China.net Real Estate News Recently, Yu Liang, Chairman of the Board of Vanke, delivered a speech at the 2022 annual meeting of Vanke Group.
The following is the original text:
2022 is a year for the Group to break the boat and fight against the odds, and it is also the beginning of a new era. Everyone’s understanding of this issue is not comprehensive enough. Vanke often speaks of five-in-one transformation, namely strategy-mechanism-culture-organization-people, specifically three things from strategy to organization to people. Strategy, organization, and people are linked together through mechanism and culture. Let me talk about these aspects first.
1. In terms of strategy
The first feature of the external environment is that the industry has entered the stage of shrinking and clearing the balance sheet.For the real estate industry, shrinking the balance sheet and clearing it means de-financialization. The state does not allow real estate to occupy too much financial resources, nor can it allow residents to bear a high debt burden due to buying a house, because these financial resources do not effectively support the real economy. Definancialization is a natural trend and a painful process. For example, it feels good to give you sugar at the beginning, but after eating too much, you will accumulate fat, and it will be very painful when you quit sugar. At this time, it is already heavily dependent, and it will be sluggish without sugar.
This year is the year of the last stand. How to understand the last stand? It is either dead or alive, with no intermediate state. If you can solve the burdens accumulated in the past, you will have the opportunity to start a new journey. If you cannot get rid of the burdens, you will not be able to live. Pan Aimin’s report has told us through Japan’s case to stop having illusions, and we must clear things up quickly and resolutely. For us, it is a battle of life and death.
Another output of the external environment is the new development model of the industry mentioned at this year’s Economic Work Conference. Pre-judgment, the new development model can be summarized as a center and three basic points.A center is the solutioncommon peopleliving problem.The three basic points, or three basic starting points, are housing and housing without speculation, simultaneous renting and purchasing, and the matching of people-land-housing.Housing and not speculating is actually two aspects of “housing” and “not speculating”. Regarding the aspect of “houses are used to live in”, the policy may be slightly relaxed, because some overly strict restrictions on existing needs may be slightly loosened in order to effectively meet the reasonable living needs of residents. “No speculation” means that although some restrictions on house purchases may be lifted, speculation is still not allowed, and the increase limit will be retained. The government also controls investment speculation by means of taxes or restrictions on sales. While “housing” may unleash some demand, is there still such a large amount of demand today? Last year, the age of customers who bought Vanke houses was pushed back by another two years, and as the demand continued to be met, the total amount was also decreasing. The second is the combination of lease and purchase. The combination of rent and purchase is an opportunity for rental housing, but it also means that buyers who just need a house can choose between “renting” and “purchasing”, which will divert the demand for buying a house. And even if the demand for rental housing increases, it will not be able to offset the decline in the scale of house sales in the development business. At the same time, many small and medium-sized cities in China are cheap and in great supply. They do not require development leases. Third, the matching relationship between people, land, and houses may change. In the past, the distribution of construction land indicators did not match the distribution of population. The supply of cities where population flowed in was generally insufficient, and the relationship between land and housing was also not matched. For example, Shenzhen used to have only about 20% of the residential land index, while abroad it is generally about 40%. In the new development model, the relationship between people-land-house may be improved. Housing supply in core and major cities will increase, and some improvement needs that have not been met due to purchase restrictions in the past may be released in the future. But everyone has to adapt to the reality that the industry is returning to people’s livelihood attributes, and don’t expect prices to rise.
In addition to the three basic points of the above-mentioned one center, there are two major changes. One is that the market differentiation will become more and more obvious, and the other is that the industry scale will begin to shrink. In the face of major changes, we must also make corresponding changes. We need to think further in terms of investment in Biga. In the face of shrinking market differentiation and very limited profits, we need higher-quality investment, and we must shift from the uniform and decentralized investment in the past to better performance in the market and the ability of the team to operate. Proven local intensive investment. If some areas are really not doing well, it may be necessary to cancel the reorganization system and take back the designation. The projects we face are becoming more and more complex, and the more complex the situation, the more disciplines we must adhere to.
2. Organizational aspects
Our organization faces more intense competition after the market shrinks. Everyone wants to survive and will go all out. How can we win?The first is how do we build a game of chess?It turned out that the Northwest Region specially set up an office in Shanghai to recruit high-level talents. Looking at it today, does each region really need to build so many product lines and so many product managers? Seeing Zhang Hai’s introduction to the investment map today, do we still need each company to establish a separate investment and development team dedicated to researching cities? Can everyone’s understanding of macro policy surpass that of Pan Aimin? Moreover, we also have external professional professors assisting the research. Similar to investment development and product teams, we need to build a game of chess. In the face of fierce competition, we do not have so many resources and energy to spread our efforts.
Second, how should our organization adapt in the face of business fluctuations?The traditional development business is shrinking, and the organization is only responding to the situation of shrinking business scale. The operating business should be “long”, I agree; the complex projects of level 6-8 in the development business should be “long”, I agree. But what about the “elimination” part? No one has proposed how to solve the “elimination” corresponding to “long” when our traditional business is shrinking. The “long” can be “long”, and must be “long”, but the “eliminate” must also be “eliminated”. Let me take the example of the chief customer officer. At the beginning, each unit set up a chief customer officer, and the group has a total of 65 chief customer officers. Now it has been reduced to 14 people. Although the number of people has been greatly reduced, in terms of the quality of the special report, it is much better than 65 people because it is more professional. It is easier for 14 people to cooperate, and it is easier to meet and discuss issues. The 51 extra colleagues that were added before were divided into other departments, that is to say, we recruited some people to do one thing. Later, although they were not suitable or adjusted, they still stayed here. Therefore, the change of business is inevitable. Adjust with tissue adaptation.
The third question, how can we find new anchor points in the face of the black iron age of the industry?What new anchor points have our compensation system established, are we still anchored in the golden age system? Thaw and Mr. Zhu mentioned just now that everyone’s income must be significantly reduced this year. Of course, the anchor point of the organization, everyone should not think that it is just income, this new anchor point, we must establish a new anchor point in all aspects, and our welfare, subsidies, etc., must be adapted to the era of black iron. We have come from the golden age. Today, we must establish a new anchor point at this point in our hearts and then set off, otherwise we will not be able to get rid of the inertia of the Huang Quan era.
The fourth question is, in the face of an industry that is already about 10% meager profit, should we reengineer the process?I still cite one thing that impressed me the most, I visitedBYD, Wang Chuanfu said that he does not produce tires and glass, but produces everything else himself. I said that the auto parts are very mature and can be used. But later I found out that this is still the golden age thinking, looking for various spare parts manufacturers, you can put the car together. He said that Mr. Yu has a manufacturer for each part, and each manufacturer has to make 10% of the profit. How can we make money together? In the past, every link of real estate could be outsourced. After outsourcing every link, we can still make money. Can we still do it today? All the work is done by people, and everyone has to earn 10%. We must have no money to earn, so we need to reengineer the process. What impressed me most about the development and management headquarters was the case of the wood floor substrate in the buyer’s mechanism. Therefore, our setter culture often asks the outside world to contract to make one. Yesterday, it was said that it is normal to remove 200,000 to 300,000 yuan of the construction site hoarding. We are in the age of black iron today, who do we do if we don’t? Many of our current charging models that use cost-plus methods will be subverted. We used to be extravagant, setters, and fake hands in the past, and the method of subcontracting layer by layer must be unfeasible. For organizations, the above four points are what we may need to adjust in the face of change.
3. The human aspect
After talking about strategy and organization, I will talk about people. In fact, organization is also a people problem. In the past two days, including usually, I have heard a lot of people complain about a problem, that is, we have no talents, and we hope that there are supermen. I want to ask who are we? Who will we do if we don’t? If there are really capable people and superhumans, what do we need to do? We imagine that it is impossible to invite Superman to come. Do you remember the example of six people I mentioned in the group target action communication meeting? He Guopei said that he just thinks of everyone, but he has not done all the things he has done completely, such as listening to the voices of customers in the restaurant at breakfast time every day, and giving customers a special gift when they leave the store to surprise them. Li Bin, the project manager of the Wuhu company, is also an ordinary person. He insists on going to the construction site for more than 300 days a year. Is it an ability issue or an attitude issue? How did Deng Qiqi of Chongqing Weijia sell 293 houses a year? She can make friends with every customer who has made a deal, and let the customers who have made a deal help her recommend a house. How did Fang Yihong, a property security officer who turned to Pu Lin, become the million-dollar sales champion? Although he is no longer a security guard, he stands guard at the gate at a fixed time every day and turns around in the park. He never waits for guests at Pulin’s office.These examples make us think about what we lack today, is it the so-called ability or the attitude to do the job well?
I especially hate the project managers who use photos to sign in to prove that they have been on the construction site. I suggest that the BGs in each district and city should deal with it seriously (directly exchanged for dismissal) as soon as they are found. Vanke would rather close the construction site than allow such a project manager to exist, no matter how capable Not what Vanke needs. Today, we do have some companies that have not done well, but Vanke has been in real estate for so long, and we are not without people in the projects of level 1-5, but we lack the attitude and responsible spirit to do well.
4. Mechanism
I just talked about strategy, organization, and people, now let’s talk about mechanisms. When many people mention the mechanism, they can only think of giving enough incentives, such as monetary incentives. Can we still give that much money in a “dark iron age” environment? There are many popular industries in society, such as Metaverse,game, energy, etc. These industries are more likely to find suitable people through monetary incentives, and our industry has developed to this day without this bidding ability, we cannot give more monetary incentives than others, and people who are only motivated by money are also Not suitable for working in the industry of the Iron Age. The mechanism that Vanke can provide is a stage for business and an opportunity for development, rather than simply giving money.
5. Cultural aspects
Speaking of culture, there is no doubt that the most important eight words at the moment are “save food and clothing, and wartime atmosphere”. I would like to emphasize a few points.
First, we are working against the backdrop of the last stand. All work revolves around fighting wars, focusing on the three main tasks of falling back and steadily improving, shrinking and clearing the watch and “growing muscles”, and work that has nothing to do with it can be put aside for a while. , in a secondary position.All our resources, including organizational resources, financial resources, and human resources, must be allocated to these three tasks. For example, the issue of training has been discussed recently. Training is an ongoing task, but this year, large-scale, long-term, and centralized training for long-term development may not be appropriate. OK. Therefore, everyone must understand that since it is a last-ditch battle, all our work must focus on three major tasks.
Second, we must strengthen performance. Heroes can only be judged by winning or losing, and cadres can only be selected from the winning team.I have seen that some sales champions are still doing well and are very capable, but why haven’t they played a role in higher positions and bigger platforms? Is it because these positions no longer need good people?
Third, all managers must sink and take the lead.Now the group has cancelled the level of the original group partners, and all the original group partners have all sunk to their units. Zhang Hai’s report said that the first level to carry the first level is to sink. If you, as the general manager, do not go to the project site, do not personally understand the situation, but only sit in the office, it is definitely not qualified. In the face of strong performance, it is very problematic if managers cannot take the lead and actively sink. Including the division of labor and cooperation between Mr. Zhu, Zhang Hai and Zhu Baoquan, it is also a kind of sinking, allowing Mr. Zhu to sink more into the important task of reducing the group’s balance sheet.
Fourth, there must be strict discipline in terms of culture.In the face of big battles and bad battles, even if you have the best weapons, you can’t win the battle with lax discipline. Strict discipline is not just a matter of prohibition, including investment discipline and bottom-line disciplines must be firmly adhered to. In Zhang Hai’s report yesterday, it was mentioned that Longfor has been adhering to discipline for a long time, and Zhonghai has also done a lot in this regard.
Fifth, save money, reduce waste, and create a wartime atmosphere of frugal food.The advocacy previously issued by the headquarters to the entire group has not been implemented in various places. When my assistant booked me a flight ticket, I would not buy first class. If there are flights that are close in time, I will buy which one is cheaper. How much money I can save is not the most important thing. The signal conveyed is very important. If our management can’t take the lead and lead by example. Then the signal sent will be greatly reduced, how to ask employees? Regarding the creation of a wartime atmosphere with limited schedules and food, please implement it by yourself, so that everyone can feel that the atmosphere of the war is different from the past.
The theme of today’s annual meeting is “If you dare to fight, you will win”, and I conclude with four sentences.
First, dare to fight? Do we have a choice on this issue? Dare to fight there is still a chance to win, but the result of daring to fight is definitely failure, so we have no choice on this issue. Only dare to fight to get a chance of survival.
Second, will they fight? Many times we say that we won’t fight, but if we don’t fight, we will never. Only if we fight can we do so. We also have no choice.For example, have we learned how to become a sales champion after listening to the examples of Deng Qiqi and Fang Yihong? Also learn her method and spirit, and only through action can this work improve. You learn while you fight, you never learn if you don’t fight. Today, there must be people in such a huge team of Vanke who will play. If there are so many blank spots, no one will play. To be honest, we would not be able to survive.
Third, it is very important to be willing to play together.How to understand partnership play? That is, some people attack, some people want to cover, and even sacrifice their lives in cover to stop the attacking enemy. Whether we are willing to fight together means that if we are not willing to be beaten, we will fail. As a backup force, if you support the front line to win, you can share the fruits of victory together. For example, investment, the market has undergone such great changes, and the capabilities of each operation team are also very different. Today, there are not so many forces and resources that can be dispersed, so we must work together. For example, in the Port Apartment business, if the development BG does not help to establish government relations, the apartment BU does not have the ability and team. In terms of housekeeping services, etc., if the property BG does not help him establish a training system, it may cost money and be thankless entirely on its own. Let’s not underestimate ourselves and say that so-and-so is better than us, who can sign a comprehensive strategic cooperation agreement with the Shanghai Municipal Government? It is Vanke. Who is Guangzhou going to sign a strategic cooperation agreement with? It is Vanke. Therefore, we have a lot of resources, and the strength of the whole group is combined, and Vanke is very strong. But if everyone wants to be the boss, and each has his own share and his own work, which leads to the dispersion of forces, then we cannot win.
The fourth and most crucial question is whether we can play particularly well.To win this battle and to win the next spring, we can only demand ourselves to be “extremely good”. Otherwise, what’s the point of dying if you can’t do it particularly well? What is particularly good?
Three requirements—– Be a professional master, an all-around champion, and a long-distance runner.Being a professional master tells us that we can’t be satisfied with being an amateur player. We should not compare with ourselves in the past, nor with our brothers, but with the benchmarks in the industry. If you have become a benchmark in the industry should be compared with a higher target. Ten years ago, when the marathon level was not high, running under three hours was a very good result. At that time, the first batch of people who could run under three hours thought they were very good, but after a few years, it will not be because this result has been subverted by other people, so we have to become professional masters to be very good.
The second is to be an all-around champion.The era of relying on one trick to eat the whole world is over. Now we must pay equal attention to development, operation and service. This is also Vanke’s new triathlon. It’s not enough to just run a marathon. We also need to be good at swimming and cycling, and we must be an all-around champion. Because only being an all-around champion can make money, it is impossible to make money by doing individual events separately in the past.
The third is to be a long-distance runner.Persistence for a long time, insisting on doing the right thing for a long time, and not violating discipline, can make us play particularly well.
If we dare to fight, can fight, and are willing to fight together, we will win, and we will win especially well. These are my concluding remarks at the annual meeting of the group. Thank you.
(Article source: China.com Real Estate)