDICATORS FOR PRODUCT MANAGER

Overall To manage the product research and development efforts, so as to realize the R&D goals
Responsibility and improve the competitiveness of the company

1 Product R&D Planning and Management

i) To develop vision and strategic direction for the product(s) in charge, and
coordinate necessary R&D efforts and through evaluation, supervision,
communication, and coordination, ensure successful completion of projects;
ii) Be responsible for the updating/upgrading of current designs and technologies;
iii) To propose and coordinate R&D efforts for new product(s).
2 Market Research
i) To coordinate manpower to collect relevant, up-to-date market data and
information on latest technologies;
ii) To gain thorough understanding of the market’s needs and perform needs
analysis and assessment;
iii) To submit market research report, and propose new R&D and technological
directions;
Work Responsibility

iv) To swiftly respond to feedback from the Marketing Department.

3 R&D Process and Production Management
i) To perform quality and quantity control;
ii) To test new product(s) and make timely improvement(s)/correction(s) where
necessary, and assess and report on the outcomes of the project;
iii) To supervise and manage the production department and its technologies and
processes.
4 Product Maintenance
i) To track users’ feedback, and update/upgrade products where necessary;
ii) To coordinate team members to provide technical support to other departments;
iii) To undertake crisis management of the product(s), and initiate cross-department
meetings where necessary.
5 Project Team Management
i) To gain thorough understanding of the strengths of team members so as to
optimize the deployment and coordination of manpower, and to submit interim work
plan from time to time;
ii) To appraise the job performance of team members.

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EXHIBIT 5: KEY PERFORMANCE INDICATORS FOR PRODUCT MANAGER

(CONT’D)

Work Authority 1 The authority to take the lead on the product(s) in charge;

The authority to propose change(s) to the operational logistics of the

2
department;

3 The authority to reward and/or punish project members.

Appraisal Relationship

Source: Provided by company.

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