Lenovo Group Ltd. (HKSE: 0992) (LNVGY)

[revlis]

Changing Corporate Culture Is Hard. Here’s How Lenovo Did It.

This is what corporate culture change looks like: a chief executive camped out in the lobby of headquarters, wearing a “Hello, my name is…” sticker and shaking hands with employees as they walk through the door.

That’s what Yang Yuanqing, the head of personal-computer maker Lenovo Group Ltd.0992.HK -1.02%, did in 1999, according to a new book by two Lenovo executives detailing the Beijing-based company’s transformation from a quintessentially Chinese firm into a global giant with operations in 60 countries.

Previously, employees were used to calling their boss “Chief Executive Officer Yang,” or Yang Zong in Mandarin, a common practice in the formal, hierarchical style of many Chinese companies. But YY, as he is now known within the company, believed such rigid traditions would inhibit Lenovo’s evolution from a Chinese to a global firm.

But just telling employees to change their habit wasn’t enough.

For more than a week, Mr. Yang and his senior leadership team greeted employees in the lobby, shaking hands and introducing themselves with their given names, not their titles. Still, afraid of sounding disrespectful or bad-mannered, many employees mumbled the new greetings or avoided addressing supervisors by name, said Gina Qiao, the company’s senior vice president of global human resources. To move the process along, leaders jokingly threatened to fine workers who clung to the old convention, she added. Eventually, it took.

As more Chinese companies prepare themselves for a broader global presence – e-commerce giant Alibaba Group Holding Ltd. is likely to hold an initial public offering in September – they will face the same challenges Lenovo did: integrating the Eastern culture in which they emerged with the Western values of many of their customers and a growing portion of their employees.


Yang Yuanqing — but you can call him YY. Agence France-Presse/Getty Images
Getting Lenovo workers do act less formally was “a hard sell,” write Qiao and Yolanda Conyers, chief diversity officer, authors of the new book “The Lenovo Way: Managing a Diverse Global Company for Optimal Performance.”

Eventually the “exhausting process… did the trick.” The egalitarian approach helped position the company for later acquisitions and partnerships with overseas firms.

As the authors note, altering corporate culture is a slow, uneven process, driven in many cases by small changes. For Lenovo, that meant offering tea as well as coffee at meetings in the firm’s U.S. facilities to satisfy Chinese managers’ expectations and making employees more aware of subtle communication issues such as Westerners’ habit of jumping into conversations versus the Chinese tendency to wait one’s turn to speak.

The company created a two-day cross-cultural training course called East Meets West for senior leaders and employees working in corporate functions like HR, strategy and research and development. As Lenovo expanded further, it changed the class’s name to Managing Across Cultures. A few thousand of its 54,000 employees have taken the training.

Today, thanks largely to its 2005 acquisition of International Business Machines Corp.’s personal-computer business, Lenovo is the no. 1 seller of PCs in the world by shipments, with a stock price that has nearly doubled in the last two years on the Hong Kong stock exchange, to $11.82 HKD.

The firm’s work is not over. Lenovo is trying to keep up with consumers’ migration to mobile devices, and earlier this year agreed to acquire Google Inc.’s Motorola Mobility smartphone business. It is also in the process of buying IBM’s low-end server unit, and last year purchased a consumer-electronics business in Brazil.

“With each new acquisition,” the authors write, “the integration process begins again.”

http://blogs.wsj.com/atwork/2014/08/25/changing-corporate-culture-is-hard-heres-how-lenovo-did-it/