Huawei - are three CEOs better than one?

I've been researching the rapid growth of Chinese technology firm Huawei this week and came across a feature of Hauwei#s leadership structure which stopped me dead in my tracks. Most big companies have one CEO (Chief Executive Officer). But, Huawei has decided to do things differently. It has decide to have three!

As Bloomberg reported in 2012:

"Huawei Technologies Co., China’s largest maker of phone equipment, said its founder Ren Zhengfei is splitting the role of chief executive officer with a panel of three executives who will rotate at six-month intervals."

Delving a bit deeper, I found this intriguing letter to shareholders explaining the decision. This would make for a fruitful discussion with students about the role of the CEO in leading a complex and fast-growing multinational like Huawei.

For example, look at the following excerpts from the letter:

"Today, tides rise and surge; companies are springing up all over the place while others are quickly being swept away. Huawei hasn't found a way to adapt well to a rapidly changing society. Time will tell if the rotating CEO system is the right move or not."

"Huawei is a technology-centric company that possesses nothing except knowledge and customer recognition. Due to technological dynamics and market fluctuations, Huawei has adopted a rotating CEO system in which a small group of executives take turns to fulfill CEO duties. "

"Traditionally, one person was authorized to act as a company CEO, and the fate of the company rested with this single person. Such a practice echoes the Chinese saying, "Success or failure rests with Xiao He*." History has proven time and again that this practice poses greater risks."

Huawei is certainly one for business students to watch. The current incumbent of the CEO role has recently announced Huawei's results for 2012 and outlined what the business wants to acheive in 2013:

"Chinese infrastructure vendor Huawei’s rotating and acting CEO Guo Ping has outline the firm’s priorities in a New Year’s message to stakeholders. He revealed that Huawei’s sales revenue for 2012 is expected to exceed $35bn, with a net profit of around $2.4bn, marking more than a ten per cent increase year on year for both."

The CEO also announced that Huawei’s strategic objective in 2013 is to establish leading positions in mobile broadband, fixed broadband and backbone network solutions.

“Our value does not simply lie in our capability to help customers lower their procurement costs. More importantly, it lies in our capability to increase their competitiveness and profitability,” he said.

Huawei’s staff should devote energy to specific business objectives, and avoid the impulse to expand business blindly, Guo Ping added, warning that managers who expand business blindly will be held accountable