Lining Executives' Collective "Big Shift" Decentralization And Centralization

Lining Aftershock: change is actually happening.

After a wave of executive turnover in the first half of 2011, the Li Ning Co Ltd crisis did not end.

Recently, the vice president and CPO Xu Maochun, the government and director of the Department of public affairs, Zhang Xiaoyan, also confirmed their resignation.

The outside world is unpredictable. This is the end of the turmoil in the Li Ning Co's 3 year adjustment period, or the beginning of a new wave of aftershocks.

Senior executives "shift"

At the end of June 2010, in view of the unsustainable growth of relying on shop expansion in the context of soaring human costs and store rents, Li Ning Co initiated the brand remodeling and launched the brand new Slogan of the new "Make the Change".

However, a large number of old product inventory and the unsuccessful channel integration have made the company's orders flat or even lower than before.

Lining adjusted the 3 year period to start this prelude.

More than half a year, the poor performance of CMO Fang Shiwei, COO Guo Jianxin, Lotto general manager Wu Xianyong and other core executives have left.

This is also considered to be the second "earthquake" in the company's history after the departure of Chen Yihong, former general manager of Li Ning Co in 2005.

Although the performance is also poor, but unlike Chen Yihong, this wave of executives leave far from the "warmth" when Chen Yihong left.

In 1991, Chen Yihong joined in the second year after the Li Ning Co was founded.

In early 1996, Lining merged 3 companies in Beijing, Guangdong and Yantai into Lining sporting goods group company, the pro chairman and general manager, and Chen Yihong as executive deputy general manager; Lining played the de facto role of CEO because of Lining's specific business, and realized the sales volume of 650 million yuan in 1996.

Ambitious Chen Yihong has put forward the goal of "over 1 billion yuan in 1997".

However, due to a series of reasons such as the Asian financial crisis and macroeconomic regulation and control, the sales volume of Li Ning Co has not exceeded 1 billion yuan from 1997 to 2001.

Lining realized that 1 billion yuan might be Chen's "ceiling".

On balance, he politely asked Chen Yihong to find an assistant.

Since then, in July 2005, Li Ning Co listed for one year, and Chen Yihong and his wife holding 93% of Shanghai's Titan Corp offer 44 million 814 thousand yuan to acquire 80% of the trend of's holdings, officially "solo".

At Lining's farewell banquet for Chen Yihong, two people were drunk.

Wang Yafei, an independent director of Li Ning Co, described it as "two people were soaked in wine on their chest and held together in tears."

Nowadays, fewer and fewer executives are worthy of Lining's own wine.

Fang Shiwei and Xu Maochun belonged to "paratroopers" and were promoted to Vice Presidents within three years in the Li Ning Co within two years. Guo Jianxin, Wu Xianyong and Zhang Xiaoyan were all "Lining", but obviously Zhang Zhiyong was not a Zhang Zhiyong.

As chief executive officer of Li Ning Co, Zhang Zhiyong had made a point in his interview with reporters that he had raised the idea that "big things are not bothered", "those who do trivial things are not lazy" and "take soldiers are not good".

"Not good", of course, is when the knife can not be soft.

According to the insiders, since June 2010, the product design and development of Xu Maochun under the leadership of the government, at least in the new fashion, fashion sense of the company's goals; and Zhang Xiaoyan as an assistant to the president, long-term management of Lining's government public relations and corporate communication, due to poor performance of the company has been negative news frequently, and some people need to be responsible for this, especially in July has reported that Zhang Zhiyong's "employment" loss.

"CXO level executives inside the company have changed all but Zhang Zhiyong."

A Lining employee said.

In May 24, 2011, in response to the departure of executives, the Li Ning Co issued a notice saying that "there is sufficient talent pool and appropriate management structure to match the corresponding job requirements and the company's development needs."

The fact is that after the departure of former COO Guo Jianxin, Zhang Zhiyong had to concurrently serve as COO. Lu Ning, who had been a member of 3813.HK for about 3 years, was announced as a new COO not long ago.

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Decentralization and centralization

In October 14, 2011, when announcing the restructuring of the company's organization, Lining's announcement also announced the appointment of Lu Ning and Xu Maochun's departure.

According to the new function allocation, COO Lu Ning will "co-ordinate the three major business segments of Lining brand sales headquarters and sales areas, products and supply chain".

At the same time, the general manager of footwear products and general manager of clothing / accessories products also report to Chief Operations Officer to co-ordinate product planning, design development and production management, reduce costs and improve efficiency.

In this regard, a resignation executive only used "white cloud dog" 4 words express emotion.

Compared with the fact that Li Ning Co executives have changed their functions in recent years, it is a great sigh to know why today is the first time.

As mentioned before, within the Li Ning Co, the "airborne" Fang Shiwei and Xu Maochun belong to the "three level rise".

In 2007, Fang Shiwei, as the director of strategic marketing, joined Lining from Ogilvy, and was promoted to CMO in 2009. At the end of 2009, Fang was also appointed as the CO ordinator of Lining's brand remodeling. Xu Maochun was also the vice president and CPO of the product category from the head of the service category, because of the company's establishment of CPO in 2009.

In order to substantiate the terms of reference of CMO, Zhang Zhiyong set up a new functional department under the position of CMO -- BI (Brand Initiative, brand strategy planning department).

The establishment of BI is aimed at solving Lining brand and product planning problems. It not only controls the life cycle of the brand, but also integrates the brand strategy, sports marketing strategy and product strategy of the company. In Zhang Zhiyong's words, the BI department should draw a complete brand map.

And because of the brand, sports marketing and product planning, under the jurisdiction of basketball, running, women, sports life, urban light sports, badminton and other six major business categories, the BI Department has been a bit like Li Ning Co's "development and Reform Commission" and "jade" since its birthday.

The 5 senior directors of the BI department are the five major categories, and their jurisdiction over COO and CPO is mostly crossed.

In short, after the establishment of BI and so on, the product planning originally assigned to COO is integrated by two airborne CMO, CPO and 5 senior directors.

During this period, the relationship between Zhang Zhiyong and Guo Jianxin can be imagined.

After Fang Shiwei and Xu Maochun were left unsuccessfully for a variety of reasons, the original COO Guo Jianxin went away. Zhang Zhiyong's newly recruited Lu Ning was again "centralized".

In fact, under the name of the adjustment of the company's organizational structure, apart from the "bright line", Zhang Xiaoyan's Department has also been wandering away from the company to become a foreshadowing.

Insiders revealed that about a year ago, because of the failure to change the label and felt the enormous pressure from the market sales, Zhang Zhiyong assigned his public affairs department and information technology system to CFO Zhong Qi Qi. Zhang Xiaoyan and Zhang Jun, general manager of information technology system, report from Zhang Zhiyong to Zhong Yi Qi.

And since the clock was mainly in Hongkong, the two departments returned to Zhang Zhiyong directly after six months.

But only about a month later, Guo Jianxin left, Zhang Zhiyong served as COO, and the direct decision makers of the two departments became Zhong Yiqi again.

The direct result of public affairs reporting to CFO is that Li Ning Co's market, product marketing and corporate brand communication belong to Zhang Zhiyong and Zhong Yi Qi's decision making, and the cost of communication has increased significantly.

After Zhang Xiaoyan left office, the main functions of the Department of public affairs were divided into two parts. Financial and public relations and business communication were classified as new CMO, and government public relations remained in the original department.

However, there is no conclusion on the BI ownership and adjustment of work style with cross departmental coordination functions.

Olympic year crisis

Lining, chairman of the board of directors of the company, of course, is not aware of the underachievement of the company, the turbulence of personnel, and the undercurrents caused by the executives' parachuting and unclear functions.

In fact, as early as a meeting in 2007, Zhang Zhiyong had taken the initiative to talk about the problems he had discussed with Lining himself.

Zhang said Lining encouraged him to continue to "go on".

Such a discussion can not have no background.

Earnings data show that, as the most challenging company in the Lining industry, Anta (2020.HK) narrowed its sales gap to nearly $2 billion in 2007, to about one billion yuan in 2007. In the financial year, Anta's profit was only 7 million yuan less than that of Lining.

From 2008 to 2010, Lining's inventory turnover dropped from more than 60 days to 50 days, while Anta dropped from 45 days to 35 days.

One of the most lethal strategic mistakes of Zhang Zhiyong in the face of Anta, which is closely followed, is that by the end of 2008, Anta had become a strategic cooperative partner of the Chinese Olympic Committee with a price far from the outside world.

A senior executive from a sporting goods brand in Jinjiang said that the 4 year contract price of Anta's COC sponsorship was about 400 million yuan, which is quite different from the 600 million yuan and even 800 million yuan that had been widely disseminated.

In contrast, Zhang Zhiyong, who once decided to quit the COC bid because of the high price, has signed NBA star Baran Davis and NBA rookie Evan Turner at a high price since then.

It is regrettable that Davies, who had created the "black eight" miracle in the NBA finals, that is, the eighth elimination of the first place, has long been trapped in injuries.

At the upcoming London 2012 Olympic Games, Chinese spectators will first see Chinese athletes wearing Anta awarding costume on the podium.

Prior to this, in addition to the 1 billion yuan Adidas has won the Beijing Olympic qualification, Lining was once the only brand of COC award dress.

Of course, the price of Davies and other COC is far from high, but in 4 years COC has participated in more than ten international events, including the summer Olympic Games with high domestic ratings.

It is incomprehensible for Li Ning Co to hand over such brands to Anta.

Despite all the public appearances and letters to employees, calling on all staff to support Zhang Zhiyong and management, Lining's actions are hard to convince that Zhang Zhiyong is still at ease.

A phenomenon worth pondering is that, with the help of Chen Yihong and Zhang Zhiyong, Lining accumulated his own billions of dollars. But at the end of August 2010, express energy saving limited announced three pactions: buying 30.9% of the shares of Li Ning Co with fast energy saving new shares and convertible notes; purchasing 400 million yuan for the extraordinary China in sports promotion business; and buying Shenyang Industrial Park project for 700 million yuan.

If the acquisition is successful, there is no doubt that Zhang Zhiyong and Lining will have more layers of reporting.

However, the news was that in the evening of September 1, 2011, the announcement of the extraordinary China said that the acquisition was no longer in progress.

Does this make Zhang Zhiyong more comfortable with the pformation and reshaping of Li Ning Co?

But insiders say the key to the acquisition is that the Hongkong Securities Regulatory Commission is not allowed to release it.