602. Decentralization
This group of expert consultants specially invited for a lot of money is quite real, but Li Yifan's first thought after hearing his father say their opinions.
At present, most companies in the world start with a family when they start their business, and when they grow to a certain level, they will face various problems.
Especially after this family business expands rapidly and enters multiple different business fields, it will encounter many problems. After all, not everyone is a business genius. When the owner's business develops and grows to a certain level, it often faces many new problems and impacts brought by new fields. How to deal with such problems well becomes a difficult problem.
In the early stages of family-style enterprises, most of them are based on a pyramid-shaped structure, which is the so-called centralized model, with parents as the leader, and then allocate the backbone of the family to family industries in different fields and industries for management. However, when the business grows bigger and bigger, it often faces limited personal abilities and vision, which limits the development of the enterprise.
And on the other hand, such pyramid-shaped management often causes too much mountain doctrine within the enterprise. After the leader decentralizes power, the small leader will continue to cultivate his confidants and manage the business he manages. This will lead to excessive redundant staff and too many management classes, resulting in reduced efficiency of the enterprise, chaos in management, and even internal strife.
Most of these seem to be isolated incidents, but when isolated incidents of all sizes are linked together, they often have a fatal impact on a family business.
This is also the main reason why so many large consortiums in the United States later adopted the shareholding system. Through the changes of shares, fresh external blood is constantly novel and fresh to the family to participate in the operation, thus maintaining the vitality of joining the group.
However, the model in the Celestial Empire is not necessarily suitable, especially for a family business like Li Yifan’s family that has just been established and is in a booming period.
What's more, even though their family business has developed to this point, their family business has faced various situations of insufficient talents. They are even more urgently needed to find a suitable way to change this situation.
The Li family is involved in too many industries. They now have a Zhengyang hotel, a hot spring ski resort built in Lianhua Township, a blueberry planting base, a Phoenix Winery, a Shuguang Construction Company, a dairy factory, a printing factory, a maternal and infant chain store, and a breeding base in Luoniu Town, a seafood breeding base in Yingcheng, a newly opened hot pot chain, and a ranch in Canada. In total, they have already been involved in more than a dozen industries.
When we look at it, these industries seem to be messy. Although the operating conditions of these companies now seem to be pretty good, once the domestic economic development encounters problems, these industries will encounter problems.
So now the most appropriate time is to integrate the resources of these enterprises and form a more modern management model.
The so-called flat management proposed by those Belgian expert consultants is the most suitable choice for this family business at present.
The so-called flat management is actually to squeeze the pyramid-shaped structure of a family business as much as possible, and to put it bluntly, to decentralize the power as much as possible, divide different industries into one department for management, and then these managers report directly to the leaders at the top of the pyramid.
Reduce the intermediate links as much as possible and reduce administrative management costs. This management model is actually the favorite management model of modern large multinational enterprises.
This management model emerged in the United States, and it can even be said to be in the hands of a legendary operator, and this legendary operator is Jack Welch of the revived General Electric!
When Jack Welch accepted General Electric in 1981, General Electric was in a trough. Outside, they were constantly facing the encirclement of the younger generations of emerging electronic manufacturing industries in Japan, constantly losing their territory. In the internal management chaos, the old leadership style blocked the rise. Many employees felt that they were not allowed to leave when General Electric had no choice.
It was in such a dilemma that Jack Welch carried out drastic reforms to General Electric's management model. On the one hand, he integrated the company's internal resources, and on the other hand, he vigorously laid off some useless middle-level managers to reduce administrative costs as much as possible.
It also enables multiple departments within the company to communicate smoothly and reduce unnecessary losses. At the same time, it also vigorously cultivates young people, breaking the company's inherent family-style talent training model as much as possible, boldly activates new people, and opens up channels for young people to advance.
It was under such a management model that General Electric, under his leadership, has rapidly recovered, and in 20 years, it has changed from a company with an asset scale of only US$13 billion to a behemoth with a market value of US$480 billion, becoming the most profitable among listed companies in the United States and the second largest in the world.
He himself retreated from the position of General Electric in 2001 with the legend, the most respected CEO, and the world's number one CEO.
Although this business master is still built on earth, his experience has been regarded as a genius by many people, and the flat management model he promoted has become the best business model advocated by many scholars of economic management.
At this time, introducing such a management model in a family business is definitely a very good way for Li Yifan, who has always wanted to make his family industry bigger and stronger.
If you want to build high-rise buildings, you must lay a solid foundation. If you want to make the company bigger and stronger, you must have very good rules and regulations.
Li Yifan roughly explained the so-called flat management model to Li Liqiang. After hearing this, Li Liqiang nodded frequently, especially after hearing from Li Yifan that this management model is the most advanced management model in the world at present, he suddenly felt an eye-opening feeling.
"Dad, our family's industries are currently quite large, but at first glance, they seem very complex. We have carefully managed many industries without flaws. For example, how long has it been since you visited the cattle farm in Naluo Niu Town?"
After Li Yifan said this, Li Liqiang turned red with a rare old face. Now that he has grown his business, he really doesn’t like such an industry.
In addition, because the scale of the cattle farm has never been very large, he even felt that there was a little idea of not spending too much effort to manage it.
"Dad, all of our industries are in a period of rapid growth. That's because we have caught up with a good time. To put it bluntly, the domestic consumer market is in a period of rapid expansion, but the market is expanding at a limit, and there will always be some competitors. What should we do if our upward momentum stagnates? At that time, these originally good industries will become tasteless and a pity to abandon. Therefore, if we want our industries to survive for a long time, we must work hard on management now, set good rules and regulations, and keep the company healthy. We can't care about it ourselves, so please ask experts and people who understand the industry to come and help manage it."
After hearing Li Yifan's words, Li Liqiang couldn't help but hesitate a little.
"But if you really hire an outsider, you know the character of our Chinese people. After all, you are still worried!"
"Haha, what's wrong with you? You have a high salary and a good job, sign the contract in black and white, and then send a few supervisors, mainly to grasp the financial power, and then they can still make waves?"
Li Yifan sneered and said, "It is indeed in charge of a company. After all, it is not in charge of a country. There is no need to worry too much about personnel appointments and removals. He is very open-minded in this regard and can definitely delegate power."
As long as you have the ability, you can go on it. Even if you like to install some confidants, it is fine. However, as long as you firmly grasp the financial power, you can absolutely control the company.
What is the situation in China now and in the future? There is nothing short of people!
After thinking about it, Li Liqiang felt that what his son said was the same. As long as he grasped the financial power, what else should he be afraid of?
"Dad, although our family has many industries, in my opinion, it is actually just a few major projects, such as Zhengyang Hotel and Fucheng Feibu Hotpot Chain. These can be classified as a catering department, while the hot spring resort can be classified as a tourism department, wineries and milk powder factories can be classified as a production department, and the blueberry breeding base and Yingcheng seafood breeding base can be classified as a breeding department. In this way, several parts will be separated and there will be no management.
Chapter completed!