On the afternoon of the 22nd, Huawei's internal forum launched an article on "The entire company's business policy should shift from pursuing scale to pursuing profit and cash flow". Ren Zhengfei mentioned in the article that Huawei should change its thinking and business policy from pursuing scale to pursuing profit and cash flow to ensure that it can survive the crisis in the next three years when the global consumption capacity is declining.

The article mentions that Huawei's cloud computing should focus on supporting Huawei's business development and take the path of supporting the industrial internet, with survival as the main guiding principle, shrinking and closing all edge businesses, and conveying the cold to everyone. Digital energy has increased investment in the strategic opportunity window and strengthened the combat team. Intelligent car solutions cannot pave the way for a complete front line, and it is necessary to reduce research budgets and strengthen commercial closed-loop.

Huawei's most important judgment today is:

The next decade should be a very painful historical period, and the global economy will continue to decline. Due to the impact of war and the continued blockade and suppression by the United States, the world's economy is unlikely to improve in the next 3 to 5 years. Coupled with the impact of the pandemic, there should not be a bright spot in any region of the world. So there will be a significant decrease in consumption capacity, which will not only put pressure on our supply, but also on the market.

Of course, this is not the first time Huawei has shouted "survive".

The problem is, as strong as Huawei and as big as Huawei, both feel full of crisis. What can we do?

The answers we can provide for the electric motor industry chain are actually not too biased. That is, the only way out of the crisis is to "reduce costs and increase efficiency".

So, from a practical perspective, what should we do? Let me give you a few important measures to learn from for different companies:

Maintaining cash flow, profit and income for the next three years are not important, cash flow is the most important

Every founder needs to look at how much money is currently on their books and, at the worst possible level, estimate how much money they can receive in the next 3-6 months? How long can it last? If you can live for 6 months, congratulations. If you can only live for three months, then you need to take strong measures to manage cash flow.

To maintain payment and cash targets, some customers who may have problems need to make adjustments. Some problematic accounts receivable may need to be adjusted, which are all aspects of dynamic management changes in the strategy.

In a crisis, there is nothing that cannot be done, and any measures that affect cash can be adjusted.

Of course, do you want to borrow money from the bank? I think the country is concerned about some large enterprises, and many small enterprises may not be able to obtain loans. The most fundamental thing is to solve one's own problems. For example, co founders can now take out a portion of the money they have earned in the past and invest it in.

Perhaps the least important aspect of the strategy for the next three years is actually the issue of making money. We may need to lower our profit target, and sticking to survival is victory.

Cut down various excess costs

The key is the following items, such as material costs, procurement costs, logistics costs, and severe inventory structure