YANG YUANQING: LENOVO

1. Biography
Yuanqing Yang joined the Lenovo Group in 1989 and has played a key role in
Lenovo’s transformation into a US$70 billion global technology powerhouse employing
75,000 people and serving customers in 180 markets around the world.
Under his leadership, Lenovo completed the acquisition of the IBM PC business
in May 2005 and the acquisitions of the IBM x86 server business and Motorola Mobility
in October 2014. After leading the company to become the largest PC company in the
world, Yang has built new growth engines, including infrastructure, mobile, solutions
and services, driving Lenovo to transform from a device provider to a solution provider,
charging full speed ahead toward its vision of smarter technology for all.
Mr. Yang has been the recipient of multiple awards and industry accolades. He
was on Barron's Best CEOs list from 2013 to 2015 and in 2014 won the Edison
Achievement Award. And Mr. Yang has been named one of China's Most Influential
Business Leaders by Fortune (China) magazine every year for the past decade.

Mr. Yang was born in Anhui Province of China in November 1964. He spent his
childhood in Hefei in Anhui province. He grew up poor, as his parents were paid the
same salaries as manual laborers. Yang's father, Yang Furong, was a disciplined man
with strict standards. Yang said of his father, "If he set a target, no matter what
happened, he wanted to reach it." While his parents wanted him to pursue a career in
medicine, and he had a budding interest in literature, Yang decided to study computer
science on the advice of a family friend who was a university professor. He received a
master’s degree in computer science from the University of Science and Technology of
China and a bachelor’s degree in computer science and engineering from Shanghai Jiao
Tong University. Mr. Yang serves as a member of the International Advisory Council of
Brookings Institute and is a board member of Baidu, Inc., and TaiKang Insurance Group.
When looking at an acquisition, Yuanqing and Lenovo use a process they call the
Triangle Process. If deciding on whether a business is worth acquiring and developing,
they consider three factors:
1. Is the market big enough? It doesn’t matter if the target doesn’t have a lion’s
share of that market – there just needs to be enough potential that it’s
promising.
2. Does it fit with Lenovo’s core? At its heart, Lenovo is driven by computation
and technology, and that’s where their products must live.
3. Can resources compensate for shortcomings? Lenovo understands that there
may be a learning curve in acquiring a company and entering a new market;
they’re not averse to that, provided they have the operational ability to carry
the product through those times like with Motorola.
The company believes that a healthy corporate culture is key to having a healthy
bottom line. To that end, Lenovo has created what it calls an “ownership culture” based
on three tenets:
 1. “Everyone is an engine,” as Yuanqing says. That is, they’re empowered to
drive decisions. Employees are encouraged to think for themselves and act
accordingly.
2. Lenovo has fostered a commitment culture. Whether you’re management or
the low one on the totem pole, making a commitment means delivering that
commitment. Period.
3. Pioneering is key. Lenovo may believe in buying existing intellectual
properties, but its power comes from pushing to innovate and always seeking
to be better.
Discreet in appearance, Yang is an ambitious strategist who believes that “being
number one is important, because nobody can name the world’s second highest
mountain.”

2. Beginning of Lenovo
In an era when a laptop or a PC is a quintessential for every individual,
organization and home, it is not an easy task to compete with all the big computer
manufacturers of the world and become one of the best. But for the CEO of Lenovo,
Yang Yuanqing, that wasn’t a difficult task. Today, Lenovo, based in China, is the
world’s largest personal computer vendor.Born to a couple of surgeons, Yang lived a life
of poverty as his parents were heavily underpaid in the cultural revolution-era of the
60’s.
Yang then joined Lenovo, which was known as a Legend in those days. He took
up the position of a sales man for a very meagre salary giving up another job as a
professor in a university. For a 25 year old Yang, it was a very quick climb up the ladder
after that. He was promoted very soon and was known for his outstanding sales record
in the company. He then wanted to leave to the United States and study business for the
exposure to world businesses.
But the chairman of Lenovo, Liu Chuanzhi did not let him go away as he thought
that the company really needed him. So he stayed. Shortly after that, he was appointed
by Liu to head the personal computers business at Lenovo only when 29 years old.
Yang then leaped to the position of a CEO in the year 2001 when Liu Chanzhi
retired. Lenovo wasn’t as big as it is today, but thanks to his excellent managerial and
sales skills, the brand went on to become huge and began to compete with companies
like Microsoft by the year 2005. By 2013, Lenovo was the world’s largest producer of
personal computers still under the chairman ship of Yan Yuan Qing.The ambitious Yang
Yuanqing however has bigger dreams. He wants Lenovo to grow in PC plus, mobile
phones and tablets as well, which is what the team is focusing on at the moment.
Since its founding in 1984 by Chinese entrepreneur, Yuan Tien-hsiung. He
wanted to create a company that would be able to compete with American companies
such as IBM. To achieve this goal, he decided to focus on creating products that were
affordable and easy to use. His first product was the ThinkPad, which was designed to
be durable and reliable, Lenovo Group Limited (OTCMKTS: LNVGY) has enjoyed a
prodigious rise to become one of the world’s largest technology companies. In this
article, we take a look at the strategic model underlying one of China’s most successful
corporations. Lenovo is a Chinese technology company that designs, manufactures, and
sells personal computers, tablets, smartphones, smart televisions, workstations, and
servers. Lenovo is the world's largest PC vendor, claiming a 25.2% market share for the
fourth quarter of 2020, well ahead of HP Inc., Dell, and Apple. Lenovo has impressive
competitive advantages over its rivals in the PC marketplace, including its large
distribution network and its ability to expand its presence in emerging markets. Over
the years, Lenovo has used strategic acquisitions and partnerships to access new
markets and increase sales. Lenovo lags in market share behind its rivals in both tablet
and smartphone sales.
Lenovo wasn’t “Lenovo” until 2003 – it began life as “New Technology
Developer, Inc.” in 1984, back when a bunch of engineers might have been excellent at
developing technology but were lousy at branding. It was a team of 10 engineers led by
Liu Chuanzhi and his deep pockets with about $30,000 that spurred the birth of NTD in
a couple of Beijing back rooms on November 1, 1984.
Within a couple of years, they got branding savvy and changed the company
name to Legend. First, they worked only on business technology, but it was Legend’s
1990 launch of its first personal computer, the Legend PC, that would bring it big
success. But founder Chuanzhi speaks of the early 2000s as a time when Lenovo realized
that diversifying its product base in China wasn’t working for them. They concluded
they’d need to expand internationally to grow their brand.
‘The language was a big challenge. At the time, not all of our Chinese directors
could speak fluent English. The company made a decision to use English as the medium
of communication in board meetings.’ It was decided that English would be the primary
language for doing business within Lenovo because they wanted to become global
players. They believed that conducting business in English would attract more
international, high-caliber talent to their board and executive ranks.
Yuanqing has been with Lenovo since 1989, back in its fledgling days as Legend.
At just 25, he already earned a master’s degree in computer science and had been
planning to become a professor of computer sciences when he spotted a Lenovo ad and
decided to give sales a try. His salary was the equivalent of $30 monthly. A natural at
sales, Yuanqing was also known for being quiet and contemplative – attributes that
appealed to Lenovo founder Chuanzhi, who promoted Yuanqing to head their personal
computer division at the age of 29.
Yuanqing would be CEO by 37 when Chuanzhi retired. But Chuanzhi didn’t
disappear – he stuck around on the Lenovo board, and when the masterstroke was made
to buy IBM PCD, it was Yuanqing and Chuanzhi who made it happen. By that time,
Yuanqing had stepped down as CEO to be the chairman of Lenovo’s board of directors
from 2004 to 2008. Enter the recession and the board's plea for Yuanqing to return as
CEO, and Yuanqing acquiesced because, “The company needed me.”
Yuanqing makes headlines around the world based on his business smarts alone,
but his leadership goes well beyond the trading bell and sales desk. When he received a
$3 million bonus for record growth in 2012, he distributed his bonus to over 10,000
employees. He wasn’t content to do it just once, either, again redistributing a $3.25
million bonus in 2013 to over 10,000 employees working in 20 countries. Those working
in reception and production received up to $314 each, about a month’s pay in parts of
China, which is where 85 percent of the recipients lived.
The company’s business philosophy of recent years has been described as
“protect and attack.” That is, they protect the division that made them – the personal
computer division – while going on the attack with other technologies like smartphones,
tablets and even server hardware and other solutions.
Upon entering the market, Lenovo faced several challenges in the computer
industry. Here are some of the key challenges they encountered:
1. Establishing Brand Recognition: Lenovo had to compete with well-
established brands that already had strong brand recognition in the market.
Building brand awareness and establishing themselves as a credible and
innovative brand was a significant challenge.
2. Intense Competition: The computer industry is highly competitive, with
many established players vying for market share. Lenovo had to find ways to
differentiate themselves and stand out amidst fierce competition.
3. Customer Perception: Lenovo faced the challenge of overcoming any
negative perceptions or biases that customers may have had towards their
brand. They needed to convince customers of the quality and reliability of
their products.
4. Market Saturation: The market for computers was already saturated with
various brands and products. Lenovo had to find ways to carve out their own
niche and gain market share in a crowded marketplace.
5. Distribution and Channel Expansion: Lenovo needed to establish an effective
distribution network to ensure their products were readily available to
customers. This involved building relationships with retailers and expanding
their online and offline distribution channels.
"The mobile business has failed to meet our expectation," admitted Yang
Yuanqing, Lenovo's chairman and CEO, during a press conference in Hong Kong on
Thursday. Instead of revitalizing the segment by dedicating more resources, he said the
company planned to cut total expense by 30%, so it will not continue to be a drag on
group earnings. "In the short term, we are not thinking about growing our market share.
We want [the mobile business] to turn around as soon as possible," he said.
Despite its aggressive expansion, Lenovo rarely sent managers from China to
oversee acquired operations abroad, as it placed a strong emphasis on delegating
authority to front-line operations. This approach had been considered a secret ingredient
of its success. However, the "customer and frontline first" spirit seems to have faded over
time, as Lenovo moved to focus on more big-spending business and government clients,
as opposed to ordinary people.
It set up a cross-operational department to oversee various products earlier this
month, including personal computers and smartphones, to provide more comprehensive
services to customers. It is also developing interactive stores that let customers
experience its AI-supported speakers and educational tools for children, wearable
devices and games. It plans to open 150 of them by the end of this year, including in
Beijing, Chengdu and Shenzhen. In order to restore the focus on customer experience,
Yang plans to double the weighting of customer satisfaction in employees' performance
reviews to 20% from 10%, according to Chinese media outlets.