lenovo case
strategy+business
ISSUE 76 AUTUMN 2014
Lenovo Goes Global
China’s most recognizable brand has plans to overtake Apple and Samsung.
BY WILLIAM J. HOLSTEIN
REPRINT 00274
Lenovo chief executive Yang Yuanqing (top row, left); a technician subjects a Lenovo design to a vibration test (top row, right); Gerry P. Smith, head of
Lenovo’s enterprise business (middle row); Yoga Ultrabook
strategy+business issue 76
feature global perspective
1
Leno
Goe
GLo
China’s most recognizable brand has plans to overtake
Apple and Samsung. by William J. Holstein
feature global perspective
ovo es obaL
2
feature global perspective
3
In
the beginning, it was cultural and managerial chaos. When Chinese computer company Lenovo dispatched a team to New York in
2004 to discuss acquiring the personal computer division of IBM, only one member of the team—the company’s chief financial officer—spoke English. Lenovo was an offshoot of a Chinese government research institute, and none of the leadership team had operated outside Chinese-speaking Asia. Yet they were dealing with executives from IBM, a sophisticated multinational active in 160 markets. Gina Qiao, who was a member of the Lenovo team representing human resources, recalls that she was completely baffled by IBM’s compensation and pension system. Nothing like it existed in China.
Once Lenovo acquired the much larger but unprofitable PC division on May 1, 2005, for US$1.75 billion, the two sides discovered that they truly didn’t understand each other. Lenovo executives decided that English would be the official language of the new company and started learning it. But the challenges went beyond vocabulary. Words could be translated from one language to another, but underlying assumptions couldn’t.
“We had two rivers of culture,” recalls Qiao.
For example, the two sides did not know how to disagree with each other. When the U.S. executives spoke in a meeting, the Chinese
ISSUE 76 AUTUMN 2014
Lenovo Goes Global
China’s most recognizable brand has plans to overtake Apple and Samsung.
BY WILLIAM J. HOLSTEIN
REPRINT 00274
Lenovo chief executive Yang Yuanqing (top row, left); a technician subjects a Lenovo design to a vibration test (top row, right); Gerry P. Smith, head of
Lenovo’s enterprise business (middle row); Yoga Ultrabook
strategy+business issue 76
feature global perspective
1
Leno
Goe
GLo
China’s most recognizable brand has plans to overtake
Apple and Samsung. by William J. Holstein
feature global perspective
ovo es obaL
2
feature global perspective
3
In
the beginning, it was cultural and managerial chaos. When Chinese computer company Lenovo dispatched a team to New York in
2004 to discuss acquiring the personal computer division of IBM, only one member of the team—the company’s chief financial officer—spoke English. Lenovo was an offshoot of a Chinese government research institute, and none of the leadership team had operated outside Chinese-speaking Asia. Yet they were dealing with executives from IBM, a sophisticated multinational active in 160 markets. Gina Qiao, who was a member of the Lenovo team representing human resources, recalls that she was completely baffled by IBM’s compensation and pension system. Nothing like it existed in China.
Once Lenovo acquired the much larger but unprofitable PC division on May 1, 2005, for US$1.75 billion, the two sides discovered that they truly didn’t understand each other. Lenovo executives decided that English would be the official language of the new company and started learning it. But the challenges went beyond vocabulary. Words could be translated from one language to another, but underlying assumptions couldn’t.
“We had two rivers of culture,” recalls Qiao.
For example, the two sides did not know how to disagree with each other. When the U.S. executives spoke in a meeting, the Chinese