Summary of Key Points
Geely began its journey towards de-familialization around 1999, stemming from a crisis caused by a misdecision by a family member. Over the past 24 years, Li Shufu has experienced two failures in bringing in external professional managers (Bai Yang and Xu Gang) to reform the company. Instead, he focused on nurturing internal managers such as Yang Jian, An Conghui, and Gan Jiayue, gradually establishing a systematic management structure. In 2024, Li Shufu stepped down as the chairman of Geely Automobile, handing over the reins to An Conghui and Gan Jiayue, marking the transition from a "founder-driven" to a "system and team-driven" model. The core task of the new leadership team is to integrate multiple brands, improve operational efficiency under the "One Geely" brand, and address the issue of a weak mid-range product portfolio.
I. The Starting Point of De-Familialization: A Family Crisis That Spurred Change
In 2002, Li Shufu's brother, who was then the vice president of Geely, made a decision without following company regulations, resulting in a loss of hundreds of millions of yuan and nearly causing the company's collapse. This incident made Li Shufu realize that while a family can help a small business start quickly, family management can undermine established systems and pose risks as the company grows. Consequently, he began to entrust management to professional managers, marking the first step in Geely's transformation from a family-owned workshop to a modern enterprise.
II. Early Attempts at Professional Manager Reforms: Two Failed Initiatives
Li Shufu initially tried to bring in experienced managers from outside, but both attempts failed:
1. Bai Yang's ERP Reform: Incompatible with Local Practices
In 2002, Bai Yang, with foreign management experience, was hired as the CEO to implement an ERP system for unified process management. However, Geely had just merged brands such as Haoying and Meiri, and departmental powers were not yet aligned. Employees were accustomed to working based on experience, leading to higher production costs than market prices. Bai Yang left the company within a year.
2. Xu Gang's Hua Pu Experiment: Conflicting Priorities
Xu Gang, with a background in finance and taxation, helped Geely with equity restructuring and fundraising for listing. His focus on the mid-to-high-end Hua Pu brand (comparable to Audi) clashed with Geely's own expansion strategy towards higher-priced products. Xu Gang was eventually removed from his position.
Lesson Learned: External managers who do not understand Geely's unique cultural and operational context find it difficult to implement radical reforms or align their strategies with the company's goals.
III. Turning to Internal Talent Development
After the two failures, Geely decided to cultivate its own capable successors:
- Yang Jian: From a Small Salary to a Key Leader
Joining Geely in 1996 as a small factory owner, Yang Jian worked in various roles over a decade, eventually becoming a key contributor to the company's success. During the financial crisis in 2008, he adjusted dealer incentives, resulting in a 217% increase in profits.
- An Conghui: From Auditor to Founder of Jikr
After graduating, An Conghui was tasked with building factories and later managed the Emgrand EC7 (with sales exceeding 90,000 units) and the Lynk & Co brand. In 2021, she founded Jikr, becoming a core member of the team.
- Gan Jiayue: A Post-80s CEO with Financial Background
Rising from a subsidiary's finance manager to the group's procurement head, Gan Jiayue reduced the number of products by 20% while increasing profits by 46% in 2020.
Logic: Internal employees understand Geely's culture and business better, allowing them to integrate experience with established systems more effectively.
IV. The Division of Powers: Founders Handle Risky Decisions, Managers Execute Operations
Li Shufu did not completely relinquish control; instead, he shared responsibilities with professional managers:
- Founders Make Risky Decisions
For example, investing in automatic transmissions (with a 20% success rate and costing 100 million yuan) or acquiring Volvo (for an amount equivalent to Geely's annual revenue) were decisions that managers were hesitant to make, but they became key drivers of Geely's competitiveness.
- Managers Manage Daily Operations
Decisions on product launch timelines and supply chain integration are made collectively through the Management Committee, with Li Shufu retaining the veto power but rarely using it.
Balance: Founders set the direction, while managers ensure implementation, balancing the need for strategic vision with the need for efficient operations.
V. The New Team's Challenge: How to Improve Efficiency under the "One Geely" Model
In 2022, Li Shufu promoted the "One Geely" initiative, integrating brands like Jikr and Lynk & Co into the listed company. The new team faces three main challenges:
1. Strengthening the Mid-Range Portfolio
While Jikr (high-end) and Xingyuan (low-end) are successful, there is a lack of mid-range models with strong sales potential.
2. Reducing Costs through Integration
Geely has already implemented centralized procurement and shared research and development, but further efforts are needed to eliminate redundant products and improve supply chain efficiency.
3. Linking Incentives to Performance
Gan Jiayue's compensation is tied to sales and market share, motivating the team to maximize the integration's benefits.
Goal: The goal is for "One Geely" to achieve more than the sum of its individual brands, truly enhancing efficiency.
Conclusion
Geely's 24-year journey towards de-familialization represents the transformation of a private enterprise from a family-owned business to one governed by rules and systems. From a family crisis to the trial of external managers, to the development of an internal core team, Geely has established a system-driven approach. Whether the new leadership team can meet the challenge of improving efficiency will determine Geely's competitiveness in the new energy era. This story is not only Geely's but also a common path for many Chinese private companies growing in a similar context.