Ideal Auto’s latest quarterly financial report conference once again involved itself in the storm. The gross profit margin was cut in half, the management method was changed, and the sudden high-level change of blood caught people by surprise.
In this change, Li Xiang announced that the company will upgrade to a matrix organization. At the same time, Shen Yanan will step down as president, leave the board of directors of Li Auto, and join the process committee to serve the smooth transition of Li Auto until June next year. Chief engineer Ma Donghui will succeed Shen Yanan as the president of Li Auto and join the board of directors, taking charge of the R&D and supply groups as a whole.
It is worth noting that since the resignation of CTO Wang Kai at the beginning of the year, the ideal CTO position has been vacant. In this reform, Li Xiang promoted Xie Yan, the head of the system R&D department recruited from Huawei for less than a year, to the company’s CTO , with full responsibility for the Systems and Computing group.
Li Xiang said that this round of reform is because the company has entered a new stage, “to prepare for hundreds of billions and trillions of revenue.”
But why did Shen Yanan resign suddenly? Why did Li Xiang let Ma Donghui, who had never managed a supply chain, take charge of the integrated supply chain? Why is Xie Yan the CTO instead of Lang Xianpeng, the No. 1 member of the internal autonomous driving team? Leifeng.com learned that in the past six months, Ideal is still actively recruiting a CTO with an autonomous driving background.
There must be a reason for everything, and there are traces to follow before the storm. This article will try to explore the answer.
IPD is only the first step to ideally learn Huawei
After the IPO in 2020, Li Xiang is not only expanding his team and starting to develop intelligent driving by himself, but also learning how to make organizational management more advanced. Because he himself predicts that the ideal future will have the opportunity to hit an annual income of 100 billion. The key to determining the company’s ability to break through the 100 billion revenue scale is to upgrade the company into a matrix organization.
In China, there are very few companies adopting a matrix structure, because this management structure has never appeared in Chinese history, and Western companies that have successfully practiced this structure have not formed a systematic scientific theory, and each is different.
Huawei is one of the few Chinese companies that has successfully practiced a matrix organization.
Li Xiang once said in an interview that the best way for him to learn is to study large companies. He has studied Ali, Huawei, and Byte deeply.
A matrix organization is the ideal result of learning from Huawei for a year. Under the new plan, Ideal currently has 5 horizontally managed physical departments, including the Strategy Department, Product Department, Commercial Department, Supply Department, Process Department, Organization Department, and Finance Department.
Like Huawei, Li Xiang also set up seven first-level processes in the seven horizontal management departments, corresponding to: DSTE (from strategy to execution), IPD (Integrated Product Development, integrated product development), IPMS (Integrated Product Marketing & Sales, integrated product marketing and sales), ISC (Integrated Supply Chain, integrated supply chain), BT&IT, LTD, IFS (integrated financial transformation), forming the smallest closed loop of operation of the matrix organization.
Among the seven first-level processes, the most important ones are IPD, IPMS and ISC.
Since last year, Ideal has gradually introduced the IPD system. In 2021, Li Xiang established a large product department within the company to build an IPD system. In January 2022, Li Xiang also held a meeting of directors internally, officially announced the launch of IPD, and appointed the relevant person in charge.
Li Xiang said that one of his core OKRs for 2022 is to learn Huawei’s IPD process and promote its implementation. In order to promote the implementation of IPD, he also found a consulting company to provide IPD introduction training for employees. At the same time, he also introduced Meng Xiaokun, a senior expert with Huawei background, who is responsible for sorting out and building the IPD process in the strategy department. Ideal second-generation models, including L9, L8, L7, etc., are all products of this centralized product development process.
IPD is the first step for Ideal to learn from Huawei. The advantage of this management method is that it can promote the whole process of product definition, R&D, production, and sales with the product as the goal. This idea of promoting R&D with products is very unique. Think personal touch.
However, under this mechanism, the person in charge of each project is very critical. If he does not have sufficient perception of the product and an independent judgment on the overall market like Li Xiang, once there is an error in one of the links or processes, the resulting The impact is not a little bit.
The delisting of Ideal ONE is a typical example. The accelerated withdrawal of Ideal ONE from the market has brought a loss of 803 million yuan to Ideal. Issues related to the provision of Ideal ONE have also affected the gross profit rate of vehicles. 9.2 percentage points.
Although the founder Li Xiang played a decisive role in the discontinuation of Ideal ONE, the internal IPD process of the group was connected to the product and development team, but not to sales, which led to management confusion.
Although IPD has been operating within Ideal, it still needs to be continuously improved according to its own situation. In order to make up for the defect of IPD’s misjudgment of the market, Li Xiang introduced the IPMS process.
IPMS, derived from IPD, is a set of procedures for product launch progress, which is the same as IPD at all operating nodes. However, IPMS pays more attention to the market feedback of products. The core logic of its process design is to interpret the product readiness of each node of IPD from the perspective of sales personnel, so as to make corresponding preparations for listing, further standardize and process, and finally The IPMS process is formed, which can be understood as the IPD from the salesperson’s perspective.
IPD is in charge of product development progress, and IPMS is in charge of product launch progress and quality. Because the operation nodes are the same, the quality of development progress and product launch progress are interlocked. Li Xiang said, “When the whole system becomes complicated, It is not enough to align information, it is also necessary to lock various departments together at key links (perception, decision-making, execution).”
IPMS is the key marketing process that makes Huawei mobile phones so popular. Li wants to learn IPMS from Huawei, which is related to whether Li Auto can win the quadrillion-level consumer market.
However, IPMS is not an easy task, because it involves issues such as cross-departmental collaboration and information handover, and relies heavily on personnel. It takes a long time for a product to go from planning to delisting, and it requires high skill requirements for personnel management and project management. Once a person’s job transfer or resignation is handed over, the handover of documents will encounter great difficulties .
Having learned from the experience of the discontinuation of ideal ONE, in this adjustment, Li Xiang will control the IPMS as a whole.
Why not let Shen Yanan manage ISC?
In addition to IPMS and IPD, the ISC (Integrated Supply Chain) system is another mountain that stands in front of the ideal organizational upgrade.
When Meituan founder Wang Xinggang invested in Li Auto in 2019, he warned Li that he wanted to lay out the supply chain in advance, and told him that the loss of expanding production scale was nothing more than a waste of 100 million or 20 million yuan due to the construction of factories in advance. But if they can’t keep up, the losses can reach billions or tens of billions.
However, Li Xiang didn’t make up his mind at the time, and instead made the layout after the IPO. And this move was a bit late, because Li Xiang did not expect that the Shanghai epidemic in April 2022 would affect Jiangsu’s logistics, causing the Changzhou factory to operate for only one week and stop production for three weeks. At the same time, he did not expect the raw material cost of lithium carbonate. The increase in battery pack costs will lead to an increase of nearly 50%, so that the price of Ideal ONE will increase by more than 10,000.
After many lessons, Li Xiang realized that it is imperative to control the supply chain.
In this reform, Li Xiang did not let Shen Yanan continue to manage the manufacturing, supply chain and quality departments, but let the chief engineer Ma Donghui take charge of this part. Although Ma Donghui has nearly 20 years of experience in automotive hardware development, he knows little about supply chain management compared to former president Shen Yanan.
Why did Li want to make a risky move?
Shen Yanan is called the most trusted person by Li Xiang, who has accompanied Li Xiang through the darkest moments one after another, and is a vital member of Li Xiang. This point was affirmed by Li Xiang himself in the letter from all employees. Li Xiang said that Shen Yanan helped him, a founder with only Internet entrepreneurial experience, jointly create a smart electric vehicle start-up that is extremely difficult to survive.
In the early days, Li Xiang only let Shen Yanan manage the supply chain. Later, he gradually handed over production, manufacturing and sales to him. The “user business group” under his management consists of six first-level departments: manufacturing, supply chain, quality and safety, and Sales, charging network, after-sales, overseas, it shows Li Xiang’s trust in it.
However, changes came this year. Regarding Shen Yanan’s departure, Li Xiang responded that it was Shen Yanan’s own decision, “his decision does not leave much time for the company.”
However, some insiders speculate that Shen Yanan’s resignation may be related to the insufficient production capacity planning he was responsible for.
Ideal ONE is the first mass-produced model of Ideal. It has only been three years since it was launched, and the cumulative production of Ideal ONE has exceeded 200,000 units, becoming the best-selling new energy model with a price of more than 300,000 yuan.
According to Ideal’s previous plan, Ideal Motors originally planned to achieve the ideal L9 delivery volume of more than 10,000 vehicles in September. The medium and large SUV Ideal L8 will be released in early November 2022. It will be delivered immediately after release, and a six-seater version and a five-seater VIP version will be available. Two models. But in fact, it has become the L8, the replacement model of Ideal ONE, which was rushed to the market less than half a year after the release of Ideal L9.
At that time, only the Changzhou factory of Ideal was in normal operation. Although there was a production base in Beijing, it was still being upgraded, with an annual planned production capacity of 100,000 vehicles. At the beginning of 2022, Ideal bought 1,133,400 square meters of second-class industrial land in Chongqing, which is regarded as the ideal third factory by the outside world, but the factory will not be officially put into operation until 2024.
The planned annual production capacity of the expanded Changzhou plant will reach 200,000 vehicles, which cannot meet the ideal production capacity. As of November 30 this year, Ideal has delivered a total of 236,000 vehicles. Based on the existing annual production capacity of 100,000 ideal vehicles, its capacity utilization rate has exceeded 257%.
However, insufficient capacity planning is not entirely Shen Yanan’s problem. A person familiar with the matter told Leifeng.com that capacity planning is related to qualifications. The factory did not start production because some qualifications have not been obtained. [About the car factory waiting for the government to issue a license, we will launch a series of special articles, so stay tuned. All the insiders are also welcome to chat with the author on WeChat (ysl1075442629). 】
Regarding the real reason for Shen Yanan’s departure, there is a saying that it has something to do with his not fully agreeing to implement a matrix organization throughout the company.
Li Xiang had already had the idea of implementing a matrix organization in the company before he publicly changed his management method this time, but his idea did not receive strong support from Shen Yanan.
Compared with the IPD process, the challenge of changing the “integrated supply chain” process is much greater, because it covers a wider range of changes, including multiple business systems such as sales, procurement, manufacturing, logistics, and customer service within the company. , but also includes customers and suppliers outside the enterprise. Once the supply chain system is to be managed in a process-based manner, it means that all information about the company’s supply chain must become open and transparent. The integrated supply chain may involve some interests of some people.
Li Xiang’s personnel adjustment this time also confirmed the rumors and conjectures of the outside world.
It is not without warning that Shen Yanan left the ideal car. In September this year, when the company was caught in a vortex of public opinion, he sold the shares of Ideal Auto twice in a row within 5 days, reducing his holdings by 1 million shares and cashing out 13.1638 million US dollars, or about 91.13 million yuan.
Li Xiang said that Shen Yanan is a top partner who can’t be met, and it is not easy to find a direct replacement for him. In the future, Ma Donghui will be responsible for the software and hardware development and supply chain related work related to mass production projects. Form, because R&D and supply should be closely coordinated.” So, was it in a non-tight state before?
Why didn’t Lang Xianpeng take the position?
In this organizational structure and personnel appointment, another thing worth pondering is that Xie Yan serves as CTO. There are two ideal CTOs in total, one is Wang Kai and the other is Xie Yan.
In 2020, after Ideal went public, it began to expand its team, and it is also deploying autonomous driving research and development. Although products and efficiency are ideal advantages, in Wei Xiaoli, ideal autonomous driving research and development has always been at the bottom. At that time, the ideal autonomous driving team had only more than 20 people, and the computing power team had more than 10 people, reporting to Vice President Fan Haoyu.
Although most of Ideal’s vice presidents are trained from within the company, Li Xiang has always wanted to recruit an executive for the company to be in charge of software-level research and development. So in August 2020, Li Xiang recruited Wang Kai from Visteon to serve as the company’s CTO.
After Wang Kai came to Ideal, he recruited Korean Huang Danian from GAC to be responsible for the delivery of the 2021 Ideal ONE smart driving.
At the same time, Ideal was learning from Huawei and also learning to separate products from R&D. The R&D was jointly in charge of Ma Donghui and Wang Kai. The product delivery part was originally in charge of Fan Haoyu, and then handed over to Huang Danian.
At that time, Ideal internally advocated that technology research and development and product research and development should be done separately (this is also one of the essence of IPD), and advocated that Ma Donghui should be responsible for mass production research and development within two years, and be responsible for technology research and development for more than three years.
Under this structure, Huang Danian, who is closely integrated with mass production and responsible for the delivery of the 2021 Ideal ONE, has to report to Ma Donghui, while Lang Xianpeng, who was in the No. 1 position of the autonomous driving team before, reports to Wang Kai instead of Ma Donghui.
This arrangement raises some questions about ideal self-driving fleet management.
Lang Xianpeng and Wang Kai had a disagreement on whether to self-develop intelligent driving. Ideal is to change the assisted driving hardware architecture for Ideal ONE from October 2020, but there is no unified internal conclusion on how to do it.
The “conservatives” led by Wang Kai feel that the company’s assisted driving research and development team has less than 100 people, and less than half of the employees have code development capabilities, which cannot support complete self-development. They advocate cooperation with suppliers, but only if the other party is required to automatically The driving algorithm code is open, which is the so-called “white box model”. When there is a need, the company will send people to the supplier to make changes.
Leifeng.com learned that Shen Shaojie, the leader of DJI’s vehicle-mounted vehicles at the time, had talked with Li Xiang about jointly developing an intelligent driving system, and was even willing to open source the code to Ideal (this actually violated DJI’s traditional system), but Ideal In the end, Horizon was chosen. This state of cooperation with suppliers for intelligent driving research and development will continue until early 2021.
Inside Ideal, there is also a force advocating self-development of autonomous driving, represented by Lang Xianpeng. Lang Xianpeng’s point of view is that if the supplier’s solution is adopted, a lot of time and energy will be consumed in the connection and communication of various processes. In the future, almost no supplier can do higher-level assisted driving, and this road will not go far. .
At the beginning of 2021, Lang Xianpeng and Li Xiang issued a military order of “resign if you don’t do self-research”, and launched an intelligent driving project called “Acropolis”, which gained Li Xiang’s trust and became the actual leader in the research and development of Ideal ONE intelligent driving. .
Soon after, Huang Danian left Ideal. An insider told Leifeng.com that Huang Danian was mainly in charge of the supply chain at GAC before his ideal, and had never done research and development on autonomous driving.
Wang Kai also resigned soon after, and the ideal CTO position was taken over by Ma Donghui.
After Wang Kai left, Li wanted to seek CTO eagerly. He mobilized a large number of headhunting friends and asked them to help recruit suitable candidates from major Internet companies. As long as it is the “right person” he thinks, no matter which city he is in, Li Xiang will be full of sincerity and take the time to fly to talk with the other party in person.
Wei Junqing of Didi Autopilot also appeared on the headhunting list, but Ideal could not match his offer.
The headhunter also recommended a high P-level CTO candidate in BAT to Li Xiang. The candidate’s annual salary in his old club exceeded 20 million, but Li Xiang could only pay half and half (about 12 million). After many rounds of negotiations, he could only Give another 3 million more, and finally the candidate chose a bigger offer with a higher salary from other platforms without looking back.
Before Xie Yan joined Li Auto, Li Xiang did not promote Lang Xianpeng as CTO. Lang Xianpeng’s self-developed smart driving plan has been announced to the public that he has “successfully” realized full-stack self-development.
At present, the path of autonomous driving on the market can be roughly divided into three directions. One is represented by Tesla, which uses pure vision and strong perception technology for autonomous driving; the other is a solution using vision + high-precision maps. This is represented by Xiaopeng; in addition, it is represented by the vision + lidar solution, represented by Momo Zhixing, etc.
Lang Xianpeng worked in Baidu for 6 years before coming to Li Auto in 2018. The self-developed intelligent driving solution advocated by Lang in Ideal Auto is still an intelligent driving solution that relies on high-precision maps.
The delay in the release of Xiaopeng’s new car is because its assisted driving does not have high-precision map qualifications. This incident has proved that the “vision + high-precision map” solution is difficult. To self-develop assisted driving, you must first obtain the high-precision map qualification.
And this is another great difficulty for the ideal. An Gaode map expert once told Leifeng.com that there is a well-known regulation in the high-precision map industry, and companies with foreign backgrounds cannot obtain this qualification, including Weilai, Xiaopeng, and Ideal.
It is conceivable whether Lang Xianpeng’s self-developed autonomous driving plan has been successfully implemented in the ideal.
At that time, Wang Yilun, who was in charge of the ideal intelligent driving AI algorithm, also participated in the Langxianpeng Acropolis Project. Wang Yilun joined Li Auto in December 2020. He was a senior expert of Huawei Auto BU and chief AI architect of Kuandou Technology. Kuanteng Technology focuses on high-precision maps for autonomous driving. The founder Liu Jun was previously the head of Baidu’s map department. His partner at the time was Wang Yilun.
Wang Yilun is in charge of the perception algorithm team at Ideal and reports to Lang Xianpeng. However, in October this year, Wang Yilun also left.
Regarding the reason for Wang Yilun’s departure, Ideal did not give a positive response.
Stress may have been part of the reason for his departure. Wang Yilun himself once said in an interview that after joining Li Auto, work has almost become the whole of life. Under the high-intensity overtime work, he gained 20 catties a year. Previously, Li Xiang also said that it is common for the ideal self-driving team to work overtime until 12 o’clock at night, and often work overtime on Saturdays and Sundays.
Another person who is close to the ideal said that the reason for Wang Yilun’s resignation may also be that the ideal autopilot team is difficult to expand, and insufficient job indicators have not been approved due to cost considerations. By the end of 2021, Li Auto’s intelligent driving team will increase from 40 at the end of 2020 to 600 people. During the same period, Weilai’s intelligent driving team will have nearly 800-900 people. Among Xiaopeng’s 4,500 R&D personnel, about 1/3 are related to autonomous driving. talent. A headhunter told Leifeng.com that the current ideal autonomous driving team is around 700 people.
Under the new organizational method, Li Xiang promoted Xie Yan, who understands the operating system, to be the CTO. People with a background in autonomous driving research and development come to be in charge of the ideal software development team.
Before joining Li Auto, Xie Yan participated in and led the development of the operating system AliOS at Ali. After leaving Ali, he managed the Hongmeng operating system business at Huawei. Xie Yan is not only the core talent of the domestic operating system, but also familiar with Huawei’s IPD system. It is a perfect fit to choose him to lead the company’s system development group.
A plus point for Xie Yan is the successful establishment of the ideal cockpit laboratory, and the connection between the basic research and development of the ideal cockpit and technical product development.
In the ideal, Xie Yan also got the support of the soul figure and veteran Fan Haoyu. Xie and Fan are both colleagues of Alibaba Cloud OS, and Xie’s joining also came from Fan’s recommendation. Another identity of Xie Yan is a classmate of Meituan Wang Xing at the University of Delaware in the United States. In daily chats, he will mention his old classmate who is not bad but comes back to do food delivery. It is worth mentioning that Wang Xing is the most important investor of Ideal.
In short, this upgrade of the organizational structure is Li Xiang’s review and accountability of various internal problems in the past few years; Adjustment.
As for the effect, let’s wait and see.
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