Vanke Yu Liang once again sounded the siren to the industry. 2022 will be a time of desperate battle and life and death.
On February 12, Yu Liang, chairman of the board of directors of Vanke, delivered a summary speech at the 2022 annual meeting. In this speech, Yu Liang spoke earnestly, said frankly that the real estate industry is currently in the "black iron era" and made a very severe judgment: "this year is a year of backwater, that is, whether to die or live, there is no middle state."
This speech not only involves industry observation, but also implies the direction of Vanke's next adjustment. In response to the industry requirements of "shrinking the table and clearing out", Vanke may shrink in post resource allocation, income and welfare, production process and so on. Specifically, Yu Liang proposed changes in strategy, organization and people, and talked about the requirements for mechanism and culture.
In terms of strategy, Yu Liang predicted the characteristics of the external environment. He proposed that the first feature of the external environment is that the industry has entered the stage of shrinking and clearing. For the real estate industry, shrinking the table and clearing it is de financialization. Another feature is that the new development model of the industry mentioned in this year's economic work conference can be summarized as one center and three basic points: one center is to solve the Lbx Pharmacy Chain Joint Stock Company(603883) housing problem; The three basic points are the matching of "people, land and housing". In addition, there are two major changes. One is that the market differentiation will become more and more obvious, and the other is that the scale of the industry begins to shrink.
In terms of organization, Yu Liangyong mentioned four aspects of work adjustment, which reflects the tendency of contraction everywhere. First, it emphasizes that the allocation of personnel resources throughout the country should be more concentrated; Second, the project department needs to "subtract"; Third, income, welfare and subsidies need to be readjusted; Fourth, reduce layers of subcontracting in the production process.
In terms of people, Yu Liang put forward strict requirements for the working attitude of Vanke employees. He responded to the complaint that "Vanke has no talent, and I hope there should be Superman". He put forward that the attitude of doing a good job is the most important. He even said frankly, "I especially hate the project manager who signs in with photos to prove that he has been off the construction site. I suggest that BG in all districts and cities should deal with it seriously once it is found (direct dismissal)."
in terms of mechanism, Yu Liang believes that the real estate industry in the "black iron era" has been unable to find the right people with financial incentives. The mechanism that Vanke can provide is the stage of career and development opportunities, rather than simply giving money.
In terms of culture, Yu Liang proposed "frugality and wartime atmosphere". In terms of resource allocation, it is inclined to the three main tasks of stabilizing and improving, shrinking and clearing the surface and "growing muscles"; Emphasize performance, require all managers to sink, and put forward to stick to discipline and live frugally. Yu Liang also said that he would not buy first class when booking air tickets.
The real estate industry experienced strict regulation in 2021, and there were many credit risk events. The downward trend made the industry enter the winter. Data show that as of February 16, 61 A-share listed real estate enterprises have disclosed the performance forecast for 2021, of which 26 are expected to lose, accounting for nearly half, and 14 companies are expected to decline in net profit.
The sales of head real estate enterprises were also affected. According to Kerui data, Vanke achieved sales of 627.78 billion yuan in 2021. Although it still ranked second in the list, it decreased by 10.8% year-on-year. The sales of Evergrande fell to the top three in China with a year-on-year sales of nearly 44.08 billion yuan, down from nearly 4.08 billion yuan.
the following is the full text of Yu Liang's speech:
Chairman Yu Liang's concluding speech at the 2022 meeting of Vanke Group
January 9, 2022
Shenzhen Vanke International Conference Center
2022 is a year for the group to overcome difficulties and fight back, and it is also the beginning of a new era. Everyone's understanding of this issue is not comprehensive enough. Vanke often says that the five in one reform is strategy mechanism culture organization people. Specifically, it refers to the three things from strategy to organization and then to people, which connect strategy, organization and people through mechanism and culture. Let me talk about these aspects first.
I. in terms of strategy
The first feature of the external environment is that the industry has entered the stage of shrinking and clearing. For the real estate industry, shrinking the table and clearing it is de financialization. The state does not allow real estate to occupy too many financial resources, nor does it allow residents to bear a high debt burden due to buying houses, because these financial resources do not effectively support the real economy. De financialization is an inevitable trend and a painful process. For example, it feels good to give you sugar at the beginning, but after eating too much, you accumulate fat, which will be very painful when you quit sugar. This time has been heavily dependent, no sugar will be depressed.
This year is a year of fighting back. How to understand it? Is either dead or alive, there is no middle state. If you can solve the burden accumulated in the past, you have the opportunity to start a new journey. If you can't get rid of the burden, you can't live. Pan Aimin's report, through the case of Japan, has told us not to have illusions, but to clear up quickly and resolutely. For us, it is a battle of life and death.
Another feature of the external environment is the new development model of the industry mentioned in this year's economic work conference. It is predicted that the new development model can be summarized as one center and three basic points. One center is to solve the Lbx Pharmacy Chain Joint Stock Company(603883) housing problem. Three basic points, or three basic grasping points, are the combination of housing and housing, rent and purchase, and the matching of people, land and housing. In fact, housing and housing without speculation are two aspects of "housing and housing" and "no speculation". For the aspect of "houses are used for living", the policy may be slightly relaxed, because some too strict restrictions on existing needs may be slightly relaxed to effectively solve the reasonable living needs of residents. "No speculation" means that although some restrictions on house purchase may be relaxed, speculation is still not allowed, the increase limit will be retained, and the government also controls investment speculation by means of Taxation or restriction on transfer. Although "housing" may release some demand, is there such a large demand today? Last year, the age of customers who bought Vanke's house was postponed by two years, and the total amount was also decreasing as the demand was continuously met. Second, both rent and purchase. The simultaneous development of rental and purchase is an opportunity for rental housing, but it also means that just in need buyers can choose between "rent" and "purchase", which will divert the demand for buying a house. And even if the demand for rental housing increases, it can not hedge the decline in the scale of house sales in the development business. At the same time, many small and medium-sized cities in China have cheap houses and more supply. They do not need to develop leases. Third, the matching relationship among people, land and houses may change. In the past, the distribution of construction land index and population distribution did not match, the urban supply of population inflow was generally insufficient, and the relationship between land and housing did not match. For example, Shenzhen used to have only about 20% of the residential land index, while it was generally about 40% abroad. In the new development model, the relationship between people, land and housing may be improved. The housing supply in core and major cities will increase, and some unmet improvement needs in the past due to purchase restrictions and other reasons may be released in the future.
However, we should adapt to the reality that the industry returns to the attribute of people's livelihood and do not expect prices to rise.
In addition to the above three basic points of one center, there are two major changes. One is that the market differentiation will become more and more obvious, and the other is that the scale of the industry begins to shrink. In the face of major changes, we should also make corresponding changes. In terms of Bijia investment, we need to think further. In the face of shrinking market differentiation and limited profits, we need higher quality investment. We should change from uniform and decentralized investment in the past to local intensive investment with better market performance and proven team trading ability. If some places do not do well, it may be necessary to cancel the renovation system and withdraw the serial number. The projects we face are becoming more and more complex, and the more complex the situation is, the more we need to adhere to various disciplines.
II. Organization
Our organization is facing more intense competition after the market shrinks. Everyone wants to live and will go all out. What do we rely on to win? First, how do we build a game of chess? Originally, the northwest region set up an office in Shanghai to recruit high-energy talents. From today's perspective, do all regions really need to build so many product lines and so many product leaders? Seeing the investment map introduced by Zhang Hai today, do we need each company to establish a separate investment and expansion team to study the city? Can you understand macro policy better than pan Aimin? Besides, we also have external professional professors to assist in the research. Similarly, investment and development and product teams need to build a game of chess. In the face of fierce competition, we don't have so many resources and energy to disperse our efforts.
Secondly, in the face of business changes, how can our organization adapt. The traditional development business is shrinking, but the organization only responds to the situation of shrinking business scale. The operational business should be "long", I agree; I agree that the complex projects of level 6-8 in the development business should be "long". But what about the "elimination" part? No one has proposed how to solve the "elimination" corresponding to the "long" when our traditional business shrinks. What should be "long" can be "long" and must be "long", but what should be "eliminated" should also be "eliminated". Let me give another example of chief customer officer. At the beginning, each unit set up a chief customer officer, and the group has 65 chief customer officers. Now it is reduced to 14 people. Although the number is greatly reduced, the quality of thematic reports is much better than 65 people because they are more professional. It's easier to discuss problems with 14 people. The extra 51 colleagues were divided into other departments, that is to say, we did something to recruit some people. Later, although it was inappropriate or adjusted, they still stayed here. Therefore, the change of business must be adjusted with the adaptation of the organization.
The third question is, how can we find a new anchor point in the face of the black iron era? What new anchor point does our salary system establish? Are we still anchored in the golden age system? Just now, president Zhu and I mentioned that everyone's income must be significantly reduced this year. Of course, we should not think that the anchor point of the organization is just income. For this new anchor point, we should establish new anchor points in all aspects. Our welfare and subsidies should adapt to the era of black iron. We have come from the golden age. Today, our heart must be in place at this time point and set up a new anchor point, otherwise we can't get rid of the inertia of the whole yellow age.
The fourth question is whether we should reengineer the process in the face of industries with low profits of about 10%? Let me cite one thing that impressed me most. When I visited Byd Company Limited(002594) , Wang Chuanfu said that he did not produce tires and glass, but all the others were produced by himself. I said that the auto parts were very mature and could be used. But later found that this is still the golden age thinking, find various spare parts manufacturers, you can put the car together. He said that president Yu has manufacturers for each part, and each manufacturer has to earn 10% profit. How can we make money together? In the past, every link of real estate could be outsourced. After outsourcing, we can still make money. Can we do it today? All the work is done by others. Everyone has to earn 10%. We certainly have no money to earn, so we need process reengineering. The deep impression of the development and operation Department is the case of wood floor substrate in the mobile phone system. Therefore, our setter culture always asks the outside contractor to do one. Yesterday, it was said that 200000 or 300000 yuan was normal once the construction site hoarding was removed. We are in the black iron age today. Who will do it if we don't do it ourselves? Many of our charging models using the cost plus method will be overturned. Our past extravagant, second setter, fake hands and layers of subcontracting must not be feasible. For the organization, the above four points are the work we may need to adjust in the face of changes.
III. human aspects
After finishing the strategy and organization, I'll talk about the human aspect. In fact, the organization is also the human problem. In the past two days, I have heard many people complain about a problem, that is, we have no capable people. I hope we'd better have Superman. I want to ask who we are? Who will do it if we don't? If there are really capable people and Superman, what do you want us to do? We fantasize that it is impossible to invite Superman. At the group target action communication meeting, I talked about the example of six people. Do you remember? He Guopei said that he just did all the things that everyone thought of but didn't completely do. For example, he listened to customers' voices in the restaurant at breakfast time every day, and gave customers a special gift when they left the store, which was surprising. Li Bin, the project manager of Wuhu company, is also an ordinary person. He insists on working on the construction site for more than 300 days a year. If he has nothing to do, he has to go to the construction site and have a look. In exchange, there have been no construction site accidents and group complaints for ten years. Is this a question of ability or attitude? How did Deng Qiqi of Chongqing Weijia sell 293 houses a year? She can make friends with every client who clinches a deal and ask the clients who have clinched a deal to recommend a house for her. How did the property safety officer become the top selling house in millions when he turned to park Lin's house? Although he no longer works as a security officer, he stands guard at the gate at a fixed time every day and turns around in the park. He never waits for guests in Park neighborhood office. These examples let us think about what we lack today. Is it the so-called ability or the attitude of doing a good job?
I especially hate the project manager who uses photos to sign in to prove that he has been off the construction site. I suggest that BG in all districts and cities should deal with it seriously once it is found (direct dismissal). Vanke would rather close the construction site than allow such a project manager to exist. No matter how capable it is, it is not the person Vanke needs. Today, we do have some companies that have not done well, but Vanke has done real estate for such a long time. We are not without people in level 1-5 projects, but lack of good attitude and responsible spirit.
IV. mechanism
I just talked about strategy, organization and people. Now let's talk about mechanism. When many people mention the mechanism, they can only think of giving enough incentives, such as monetary incentives. We are now in the "black iron age" environment, can we still give so much money? There are many popular industries in the society, such as yuanzizhou, games, energy, etc. these industries are easier to find the right people by using money incentives, and our industry has no ability to bid today. We can't give more money incentives than others, and people motivated only for money are not suitable to work in the industry in the black iron era. The mechanism that Vanke can provide is the stage of career and development opportunities, rather than simply giving money.
V. cultural aspects
Besides culture, there is no doubt that the most important eight words at present are - "frugality and wartime atmosphere". I would like to emphasize a few points.
First, we carry out our work in the face of a backwater battle. All work is carried out around the war, focusing on the three main tasks of falling back and steady improvement, shrinking the surface and clearing out, and "growing muscles". All irrelevant work can be put aside and put in a secondary position. All our resources, including organizational resources, financial resources and human resources, should be allocated to these three tasks. For example, the recent discussion on training is a continuous work, but this year's large-scale, long-term and centralized training for long-term development may not be appropriate, but in order to fight, it is possible to organize short-term training similar to Huangpu Military Academy.
Therefore, we should understand that since it is a battle against a backwater and a desperate situation, all our work must focus on three major tasks.
Second, strengthen performance. Heroes can only be judged by winning or losing, and cadres can only be selected from the ranks that win the war. I see that some Sales Champions are doing well and capable, but why don't they play a role in higher posts and larger platforms? Is it because these positions no longer need excellent people?
Third, managers should all sink and take the lead. Now the group has cancelled the level of the original group partners, and all the original group partners have sunk to their units. Zhang Hai said in his report that one level with one level is to sink. If you, as the general manager, do not go to the project site, do not personally understand the situation, and only sit in the office, it must be unqualified. In the face of strong performance, it is very problematic for managers to take the lead and sink down actively. Including the division of labor and cooperation arrangement of president Zhu, Zhang Hai and Zhu Baobao, it is also a sinking, so that president Zhu can sink more to the important task of shrinking the group's table and clearing it.
Fourth, in terms of culture, we must have strict discipline. In the face of big and evil battles, even if there are good weapons and lax discipline, we can't win the war. Strict discipline is not only a matter of orders and prohibitions, but also investment discipline and various bottom line disciplines. Zhang Hai mentioned in his report yesterday that Longhu has adhered to discipline for a long time, and CNOOC has done well in this regard. It is precisely because it has adhered to discipline for a long time that it can still take and pick projects.
Fifth, we should live frugally, reduce waste and create a wartime atmosphere of saving food. The advocacy issued by the headquarters to the whole group has not been implemented in all places. My assistant won't buy first class when booking a ticket for me. If I have time to get close, I will buy whichever flight is cheaper. How much money can be saved is not the most important. The signal is very important. If our management can't take the lead and set an example. Then the signal will be greatly reduced. How to ask employees? As for creating a wartime atmosphere of saving tables and reducing food, all units should implement it by themselves to make everyone feel that the atmosphere of war is different from that in the past.
The theme of today's annual meeting is "dare to fight and win". I conclude with four sentences.
First, dare you fight? Do we have a choice on this issue? There is still a chance to win if we dare to fight, but the result of not daring to fight must be failure, so we have no choice. Only by daring to fight can we get a glimmer of vitality.
Second, will you fight? Many times we say we won't fight, but if we don't fight, we'll never fight. It's only possible to fight. We also have no choice. For example, after listening to the examples of Deng Qiqi and Fang Yihong, did we learn how to become a sales champion? But also learn her method and spirit, and only through action can this work be improved. Learn in the process of playing. You will never learn if you don't play. Today, there must be someone in Vanke's huge team who can fight. If there are so many blank spots, no one will fight. To be honest, we can't live long ago.
Third, it is very important to be willing to play together. How to understand partnership? It means that some people attack and some want to cover, and even die while covering in order to block the incoming enemy. Whether we are willing to fight together means that if we are not willing to be beaten, we will fail. As a backup force, if we support the front line to win, we can share the fruits of victory together. For example, with such great changes in the investment market, the ability of each operation team also varies greatly. Today, there are not so many forces and resources to disperse, so we must fight together. For example, if the development BG does not help establish government relations, the apartment Bu does not have this ability and team. It's impossible for BG to help the housekeeper establish the property service system if they don't rely on their own money. Let's not belittle ourselves and say that so and so is better than us. Who can sign a comprehensive strategic cooperation agreement with the Shanghai municipal government? Yes, Vanke. Who is Guangzhou going to sign a strategic cooperation agreement with? Yes, Vanke. So we have a lot of resources. When the power of the whole group comes together, Vanke is very powerful. But if everyone wants to be the boss, take charge of one stall and set up one set, leading to the dispersion of power, then we can't win.
The fourth and most crucial question is whether we can play particularly well. To win this battle and win next spring, we must take "particularly good" as the standard. Otherwise, if you can't do it very well, what's the meaning of just dying? What do you mean especially good?
Three requirements - to be a professional expert, an all-round champion and a winner in long-distance running. Being a professional expert tells us that we can't be satisfied with being a good amateur. We should not compare with ourselves in the past or with our brothers, but with the benchmark in the industry. If you have become an industry benchmark, you should compare it with the goal of greater excellence. Ten years ago, when the level of marathon was not high, running for three hours was a very good result. At that time, the first batch of people who could run for three hours felt that they were very good, but not in a few years. Because this achievement has been overturned by others, we have to become professional experts to do particularly well.
Second, be an all-round champion. The era of relying on one recruit fresh food to eat the world has ended. Now we should pay equal attention to development, operation and service, which is also Vanke's new triathlon. Just running a marathon is not enough. We also need to be good at swimming and cycling. We must be an all-round champion. Because only being an all-round champion can make a profit. As in the past, it is impossible to make money by doing individual items separately.
Third, be a long-distance runner. Long term persistence, long-term persistence, doing the right thing and not violating discipline can make us play particularly well.
If we dare to fight, can fight and are willing to fight together, we will win, and we will win especially well. The above is my concluding speech at the annual meeting of the group. Thank you.
