Source: Late Auto Author: Dou Yajuan

Two years after announcing the full learning of Huawei in 2022 and upgrading to Matrix Organization, Ideal is once again initiating such a drastic organizational transformation.

In April, Ideal Auto issued an internal staff announcement announcing the upgrade of the company's current matrix-type organization. This change mainly focuses on Ideal Auto's CEO office.

The CEO Office is an important achievement of the ideal comprehensive study of Huawei and implementation of the Matrix Organization. Although it's called an office, it's huge and has so many people. At one point, there were over 500 people.

It is a series of horizontal departments with founder Li Xiang at the center, including the Product Department, Commerce Department, Strategy Department, Supply Department, and Brand Department. The heads are Fan Haoyu, Liu Jie, Zhang Hui, Liao Zehua, and Liao Zehua.

After the adjustment, the CEO Office will be renamed the “Product and Strategy Group” and a “Product Line” department and a “Quality Operation” department will be established. The product line mainly focuses on successful product commercial decision-making and handling, and quality operations focus on improving process quality and execution efficiency.

In the past, Li wanted to manage too much; the products, supply, and business of the three horizontal departments all reported directly to him. After the adjustments, there are now only “products” left in the “production, supply and marketing” group surrounding Li Xiang.

The ideal focus was to reorganize the matrix department and merge the model PDT (Product Development Team) and the commercial PCT (Product Commercial Team) into a “product line”. The supply department and GTM (Go To Market, product launch trader) have returned to a vertical division, more like Huawei's “resource line.” The model product manager and commercial department are integrated, and the two teams work together to achieve the goal of “product commercial success”.

This organizational adjustment occurred after MEGA, the ideal first pure electric car, did not sell as much as expected, but the adjustment had little to do with MEGA.

MEGA's failure to meet sales expectations is essentially a misalignment between product positioning and sales targets. After MEGA, Ideal rediscussed the release pace of subsequent pure electric models; however, the L6, a new car that has taken on a heavy responsibility this year, will soon be launched. It is positioned in the Red Sea market. It is a breakthrough in ideal downward exploration, and pricing has become a problem.

In these new models, the ideal is not only to restrain one's desire for sales, but also to consider complex competition and an almost dangerous public opinion environment. These and organizational management are challenges on a different level. A good organization can guarantee that instructions are executed without errors, but they cannot guarantee that the instructions are correct.

The “Production, Supply and Marketing” group that revolves around Li Xiang only has products left

Over the past two years, on the basis of cross-departmental collaboration, Ideal CEO Office has gone through four major level processes: IPD (integrated product development), DSTE (from strategy to execution), IPMS (integrated product marketing and sales), and ISC (integrated supply chain).

In addition to the CEO office, ideally, there is also a CFO office built around CFO Li Tie, which is responsible for finance and manpower, and responds to the IFS (Integrated Financial Transformation) process.

Prior to this round of adjustments, the three major departments of the Product Department, Supply Department, and Commerce Department were used as “production, supply and marketing” groups within Ideal, representing the highest decision for ideal “production, supply and marketing.”

The heads of these three departments, Li Xiang, and CFO Li Tie formed a decision-making committee to meet and discuss every week to ensure information exchange, timely adjustments, and consistent goals.

Every “production, supply and marketing” horizontal department has a corresponding vertical department. Some have similar names, such as “supply” and “supply chain,” but have different responsibilities. The horizontal department is mainly responsible for decision-making, and the vertical department is mainly responsible for implementation.

It can be understood as, “The horizontal department sees the road, the vertical department drives, navigation is a seven-level process, and the destination is commercial success.”

Looking at these horizontal divisions, Fan Haoyu's product department has four major platforms, namely the L platform and M platform, and the two major technical solution platforms, the intelligent platform and the electric platform. Among them, the intelligent platform corresponds to intelligent driving (the person in charge is Lang Xianpeng) and intelligent space (Gou Xiaofei) under the product development group managed by Ma Donghui, and the electric platform corresponds to the electric vehicle (Liu Liguo).

Similarly, the horizontal supply department (Liao Zehua) corresponds to the supply chain under the production and research group (Meng Qingpeng). The horizontal supply department is responsible for planning supply strategies and conveying supply demand on the sales and product side; the vertical supply chain department is responsible for managing specific matters such as supplier prices and supply.

The commercial department managed by Liu Jie is responsible for business insight planning, building the company's business processes, and carrying out marketing plans and sales transactions for specific products. In summary, the Ministry of Commerce and the Product Department work together to ensure commercial success. The vertical department corresponding to the commercial team is Zou Liangjun's sales and service department. The commercial team is responsible for formulating the listing plan and sales strategy, and the sales team is responsible for execution.

Ideal is the only company among the three new car companies to fully learn from Huawei and establish a matrix organization.

In 2021, Ideal Product Division first introduced the Huawei IPD process to form a PDT (Product Development Team) around each model. The person in charge of the model is the PDT manager. They help Li Xiang manage every model project. Li Xiang's position for this role is: the person responsible for the commercial success of a product, similar to the CEO of every car.

At the end of 2022, the ideal is to fully learn from Huawei, establish a supply department and a commercial department, with departments corresponding to product PDT. In the commercial department, PCT (Product Commercial Team) is responsible for leading sales and marketing. In the supply department, PST (Product Supply Team) is responsible for opening up the supply chain.

Taking MEGA as an example, the ideal would be to use MEGA product leader Li Xinyang to form PDT. The team includes various product representatives, project representatives, R&D representatives, financial representatives, etc. Corresponding to PDT, the Department of Commerce will also establish a corresponding PCT, including retail representatives, delivery representatives, brand representatives, etc. The supply department will also set up a corresponding PST, including various supply chain representatives.

PDT, PCT, and PST are all dotted horizontal organizations, and the members that make up these three teams come from various physical business divisions of the company. They do not report directly to the team manager in terms of business, but their performance is assessed by PDT, PCT, and PST managers respectively.

This not only breaks down departmental walls, but also guarantees the power of team managers, avoids management chaos among team managers and department managers, and promotes the company's management and organizational change with the product line as the center of operation.

In this adjustment, the CEO Office officially changed its name to the “Product and Strategy Group” to focus more on products and strategies, weakening the supply chain and commercial sales functions.

The supply department no longer reports to Li Xiang. After adjustment, it was merged into the “Production and R&D Group” managed by CEO Ma Donghui, and renamed “Supply Operation.” Under Zou Liangjun, senior vice president of sales and service, Ideal Auto has set up a new GTM (Go to Market) team to collaborate on the implementation of new product launch plans and be responsible for market results.

Li wants to further decentralize power while focusing more on products. “The core reason is that Li Xiang wants to manage the most important products, and it is also because Huawei's GTM and supply are in their respective vertical divisions.” A person close to the ideal said.

After adjustment: Model PDT and commercial PCT merged into a product line

Under the “Product and Strategy Group”, Ideal has established a new “Product Line” department, which is headed by Liu Jie, the former vice president of Ideal Commerce. The model PDT (about 20 people), which was under the control of Fan Haoyu, left the original product department and formed a new “product line” with a commercial team other than GTM.

This means that the model PDT (product development team) and PCT (product commercial team) will work together in one department to be jointly responsible for “product commercial success.”

A person close to the ideal said that a matrix organization is characterized by the fact that no one person is responsible for everything. Responsibility in English has different meanings: responsibility and responsibility. Commitment is responsible for the outcome of this, and Responsibility is responsible for doing it.

The people mentioned above believe that PDT is a collaborative and collective decision-making mechanism that acts as a “railway police” and brings everyone (responsibility) responsible for doing this, so that they can work effectively together.

“Late Auto” learned that the new product line division has three model product lines, which are classified according to model size. Tang Jing, Zhang Xiao, and Li Xinyang are the presidents of the three product lines. Before the adjustment, the model would ideally be divided into two model platforms: pure electric and range-extended. Hou Yue and Li Xinyang were in charge, respectively.

The head of the new division “Product Line” is Liu Jie. He has joined Ideal since 2016 as the head of Ideal Sales Department. Prior to joining Ideal, Liu Jie was responsible for sales of high-end models in the Chinese market at BMW and had business dealings with Auto Home founded by Li Xiang.

Originally responsible for the Ideal Products Division was Vice President Fan Haoyu. He joined Ideal in June 2017 and is the ideal No. 551 employee. Prior to that, he worked as a product manager at Alibaba Cloud OS Internet Vehicle and was responsible for cockpit products in the Zebra project.

When Liu Jie and Fan Haoyu joined, the ideal was that early financing did not go smoothly and was not favored by the market because they chose the growth route. This is also reflected in recruitment, which is quite different from Li Bin's ability to finance the most money and recruit top talents. When Li wanted to recruit people early, he could only choose people who believed in his ideals, but they were not very strong people.

“Even if we pay the same amount of money, they choose to go to Huawei, Baidu, and Ali; they don't want to come to us.” Li wanted to say it.

Obviously, Fan Haoyu and Liu Jie were the minority that believed in ideals at the time. They left Ali, the “internet giant” of the year, and BMW, which could sell high-premium luxury cars, to join the ideals of a “new car builder” with an uncertain future.

Li Xiang also gave Fan Haoyu and Liu Jie a great deal of power and trust. The two were ideal two vice presidents, and after that, they didn't manage how the organization changed; the two were always within the core management circle.

At the beginning, the ideal number of people was small, and the organizational division was unclear. After joining, Liu Jie was the head of the sales team, including sales, products, and brands. Fan Haoyu manages the Intelligence and Systems Division, including software-related R&D such as smart cockpits, autonomous driving, and cloud computing.

When Fan Haoyu took over the software, ideal didn't invest much money into intelligence; surviving was the main theme at the time. In August 2020, Ideal found a more suitable candidate for the Management Intelligence and Systems Department—Wang Kai, who was Visteon's Global Chief Architect and Director of Advanced Driver Assistance Systems, and then began investing heavily to catch up with his peers.

In 2021, I want to learn from Huawei and split the company into two product and R&D lines. Fan Haoyu moved from R&D to product. He brought in more than 20 product managers from the Intelligence and Systems Department. In addition to Liu Jie's model planning team and Naga's design department, he formed an ideal early product department.

The product division has become an ideal testing ground for the introduction of Huawei IPD (Integrated Product Development). At the same time, Fan Haoyu continues to seek suitable product managers from within and outside the company to join.

In an ideal environment, management has no assistants, secretaries, or drivers; the product team is most often around Li Xiang.

Fan Haoyu and Li Xiang have been working together for 7 years. Ideally, various product decisions will be made frequently, from styling decisions to seat reviews. The two are inseparable. Some ideal employees think that Fan Haoyu is very confident and dared to make judgments. He blurted out all kinds of thinking frameworks, and acted like “Little Li Xiang.”

In April of last year, Fan Haoyu was upgraded from the previous rank of M10 to M11.

It took three years for Fan Haoyu to set up a large product department with nearly 300 people. Before the adjustment, the product division had four major PDTs, two model PDTs: L and M; two platform PDTs: intelligent and electric.

Fan Haoyu once said to “Late Auto”, “My product team has two types of people, one loves cars, and the other loves technology.” The former mostly comes from car companies and supply chains, while the latter comes from technology and internet companies.

Model PDT managers are often “car lovers” as described by Fan Haoyu, such as Hou Yue and Li Xinyang. Their favorite thing to do is buy out of print car models from around the world on second-hand websites and place hundreds of models on their desks.

Li Xiang's requirements for model PDT managers are extremely high. He must help Li Xiang manage a model product and be directly responsible for the commercial success of this product. In the large product division before the adjustment, there were only close to 20 people in the PDT model.

According to one person close to his ideal, Fan Haoyu is more like a “person who loves technology” in his mouth. The product department also has nearly 200 people who love technology. They are responsible for specific functions such as interaction, applications, AI, autonomous driving, and smart cockpits. They are often experts in the fields responsible.

These “car lovers” and “technology lovers” formed an ideal product team, brought expertise in their respective fields, thought collectively, and shared Li Xiang's own decision-making tasks on the product. Regarding MEGA, Fan Haoyu once said that decisions requiring Li Xiang to make personal decisions only account for 20%, and 80% of the product details are created by the team.

Vehicle PDT and platform PDT have many collaborations and frictions in everyday work. Taking MEGA as an example, Fan Haoyu once told “Delayed Auto” that if MEGA's range is to be determined, the electric platform PDT and the model PDT are interlocked. Electric platform PDT involves various models. It is necessary to consider reducing the cost of the platform, while also satisfying the “commercial success of the product” of a single model. There is usually a lot of controversy between the platform PDT and the model PDT until the optimal balance is found.

The product team split in two, leaving the model PDT independent, leaving only the platform PDT. Fan Haoyu's work will focus more on the R&D and design of software systems and electric platforms, and the focus will return to the old business.

At the end of 2022, the ideal was switched to a matrix organization and a horizontal department was established. Liu Jie became the head of the commercial department. Some positions in the Ministry of Commerce and the Product Department are also handled one by one. The planning team of the product department plans the product, and the planning team of the Ministry of Commerce plans the commercial road signs for the company; the product department has model PDT, and the PDT manager is responsible for the commercial success of the product; the commercial department has a corresponding PCT, and the PCT manager is also responsible for the commercial success of the product.

A “product line” is a merger of two teams with the same goals and close cooperation between the model product manager and the original model commercial team. The product line is responsible for commercial success. The task is arduous, and it can be said that it is a burden. “Liu Jie is the original commercial manager, and it is also suitable for him to manage the product line.” A person close to the ideal said.

After adjustment: GTM and the Ministry of Supply return to vertical departments, more like Huawei's “resource line”

Under the previous structure, Li Xiang was the only CEO of the three new forces whose “production, supply and marketing” all reported to him.

The departments reporting directly to NIO CEO Li Bin himself include industrial research, autonomous driving, and new businesses (new brand Ledao and mobile phones). The sales and supply chain are managed by co-founder Qin Lihong and Executive Vice President Shen Feng, respectively.

Xiaopeng Motor CEO He Xiaopeng has the most management departments, with 9 departments including autonomous driving, supply chain, and modeling, but the model planning and sales team are all directly managed by President Wang Fengying.

In this adjustment, the supply department no longer reported to Li Xiang. After the adjustment, it was merged into the “Production and R&D Group” managed by CEO Ma Donghui, and changed its name to “Supply Operation.”

Under Zou Liangjun, senior vice president of sales and service, Ideal Auto has set up a new GTM (Go to Market) team to collaborate on the implementation of new product launch and trading plans. GTM was originally a small team under the commercial department. It was responsible for product trading after the model entered the market. It needed to capture market information from the sales side at all times, which was strongly related to sales.

After the adjustment, GTM, which was originally placed in the horizontal organization, was integrated with supply and respective vertical departments, making communication more convenient.

Zou Liangjun worked at Huawei for 20 years and was the head of Huawei's Italian terminal company. Since 2018, he has been responsible for the overseas sales and service of Honor brands, and is proficient in marketing and IPD processes.

A person close to ideal commented on Zou Liangjun: “At Huawei, he is Yu Chengdong's strongest general. He has fought tough battles, is also responsible for honoring global brands, and has an international perspective. The management level is very high, leading the company forward on a big strategy.”

Shen Yanan, co-founder and president of Ideal, was responsible for the supply chain, manufacturing, and sales before leaving. In 2022, Li Xiang was looking for someone to replace him, but it didn't work. After Shen Yanan left, Li Xiang temporarily managed the commercial team (including sales, service, and charging networks). After Zou Liangjun joined, Li Xiang handed over the commercial team.

After this adjustment, Zou Liangjun from the “Huawei family” will further take over the desired sales system. The newly established GTM is responsible for collaborating on the implementation of new product launch trading plans and is responsible for market results. GTM is responsible for individual product strategy adjustments across the country, and is responsible for specific matters such as product fine-tuning, pricing strategies, formulating promotion methods, and finding target customer groups.

Take Huawei's BU (Business Unit) as an example. Under the CEO are functional departments such as HR, Quality Operations, Audit, and Cybersecurity. Vertical departments include R&D, sales and service, marketing, and supply chain. These departments form Huawei's resource line, and each vertical department has professional process management.

The horizontal division of Huawei is a “product line”. A product line refers to a group of products with similar positioning, with similar prices and similar target groups.

Taking the Huawei mobile phone business as an example, the Huawei terminal BG has multiple mobile phone product lines such as Mate, P, Nova, and Enjoy. Prices range from high to low, covering most mobile phone consumers, and each series has its own product line president.

“At Huawei, once the division is upgraded to a product line, it means that the business market is huge, and Huawei will invest more resources. At the same time, product line presidents must guarantee business profits.” A person close to Huawei said.

In Huawei's smart car solution BU (hereinafter referred to as “car BU”), only the intelligent driving department was upgraded to a product line. First, because Huawei has invested thousands of people, the product line operation is necessary; second, Yu Chengdong plans to make car BU profitable this year, and Smart Driving, as the department with the biggest investment, will also be profitable.

There is a similarity between Huawei and Ideal when the IPD process was fully implemented. Both companies already had experience in developing successful products. At the time, Huawei had 9 product lines, and Ideal also planned ten cars on two platforms. The team reached more than 10,000 people, and the company faced the challenge of managing multiple projects in parallel.

Huawei's introduction of IPD is a long-term, gradual process. In 1999, Huawei began introducing the IPD process. During this period, Ren Zhengfei proposed cutting back and forth. In 2002, all Huawei product line development was carried out in accordance with the IPD process. Over the next 8 years, Huawei continued to optimize and solidify the IPD process. After 2011, Huawei expanded from communications business to consumer business and enterprise business. For these new businesses, Huawei also spent a lot of money on scenario-based process construction and optimization.

Over the past 20 years, Huawei's IPD R&D system process optimization has never stopped. By 2018, the IPD process had been updated from version 1.0 to version 8.1, costing more than a billion dollars.

After 20 years of hard work, Huawei has made IPD a vibrant management system. This has supported Huawei's rapid growth into a giant in the fields of mobile phones, cloud, chips, digital energy, and smart car solutions in addition to the communications field.

In order to enter the automotive industry, we sell more solutions. Huawei Terminal BG established the Smart Car Selection Business Division to cooperate with various car companies to help car companies define products and sales, and connect the technology provided by BU on the bus. Last year, the Smart Choice car that Huawei and Cyrus collaborated on went viral on the M7, which sold 170,000 cars in 9 months.

“Smart Car requires deep cooperation with the four car companies, but the Smart Car Department only has a few hundred people. Just cooperating with Cyrus, a car company is no less difficult than ideal management.” A person close to Huawei said. As a comparison, Ideal sold 376,000 cars last year, and the number of employees exceeded 30,000.

Although the Smart Car Team is small, it can use the R&D capabilities of several thousand people from Car BU through the Solution Department under Car BU; it can also utilize the marketing, brand, and channel management capabilities that Terminal BG has accumulated over ten years in the mobile phone industry.

Behind Huawei's seemingly “invincible,” it is inseparable from the huge matrix organization and processes established by Huawei. At the same time, this operating model is also expensive. It requires appropriate product line leaders to manage across fields and make products like an operating company; it requires Huawei's 20-year talent fleet construction, efficient support from functional departments, and a competitive talent incentive system.

IPD has been successfully verified by Huawei. It adapts to a product system with a long industrial chain that requires constant iteration. However, the IPD process does not guarantee the success of the product. IPD is a systematic project that can standardize processes and avoid risks. Help the company not step into the organizational process, but the organizational process is only one part of the company.

This year is the 9th year of the ideal establishment and the 4th year of studying at Huawei. It is still a long way from actually becoming a matrix organization.

edit/lambor