Global Leadership Business Essay

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Due to the fierce competitive business circumstance in the global market, international expansion has become the mainstream for assisting the growth of economy. Based on this situation, we choose these two successful leaders in the IT domain. One is Michael Dell from the USA and the other is Mr. Chuanzhi Liu, the creator of Lenovo.

Mr. Dell is insisting on pursuing his personal dream to build his IT Kingdom until its success. Compared with Mr. Dell, the growth environment of Mr. Liu is more complex, his Lenovo Corp. s founding is based on the special period of time of the reform and opening-up in China. Therefore, this report has strongly focused on investigate their different cultural influences and, whether they have had influence on their respective leadership styles.

Michael Dell

Michael Dell is an American born entrepreneur, founder and CEO of Dell Computer. He is one of the richest people in the word with a gross worth of over $12.3 billion according to the Forbes.1 He was born in 1965 in Austin, Texas where he still lives with his wife and four children. In 1992, he became the youngest CEO to head a Fortune 500 company at the age of only 27 years old.

Michael Dell is most famous for starting Dell Computer Corporation while a college student. This was the first computer company to offer a direct-to-consumer method of selling a computer. Rather than buy a pre-packaged computer at a store, customers could order a custom made product directly from the factory. This eliminated the middle-man and allowed for a greater profit margin for the company. In 1983, he began selling built-to-order computers out of his dorm room. He was a very optimistic student eager beat IBM, the main producer of the time. His little venture became rather successful. The next year, against the wishes of his parents and with only $1000 of start-up capital invested, he dropped out of school and began running the business full time2. The rest, as we say, is history.

Unlike many of the rags to riches stories that permeate the fairy tales of the American Dream, Dell was raised to be a success in life. From a sociological prospective, Dell was born reasonably privileged and had all the tools needed to plant the seeds of success. His father was an orthodontist, his grandfather was a doctor, and his was mother a stock-broker. Growing up, his parents were supportive of his interests and encouraged his studies. In addition, his mother, a successful business woman herself, frequently discussed market influences at home.3 From an early age, Dell had demonstrated skills in math and science and was expected to become a doctor. He went into the University of Texas, Austin to study biology. Having this encouragement as a child does not, of course, guarantee one s success in life. However, his supportive background, combined with his own personality traits lead him to where he is today.

There are many stories about Dell and his own personal factors that contributed to his success. Most of these stories talk of his taking initiative to start businesses early in life. One commonly told story when he was a teenager he had a job selling newspaper subscriptions. In the process of selling the papers, he noticed that the main people who bought the papers were newlyweds and people just moving to the area. Rather than just randomly canvas a sales area, he took this information and hired some friends to research the public records of marriage and real estate information. This gave him a targeted list of potential customers and he was able to sell a large number of subscriptions, eventually earning more money than someone working full time3 He was able to succeed through initiative, combined with his ability to influence people to support his vision. Later on, while in college, he continued this proactive approach to money-making by starting the company in his dorm room and not just waiting until he was out of school or when his parents said he should. He has a very strong internal Locus of Control which identifies and seizes opportunities when they arise.

Liu ChuanZhi

Liu Chuanzhi was born at a rich family in 1944 in Jiangsu province. His father had worked as the first generation of executives for the Bank of China before 1949. With the effect by his father, Liu became one of the best students in his high school. In 1961, he entered the Xian Military Communication Engineering College. It is very difficult to enter the university to study at that period in China. During his time in university, Liu s teachers all experienced the war time, their stories affected Liu Chuanzhi a lot. He had many of the army spirits from that time. After he graduated in 1966, he became a researcher at the Chinese Academy of Science. When Liu prepared to jump into his job with full passion, the Cultural Revolution broke out. During that time, the school and university closed, people all stopped working. Liu Chuanzhi was forced to be a laborer and sent to a state-owned rice farm from 1968 to 1970. After that, Liu went back to the Academy as an engineer-administrator in 1970 when it reopened.i But under the background in China that time, the development of China almost stopped in 1970s; people just struggled with each other. Liu was not able to do science research. When the reform ended, Liu was 35 years old, he had already lost his youth, and his best time had been wasted.

Time changed when Deng Xiaoping started an economic reform in the 1980s. China had more flexible poliies to make money and do business. Liu Chuanzhi had worked in the Chinese Academy of Sciences for over 13 years by that time. He felt bored because he had great ambition, he had passion and he wanted to do something great, but he never had the opportunity to do so. Now, he saw a big chance, maybe the last chance to make his dream come true, so he decided to change to build his own business. Then, Liu loaned from the academy for 200,000 Yuan and 10 staff, founded a company---Lenovo in 1984, that year he was 40 years old.

Based on the situation at that time, Liu Chuanzhi decideed to develop technology and trade as the company strategy. The company developed a device for Chinese character input on the computer in 1985, and then they finished a character recognition device which allowed people to input their language by handwriting 4 them on a pad in 1990. In addition to this, Lenovo grew not only by developing PC, but also by acting as an agent for foreign computer companies like IBM & HP from the end of the 1980s. ii The high-tech product promoted the influence and brand of the company. The trade helped Liu and his company obtain enough money and understand the marketing better. Liu Chuanzhi s company became one of the most effective IT companies in China in the early 1990s.

But In 1994, the Lenovo didn t achieved their planned selling target first time because of the strong competitors ------ foreign PC companies like IBM, HP and Compaq. The main reason was that Chinese government decided to decrease the tariffs and opened the market for the foreign computer companies. These foreign companies have strong advantages5 on the aspects of technical, funding and management. The PC market share for Lenovo dropped to 6% that time.iii Facing this difficult situation, Liu analysis and made new company strategy. First, strengthen the product localization to suit Chinese customer better. Second, set up an excellent supply chain called golden supply chain to reduce the product cost. In the same time, Liu Chuanzhi re-designed the company organization, delegated a young person, Yang Yuanqing, who had been coached by Liu as the general manager of PC business division. By these actions, after 2 years, Lenovo had surpassed IBM and other companies and became the first position for market share in computer sales in China.

After enter to the new century, Liu Chuanzhi lead his company into the global market competition. He faced more challenge and opportunity. In the end of 2004, he purchased the PC division from IBM. This news shocked the world, and this is a?historic timing for the Chinese company, Liu Chuanzhi became a hero in China.

In 2004, Liu left his job to Yang Yuanqing and quit from the chairman of Lenovo group, focus on the investment business. But the company didn t go very well after he left, they encountered deficit for the first time in 2008. So Liu Chuanzhi decided to return to Lenovo group, leading his company again to get rid of the crisis. Based on the new environment of global market, he adjusted the strategy for company. During 2009 and 2010, the company made profit again and transformed into a successful business.iv

Liu Chuanzhi has a great ambition and strong self-confidence. He started his enterprise at 40 years old, this is quite rare even around the world. Also, he has great vision, he can set up and adjust the strategy effectively when the company facing crisis. He can always understand the market and situation clearly and do the right things. On the other hand, Liu has great ability to inspire and coach the talents. He let young talent join the management earlier, therefore these young men can understand the management and themselves more. Liu doesn t just order them what to do, but also coach what they should think and leave the rights to themselves. After Liu s coaching, these young men like Yang Yuanqing and Guo Wei, grew vey fast and operated the company very well.

What made them who they are

Michael Dell

Personality Highlights

Locus of control

Risk Taking

Emotional Stability

Openness to Experience







Terminal value----Happiness

* Individual Happiness

Happiness, do things what you really like. This is Michael Dell's definition of success, and also is his terminal value. Reviewing his legendary history, Mr. Dell was always driven by what he wanted to do, not what he had to do. A lot of people conform to the routine which their family or surrounding society think they should follow, and then go through life unhappy, no matter if others think they are successful or not.

* Family Happiness

He not only cares about his own happiness but also cares about his family's concern. When he decided to quit from college and put up his own business. He didn't just insist on his own way when others strongly opposed. Instead, he smartly gave an eclectic proposal that was to provide a satisfying sales figure to prove he could continue his business, by which he obtained the support from his parents.

* Universal Happiness

When he tried to boost the development of the company, he believed that the enterprise's commitment was not just to make profit to satisfy the shareholders, but more importantly, was to benefit peoples lives. Around this happiness principle, Mr. Dell, his company, and all his life, positively influenced all human beings in this world.

Instrumental Value----Responsibility, Broad-minded, Courageous

He tried to keep a good balance between work and life with full responsibilities for both business and family. When he gained the fortune and became one of the richest people on the earth, he did not retire just to enjoy the rest of his life with his huge fortune. Instead, he and his wife set up a charity fund, focusing on children and women charity activities.

He encourages other people s idea, never afraid of making changes. While Dell Inc. met crisis during 2006-2007, he came back to the company, reclaimed the CEO position, and confronted the problem courageously with all staff. He hired highly efficient professionals, listened to their ideas, and made changes on the strategy following market situations.

Culture Influence

Michael Dell s personal traits and values, which are main factors to his success, are greatly influenced by western culture and American culture. In western culture, people uphold the spirit of innovation, encourage independent thinking and respect individuality. These cultural elements greatly mixed into Michael Dell s blood, and mold him into a courageous and innovative person, who always dares to try new things and start his own business when he was still in teenager age.

On the other hand, the advanced development of commercialization in western society also contributed to Dells flexible thinking and market sensitivity, which enabled him to capture business opportunities and figure out the most efficient strategy for earning profit. As Mr. Dell was deciting to quit school, he implied that education is important for a person, however, it is more important for a person to grasping the good chances. (Dell, College Can Wait, 2003)

Market Opportunity

There is an old Chinese saying The situation made the hero (ʱ Ӣ ). In terms of this sense, Michael Dell is definitely a hero made by the coming-up of the information age.

During the 1980's, the computer, which formerly was considered as merely equipment of industrial production, began to speed its steps into the sight of personal consumption. People have not only desire for it, but also curiousness and confusion as well. However, the commonly used selling method was not customer oriented and the transactions with a middle party made the price of PCs incredibly high. After recognizing that, Michael Dell innovated a direct-sell strategy with a communication mechanism with potential customers. What is more fundamental is that the age and accompanied innovation of technology created conditions on which he could apply his excellent marketing ability. From the end of 1990's to the earlier several years of 21st century, the significant development information technology influenced greatly on almost every aspects of human's life. People changed their communication style, shopping style, entertainment style, etc. Meanwhile, people had more specific demands on what they purchased. This change gave the company both a new opportunity and a challenge in some way. To meet this consumption trend, Dell's company implemented their model-customizing strategy to allow people to customize special PC component through the internet.

Liu ChuanZhi

Personality Highlights

Locus of control


Terminal Value----A sense of Accomplishment

All through Liu Chuanzhi s successful and exciting life, he is always chasing a sense of accomplishment. No matter what kind of difficulties in road, no matter what kind of success he has achieved, he never stop going, never satisfied with staying where they are. That value gave him direction all through his life. When he was young, he entered military school expecting to make contributions to the country. When he started his business in 1984, he was forty years old, holding an engineer position in the Chinese Academy of Sciences, feeling unsatisfied with the monotonous daily work. When the company was going through a fast developing period in the 1980s through selling foreign brand products, he decided to develop their own PC brand, which is now known as Lenovo. Liu Chuanzhi once mentioned in an interview that the most interests in a person are to accomplish the goals he set by himself. Even today, Liu Chuanzhi is still trying to achieve development in the investment and real-estate industry. His inner need of a strong sense of accomplishment made him an ambitious visionary and intellectual leader of the company.

Instrumental Value----Ambitious, Intellectual, Responsible

The developing process of Lenovo is the clear indication of Liu s great ambitious and intelligence. His responsibility not only shows in his daily hard work for the company, but also in his insistence on developing a national IT industry, and build up a world level IT brand. These values not only formed his personal spirit but also became a part of Lenovo s corporate culture.

Culture Influence

As a leader who was raised and educated in China, Liu Chuanzhi was greatly influenced by the traditional Chinese philosophy. In such theory, there is a lot of discussion about situation. Understanding of these theories always helped him take advantage from the chaotic market order.

Military and Life Experience

Years experience of learning in the Xian Institute of Military Communication Engineering school, and also the afterward experience as a manual laborer on a rice farm, had shaped Liu Chuanzhi into a person with strong determination. He is ambitious, decisive, doing things with a clear vision and quick action. These characteristics are legacies of military life and early hardship, also critical factors that made him a highly efficient and effective leader in his company.

Eastern vs. Western Differences

From the end of the 20th century to the beginning of the 21st century, a lot of technology products were introduced from the West to the East, including PC computers. For a long time in the last century, China was a mysterious country for most western entrepreneurs. Doing business in China is very different from doing so in western country. As west concerns, in China, government administrates the market, controls the competition, and rations the most important business resources. In western countries, business people could try to achieve the enterprise goal by creative ideas and optimized marketing strategy. Under that environment, whether a company is good or not usually is the reflection of the company's business ability. Comparing to that, an enterprise trying to do business needs more political acuteness in China. However, as the progress of the reform and opening in last several decades, China has been developing a socialist market system balanced with a good momentum of growth in the national economy. Fair competition and that only the best could survive have gradually become the major principle of the Chinese market. It is the inevitable result caused by global trend. Mr. Dell, is just the right business leader who is business insightful and farsighted with a long-term business goal. In 1989, Mr. Dell visited Shenzhen, a symbol city of China reform and opening. Now, Dell Inc. has a big market share in PC sales as the second largest PC seller in China. The company would not make this achievement without stepping into China market at earlier time. It s a big risk for a MNC to enter China market at that time, but just as Mr. Dell said, Don t be afraid to fail because that's usually when you learn." 8

The unique features of a local environment always give special characteristics to its inhabitants. Leaders from different cultures have different leadership style, in this case Michael Dell and Liu Chuanzhi. For Michael Dell and those western business leaders, they always focus on the management of their business and maximize the benefits. Those leaders in China we may tell a different story. Due to the political condition of China, Political correctness has become a pet phrase of Chinese business leaders. Running a company in China, leaders must have a sharp political sensitivity.

Leadership practice may be different with different culture background and different political background. However, there are some universal core ingredients within both western leadership and eastern leadership: study and the situation, and figure out the best solution.

It s hard to say which is better; both have their advantages and disadvantages. Business leaders from different culture backgrounds will be more adapted to local market conditions, after entering a new environment; all of them have a learning and adaptation process.

Different situations shapes different types of leadership styles. It s really hard to find the extreme example like reform and opening up in modern western history. On the other hand, the Chinese business leaders may not suit for the western market rules. They had suit for the changing market of China, when they enter a stable market, the market rules may make them pretty uncomfortable.

Leadership Practice

Michael Dell

o Leadership characteristics

1. Powerful Vision

Vision is one of the most critical elements for Michael Dell s success. In 1984, when Michael Dell was still a 19 year-old student, he noticed an opportunity of selling PCs at lower price. At that time, PCs had not entered ordinary family households because of the unacceptable high price. Michael Dell saw that when a consumer bought a PC, the inside components were only worth about one fifth of the price he paid. PC producers such as IBM, would buy these components from other companies, assemble them, and then sell the assembled products to dealers with a price about 2 or 3 times of costs. Then the dealer, who basically knew little about supporting computers, would sell it with a higher price. Michael Dell realized the disadvantages of this traditional business model and understood the market needs of lower price PC. So when he was designing his own business, he skipped the step of selling to dealers, offering assembled products directly to consumers. In that way, Michael Dell not only created a low-cost direct-sell business model, which offered a ceaseless driving force for Dell Company in the past twenty years, but also greatly promoted the popularization of the PC.

2. Sense of Innovation

Computer industry is known for fast development and innovative work. As an industry leader, Michael Dell, to some extent, promoted and dominated the pace and directions of the industry development. His strong sense of innovation made him keep trying new things, taking risk and working hard to find better solutions. Some of those solutions led to a revolutionary change or became industrial criterion.

* Dell was the pioneer of the revolutionary direct selling business model to end users.

* Dell also became a pioneer of on-line PC selling business in 1994, and soon enlarged the business scale and turned it into a profit engine. By 1999, Dell was the largest seller on the Internet, trumping (AMZN ), eBay (EBAY ), and Yahoo! combined.6

* Dell was the first to create a No Inventory business model that enabled the company to maintain a low inventory of computer parts through scientific and accurate management. This strategy not only reduced the need and cost for warehouse space, but also ensured that Dell keeps the newest products its supplier offer and could update stock promptly and low-costly whenever a new techniques hits market. The No Inventory Strategy made the company to achieve a 50 percent annual growth rate from 1994-1998, and enhanced the company from a second-tier PC maker to the world largest giant.

3. Stable and consistent Goal Chaser

Michael Dell became the youngest CEO of Fortune 500 company in 1992, at age of 27. Through the past years, he was admired as a visionary and an innovator, but he was also a stable, consistent leader. When he was still a freshman in college, Michael Dell declared that he wanted to beat IBM in someday. So when he finally started his own business, competing with IBM in PC field, he established a revolutionary new business model challenging the traditional model advocated by IBM. Then he kept focused on his direct service, low price strategy in achieving further business success. His focus was so obvious and significant that many business analysts even regarded it as one of Dell's secrets to success.7

4. Flexible and market-oriented

Although Michael Dell kept focusing on the concept of direct sales business strategy, he didn t regard it as the only option in business practice. He is market-oriented, and could be flexible to adjust company strategies and operating model whenever necessary. When the PC market was in a slump in early 2000s, he diversified products and led the company up to peak in 2004. After noticing that laptops outsell desktops, he changed his producing strategy. And after recognizing that customers prefer to handle laptops before buying, he updated the company s sales strategy through employing some indirect sales channels, such as retailing chains Wal-Mart and Best Buy.

5. Open-minded and Inspiring

Michael Dell cherishes difference as a factor breeds innovation. He encourages different thinking in his team, and gathered a diversified work force and external consultants in his teams to diagnose problems and search solutions with different angles. In 2007, he declared a two-month amnesty within the company to encourage people to discuss problems and deal with them quickly, without fear of being fired or demoted.8

6. Passionate for work

Michael Dell insists on doing things he loves. He has great passion in computer technology. This passion made him decide to drop out of school remain at the head of the company from early days to now, when Dell Company has already became a major player in the global IT industry and himself has became one of the richest people in the world. Michael Dell once relinquished the CEO title to Kevin Rollins and only stayed on as the chairman in the company in 2004. However, even in this period, he remained in charge of the company through creating a shared leadership structure with Rollins. Michael devotes ceaseless passion in work and regards it as his responsibility to keep his company growing sustainably, maintain its leading position in market and also pursue its growth ambitions in the computer industry.

o Type of leader and Power Analysis

Leadership Characteristics

Leader type

Influence Power

o Leadership Interaction Analysis

Case Study: Handling Crisis in 2007

2006 was a bad year for Dell Inc. In this year, Dell was surpassed by HP and lost its title as the largest PC seller in the world. It suffered from a sluggish growth, a disappointing fiscal result, an enormous battery recall and a federal accounting investigation. In that year, only two years after Dell reaching top, the company became disadvantageous in the changing market. During this period, corporate PC sales slowed and consumer sales boomed, consumers became picky on product design, and the U.S. market which Dell kept focusing on got mature and was growing weakly. Under this circumstance, after only being in the position of chairman for 3 years, Michael Dell reclaimed the CEO title in January 2007. And he carried out significant changes to the company.

> Restructured management, cut bureaucracy. Brought in new blood through hiring highly professional top executives.

> Emphasized on the consumer market, diversify consumer products. Paid more attention on customer services; built up relationship with the consumer PC buyers. Set up a Web site called Idea Storm, which served as a platform for collecting customer suggestions on new products and services and discussions about the proposals9.

> Explored oversea markets, made a big push to increase market share there.

> Made a change in its distribution model, opened retail channels through cooperating with world retailing giants, after recognizing the difference between corporate PC buyers and consumer PC buyers, that consumer PC buyers would like to handle devices in person before buying.

Except from carrying out strategic changes, Michael Dell also paid attention to use his vision to motivate his employees and improve team moral. Even though the management restructuring led to some high level turbulence within the company, the highly experienced top executives he hired soon began to play their role in streamlining the business in different functions. Generally speaking the company s employees were keeping high expectations on company turnaround leading by Michael, and the personal opportunity to learn and grow. They were encouraged to be direct, and eager to contribute new ideas as well.10

The new strategies enhanced the brand image of Dell, also helped to gain a revenue recovery in later years. In Fiscal 2008 the company increased its year-over-year net revenue by 6% to $61.1 billion, net income was $2.9 billion for Fiscal 2008, or 4.8% of net revenue compared to$2.6 billion for Fiscal 2007.11 The overseas markets experienced fast grow, and generate about half of its sales already.

Interaction with followers and situation

Liu ChuanZhi

o Leadership characteristics

1. Sensitive in Catching Market Opportunities

Liu Chuanzhi is very sensitive to market opportunities. When he founded the company, China had just begun economic reform and opened doors to the outside world. At that time business was the last choice of an intellectual, for nobody knew how far they could go in a highly restrained market environment. However, Liu foresaw the huge market potential and technological advantages, and seized the chance.

2. Highly Responsible and Spirit of Dedication

After the first period of hard time, Legend developed a track as a successful distributor selling PC products of foreign brands. However, in 1990, when foreign PC makers fastened their steps entering Chinese market, Liu made a bold but visionary decision ---to build up a national IT brand. He regarded it as his responsibility to lighten China IT industry. From then on, Legend has started its difficult while fabulous journey.

Liu is highly responsible for the cause he started. He devoted most of his time and energy to the company, and put the spirit of dedication into the corporation culture.

3. Intellectual and Sophisticated in adjusting to Complicated Market Environment

Legend was founded and developed under a special market environment in China, a period offering many opportunities. However, the planned economy system and centered government control also produced many barriers for the development of enterprises. As the leader of Legend group, Liu was very intellectual and thoughtful. On the one hand he seized the once-in-a-blue-moon opportunity and directed the company to a path of market competition; on the other hand, he had a deep understanding of the art of making compromise, and formed a balanced relationship with government authorities. Liu s successful relationships enabled the company to gain government support, and created a relatively healthy environment for its development.

4. Ambitious and Persistent in Achieving Goals

It was Liu Chuanzhi s ambition that led the company to a path of accelerated development. His military experience made him a man with iron will, who never lowered his head to difficulties. He set steps for the development of Legend. First, Legend started off as a distributor, building up distribution networks before marketing. Second, it benefited from the determination of central government to nurture a strong IT sector by supporting links between academic achievement and industrial output. Third, it listed its Hong Kong branch on the stock market in 1994. Three years later it wrapped Beijing Legend's assets into the Hong Kong branch to top international investors. Legend s shares were concluded in Hong Kong's main Hang Seng index in 2000 and also New York share market.

"Our unwavering goal is to create a true international corporation," said chairman and co-founder Liu Chuanzhi in 2003, announcing the $1.75bn (?900m) deal which created the world's third-biggest PC manufacturer. At present, Lenovo has become the world's No. 4 personal computer maker. (Hennock, 2004)

5. Courageous of Confronting Challenges and Making Changes

Lenovo experienced a period of financial crisis at the end of 2008, which made the company suffer from great loss of 96.7 million dollars in the last quarter of 2008, and 76 million dollars in the first quarter of 2009. The striking green figure shocked Liu Chuanzhi, and made him, the 65-year-old founder, return to the state of a single chairman. He made changes to the company strategy and managed to lead the company, the biggest IT brand in China and the fourth largest PC maker in world out of the mire of crisis. His courage spread to every corner of the company which gave his followers faith and belief.

6. Broad-minded and Encouraging in Coaching Young Talents

By 1996 Legend had surpassed IBM over China's market share in computer sales and had kept the lead even until the dawn of the new century. Liu believed that his company would remain on top via innovations. Legend was one of the first Chinese companies to offer its employees stock options, and Liu promoted talented young to higher managing position. In the late period of 1990s many of Legend's managers were quite young, which infused "strong entrepreneurial spirit" into the company.

o Type of leader and Power Analysis

Leadership Characteristics

Leader type

Influence Power

o Leadership Interaction Analysis

Case Study: Handling Crisis in 2008-2009

The strength of the financial crisis at the end of 2008 depressed Lenovo Group in an unthinkable way. But just within a single year, Lenovo Group made a beautiful turnover. A quarter report revealed that Lenovo s global market share increased 10% for the first time in 2010. After Lenovo lost 91 million dollars in the fourth quarter of 2008 and 760 million dollars in the first quarter of 2009, Liu Chuanzhi fell into deep thinking of the reasons causing such a large-scale loss. In order to figure these questions out, Liu Chuanzhi got back to the highest position of management again. The decision proved pretty wise. Not long ago, Lenovo Group announced its satisfactory achievement. Up to the first quarter on June 30, 2010, in the first wealth season, the global market share of Lenovo has been up to two figures for the first time, it is 10.2%.12

> Challenge the status. Liu Chuanzhi chose to return to the management position to confront difficulties with all their staff. This behavior greatly inspired the staff of group.

> Ask what and why. Before taking actions, Mr. Liu looked deeply into the question first and tried to find the root cause of loss.

> Long-term view and courageous. Mr.Liu didn t just feel self-satisfied when he successfully reversed the situation of Lenovo Group. For him, the most important thing is how to stand up and find out the law of the trade from the crisis.

Interaction with followers and situation

What we could learn?

What can we learn from Michael Dell?

Dell is always highly motivated by Michael Dell s powerful vision. On the basis of sharing his ambitions, influencing and motivating his followers with his goals, dreams and visions, Dell finds a path to convert his goals and vision into all followers beliefs and actions. Teamwork expedites realization of those Big Dreams. And habitually being sensitive to occurrence of any change in situation, he can quickly adjust himself to cope with the change and seize favorable business opportunities from it.

Strong sense of innovation: Success always deserves to the person who bravely being the first, creative and original. Dell holds strong belief in this point and has keen perspective on any chance of innovation. Courageously facing with ambiguity, he never hesitates to take risk of trying something new. He also respects and actively encourages his followers to hold and express their different ideas, and thinking approaches better the current situation.

Toward himself, Dell has strong self-awareness. He holds clear minds on his strengths and disadvantages. And he also has optimistic attitude toward setbacks and failures. He uses mistakes as opportunities to educate and improve himself as well as his followers, for helping both of them to build a vision of how the future business could be better. Not only learns from mistakes, he also borrows others talent he needs to improve himself. He always reminds that never self-rank as the smartest person in a team.

His tenacity is another crucial factor contributed to his success. He works hard at his dreams and never gives up. His toil and sweat are the building blocks of his success. Modeling the way, he tells those who are filled with dreams must be determined, tenacious and persevering to go after their dreams whatever the costs. As Michael Dell believes, success is earned but not deserved.

What can we learn from Liu Chuanzhi?

The successful person always makes adequate preparations to meet opportunities as they duly arrive. Liu Chuanzhi s success just attributes to the fact that he made himself well prepared for meeting the coming of the golden ages when China started to implement market-oriented reforms. He instructs his followers that if we could not change the big environment, then should work hard to change the small environment and, if still we could not even change the small environment, we should learn to adapt to it first and wait for the chance of change it. He emphasizes long-term development rather than short-term effectiveness. He is very sensitive to the challenges and opportunities, as well as to the external market environment. Good strategy comes from good vision, such as developing localization, strengthening the supply chain, decreasing the cost, arising price war, designing the product fit Chinese environment and situation, speeding internationalization, etc..

Sensitivity to political situation is another vital factor for his business success, especially in the market economy with Chinese characteristics. Well understand the political and social meanings of doing business in China, he develops and maintains positive relationship with Chinese government, which contributes a lot for Legend to undergo and successfully survival from the challenges and difficulties. Liu Chuanzhi illustrated the relationship between the business and political egg and optimal temperature for it to be incubated. The eggs would suffer if the temperature was either too high or too low. As for enterprises in China, before 1978 the temperature was just too hot for an egg to incubate. By the year of 1984, when they started Lianxiang, the temperature was probably 42 degrees. Today the temperature is around 40 degrees, which is not optimalal. Therefore, a smart egg has to adapt to its surroundings and strengthen its vitality in order to incubate itself into a little chick.

Liu Chuanzhi modeled the way that if you have a dream, it is never too late to take a start. He started in business in his forties, an age most majority of Chinese considered an age in which a man already had both the life and career established and also, impossible (or say very hard) to start anew . However, Liu stepped resolutely out of the Computer Sciences Institute of the Chinese Academy of Sciences. With initial investment no more than RMB 200,000 and the assistance of 10 colleagues from the Institute of Computing Technology, Liu Chuanzhi founded the New Technology Development Company, which was publically known as Legend. Ups and downs in the hard times only he knows. Only his great perseverance paves the way.

Another factor contributed to Liu s success lies in his spirit of innovation, which exhibits well in his continuous pursuit of innovative technologies, management concepts and organization structures. In the 1990s, high-tech companies usual expanded through an usual management concept: technology-engineering-trade (developing new technologies, selling them off, and then entering the stock market). However, considering the immaturity nature of the Chinese market at that time, Liu Chuanzhi, gave up that option for Legend and, as a pioneer riding the winds of reform, he managed Legend with a totally different strategy, a key quite new management concept: trade-technology-engineering , and later proven to be a great success.

Being highly self-disciplined, humble, honest and upright, Liu Chuanzhi models the way to all his followers and contributes a lot into the cultivation of Legend s culture and value system, as well as moving on his own steps to success. Liu values his followers as scattered shinning pearls but lowers down himself as one ordinary thread, which stringing all those pearls up. This shows not only his attitude of being humble, but also his emotions of real appreciating the talents. Being humble in heart, both Liu and his followers involve themselves in continuous learning from competitors, clients, as well as from past failures and setbacks.

Comparing Michael Dell and Liu Chuanzhi, they both share in common some factors of success, powerful vision, strong sense of innovation, optimistic attitude toward ambiguity, setbacks and failures, perseverance and sincere appreciation of talents. All those attributions are indispensable for being a success leader.


Nowadays, most of the organizations are facing the intensive global competition. In order to survive in this challenging market, the majority of leaders emphasize on technical innovation, quality improvement and customer service. However, sometimes, they pay less attention and effort on the improvement of their art of leadership.

According to our report, we are aware that leadership and culture should be considered as a whole. Both leadership and culture are taking crucial parts in the innovation of the organization. On one hand, if he/she is a good leader, definitely his/her vision, skills, behaviors, competencies and style will have a deep influence on his/her followers. On the other hand, in our point of view, organizational culture is equal to a leader s personal attitude and skills. ,Particularly in the way that leader s attitude sometimes determine the direction of the organizational culture If the organization lacks innovation, the leadership cannot bring into play, no matter how strong your leadership is. Therefore, the art of leadership and organizational culture are still facing challenges, this spurs us to continuously make change and innovation.

1 (2009). The World's Billionaires, Complete Coverage., pp.

2 Dell, M. (2003). College Can Wait. In N. Geghard, M. Marriner, & J. Gordon, Roadtrip Nation: A Guide to Discovering Your Path in Life. The Random House Ballantine Publishing Group.

3 Dell, M., & Fredman, C. (1999). Direct from Dell: Strategies that Revolotionized an Industry. HarperBusiness.

iBiography of Liu Chuanzhi. Reference for Business web site

2 brief Introduction for Liu Chuanzhi. Baidu Baike, September 2010

3 P1 Brief Introduction for Liu Chuanzhi. Baidu Baike, September 2010

4 P1 Liu Chuanzhi return, Lenovo Group restart to gain. Sohu News 10th, Nov,2009

6 Michael Dell: Thinking out of the Box

7 Michael Dell Biography - life, children, parents, name, history, school, young, old, information, born, college

8 Can Michael Dell Refocus His Namesake?

9 After Its Founder s Return, Many Are Leaving at Dell:

10 Employee Engagement at Dell:

11 Annual Report of 2008:


i P1 Biography of Liu Chuanzhi. Reference for Business web site

ii P1 Brief Introduction for Liu Chuanzhi. Baidu Baike, September 2010

iii P1 Brief Introduction for Liu Chuanzhi. Baidu Baike, September 2010

iv P1 Liu Chuanzhi return, Lenovo Group restart to gain. Sohu News 10th, Nov,2009