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All the honors of yesterday have become distant memories

I have worked hard for half my life, and now I am walking into the storm again tonight

I can't go with the flow, for the sake of my beloved relatives

No matter how hard it is, we must be strong, just for those expectant eyes

If the heart is there, the dream is there, there is true love between heaven and earth

No matter success or failure, life is heroic, it's just starting over again

I dare not listen to Liu Huan's songs often, but every time I listen to them my blood boils and I can't help but hum along with the music.

This song "Start Over Again" is the theme song of a TV series in the 1990s. It was a period drama that reflected the reform and opening up. Although times have changed, it is still relatable in the present.

I thought of my stepfather, who passed away six years ago at the age of 97.

When he was alive, he led a very regular life. Every morning, he would play mahjong with neighbors of similar age for a few rounds, and the winnings and losses were always 30 to 50 cents.

He sleeps for more than an hour after lunch. After waking up, he fiddles with his dozen pots of flowers and plants on the balcony. Then, he makes a pot of tea and goes downstairs for a walk after drinking it. He walks about three to five kilometers every day.

After dinner, he would watch TV and follow all kinds of international and domestic news. He lived a carefree life for decades. Many retired people who were the same age as his stepfather or many years younger envied him for his healthy body and his carefree life.

Whenever this happened, my stepfather would smile with satisfaction and say, "Oh, what a god! Live with a sense of pride!"

After hearing it so many times, this sentence has been engraved in my heart.

Sometimes, the truth is simple. In fact, life is all about living with a clear mind.

For example, what is the ambition of a child? It must be to live a fun life, to be innocent and lively, and to grow up happily.

The ambition of adults is to live a meaningful life. With a goal in mind, life has a purpose.

The spirit of the elderly is that life is enjoyable, fulfilling and sweet.

Many ancient sayings are also very simple, such as "A man lives to his last breath" and "There is no greater sorrow than a dead heart" and so on.

The "heart" here refers to beliefs, goals, hopes, etc. In short, it means that the heart is the foundation of life. If the heart is smooth, time flies like an arrow; if the heart is dead, the days are like years.

I think of enterprises again. Like people, enterprises that have gone through many economic cycles actually live on their spirit.

Luo Zhenyu said in his 2019-2020 "Friends of Time" New Year's Eve speech:

"The basics refer to those things that cannot be changed, taken away, or thrown away. This is also the intrinsic value and meaning of existence that an enterprise should have in order to seek long-term development and stable operation, which is what we often call internal factors or internal driving forces;

Specifically, a person's long-term competitiveness is not wealth and relationships, but his "basic base";

The long-term fate of a country does not depend on opportunities and skills, but on its "basic situation". Seeing the "basic situation" under our feet is the first step for us to clear the fog and glimpse the future;

The value of thinking about the fundamentals is that it allows us to see our own talents and constraints, and to establish our own advantages and confidence in the long run. When we cannot see the future clearly, it is better to focus our attention, return to our feet, and see our fundamentals clearly. "

Luo Pang put it elegantly, but in fact, the so-called "basic base" is just ambition.

At present, most Chinese companies have "returned to their feet", and are busy looking for lifebuoys, not paying attention to the basics. The spirit is low, and only chaos remains.

Many years ago, I visited Japan several times and visited more than a dozen companies, including Toyota, Panasonic, Hitachi, Kawasaki Heavy Industries, Mitsukoshi Department Store, etc. Half of them were founded after the Meiji Restoration and before World War II.

Among them, Mitsukoshi Department Store has the longest history, which began in the Edo period, 200 years before the Meiji Restoration. In the 1990s, Isetan Department Store, which entered Shanghai, Tianjin and Chengdu in China, was an international brand under Mitsukoshi Department Store.

In March this year, Shanghai Meilong Town Department Store announced that their Isetan department store would close on June 30. Like many physical stores in China, Isetan department store is struggling in China and is almost disappearing. The Chinese market is only a part of Isetan, and the closure seems sad, but it is in order.

"Living is the most important thing" became the only thought in my mind, and talking about morale was a bit unrealistic.

Every time I visit a company, I think about a question in my mind: These Japanese companies with a century-old history have all experienced World War II. How did they survive the darkest moments?

The Potsdam Declaration completely blocked Japan's militarist path of plundering other countries' resources through war. God closed one door and opened another window.

From 1945 to 1952, Japan, which was hit by two atomic bombs by the Americans, quickly completed its domestic reconstruction. Then, it entered a 20-year period of rapid economic development, and then a period of more than a decade of stable development.

In 1985, the G5 group (the United States, Japan, Britain, Germany and France) signed the famous "Plaza Accord", the Japanese yen appreciated and the US dollar depreciated, Japan's economic bubble burst, and began a twenty-year economic recession cycle.

The ebb and flow of the tide seem to be developing in a regular pattern.

The Japanese companies I visited all experienced these periods and grew well. Of course, Japan received strong support from Europe and the United States during its post-war reconstruction, which was an external force.

However, if these Japanese companies do not have strong vitality, it will be difficult for them to recover even with external help.

As long as the green mountains remain, there will be no shortage of firewood.

What is the green mountain of Japanese companies? What is their vitality?The so-called Bushido spirit that we are accustomed to is actually their spirit of competition and development, which is the basic foundation they have always adhered to after the Meiji Restoration.

I visited more than a dozen century-old companies in Northern Europe and Germany and asked the same questions, and the answers I got were consistent.

This is the inspiration from other people's experience. A fool looking at his neighbor during the Chinese New Year is also the simplest benchmark. "If the heart is there, the dream is there", if you have the heart, you will be as orderly as ever.

In 2001, I studied a local state-controlled listed company in Shandong. This company has 1,700 employees, including more than 50 doctoral and post-doctoral students, more than 700 master's students, and more than 800 college students. I was deeply impressed by the company's practice in building a knowledge-based enterprise.

Later, the entrepreneur was imprisoned. Although the company's business is still on the same track as before, the practice of knowledge-based enterprises has stopped.

More than 20 years have passed, and the company is still there, with annual sales revenue of more than 6 billion yuan and profits of more than 500 million yuan. Although it survived a disaster, it is only a mediocre existence when measured by more than 20 years.

At the end of 2004, I studied another local state-owned enterprise, and its entrepreneur was also imprisoned. This was a traditional consumer goods company. Twenty years later, this company had sales revenue of more than 100 billion yuan and profits of over 10 billion yuan in 2023, and had become a world-class industry giant.

The results are so different, what’s the reason?

Following the rules, abnormal leadership changes are usually a disaster for the development of enterprises. Changing people is like changing knives. When playing cards, if you have bad luck, you can change to a new person and your luck will turn around. What about corporate replacement? Some replacements are almost like self-mutilation; some replacements can help companies reborn and develop healthily.

What factors are most important in causing this difference?

The leaders of the two companies were imprisoned three years apart. What they have in common is that their core businesses are both on the rise. They have good asset quality, low debt ratio, ample funds and good cash flow. China's accession to the WTO and the deepening of reform and opening up have had the same impact on the development of the two companies.

The only difference is that the successor of one company was selected from within the company, with the previous president taking over as chairman, while the successor of the other company was selected by the government from a cross-industry state-owned listed company and was parachuted in.

Different ways and methods of replacing people will lead to different results in how a company overcomes the crisis.

The successor from within the enterprise has the recognition and trust of the team and knows the direction of the enterprise's innovation and development. He can quickly gather people's hearts, keep the team's morale high and the basic foundation intact.

The parachuted successor does not have this advantage. He can also quickly understand the fundamentals of the company, but facing a team of nearly 2,000 people, mainly composed of masters and doctors, how to gather people's hearts is a huge challenge.

It is easy to understand the fundamentals, but it is difficult to rebuild the fundamentals.

If an enterprise has no people, it will stop. It is not about the number of people, but the hearts of people. Therefore, the spirit is the basic foundation.

Of course, nothing is absolute. At the beginning of the century, Carlos Ghosn, the Frenchman who successfully rebuilt Nissan Motors as a “cost killer”, was an airborne soldier. Although it may seem like an exception, it was actually because of the backbone team’s determination to change and survive that laid the foundation for corporate reengineering.

There is a Chinese saying, "If you have something, don't be sick; if you lack something, don't lack money." The first half of this saying makes sense, and the second half is also reasonable.

A slight modification, such as changing it to "Whatever you lack, don't lack spirit", may be more applicable to enterprises. Because without spirit, you will become poor even if you have money, which is an incurable disease.

If you have ambition, you will think of change even if you are poor. You can become rich even if you are poor. China's reform and opening up fully illustrates this point. 100% of Chinese private enterprises started out with nothing but ambition.

Many people regard "a person's life is a breath" as ambition and backbone. In fact, it is also appropriate to understand it as the term "vital energy" in Chinese medicine. The vitality of a person is tenacious, and starving the body or exhausting the muscles and bones will not be fatal. The key is not to damage the vital energy.

An entrepreneur friend in Xi'an told me that Lintong has the best hot springs in the world. Because, according to historical records, there has never been an earthquake in Lintong, which means that it has never been damaged. Therefore, the hot springs in Lintong do not smell of sulfur, but the content of hot spring essence is very high, and the whole body will be smooth after soaking. Japanese tourists who love hot springs come to Lintong in groups, and they are reluctant to leave as if "fish cannot live without water".

What exactly is Yuan Qi? According to Chinese medicine theory, Yuan Qi originates from the innate essence and the acquired essence of water and grain. In fact, it is difficult to explain it clearly. Since it is not clear, it is better to use the word "heart and qi" instead. It is simple and clear to apply the ancient to the present.

At present, more and more people and companies are suffering from the loss of vitality. Therefore, internal circulation, lying flat, unemployment, running away, bankruptcy, etc.These words, which have appeared frequently in recent years, tell us that the spirit of struggle has been lost, which is the biggest risk facing Chinese companies.

The current environment of Chinese enterprises is very reminiscent of Japanese enterprises. Japanese enterprises have a history of more than 100 years, while our reform and opening up has only been more than 40 years. During this period, we have not experienced war. However, the degree of starvation and fatigue of Chinese enterprises is similar to that of Japanese enterprises after World War II, but the nature and environment are different.

World War II emptied the wealth of Japanese companies. However, the domestic market in Japan, which was in ruins after the defeat, and the tolerance of European and American countries towards Japanese companies provided them with great opportunities for their rise. At this moment, Chinese companies are facing various sieges and blockades.

What is the biggest difference between us and others? Others are brave after knowing shame, but we are discouraged. When we are discouraged, even if spring comes, we can't start over.

Internet media often report on China's wealthy people running away. There are two dimensions to understand why the rich run away:

The first dimension is that it is logical for the rich to flee because being wealthy makes them dangerous;

The second dimension is that it is illogical for the rich to run away, because the most vulgar but also the most authentic way to bring honor to one's family and to be respected in front of others is to stay in one's motherland.

Chinese culture emphasizes that if you are successful, you should help the world, and those who have permanent property have perseverance. Regardless of which logic you use, I believe that few rich people are willing to drift away from home. Most of these people are the foundation of enterprises, and enterprises are the foundation of the national economy. If the foundation is not solid, the earth will shake.

In an enterprise, there are two concepts that cannot be confused:One is called fundamentals, and the other is called basic foundation.Fundamentals are on-balance sheet assets: balance sheet, cash flow statement, operating profit and loss, etc. Basics are off-balance sheet assets, invisible things, such as intangible assets, business model, corporate culture, etc.

The most important off-balance sheet asset is the vitality of the enterprise, that is, the spirit.

Fundamentals are summaries of the past, such as reports, data, pie charts, etc.Even if we use the DuPont analysis method to do some analysis about the future, it is still a deduction at the numerical level.

The fundamentals determine the future. If you don’t know the fundamentals of a company accurately, you will be easily blinded by the fundamentals. We can attribute some factors that cannot be expressed in numbers to the fundamentals of a company, such as entrepreneurs and core teams, corporate values, business models, technological levels, corporate governance, and brand value.

Ultimately, the core driving force is the company's spirit. If the fundamentals are broken, it means that the company is sick, maybe it's a cold, maybe it's a bruise, or even internal organ damage. No matter which one it is, it can be cured. If the basic foundation is broken, it means that the disease is terminal and incurable.

Therefore, it is said that “there is no greater sorrow than a dead heart.” Even if Hua Tuo were alive, he could not cure heart disease.

There is another set of concepts that entrepreneurs need to be aware of: the basic foundation may or may not be a lifebuoy, but a lifebuoy is definitely not the basic foundation.

Some real estate business owners I know have been busy with several things in recent years:

The first is debt restructuring and efforts to get projects that are being developed or about to be developed onto the bank’s “white list” to secure more project loans. This is an emergency measure to solve the problem of a broken capital chain and is a lifeline.

The second thing is "Baojiaolou", which concerns thousands of households and a harmonious society and is a political issue.

The third thing is to "destock". The return of funds is also a life buoy. These measures can allow the real estate companies that have gone bankrupt to stick their heads out of the water and take a breath, instead of drowning immediately.

However, the basic foundation of most real estate enterprises is broken, and grabbing a life buoy is just to survive. At this moment, even if the top 100 real estate enterprises have life buoys, how many of them can survive in five or ten years? Maybe 10%. Because China's urbanization rate has exceeded 70%, we cannot expect China, with a population of 1.4 billion, to have an average housing area of ​​80 or even more than 100 square meters per capita.

Besides, how many real estate enterprises that are on the verge of death still have the will to fight? Apart from the differences in industry specificity and market environment, the situation of Chinese private enterprises and real estate enterprises is the same.

What is even more distressing than the deterioration of fundamentals is that the fundamentals of a considerable number of private enterprises have collapsed.Even if we actively expand overseas and actively reduce costs and increase efficiency, we are only grabbing a lifebuoy and improving fundamentals.

And where does the spirit come from?

Starting from July 15, Qunar.com has implemented flexible working methods for employees every Wednesday and Friday, which means they can work from home. Ctrip.com implemented this several years ago, and Qunar.com also conducted a trial several months in advance, with good results.

Chen Gang, CEO of Qunar.com, sent an open letter to his employees, saying: "Instead of being a lazy person trapped in your workstation, I hope that everyone can get out and see more when they are at an age when they have great potential. Through this new way of working, you can find new inspiration and use it to solve the inevitable stuck moments in your work and life."

Internet companies, leisure and business travel industries certainly support the innovative practice of hybrid office of Qunar.com. However, I think they are very smart in reducing costs and increasing efficiency. For many companies, the first thing they think of when reducing costs and increasing efficiency is to lay off employees and reduce expenses.This is an instinct that is lost in inertia. Costs are reduced, but whether efficiency is increased is another matter.

Qunar.com may also lay off employees and reduce costs, but the cleverness of hybrid office is that while costs are reduced, employees' morale may increase.

Only a foolish leader would think that simply cutting headcount can lead to cost reduction and efficiency improvement.The first priority in reducing costs and increasing efficiency is to gather people's hearts. This is true for starting a business and for survival.

The wind is strong and the waves are fierce. No one can escape gracefully, and no one can leave gracefully. From the perspective of enterprises, "the sea of ​​suffering is boundless, and turning back is the shore" is often just a self-consolation out of helplessness. We have long been in an economic cycle of great transition.

Few companies can achieve rapid growth against the cyclical trend. What we can expect is that companies should keep their ambitions. “When a man is poor, his ambitions are short; when a horse is thin, his hair grows long.” If you can’t keep your ambitions, even a lifebuoy can’t save your company.

Keeping your heart is the real solution!

No.5922 Original first article | Author: Chen Huixiang

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