Lining Change: Rebuild "Micro" Stick And Carrot

Jin Zhenjun "Outgoing", TPG did not leave

A large number of media direct this message to Kim Chun Jun "leave" and "exit", not exactly accurate.

First of all, Jin himself is the acting president of the company who has removed his duties. He is still an executive director and executive vice chairman. He is also a member of Lining's highest decision-making level. Even if he is no longer a "forward", he is still in Lining's field.

Many comments ignore the more important fact that even though Li Ning Co is paid for a job, Jin Zhenjun is not a pure professional manager. His job is a partner of TPG and director of China business.

As one of the largest private equity funds in the world, one of TPG's main styles is to take the initiative to invest, that is, it will invest a lot of resources to help the invested enterprises to improve their management and operation.

It can be said that Lining was "lent" to TPG in 2012 when he invested in 2012, and he also had the title of "acting president". Lining had never stopped looking for the official post.

Judging from the announcement, the new candidate is very familiar.

In view of Jin Zhenjun's special status, the key of the analysis is not whether Kim remains president. He knows that he will always return to investment, but whether TPG will leave.

In 2012, TPG entered the stock market at HK $7.1 (Lining's current stock price was around HK $4). Recently, a public announcement was made. TPG's two founding partners, David Bonderman and James G.Coulter, still held 17.64% in their personal name. Recently, no information has been heard about TPG's sell-off of shares in TPG.

As long as TPG's money is still on Lining's ship, there is no stop loss, that is, confidence in Lining's recovery. Even if Jin Zhenjun completely quit, it can't explain anything.

Maybe the investment circle wants to see clearly. Lining's stock price has been calm for two days.

Rebuild "micro", stick and carrot.

The pessimistic discussion caused by the resignation is deeply rooted in Lining's performance losses over the past two years. It is believed that the change pushed by Kim Chun Jun has been "fruitless". Strangely, all the critics have so far failed to tell the truth about the change. Most of them simply attribute the problem to the execution and the incompatibility of the foreign team.

Admittedly, Jin Zhenjun did not achieve the expected "V" reversal in his term of office. However, the evaluation cycle of the effectiveness of the reform is too short, and the conclusion is too early.

At the same time, take the competitive strategy of "cost performance", for example, the price of the main products of Lining basketball shoes is concentrated in the price range of 300-450 yuan, and there is no more than the "Jinjiang Department", and at the same time, it is no longer more expensive than the "Department of the Jinjiang". At the same time, it is emphasized that no more brands will attack, return to the "brand" brand of IT, and gradually abolish the non core categories which are not related to sports, focus on developing five subdivision categories, clarify the functional appeal of each category, require clear selling points, upgrade the IT system on a large scale, and build a comprehensive retail platform with "direct sale + distribution". Personally, the biggest feature of Kim's change plan is "pragmatism". He abandoned the direct competition with international brands before returning to the mid end market.

In support of its change plan, Jin Zhenjun introduced the airborne top management team on a large scale, which did bring a conflict of corporate culture.

For example, the middle level of a supervisor's sales has been mentioned privately in the interview, and the new executives are much more severe in the assessment of KPI. Lining's culture is Chinese style implicit and positive encouragement. The new executive's speech is very direct, or even a bit unpleasant. "At first, many colleagues thought they could not stay". He slowly discovered that the style of the new team was "not right and wrong", and the new atmosphere was a little bit intense, but it was helpful to enhance the execution of the company.

As a matter of neglect, Lining launched a stock incentive plan of up to 137 million shares (roughly 10% of the issued share capital) in order to bind employees' long-term interests.

The core role of these changes is to rebuild the micro foundation of Lining's internal organizations from the aspects of products, operations and incentives. The most direct result is that Lining's goods can be sold faster. According to the materials disclosed in the 2014 central newspaper, the proportion of Lining's new products inventory increased from about 30% to 50% in the 14 months from April 2013 to June 2014. In the terminal network, the proportion of new products sold to water reached 78%, and the selling rate of products in the quarter increased significantly, and the discount rate of the discount stores increased from 2013 70% to 2014 81%.

And Lining's frustrations, is not the unsalable lead to high stock?

Personally, Jin Zhenjun is a Lining.

And the achievements of business architects are obscured by poor financial performance.

"Knife" into the Treasury, the money did not go.

In fact, few people directly accuse Jin Zhenjun of these measures. Generally speaking, the main evidence of his failure is Lining's financial performance.

Indeed, the gold medal was not given a profit in the tenure of office. Especially in 2014, the China Daily reported a loss of 586 million, and the effectiveness of the reform was far from being expected.

However, in 2014, the China Daily itself had the suspicion of "conceal". If the negative effects of expansion investment, bad debt provision and other one-time items were deducted, the net profit of Lining in the first half of the year was a loss of 103 million yuan, and the actual business was close to break even.

Income in the first half of 2014 was 3 billion 137 million, gross profit was 1 billion 400 million yuan. Many people did not know the details of their expenses, and deducted the cost of products. The top three expenditures of the disclosure were: advertising and marketing expenses 607 million, staff costs 432 million, land and buildings rent 358 million, and most of them were fixed expenses, which means that once the scale is growing rapidly, Lining's financial situation can be improved rapidly.

So, is Lining's business scale likely to expand rapidly? Basketball, running, badminton, training and sports life are the core categories of its focus. In the first half of 2014, the sales of the five categories of new products recorded a year-on-year growth rate of 3%-131% (among them, the growth rate of new basketball products reached 48%), and promoted overall revenue growth. As long as this trend is not interrupted, Lining's profits can be expected.

However, Kim Chi Jun's reform is equally regrettable. Personally, this kind of regret is not a slow performance, a loss of staff or a conflict between dealers.

Management style is partial and rational. When he accepted his interview, he expressed the typical consultant's language, analyzing it logically, but with little expressive power.

In the past two years, Lining lacked the kind of "Think Different" of Jobs's return to the troubled apple in 1997, and rarely had the finishing touch of the explosive products. Under the backdrop of the "90 Lining" brand movement and the perennial loss and negative news entanglement, the moulding of the spirit was very important for Lining to enhance her status in the new generation.

As an external investor, Jin Zhenjun himself is destined to be a pitional role, and its role is phased. It may be a good thing that he moves behind the scenes when business stabilizes.

It is said that the new CEO comes from Spain, which makes people have some imagination about the new brand temperament.

Xu Lianjie, a business godfather of Jinjiang and CEO of Heng An Group, commented that the outside consulting company had such a saying, "consultants come in, they are knives, we are practitioners, and we really push ourselves."

Jin Zhenjun took on the role of "knife", and promoted many inward or inconvenient reforms. He just resigned as chief executive officer, sealed the "knife" into the Treasury, and did not take away the money. From the introduction of TPG, the change to the CBA sponsorship, is the real operator not Lining himself?

In fact, it is not necessary for the outside world to speculate on the direction of a company from the change of personnel. It is only necessary to experience the products and taste the spiritual temperament expressed, so that they can understand their status and taste in general.