It can be said that Wanda's execution ability is at least well-known in China. Everyone finds it strange that Wanda has developed so rapidly in recent years, and many projects have been very fast. Wanda’s development over the past few years, when we summarized it last year, we mentioned that we have had a growth rate of more than 8% for 30 consecutive years, with the highest annual growth rate of 45%. The speed of development has become a myth. In particular, Wanda's super execution ability, it is said to open as soon as it opens, and the speed is surprisingly fast.
How did Wanda's execution ability be trained? There are also many misunderstandings outside. Our first project in Guangzhou, Baiyun Wanda Plaza, has two floors underground, more than a dozen floors above ground, and 40 square meters. It took 11 months to open. It shouldn't have been in such a hurry, but Guangzhou had a special situation at that time, there was a Guangzhou Asian Games, so the municipal party committee and the municipal government very much hope that we will open before the Asian Games. Under such circumstances, we spent 11 months opening the business. In Guangzhou, we created the fastest speed in the history of the world, and it was not shoddy. The final effect was unexpected. The business was very good and many incomes were record. The locals didn't understand us very well. One of our independent directors went to Guangzhou to participate in corporate activities. When they heard that he was my independent director, they said that they heard that Wanda is under militarized management. He said that was not the case, and he did not know our management very well, so he asked me too. And I will talk about this issue today,
Now that the competition for talent is so fierce, how can you rely on the whip? It is difficult for everyone to fight for the enterprise willingly, so if you rely entirely on militarized management, people will be gone. What is left may be things that people don't want, so it will be troublesome.
Talk about Wanda's execution. I would like to talk about the characteristics of four aspects. The first is Wanda's strong execution, the second is the formation of an execution culture, the third is the execution management model, and the fourth is scientific and technological guarantee execution.
Wanda's strong execution is prominent in two aspects. The first is that we do what we say. We will determine the opening time when we start construction. Whether it is all Wanda Plazas, hotels, and of course the current theaters, etc. There will be an internal document to determine when the business will start. Then we will hold the Wanda Business Annual Conference in September every year. This annual business meeting will have more than 9 merchants attending. It can be said that it is the first meeting in the Chinese business industry. Our goal is to go to Las Vegas. The shopping mall annual meeting, or in line with this standard, can bring together tens of thousands of companies from all over the world at a time. I believe there will be such exhibitions in China in the future, because in China, the retail industry in the future must be the world's largest. At the meeting, we will announce the opening times of all Wanda Plaza, hotels and all other projects in the second year. Everyone will find it very strange, why do we have to announce it to the society more than a year in advance? Don’t you set yourself a rope? This is due to a kind of empathy. If I tell others that May Day or November, or the opening of the Spring Festival, the materials and number of people prepared by this business are completely different. Commercial profits are not so high. For example, when I said it opened on May Day, his staff and materials were all available, but I told him I’m sorry, it’s eleven. Although there is not much loss in the product, the half-year salary of the employees he recruited may eat up his considerable profits. So we must open the business on time and let others prepare. Why there is no problem with our business opening, many people follow, this is one of the reasons. Among them, the opening time is announced in advance, and there is no delay, and it is 2000% open. For 16 years in real estate, none of our projects have been postponed.
The second point is to get it. The real estate industry, especially the real estate sector, is a long-term process. Instead of producing teacups, there may be as many as one minute. The production cycle of real estate is like we can do it every two years, and for many companies it is three to four years. In two years, the period from negotiation to land acquisition is longer. With such a long production period, its cost control is very difficult, and it is non-standardized production. Different locations must be designed with different forms, and different regions must be arranged with different businesses. . It's simple, because it sells well in the north, but not necessarily in the south. A product that people in the south like to eat may not be eaten in the north. It is not produced in a standardized way. Under such circumstances, cost control is very difficult. Moreover, it is difficult for similar companies to overspend from the start to the completion of the final accounts. Generally, it is normal to exceed 15%-20%. For Wanda over the years, it can be said that for all real estate projects, there are almost more than 100 projects, including plazas and hotels, and our final accounting costs are lower than our budget targets. In other words, net profit is higher than our target. Counting to get it is the ability. For example, if you say that you make 10 billion for a project, but in the end, there is only 5 million. The cash flow you originally calculated will collapse. We have done two super-large cultural projects in Wuhan, which will open in the fourth quarter of this year, and Wanda Cultural Park has also opened some, like Changbai Mountain Resort and Wuhan, you may have a little idea. But the direction of the two projects will be clearly expressed. This project was designed and calculated in 09 and started in 10 years. It has taken more than 5 years now. A cultural project of 20 acres and 30 acres is very complicated. Some are models in the world, and some are completely innovative. , We have to ponder and build at the same time. How to control the cost is very complicated. From the current point of view, it is all within the scope of our cost control. This is also a sign of our strong execution, not only doing what we say, but also getting it when we get it. How to get it? This is a lot of effort, and I can't talk about time too long. At its core, as a real estate industry, it relies on cost control efforts.
The second point is to form an execution culture. That is to say, to form an execution culture within the enterprise, the first thing is to lead by example. Not to mention private enterprises, it is difficult to do it even in our party. Few people dare to shout like this. Maybe this is the same as my growth in the army. , My character formation time was in the army, so I deeply imprinted this kind of brand on my body. Up to now, I have said that in the company, I must do what employees are required to do. For many years, I have dared to say one thing, that is to follow me, I ask employees to do it, I will do it. For example, if I don't engage in nepotism, I don't have any relatives working in the company. So what do they do? They also want a good life, so I will give them money to start their own business. In fact, it is very difficult to do this. Why am I doing this? I hope that after my talent comes, he will not feel that he is family-style, or the decision-making is opaque, or irrational, and the boss makes a decision with just a tap of his head. Now I do not reimburse a penny in the company, my personal expenses are more than my own expenses. Although I am an absolute major shareholder and a private company in this company, I take the lead. As a major shareholder, I do not take advantage of minority shareholders.
Second, nothing is impossible. A culture has been formed in Wanda. As long as everyone has established a goal through the game, no one can say that it is impossible or impossible. Of course, this mother newspaper needs to be clear first, it can be done. It is definitely not to say how much you must do this year. Therefore, the formation of our one-year goal requires three months of 9, 10, and 11 to complete. Once a goal is established, everyone in the team forms a culture in terms of execution. In Wanda, only everyone finds ways to complete the task, and will not make excuses for not completing the task. You can always find a way if you want to do something, but you can always find an excuse if you don't want to do something. In our team, everyone feels that it is a shame not to complete the task, and an atmosphere is formed. Money is important in modern society, but money is not everything. For example, every year we will rank the performance and quality of our projects, especially the quality, we will have a ranking, how many squares and hotels we have made, from first to last. This ranking is at the end of the year. It will be posted outside with a large board. The last person, many times, especially the top leader, will resign. This kind of thing has formed a culture in Wanda. For example, in Guangzhou that I just talked about, we set the task to complete in two years. This is our normal construction period. We originally set two years. The mayor and the secretary of the municipal party committee at the time told me that Guangzhou lacks a modern comprehensive large-scale living shopping center. The Asian Games is waiting for decades and hundreds of years. Can it open before the opening of the Asian Games? At that time I thought you made such a request, and I agreed. After agreeing to re-arrange the plan, this is very difficult. For a project of 40 square meters, if it is not for the training of the original series of abilities, it is not that the leaders say that it can be fast. In the end, we still gritted our teeth. The project opened on schedule, 11 months, and created Chinese business history. , A miracle in the history of architecture, and now we still maintain very high revenue and profitability indicators in our system. And when it opened, the subway was not open. Now the subway is open, and the surrounding environment is better. There is also the Wuhan Central Cultural District. Originally, this project was not so urgent, and the start of construction was not long. The leaders of Wuhan told me that the century of the Revolution of 100 was approaching. At that time, I might have thought so, because it was 10 years, and Wuhan has such a history. You are a key project, can you find a way to open it? Of course, if it can be opened at this time, how much marketing cost can you save? So we are determined to do it internally. Of course, we need to take a lot of measures to complete it. We have also created miracles. After reading it, many provincial and municipal leaders were very shocked. Moreover, the XNUMX-month project is by no means shoddy. By the end of this year, the two cultural centers will open, and this project will be all over. This is also a miracle.
Let me tell you a story. The leader of the new party in Taiwan and the secretary of the Wuhan Municipal Party Committee accompanied him to go shopping at night, because what we are doing is a Republican architecture. He was very moved and said that he really thanked you Wuhan government for protecting the past buildings so well. It seems that our quality can be mixed. There is also our Changbai Mountain International Resort, which also has a story. It was originally intended to open in 2012. The goal at that time was to strive to open before the Asian Winter Games. Because we are going to compete for the Winter Asian Games, it must be completed before October 2012. This project is very rushed and must be constructed in the winter. After the completion of the project, hundreds of our core executives all fly to the site to proceed. Recognition, a heavy award was given to the construction team. Of course, this kind of project must be done occasionally. If this is always the case, people will run away early. The completion of all the projects in 10 months is also a miracle, and the opening effect is also very good. The profitability of our ski resort was 26% more than that of Yabri in the year of opening. The second snow season of this year increased by 50% compared to the first snow season. During the peak ski season, it can be said that a house is hard to find.
I talk about so many examples, which means that when a difficult decision is made for special reasons, everyone tries their best to complete the task. Of course, you need to be aware of things like being a boss. This kind of thing is a special case, and under normal circumstances it is a normal construction period. Let me give another example of sales, our Qingdao Oriental Movie Metropolis project, and Hefei project. The Qingdao Oriental Movie Metropolis project only took 16 days to complete the task due to the pre-sale certificate. At that time, our sales target was 30 billion. At that time, I also asked whether to adjust it. At that time, they said that 16 billion will be completed in 30 days unless there is a myth. Our team reduced the completion time from half a year to 16 days. They thought of many ways to overfulfill the task, and the projects launched were completely wiped out. A characteristic of Wanda's execution culture is that it is rarely heard of impossible. And I am particularly opposed to my company. If we are discussing our goals, some people say that it will definitely not work, I will win it for you. You can say it's very difficult, but you can't say it's definitely not possible. So what shall we discuss? If any task is still under discussion, during the game, you will directly veto it. This is not the case. This is not Wanda's style. So you can only say that this matter is very difficult and it may not be done. You can explain the reasons one, two, three, four or five. Why do I advocate up-and-down game, the same level game, only the task formed after the game can be completed.
The third is strict rewards and punishments. Strict rewards and punishments are easy to say, anyone can say, but it is not easy to dare to speak and punish. Take the Wuhan project, for example, they created a project miracle. A company with less than 100 people has a target sales of 2012 billion in 70 and an actual sales of 100 billion, which is so much more than that. Dare to send bonuses? In Wanda, as long as the goal is set, it will be fully honored, the bonus will be large, and it will be the best company to speak on stage. This is our culture. The second is dare to punish. I also give an example of how to punish. One of our entrepreneurial veterans, a certain vice president, and he was the vice president in charge of bidding. I also admire this person. At that time, we were going to hold a cable index. One trick was a one-year cable bidding. At that time, we already had a brand library, all of which were among the top three in the industry, all of which were XNUMX billion-level enterprises. But he strongly recommends a company of hundreds of millions. At that time, the vice presidents did not agree and did not sign. Later, his boss told me about the matter. Our company immediately conducted an investigation. There was something tricky in it. We immediately opened the board of directors and dealt with this person because he touched our red line.
The third aspect is the executive management model. Does the implementation really need to be done well, or does it depend on the mode of management and execution? The first one, we call centralization of headquarters. The overall atmosphere in China is difficult to manage. Under such circumstances, our model is a high degree of centralization of power by the headquarters, and power is concentrated to the headquarters, which weakens the personal actions of the general manager. The general manager and deputy general managers at Wanda often rotate. There is no disobedience, and dismissal if disobedience. This is our execution culture. Otherwise, everyone wants to be in Beijing or Shanghai. How can your company develop? Of course, there are also some old employees who have difficulties at home. Of course, they are discussed individually.
The second is the vertical flat management model. Our cost department, our financial system, our human resource system, quality supervision system, and safety system are all vertically aligned with the headquarters. And after the vertical, these personnel will rotate for three full years, because you are doing the same thing. Regional leaders have formed a relationship that is both supportive and restrictive.
The third is to strengthen supervision. There are weaknesses in human nature. The personalities of many people will also change. I often say that the system does not rely on loyalty, and loyalty is unreliable. If there is loyalty this year, it may not be there next year. To put it bluntly, there is loyalty in the face of money, but not necessarily loyalty in the face of beautiful women, and loyalty to both money and beautiful women, but there is no family affection. Therefore, we rely on strict system management. A characteristic of our system design is based on distrusting anyone. The starting point of our system design is not to trust anyone. For example, we are bidding, we have brand libraries in all industries, cables and elevators, and there are only three brands, and a maximum of five. Why not make 30? Why are only the top five because they are high-quality companies. Operational space efficiency, only after entering the brand library can you participate in bidding. Including merchants, to prevent loopholes in investment promotion, our merchants must enter the brand before they can enter. What's more, we are hierarchical. What level of store can those level businesses enter to minimize your freedom of operation. In terms of strengthening supervision, we mainly build a strong audit team. I don't care about anything in the group, even the legal person has withdrawn on my behalf over the years. I don't care about people, finances, and things. I only manage one department, the audit department. why? Auditors understand the business and establish great authority. This is also a very important point to ensure that we do not cross high-tension lines. For example, our vice president in Zhangzhou company and sales manager, several people do deductions. After completion, they bought all the ID cards in the house, and then reselled them. Later, we found out and greed for millions. In our internal research, we must not simply punish, but pursue criminal responsibility, and first prosecute the prosecutors. It’s not that I’m cruel. We’ve been expelled for the past ten years, but we later found out that this was not enough. There is another person that we have also pursued criminal responsibility. The company asked him to pay taxes. He used the tax money into cash to gamble. This must be prosecuted, but it will take him at least 10 years after the prosecution, and it is another one. Considering this point, we have discussed that the newly graduated master's students should be sentenced less, but must be sentenced.
The last point is to ensure the implementation of science and technology. Regarding the formation of execution ability, in addition to own system, in addition to culture, in addition to strict rewards and punishments, in addition to own supervision, a very important method is to rely on technology and information to ensure execution. One is highly informatized. We set up our own information center more than ten years ago, when many people did not have this awareness. Now this information center manager is a very high level, equivalent to a vice president. I have raised a lot of people and recruited many returnees and overseas personnel. We have realized the automation of all office systems from information to mobile terminals many years ago. We can approve documents on our mobile phone. In addition to mobile office, there are many management aspects, all of which are information-based. All our project progress is managed by the probe. We require video recording if the probe cannot enter. And all bidding is highly informationized. This kind of highly informationalized thing can also improve our execution. Because we have done a good job in informatization and dared to invest, we have been rated as China's only top XNUMX global informatization enterprises. It was also selected by the Ministry of Industry and Information Technology as one of the top XNUMX national information companies and the only private enterprise among the top ten. Informatization has greatly improved Wanda's execution and rapid work ability.
The second is to plan modularity. Why is our execution so powerful? A very important point is that Wanda places special emphasis on planning. We have a dedicated planning department, and we have plans every year, every month, every week, and every day. Our financial plan, cost plan, cash flow plan, profit plan, and personnel cost plan. , Recruitment plans, etc. are available every year. At the end of November each year, all of our bosses know how many people I should recruit, how much money I should spend, and how much money I receive in the next year. We have to refine it every week. In each case, the plan is so detailed, especially for our real estate company. The progress of this kind of project is very complicated. What should we do? Everyone has experience, but experience is unreliable. If you say that I have done 11 Wanda Plazas by myself, I don't necessarily know how to do each step. Therefore, we have developed a modular software for work planning, such as shopping malls. We start shopping malls from the day of construction until they open, generally two full years, and compiled it into more than 10 planning nodes. This node is a few parallel lines and intersects the vertical line. For example, in the construction of civil engineering, you can see which layer your project has progressed this week. You have to make sure of the design and the drawings you submit on which day. Merchants, when and what store will enter the market, the main store will enter early, the branch will enter late, and the small store will enter later, when will the opening plan be implemented, the opening plan, who will be recruited, who will be recruited, all these Everything is put together. For everyone, you don't have to think about other people's things, you only think about your own industry and this node. Sales only want sales, hotels only want hotels. Everyone can do their own things. After this plan node is completed, we will incorporate it into our information system. If it runs normally, it will be the green light. Any industry in a week, Or if any aspect of the plan fails to complete the workload, the yellow light will automatically turn on. If the yellow light is on for another week, if the problem is not resolved, it will be a red light. Red lights are punished according to different levels of nodes at the first, second and third levels. After the yellow light turns on, it will automatically turn into a green light after you have handled it properly. In addition, our three yellow lights are equivalent to one red light. So we are very detailed, this job is especially easy to do, why Wanda can always open on schedule, the core is the planned modular management. In Wanda, which department will do something, it may be planned until the end of the week at the headquarters, and may be planned until the end of the day at the company. So we will never allow you to stay there three months late, maybe you will be replaced two months late. In addition, we have a talent pool, and we have regulations on the proportion of reserves for each industry. We would rather spend a certain amount of labor cost. For example, the general manager, 360 general managers, at least 100 general managers staying at the headquarters, are alternates. Whether you can be the general manager depends on whether there is any shortage. There may be 5 vice presidents on standby. Of course, as our career expands, he will also join. We have plans in all aspects. The planning module software is the core magic weapon to ensure that we open on time.
The third is the integration of Huiyun. In a large commercial center, we are all experiential consumption now. In such a large shopping center, the information about how many people enters in the past was all handled separately, and there were several. China used to be like this. We feel that this thing wastes human resources on the one hand, and on the other hand, there are indeed some risks. For example, if it caught fire at night, he didn't know. So how to use a method to avoid people's mistakes. Of course computers also make mistakes, but that ratio is much smaller. After years of research and development, we completed the research and development in 2013 and conducted pilot projects in four Wanda Plazas. All of them will be launched this year. It is called Huiyun, which integrates all management, including fire protection, water, air conditioning, pump room, energy saving, safety, etc., on a large screen, a computer room, which is completely computerized and intelligent. And the computer software will have a beep. For example, if this person is about to change shifts, he will automatically remind you two hours in advance, and then a message tells the person who is working for you that you should go to work. For example, an air conditioner, for example, if there are a lot of people in a place, it will automatically increase the air supply, if there are fewer people, it will automatically reduce the air supply. These things ensure our execution and ensure that Wanda does not make mistakes. We actually learned a lesson. In 2008, we had a fire and lost more than a dozen lives at once, although we were not the main reason. But such things should be avoided as much as possible. So we built the Huiyun system.
Wanda's execution ability is trained by our system, our culture, strict rewards and punishments, and our technological means. I dare not say that it is the number one execution ability in the world, at least in China. Now no company dares to say when it opens when it opens, and the cost is completely under control. Of course there are also very important business models. These things have ensured that Wanda has achieved more than 8% chain growth for eight consecutive years. And after the scale of 30 billion yuan, it still maintained a 30% growth. Last year, the global economy declined, and we still maintained a growth rate of 30%. Last year's assets reached 3800 billion. At this rate, after 2015, even if we decelerate to 15%, we can achieve annual revenue of more than 2020 billion US dollars by 2020, and can achieve trillions of assets. In 20, Wanda will definitely become one of the top dozen super companies in the world, and we require XNUMX% of its revenue to come from overseas to become a first-class multinational company.
Why do we have such big ambitions? I just feel that I need to use my own practice to prove that private enterprises can rely solely on the market to allocate resources and can do the same as well-known enterprises in the world, and win glory for Chinese enterprises, especially Chinese private enterprises.
The importance of execution is the same as the biography of Jia Yi in the Han book. It must be like the body using the arm and the arm using the finger.