Ren Hongbin's Myth of Creating the State Machine

China Machinery and Equipment Import and Export Corporation (CMEC), the core subsidiary of SINOMACH, is actively preparing for listing in Hong Kong, and will announce the financing details before the end of the year. So far, SINOMACH has three listed companies in A shares, namely Ding Sheng Tiangong, Axis Research Technology and China Engineering International.

As the boss of many listed companies, what's Ren Hongbin's "Wulin Secret" to keep the income of SINOMACH's main business growing at a high speed of more than 20% for many years?

Ren Hongbin is frank, capable and humorous.

Ren Hongbin is the president of China Machinery Industry Group Corporation. As a large-scale central enterprise directly under the State-owned Assets Supervision and Administration Commission, SINOMACH ranks 47th among the world's 100 largest international engineering contractors. When Ren Hongbin became the president of SINOMACH at the end of August, 2000/kloc-0, he was the youngest president among nearly 200 central enterprises in China at that time, so he was called the "young marshal" president. SINOMACH was one of the listed companies under SINOMACH.

During Ren Hongbin's first term, SINOMACH's main business income maintained a rapid growth of more than 20% for four consecutive years, and its business volume more than doubled, reaching 50 billion yuan in 2005. The total profit has increased by 2.5 times. In 2006, the business volume achieved another success, reaching 65 billion yuan.

What is Ren Hongbin's "Wulin Secret", which makes SINOMACH achieve such a good development performance?

Solve two problems

At the end of August, 20001,Ren Hongbin came to the headquarters of SINOMACH as the new president. At that time, the headquarters of SINOMACH was still working in an obscure six-story building in Sanlihe, Xicheng District, Beijing. His first impression there was lifelessness and lack of popularity. He found that the members of the leading group of the group company and the middle-level cadres at the headquarters were older than him, and most of the employees were government workers who were diverted from the institutional reform of the former Ministry of Machinery. Moreover, the business fields of nearly 60 subsidiaries are scattered, the scale is uneven, the strength is disparity, and the whole group is loosely managed and lacks cohesion. The group headquarters has no operation, no income and no clear main business. It only focuses on management and survives by charging management fees to its subsidiaries.

According to industry analysis, the overall situation of SINOMACH is not optimistic, which is undoubtedly an unprecedented challenge for Ren Hongbin himself.

However, Ren Hongbin found a solution to the problem in a short time. After learning about SINOMACH for a period of time, Ren Hongbin realized that to change the status quo of SINOMACH, we must change our ideas quickly and act according to the law of enterprise development. Ren Hongbin believes that "no matter state-owned enterprises, private enterprises or foreign-funded enterprises, they are basically enterprises. I don't believe that state-owned enterprises can't do well. "

At the first meeting with the staff of SINOMACH, Ren Hongbin asked everyone at the headquarters to think about two questions. One of the questions is: can't the work of every employee in the group company be replaced?

After that, SINOMACH took the lead in implementing the practice of open competition for posts. At first, many employees couldn't accept it, and all kinds of comments and rumors flew all over the sky.

Ren Hongbin immediately responded: If a middle-level cadre really decides not to take part in the competition, he can stop working in his original post. Although there is great resistance, Ren Hongbin always thinks that "enterprises must do this if they want to develop". Therefore, "changing people without changing their hearts" became one of the important principles of personnel reform in Ren Hongbin at that time.

In an interview with the media, Ren Hongbin said, "At that time, many employees who knew my problems well obtained satisfactory positions through competition and grew up quickly. But employees who didn't realize the meaning of my question either lost their jobs or transferred from their original jobs. "

In 2004, SINOMACH made three successful attempts to select talents through open competition, and openly recruited general managers, deputy general managers and chief financial officers of important enterprises under SINOMACH, including China Machinery and Equipment Import and Export Corporation.

Another question that Ren Hongbin asked every employee in the headquarters to think about was, what is the survival foundation of SINOMACH as an enterprise?

At that time, SINOMACH's main business had not yet been established, and its headquarters lacked operational capacity, so it could not effectively guide and manage the operation of many subsidiaries of the whole group, which obviously violated the law of enterprise development. Ren Hongbin believes that service is only a part of SINOMACH's headquarters business, which is relatively passive. As an enterprise, to give full play to the overall advantages of the group, it is necessary to undertake projects and carry out business activities.

The word "non-entity operation" came into being, which is a unique management concept or concept of SINOMACH. Ren Hongbin believes that the name is not important, what is important is that everyone should recognize this idea. This idea is to give full play to SINOMACH's overall advantages, take advantage of SINOMACH's brand and other intangible assets, actively undertake large-scale comprehensive business at home and abroad, organize SINOMACH's affiliated enterprises to jointly implement it, and promote the common development of enterprises. On this basis, the subordinate industrial and trade enterprises and scientific research institutes are linked together through various ties, forming strong cohesion and market influence. Moreover, in the choice of "non-entity operation" projects, one of the major principles is that SINOMACH headquarters will come forward to solve projects that SINOMACH subsidiaries can't get on their own, so as to avoid the competition between headquarters and subsidiaries for projects and market grabbing.

The road to continue listing

Over the years, Ren Hongbin decided to focus on management by solving the "two major problems", which made SINOMACH a great success. But Ren Hongbin was not carried away by it. He said that the situation of SINOMACH today is the most risky time. At the end of 2005, SINOMACH moved to Zhongguancun. He warned those employees who are enjoying the modern office environment that once they move out of this modern office building, they can't even go to that shabby building.

With the development of enterprises, there are some hidden worries about state-owned machinery. According to the analysis of relevant persons, the business between the subsidiaries of SINOMACH is still relatively isolated, and there is no integration effect. It is particularly noteworthy that SINOMACH's manufacturing is relatively weak, and the supporting facilities of upstream and downstream industrial chains are not perfect.

Obviously, Ren Hongbin has been aware of these concerns. Information from SINOMACH shows that the group is laying out a "one body and two wings" development strategy with domestic trade, high-tech product research and development and production as the main body. The "four strategic sectors" that focus on development have been formed, namely, project contracting and complete sets of equipment, engineering design and construction supervision, scientific research and development and product manufacturing, and domestic and foreign trade.

Ren Hongbin outlined the future of SINOMACH. "By 2020, SINOMACH's sales revenue will reach 654.38+02 billion yuan, making it a' world top 500'. This is a very conservative figure and I believe it can be completed ahead of schedule. "

According to Ren Hongbin's strategy, one of the main tasks is to continue the restructuring process. In recent years, SINOMACH has strategically reorganized more than 70 secondary subsidiaries. The number of subsidiaries has been reduced to 43 in 2006, and will be reduced to less than 30 in 2020.

A few days ago, SINOMACH officially approved and passed a new round of asset restructuring plan. It plans to reorganize its core subsidiary, China Machinery and Equipment Import and Export Corporation (CMEC), and apply for H-share listing. CMEC's IPO in Hong Kong has entered a countdown state, and the relevant listing work is progressing in an orderly manner, and the financing details will be announced before the end of the year. Ren Hongbin said that it will take several years to promote the listing of subsidiaries, and SINOMACH will have at least 10 listed companies in the future. It is understood that before Ren Hongbin took office, SINOMACH did not have a listed company, but so far, SINOMACH has three listed companies in A-shares, namely Ding Sheng Tiangong, Axis Research Technology and China National Engineering International.

"Then, in due course, the whole SINOMACH will be listed as a whole." Ren Hongbin explained, "On the one hand, the shortage of funds is still one of the problems we face, and we need financing; On the other hand, after listing, the corporate governance structure can be improved, and corporate management will be more scientific and standardized. "