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Zhu Hai
CEIBS Global EMBA2001
Founder & Partner of Stalagnate Capital
Former Executive VP, Member of Executive Committee,
Former President of Schneider Electric (China) Co, Ltd

Before joining the VC industry in 2017, Zhu Hai had been a prominent figure in the electric industry.

He was the first Chinese president of Schneider Electric China, where he served for more than 20 years. He earned a reputation in the media as an “M&A strongman” and “iron-fisted executive” for presiding over a number high-profile mergers and acquisitions and reform initiatives.

However, Zhu came across quite different during our interview: He was both gentle and scholarly. Through more than two decades of working at Schneider Electric China, he has developed unique thoughts and insights on professional development and cross-cultural management.

Beating Your Supervisor’s KPIs, Not Just Reaching Them!

Zhu joined Schneider Electric China in 1996, and served in a number of roles, including Chief China Representative for Modicon, Marketing Manager for low voltage products, and Senior Executive leading global OEM sales. In 2009, he was promoted to be the Group’s first Chinese President for its China operations, a rare achievement among his peers.

Zhu counted himself lucky to be able to reach such a position.

“Throughout my career working at Schneider Electric China, I was very fortunate to meet four or five good leaders who introduced measures to nurture local talent, which gave me a lot of opportunities. Schneider also attaches great importance to the development and diversity of local talent.”

With an enabling corporate environment how can one maximize his or her strengths? Zhu says simply “Get things done neatly and efficiently”, adding modestly that he was not an ambitious person.

“By neatly and efficiently, I mean you need to beat your supervisor’s KPIs, not just be content with meeting them. Stop whining about not having opportunities. If you prove that you can outperform, you will have your opportunities. I’ve heard so many inspiring success stories in the business world, including one about a restroom cleaner who worked his way up to an executive position,” he said.

Zhu shared one of his own stories. When he took over part of the Shanghai operations, Schneider Electric China manufactured 5,000 electric installations annually, and the Group’s global production was 50,000 units. After six months of observation, he declared that China alone could produce 50,000 units. He was dismissed by many as a “lunatic” who knew nothing about the industry. Three years later, he reached the goal.

“If you make it, you’ll have your opportunities. The world is as simple as that.”

Maintaining an Independent Character and Viewpoint

The most common challenge with working at a foreign company is cross-cultural communication and management. Managers need to maintain an independent character and keep the channel of communication open with subordinates and colleagues from different cultural backgrounds. With more than 20 years’ experience at Schneider Electric China, Zhu shared his insights.

“For starters, be yourself. Have an independent viewpoint and stick to your guns, to build your brand,” Zhu advised. He has never used an English name, and goes by the Chinese name Zhu Hai in all communications prepared in English. This has caused occasional confusion: some people mistakenly called him Mr. Hai. “I’m known by my Chinese name since childhood. You need to respect me by getting my name right. It’s common in some Eastern European countries to put the family first, why can’t we?”
Zhu also advised having independent views, in order to have a proper conversation with colleagues. “Many Chinese working at foreign companies have no independence of judgment and thought. That is very bad,” he said.

“Apart from sticking to your guns, you need to express your opinion in a plain way,” Zhu said.

He said that he uses a “three-fives” principle in his work: 

“Three-fives” principle

• Using no more than 5 slides in a PPT presentation;
• Communicating no more than 5 messages a time。
• Get the message across within 5 minutes.

He said that at board or executives meetings, it is common to address 15 or 20 topics within two to three days, and that the audience’s patience can run out if you cannot get your message across within a few sentences. If any of his subordinates fails to communicate an idea within 5 minutes, he will tell them to pull their thoughts together before reporting to him again.

As well as urging concision in expressing a view, he suggested honing speaking skills. “You need to talk to your audience in a language they’ll understand,” he said.

In other words, you need to communicate with Westerners in the Western way of thinking, and Easterners in the Eastern way, he explained. “To speak in a language they’ll understand, you’ll need to do some homework about their values and backgrounds,” he suggested.

In 2006, Schneider Electric’s acquisition of Delixi Electric, a Wenzhou-based local brand, made headlines in the business world. Zhu, who played a pivotal role in mediating the deal, was dubbed by the media as an “M&A strongman”.

He recalled that negotiations dragged on for a year without any progress, before he was called in. He realized that at the crux of the stalemate were cultural differences between East and West. Delixi saw Schneider as a behemoth determined to gobble it up systematically by specifying detailed terms in the draft contract, while Schneider was of the belief that it had to include detailed terms given a deal of such a large scale. After identifying the underlying cause of the problem, he convened a number of meetings to assuage concerns on both sides, eventually pulling off a successful deal rarely seen in the industry.

Finally, Zhu emphasized that “you need to walk the talk, so that you can establish your reputation and command respect from others.”

Professional Managers Need to Be Entrepreneurial

In the earlier years of joining Schneider, Zhu did not have much managerial expertise, nor did he know much about financial terms of an income statement. When asked how he managed to overcome the challenges, he blurted out, “Simple, by learning.” 

In 2001, in his early 30s, Zhu Hai came to CEIBS to study for an EMBA (now known as Global EMBA). He revealed that courses offered by CEIBS have been very helpful for his career development, because they equipped him with financial knowledge, a powerful managerial tool in his eye.

“I often tell my people that financial knowledge is a managerial tool. You just cannot manage without it,” he said. He believes that all strategies can be accurately expressed in numbers. As an example, he said that all goals can be quantified in numbers, and the associated costs can be calculated, so that resources can be more efficiently distributed. He said proudly that he has adequate financial knowledge to serve as a CFO at a big company.

Zhu offered a piece of advice to Global EMBA students that as professional managers, they should take the initiative and be entrepreneurial, apart from performing their responsibilities.

As he sees it, it is absurd to believe that reaching the KPIs established by the employer should be considered a full performance of responsibilities. Managers need to make strategic plans one or two years in advance and make adjustments as necessary, while KPIs are based on the current condition for the current year.

To further make his point, he gave an example: In 2005, when the company’s business was booming, he transferred 800 posts from Beijing and Shanghai to offices located in central and western China, based on consensus expectations that there would be an economic downturn the next year. The personnel change was not included in his KPIs, but by planning it six months ahead of the competition, he gave his company a head start and hence an advantage.

Way Forward for Foreign Companies: Going from Multinational to Global

Today, as China’s economy is undergoing cyclical changes, there is no shortage of pessimism. However, Zhu believes it is normal for any economy to experience ups and downs at certain stages.

For all managers at foreign companies, the biggest challenge lies in managing for success during an economic downturn.

“All employees at foreign companies, especially middle and senior managers, must try to identify and forecast economic cycles. Most of them have zero experience in this respect,” Zhu said.

Meanwhile, Zhu suggested that managers at foreign companies should learn to properly manage their career expectations, and discard any illusion that companies will enjoy high speed growth for another 10 or 20 years consecutively. Gone are the days when front-line employees got promotions every two to three years, and wages doubled within several years.Multinational companies no longer enjoy clear advantages over local businesses, and their employees have to meet higher requirements, he added.

“We used to refer to foreign companies as multinationals, while in fact they can be either multinational companies or global companies,” Zhu said. “Multinationals replicate practices developed in the home countries in locations across the world, and they are concentrated in the IT industry. Global companies run on a core business philosophy, but adapt strategies to different markets in which they operate.”

He believes that global companies will become the mainstream in the business world, and multinationals will become a thing of the past. Schneider’s success in China has been a result of a result of transition to a global company adapting to the local market, he said. 

Do Things That Make You Happy

In 2017, Zhu left Schneider and embarked on a new career by founding Stalagnate Capital.

Having worked his way up to the top position in a foreign company, he was the envy of peers, so his departure left many of them puzzled.

“I left for a simple reason. Going digital is key to the development of a large business, and this notion has attracted wide interest across many foreign companies in China in the last five years. I wish I could help Chinese companies to get a head start in the digital transition by founding this investment company,” he explained.

He said that Stalagnate Capital invests in the manufacturing industry, using a B2B model, instead of B2C. Meanwhile, it focuses on AI-empowered digitalization.

As well as investing in Chinese companies, Zhu is also helping them to go global. “I used to help a foreign company grow in the Chinese market, now it’s the other way around.”

Zhu said that with his deep knowledge of China and Europe, he wanted to serve as a bridge connecting Chinese and European SMEs, as well as Chinese employees working at foreign companies and local private companies.

“Going forward, there will be an exodus of people from foreign companies to local businesses with greater potential and vitality. They are like flowers growing in a greenhouse and can wither quickly when exposed in the natural elements. So I wanted to create an environment that helps them make a soft landing,” Zhu said. He said he is both investing in businesses and developing talent for them to grow.

At the end of the interview, Zhu shared some his ideas on career planning:

Career planning

• Firstly, career planning is just like managing a company, so you need to know your own worth;
• Secondly, you need to examine your own strengths and weaknesses;
• Thirdly, follow your heart and do things that you enjoy. 

“I invest not just to make money, but also to share what I have learned with future business managers. I think that sharing is more fulfilling than owning,” Zhu added. 

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