Lei Jun's major surgery: millet internal transformation pushed after 80 play

Lei Jun's major surgery: millet internal transformation pushed after 80 play

It is noteworthy that the financial report shows that the average income per user of millet Internet service is 19.1 yuan, up 15.4% year-on-year, mainly from the mainland.

Sixty-five days after the launch, Lei Jun suddenly made a heavy decision to perform a thorough operation on the "brain" and "muscle" of millet.

Lei Jun has been thinking about the changes in the organizational structure for a long time. For a large Unicorn company with a revenue of more than 100 billion yuan, nearly 20,000 employees and a target of trillions of dollars, millet urgently needs to make forward-looking planning and layout in terms of development strategy, organizational management and talent echelon building.

Therefore, millet group announced the establishment of a new group staff and group organization department, and the original television, ecological chain, MIUI, mutual entertainment four major business divisions were scattered, subdivided, restructured into ten new business divisions. It was the first major adjustment since the millet went public and the biggest organizational change since the millet was founded. What is the deep logic of the biggest internal surgery in the history of millet?

In fact, since last year, millet's listing has been dominated by a variety of variables and suspenses. After the listing of millet, more transparent business performance and market performance has become the focus of attention.

From the first half of the performance, millet in revenue and net profit have maintained a rapid growth, the data is quite eye-catching.

But on the other hand, in the capital market, millet's IPO price is 17 yuan / share. Ten days after the listing, it rose 30% to reach the highest price of 21.9 yuan / share and then fell back. Recently, it has been hovering around the initial offer price. The stock price performance is not as expected. To a certain extent, millet, the "first crab" with the concept of "different rights in the same share", has also been brought about. The superstar company listed in Hong Kong is slightly embarrassed. It is generally believed that the reason why the market value of millet is not up to expectations is essentially the valuation logic of millet.

How can millet, which is undergoing a post-listing restructuring period, demonstrate its strength and potential for development and investment? How will millet break through the battle between the higher dimensions of the World Wisdom League and the world's giants and make progress from billions to trillions?

The biggest organizational change in the history of millet

On September 13, Lei Jun announced the latest organizational restructuring and personnel appointment of Millet Group in the form of an internal letter. It was the first major adjustment since the millet went public and the biggest organizational change since the millet was founded.

The greatest change in the millet group structure is that the new group staff and group organization departments have been set up to further strengthen the management function of the headquarters "brain". The two co-founders, senior vice-president Wang Chuan and Liu De, who were originally responsible for the millet television business and the ecological chain business respectively, served as the group chief of staff and the organizational department respectively. Long.

The group's staff will assist the CEO in formulating the group's development strategy and supervise the implementation of the strategy in various business departments. The group's organizational department will be responsible for the recruitment, promotion, training, assessment and incentives of middle and high-level management cadres, as well as the organizational construction and preparation and approval of various departments. Interestingly, millet became the third domestic giant to set up an organizational department after Huawei and Ali.

Another major change in millet is the reorganization of four business divisions, which were originally responsible for by Wang Chuan, Liu De, Hong Feng, Shangjin TV, Eco-chain, MIUI and Mutual Entertainment, into ten new business divisions, reorganizing the complex business structure and becoming more detailed.

At the same time, Lei Jun also promoted ten young faces as general managers of various business departments, a large number of young post-80s executives on this stage. According to reporters, the newly-appointed general managers of this group of departments are mainly post-80s, with an average age of 38.5 years, and their average working time in millet is close to six years.

"Six years compared to millet, which was founded only eight years ago, this means that these new recruits have both experienced millet's history of development, growth, combat history, but also have loyalty to millet, and the younger team is also in line with millet's temperament as an Internet company." Familiar with millet insiders told the times weekly reporter.

In conclusion, Lei Jun's series of deployments and adjustments are to strengthen the management functions of the headquarters, let the partners return to the group, and then hand over the front-line business positions to the young people.

In an internal email, Lei Jun said something profound: "No veterans, no inheritance. No new army, no future. " In fact, Lei Jun has always been the soul of millet, known as the "industry model." Although many co-founders, and in their respective fields "with great skills", but Li Wanqiang, Liu De, Wang Chuan, Hong Feng, these old ministers, in the past more roles are focused on specific lines of business, headquarters functions by Lei Junyi. People bear. A lot of times, Lei Jun feels like a "commander of the bare rod".

This is obviously not a particularly reasonable mechanism. Especially when millet has become a large Unicorn company with over 100 billion yuan in revenue, nearly 20,000 employees, and a trillion-dollar scale of sword and finger, millet is in urgent need of strategic planning, organizational management and talent echelon construction. Obviously, millet set up the organizational department and the Staff Department this time, is a change from the individual to the collective system.

Lei Jun not only fully affirmed the group veterans'combat contributions, but also understood that millet after listing must be more wolf-like young cadres to the front line, they are millet's high-speed growth engine. "If your brain is strong, you need to maintain sustained muscle strength."

According to Lei Jun, this time the adjustment of the organizational structure has been discussed since the end of last year and has been pondering for a long time. Without one step in place and once and for all adjustment, Lei Jun made it clear that millet will certainly continue to carry out a series of adjustment and Optimization in the next two years.

Everbright Securities analyst Fu Tianzi pointed out that with the expansion of the scale of enterprises, how to maintain entrepreneurial enthusiasm, operating efficiency to avoid the disadvantages of large companies, while ensuring that innovative capacity to create new growth points to ensure long-term development, is the common issue faced by the industry giants. Millet's organizational restructuring is the only way for technological giants to make progress. It will carry out profound top-down changes from strategic planning, management team to business execution. The future splitting effect is expected.

IOT and Internet become new growth engines

According to millet financial report, the revenue of smartphone business in the second quarter of millet was 30.5 billion yuan, an increase of 58.7%; the revenue of IoT and consumer products was 10.4 billion yuan, an increase of 104.3%; and the revenue of Internet services increased by 63.6% to 4 billion yuan, benefiting from the increase of advertising business.

Among the three businesses, IOT and Internet services are growing most rapidly, and have become the new engine of revenue growth. On the gross margin, smartphones had a gross margin of 6.7% in the second quarter, IOT and consumer goods of 9.4%, and Internet services had the highest gross margin, rising to 62.8% from 62.4% in the same period last year.

At the same time, the revenue structure of every business has been gradually optimized. In the first half of the year, smartphones accounted for 67.47%, IOT accounted for 22.69%, Internet accounted for 9.03%, compared with the annual report in 2017, the proportion of data decreased by 2.81 points, increased by 2.23 points and increased by 0.4 points.

By the second quarter of 2018, millet-connected Internet of Things devices, excluding mobile notebooks, had reached 115 million, up 15% from a year earlier, according to the financial results. The number of users with more than five IoT devices (excluding mobile phones and laptops) was nearly 1.7 million, up 19% from the previous year.

By the end of July, Xiao Ai, a millet AI smart platform, had lived nearly 30 million students a month, more than doubling the number of students in the first quarter compared with the same period a year ago, using it on mobile phones, refrigerators and other equipment. Xiao AI sound has been awakened for 2 billion 100 million times. It is the most popular smart speaker product in China.

The "magnitude" data that millet has grasped can not be underestimated. Zhao Xiaoguang, vice president of Tianfeng Securities and platinum analyst of New Wealth, pointed out that the precise data of users can be obtained through hardware, while BAT has not yet made complete or perfect hardware, in this respect millet has more advantages and potential. Millet precision data through hardware, there will be great room for realization in the future.

Industry data show that millet currently occupies 1.9% of the global IoT market, and Amazon has surpassed 1.2% of the world's second largest market share. Promoted by the overall development of the IoT industry, policy support and further unification of industry standards, China's consumer IoT market is expected to reach $31.8 billion by 2022.

It is worth mentioning that Huawei, Samsung, vivo, OPPO and other mobile phone giants have recently rushed into the IOT field, announced their future plans or new development strategies, the current mobile phone giant Internet of Things battle is becoming increasingly fierce.

In fact, as early as 2013, Lei Jun had foreseen the great potential of the Internet of Things and began to lay out IoT services in depth. The development logic of millet ecological chain is to take part in IoT enterprises by means of holding no shares and relying on its own brand advantage and supply chain advantage. The design capability, quality control capability and supply chain capability of "aircraft carrier" export company are also discussed. The Internet industry is supported by 206 million MIUI users and future Mijia intelligent hardware users. It is through its high gross profit to feed the low margin hardware business.

According to Chen Hang, chief analyst of Southwest Securities Electronics, the real target of millet is Amazon. Although there is still a big gap between the two, it is similar to the background that Amazon was born in the early Internet era. Millet was born in the early IoT era. As an explorer and aboriginal in the IoT era, the IoT business is the growth potential of millet. The core.

At the same time, Lei Jun said at the recent World Conference on Artificial Intelligence (WAIC 2018), millet has already made artificial intelligence the most important strategy. To become a leading international giant, millet chooses to break through the IoT, want to use "AI plus IoT", that is, the "AIot" successful foothold. In fact, two years ago, millet established AI as the core strategy. At present, there are nearly 1000 AI engineers in the team.

It is worth noting that the newly established ten business segments after millet restructuring are TV, Eco-chain, Laptop Computer, Intelligent Hardware, IOT Platform, Goods E-commerce, Internet One, Two, Three and Four.

According to Juan Ang, founder of Interview Investment, millet's software genes are getting stronger and stronger in the direction of structural adjustment. "Millet as an Internet company's model is becoming clearer and clearer, the strategy is focused on light assets and high margin business, which also points out the millet listed after the development of the main battlefield." The adjustment of the new architecture is conducive to accelerating the breakthrough of the IOT and Internet fronts and further catalyzing the release of performance.

It is worth mentioning that the R&D cost of Millet Group increased 93% from 707 million yuan in the same period last year to 1.364 billion yuan in the second quarter of this year. Millet said that it was mainly due to the expansion of Internet services and research and development of a number of new research projects.

Zhou received funding in an earlier performance interpretation conference, said millet has always stressed the importance of efficient research.

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