Normative Power and Conceptual Power
Amitai Etzioni, Professor of Sociology at Columbia University, said in his book Comparative Analysis of Complex Organizations: “Power is character- ized by the means to secure compliance. Such means can be natural, but can also be material or symbolic. There are three forms of power: coer- cive, remunerative, and normative.” He believes that coercive power may cause physical or psychological pain, remunerative power is dependent on material satisfaction, and normative power inspires moral involvement and secures compliance on the basis of rules.
Based on Amitai Etzioni’s concept of normative power, David M. Lampton, George and Sadie Hyman Professor of China Studies at Johns Hopkins University’s Paul H. Nitze School of Advanced International Studies, raised the concept of power of mind. This form of power cre- ates and disseminates knowledge and ideas to secure support. In some sense, the power of mind exceeds normative power because it covers a range of factors, including leadership, intellectual resources, innovation, and culture.
All the four forms of power coexist in harmony at Huawei, a utilitarian organization. Without the application of coercive power, such as elimi- nating underperformers, accountability for personal and organizational results, and information security regulations, the company would fall apart. A company is like a troop of soldiers who would be severely punished if they do not follow orders to attack or retreat, or disseminate defeatism. Like an army, a company is a goal-oriented organization for which coer- cive prohibitions are prevalent to hold the organization together.
Remunerative power is essential for a business organization. To seek for benefits and the idea of more pay for more work are human nature,
which any company cannot ignore. Building on this human nature, Huawei has developed and insisted on its core value proposition: Dedication is the key to success. Its compensation, bonuses, welfare packages, and its employee shareholding scheme are all remunerative incentives.
Coercive power and remunerative power are quantifiable forms of power and are based on the black-or-white rules and authoritarian culture. Of course, a company cannot operate without rules or authority, but their effects are limited. They won’t create any sense of belonging among the members.
In an age when credibility is diminishing, loyalty is losing value, and idols are falling from grace, the commitment of Huawei’s employees is unique. Sure, many people have left, but they have been emotionally attached to this business organization, just as graduates often miss their old school. For two decades, the image of Ren Zhengfei, the “Boss,” has never wavered among the people of Huawei. This is another phenomenon.
One may wonder why? The answer lies in normative power and the power of mind. Ren Zhengfei advocates grayness, which encompasses tolerance, openness, and compromise, and, therefore, transcends the traditional black-or-white way of thinking. This philosophy has created lubrication, flexibility, and warmth in the cold business machine and at the same time satisfies human desire for material gains.
More importantly, Huawei’s leadership creates a set of totems at each stage of development that form spiritual banners that surpass anything at the material level, and these banners direct every member of the organ- ization. This has caused some of Huawei’s employees and their family, friends, and even clients to comment that Huawei employees are brain- washed by the company. “Brainwash” is not exactly right because the company is doing more than washing their brains; it has been trying to change their brains completely.
Every leader is solitary. So is Ren Zhengfei. Why? Leaders are all soli- tary thinkers. Milan Kundera once said, “Man thinks and God laughs.” But the problem is that in this secular world, God is too far away from us, so every organization, whether it is a nation, a company, a school, or a church, needs a leader who keeps thinking and provides direction.
In this sense, leaders are spiritual laborers, puritan travelers in the realm of thought. I have witnessed the journey of Ren Zhengfei in the world of business philosophy and how an idea is formed, reviewed, devel- oped, and systemized. I understand that this is a really tough journey that requires special resilience. Ren Zhengfei likes to describe this process
with the concept of cloud. He said, “It takes more than half a year for a cloud to turn into rain.” What he means is that after an idea is conceived, there is still a long way to go before it can be implemented. It has to turn from gray to white, blurry to clear, and relevant rules and mechanisms should be developed to guarantee its effective implementation.
The most solitary period in this process, however, is the formation of any cloud in the sky of thought. Most commonly, Ren Zhengfei may get some hints regarding Huawei’s management and development while reading a book or talking with someone. These hints then condense in his sky of thought and form spots that gradually link into lines after further reading or talks with different people. Ren would then speak about the same subject on various occasions; the lines begin to expand and he pro- ceeds to piece them together into patches. Afterwards, he presents these patches of thought at executive meetings in which they are discussed and debated until a consensus is reached. The final idea is then publicized in a speech or essay that then stir up ripples among Huawei’s employees, much as what happens when a stone is cast into a pond.
Generally speaking, it would take two years or more for Ren Zhengfei to form a cloud of thought, and another half-year for the company to turn the cloud into rain.
Dialectics and Metaphysics
In the Latin quarter of Paris on the left bank of the Seine River there are many cafés housed in classical buildings, and people would be attracted by the fragrance of coffee that permeates through the streets. They would walk into a café and spend a cozy afternoon with a cup of coffee and a book.
In such an elegant, quiet, and yet narrow environment, many great European philosophers have garnered inspiration, including Jean Paul Sartre, Albert Camus, and Alfred de Musset. Coffee has sparked many great ideas that have ultimately changed the course of human develop- ment. However, an article titled “Coffee: An Awkward Plant” published in Life Week reminds us of the other side of the coin:
It is less known, however, that coffee and cafés have gone through a bloody history. In the 16th century, the darkest age in human civilization, coffee was considered just as wicked as pagans. Conservative theologians in the Arabian Peninsula destroyed all coffee beans on the streets of Mecca, and
the prime minister of the Turkish Empire put a café owner into a bag and threw him into the Strait of Bosporus.
Times have changed. Perhaps this is a manifestation of dialectics. Beauty and ugliness, warmth and coldness, justice and evil, success and failure, and right and wrong may change into each other over time. Ren Zhengfei said:
Our faith in grayness and compromise is based on dialectics. With the aware- ness of grayness, we are able to see a wider prospect and stay on course. Our commitment to grayness and compromise does not mean we are weak; it means we are strong. We may have to plan our strategy over a span of 10 years or more, so it can hardly be absolutely clear; there will be revisions or even complete reversion over the course. Such adjustments within the stra- tegic framework would be natural and necessary as circumstances change. But the framework itself has to be broad and gray, so that we can get the direction right, or at the very least, we can avoid heading in the opposite direction.
We don’t pursue perfection. There is no perfect strategy or direction in this world. We cannot include everything in our strategy. We can succeed so long as we hold the key. There is no perfect man in the world, either. One changes with time and circumstances. It is not dialectical to consider a man as a saint, or as a devil. We still have to follow the principle of grayness. Ren Zhengfei encourages senior executives of the company to meet with industry captains of the world while enjoying a cup of coffee. The idea is that they should increase their contacts with the outside world in order to get more information and develop a longer and broader vision. He said:
You should not only care about things right in front of your eyes. Huawei will not allow either dogmatism or empiricism. If we follow a fixed course, or depend too much on our past experience, we would get lost midway. Similarly, if we rigidly follow a certain theory or dogma we will stumble and get hurt. There are many MBA graduates who cannot run any business. Why? Because they have learned nothing more than the dogma.
Meanwhile, Ren Zhengfei admitted, “I don’t mean metaphysics is evil. There are things that are definite and mechanical which we should not bend a bit.”
The Germans are the most serious-minded people in the world. Every cell of their brain is encoded with metaphysics and mechanical
materialism, which is manifested in their daily life. This is perhaps the reason why Germany has the most advanced and most competitive fine manufacturing sector in the world and has produced the most scientists, financiers, artists, and philosophers. Of course, Germany was also the most dreaded war machine in Europe at one point in history.
In contrast, the British people see farther into the future. They show foresight and a better understanding of grayness in balancing compromise against insistence.
It is sensible to borrow wisdom from the past and the outside world. Huawei has tried to make the best use of every accomplishment from human civilization, attempting to incorporate them into its own framework.
But the question is what should be viewed with grayness and what should remain strictly white or black? Over the past two decades, Huawei has developed its own answer. The company can see gray with its strategy and its people. There can be dialectics. Tactics can be gray to some extent, or they should be adjusted to suit circumstances. Yet the core values of customer centricity and dedication as the key to success must never waver. They are the metaphysical law, or the Bible, of Huawei’s 150,000 employees. Ren Zhengfei has led his colleagues to read the Huawei Bible every year, every month, and every day, and the message has been instilled into the veins of every Huawei person.
Meanwhile, people and business operations are treated differently at Huawei. While the people are viewed with grayness, business operations should be handled with exactness in the white-or-black manner. The pro- cesses of product development, sales, delivery, and after-sales must be implemented without fault in order to fulfill the commitment to customer centricity. The reason people should be viewed with a certain amount of grayness is that people are growing and changeable, and grayness is nec- essary to unleash their drive and creativity.
At Huawei’s research institute in India, each Indian engineer writes 2,000 lines of code every month, and every Chinese turns out about 20,000 lines. The Chinese employees seem to be 10 times more effi- cient, but the problem is that each line of code written by the Indian engineers is valid, while for the Chinese engineers only 200 of the 20,000 lines are valid. Apparently, this problem cannot be treated with grayness. Metaphysics, rather than dialectics, applies to scientific research.
This contrast has impressed Ren Zhengfei deeply. He said a nation with religious faith deserves our respect. They have quite a few merits,
such as integrity, which we should learn from them. He once recom- mended to senior executives and customers of Huawei an essay titled “Market Economy with Church and Market Economy without Church” by Professor Zhao Xiao. The senior executives of Huawei, however, are impressed even more by the heartfelt respect that Indian employees have for intellectual property. For many years, Huawei has suffered from theft of technologies by both its employees and external forces. This is a moral and legal issue, and Huawei must not be a bit gray about it. The white and the black should be clearly set apart.
Huawei has set up over 40 research institutes worldwide, and the largest institute of all is located in Bangalore, India.
Ren Zhengfei said:
The principles of openness, compromise, and grayness are mainly applicable to senior management. People at lower levels can be spared. This is because the decision-making process should be gray, so that the decision-makers can open their minds and learn to compromise. Therefore, they will be able to pool together as much wisdom as possible. People at the lower levels of the organization are mainly responsible for implementing decisions. They must be practical and quick-handed. In short, the decision-making process must be slow or they will make blunders, while implementation should be as quick and efficient as possible.
Commenting on Ren Zhengfei, a senior executive of Huawei said, “For 20 years our boss has seemed very transcendental, but it is amazing that from time to time he may step in and stir up the company. Of course, the organization is able to quickly regain balance. Huawei has developed a self-healing mechanism.”