In House of Huawei: The Secret History of China’s Most Powerful Company, Eva Dou argues that Huawei has become progressively more closed, secretive, and opaque, mirroring the structure and behavior of China’s political system. While she persuasively documents Huawei’s growing opacity, this analogy risks over-structuralizing the relationship between state and firm. States seek political stability and control, whereas corporations pursue efficiency, innovation, and profit—and Huawei’s performance metrics align far more with corporate technocracy than with authoritarian stagnation.
Indeed, Huawei’s ability to produce sophisticated telecommunications infrastructure, dominate international standards bodies, and sustain massive long-term R&D investment presupposes highly formalized, rule-based corporate governance mechanisms. Its secrecy, therefore, can be interpreted less as a direct replication of authoritarian state logic than as strategic market behavior shaped by intense geopolitical pressure.
Wearing American Shoes, Building Huawei’s Own Road
Adopting foreign management practices does not signify dependence; rather, it reflects a strategic clarity of learning from others in order to construct one’s own system. Huawei’s large-scale introduction of IBM’s Integrated Product Development (IPD) and Integrated Supply Chain (ISC) processes in the late 1990s embodied this philosophy. What appeared externally as “wearing American shoes” was, in substance, a deliberate shift from experience-driven improvisation toward institutional rationality—embedding data-driven decision-making, end-to-end responsibility, and customer-centric logic into Huawei’s organizational core.
By the late 1990s, Huawei had reached nearly 9 billion yuan in revenue and employed over 8,000 people, yet its management still relied heavily on “heroic leadership” and informal rule-by-man practices. As its business expanded from switching equipment to transmission and mobile communications, cross-departmental coordination deteriorated, redundant R&D projects multiplied, and resources were badly misallocated. International expansion further exposed these weaknesses: Western clients questioned Huawei’s financial transparency and delivery standards, and in one notable case, the company was excluded from a major Brazilian bid for lacking internationally recognized financial systems. Internally, R&D remained technology-driven rather than market-driven, leading to costly projects abandoned due to the absence of customer demand.
Faced with these structural bottlenecks, Huawei launched a sweeping transformation between 2000 and 2005. Under IBM’s guidance, it invested roughly 2 billion yuan to overhaul its product development, supply chain, and financial systems. The introduction of IPD and ISC restructured how products were conceived, developed, and delivered, while the adoption of integrated financial management brought Huawei in line with global accounting and control standards. Alongside these systems, Huawei absorbed the management ethos associated with the “Blue Blood Ten”—a reference to Ford’s postwar professional managers (Ford’s Whiz Kids) — marking a decisive departure from founder-centric governance.
This transformation institutionalized data as the backbone of decision-making. Huawei built a globally unified indicator system that raised on-time delivery rates from about 65 percent to over 90 percent. Its newly developed operational forecasting system enabled full-year cash-flow simulations with unprecedented accuracy, reducing forecast errors to under five percent by 2003. These tools replaced intuition with measurable accountability, enabling Huawei to scale without losing operational control.
The effects were profound. Product development cycles were sharply shortened, R&D efficiency improved, and overseas revenue surpassed domestic revenue for the first time in 2005. More importantly, Huawei engineered a distinctive balance between disciplined processes and its long-valued “wolf pack” mentality. While standardized management reduced chaos and waste, frontline teams retained decisive operational authority—the ability to “call for action” without waiting for bureaucratic approval. This hybrid model avoided the rigidity of excessive Fordist bureaucracy while preserving speed and aggression in competitive markets.
Cultural conflict during this transition was unavoidable. Engineers initially resisted process approvals, complaining that paperwork slowed innovation. Ren Zhengfei responded by insisting on “rigidity before optimization,” even reassigning senior executives who obstructed reform. Yet Huawei did not blindly replicate Western models. It combined quantitative management with experiential judgment, adding a customer-satisfaction veto mechanism to temper purely financial metrics. It also learned from the historical shortcomings of Ford’s Blue Blood Ten by avoiding short-term financial obsession and later establishing long-horizon research platforms to sustain technological leadership.
In retrospect, this management revolution laid the institutional foundation for Huawei’s later global expansion, from executive rotation systems to large-scale innovation platforms. The deeper lesson is not whether Chinese firms should learn from the United States, but how they should transform the opponent’s deepest institutional strengths into their own organizational immunity. Huawei’s experience demonstrates that openness and autonomy are not contradictions: true independence is achieved not by rejecting external systems, but by internalizing them, reshaping them, and ultimately making them one’s own.
Huawei’s Real Bottleneck: Building Discipline Beyond Technology
By the mid-1990s, Huawei’s most critical constraint was not technological inferiority in chips or algorithms, but the absence of mature organizational capabilities and engineering discipline. While the company achieved remarkable technical breakthroughs—including the successful development of its first digital ASIC chip in 1994—its internal operations lagged far behind its growth. What ultimately threatened Huawei’s survival in 1997 was not a lack of innovation, but systemic inefficiency, non-replicable practices, and fragile processes.
This crisis was rooted in explosive expansion. Huawei’s workforce grew from fewer than 200 employees in 1992 to over 5,600 by 1997, while sales increased more than one hundredfold within six years. Yet management systems remained anchored in “rule by individuals” rather than institutionalized processes. Research and development depended on heroic improvisation instead of standardized workflows, leading to duplicated functions across products and even crude engineering practices that undermined product reliability.
Breakdowns in the supply chain further exposed Huawei’s organizational weakness. Shipment errors and delivery delays became routine, forcing the company to form nationwide “firefighting teams” to resolve crises manually. In one notorious incident, a major network failure was met not with systematic diagnosis, but with ritualistic prayers, symbolizing the absence of a rigorous failure-analysis system. Customer confidence eroded as installation quality depended entirely on a shrinking pool of veterans, making performance impossible to replicate at scale.
These internal deficiencies became even more visible when Huawei attempted to internationalize. In markets such as Russia and Brazil, Western customers criticized the company’s lack of standardized documentation, quality control, and tendering procedures. Huawei discovered that technological capability alone was insufficient for global competition; what it lacked was a reliable system that could consistently transform knowledge into repeatable industrial output.
Ren Zhengfei diagnosed the problem with unusual clarity: algorithms and chips could be conquered, but enabling an organization of tens of thousands to produce with stability and efficiency was far more difficult. He warned against premature, superficial innovation before mastering foundational logic, arguing that imitation and disciplined learning must precede leadership. This philosophy later shaped Huawei’s approach to core technologies, including its return to the GCC and LLVM mainlines after early failures in building proprietary compilers—integrating first, contributing deeply, and only then replacing key components.
The long-term significance of this transformation extends far beyond Huawei itself. The central lesson is that sustainable technological power depends less on headline breakthroughs than on engineering rigor, process coherence, and system-level resilience. In an era marked by intense global competition in chips, operating systems, and AI infrastructure, the decisive factor is no longer whether a technology can be invented, but whether it can be engineered, scaled, and delivered with reliability. Huawei’s shift from intuition-driven growth to institutionalized discipline remains a compelling reminder that the true bottleneck of innovation lies not in technology, but in the organization that must carry it.
When Confidence Becomes Complacency: The Real Enemy of True Innovation
The greatest obstacle to genuine transformation is not technology itself, but mindset—followed closely by entrenched interests. Ren Zhengfei once warned sharply against two dangerous tendencies: superficial learning that chases novelty without depth, and intellectual laziness that mistakes speed for understanding. In his view, resisting change is less destructive than self-deception—the illusion that shallow imitation combined with rapid localization can substitute for real mastery. True capability, he argued, demands patience: one must fully absorb external knowledge first, and only return to innovate after ten or even twenty years of disciplined learning. This warning is especially relevant today, as “neo-nationalist complacency” risks mistaking slogans for strategy and confidence for competence.
This mindset manifests in two recurring misconceptions in China’s pursuit of technological breakthroughs. The first is the “quick victory” theory—the belief that mobilizing national resources can deliver full-spectrum technological replacement in a short time. The second is the “uniqueness” theory—the assumption that China’s path is inherently superior and therefore need not seriously engage with the underlying logic of Western technological systems. Both reflect a closed cognitive posture. Yet, as Huawei’s history shows, true autonomy does not begin with rejection, but with deep, sometimes uncomfortable, learning—what Ren once metaphorically described as “wearing American shoes” before crafting one’s own.
In 1998, Huawei’s full adoption of IBM’s IPD and ISC management processes looked at the time like an act of submission—“cutting one’s feet to fit the shoes.” In reality, it was a surgical dismantling of Huawei’s own empirical habits using Western institutional rationality as the tool. Ren’s principle was clear: learn one school thoroughly, master its logic, and only then modify it years later. This was not dependency, but strategic humility—building the underlying capabilities that make future replacement possible. Autonomy, in this sense, is not emotional independence, but structural replaceability.
The same lesson applies directly to the 2025 AI competition. While China’s open-source large models are advancing rapidly, the true bottleneck lies not in parameters, but in engineering infrastructure—training cluster scheduling, automated parallelism, debugging toolchains, operator optimization, and deployment pipelines. These are precisely the process-level capabilities accumulated by the PyTorch and TensorFlow ecosystems through more than a decade of iteration. Independent innovation, therefore, does not mean reinventing the wheel; it means first fully understanding why that wheel was designed as it was, and then building a compatible, replaceable, and evolvable alternative. Huawei Ascend’s high compatibility with the PyTorch API exemplifies this logic. The deeper message is clear: real technological sovereignty requires a gray-scale mindset—holding firm on strategic bottom lines while remaining intellectually open, humble, and patient toward global best practices.
Institutions as Anti-Fragile Infrastructure for Rebuilding After Fire
Ren Zhengfei once remarked that even if a fire were to reduce Huawei to ashes, the company could still be rebuilt as long as its systems and processes survived. This statement captures the deepest logic of organizational resilience: true strength does not lie in star individuals, single supply chains, or short-lived technological advantages, but in institutional structures that can endure shocks and regenerate capability. Institutions, in this sense, are not mere administrative tools—they are anti-fragile infrastructure, designed not only to survive disruption but to enable reconstruction after catastrophe.
Huawei’s own transformation illustrates a fundamental shift from intuition to institutionalization, from “language” to “mathematics.” In its early R&D phase, management was driven by superstition and improvisation—burning incense to repair equipment, relying on homophones for good fortune, and tolerating loosely accountable engineering teams. After systematic reform, Huawei moved toward quantitative management, measurable processes, and standardized accountability. As executives later noted, what was once unmanageable with a few thousand engineers became controllable with more than a hundred thousand precisely because judgment was replaced by data, and heroism by process.
This lesson is directly relevant to today’s race for AI industrialization. China’s strategic advantage lies in “AI + thousands of industries,” yet without replicable, measurable, and reproducible engineering systems, this advantage risks collapsing into “pilot success and large-scale failure.” Quality inspection models that collapse across factories and smart-city platforms that fail once a key engineer departs expose a common weakness: reliance on individuals rather than institutions. The real breakthrough lies in building end-to-end AI delivery systems—spanning requirements definition, data governance, model development, testing, deployment, monitoring, and feedback—so that AI can be delivered with the same reliability as telecommunications infrastructure.
At a strategic level, the global AI competition is increasingly a contest between rational institutions and irrational euphoria. The United States is drifting into an AGI-centered narrative bubble, chasing distant breakthroughs while underinvesting in industrial foundations and application discipline. China, meanwhile, risks a different illusion: celebrating application at scale without building standardized implementation methodologies. Huawei’s experience suggests a third path—one in which “AI for Industry” is fully institutionalized through scenario definition, data flywheels, model factories, edge inference, and closed-loop iteration, each governed by SOPs, KPIs, and clear responsibility.
Ultimately, the reason external shocks failed to cripple Huawei is not that it possessed a perfect chip or operating system, but that it had already built institutionalized mechanisms for self-correction and crisis response—such as its Blue Team system to counter groupthink and its rotating CEO structure for decentralized resilience. For Chinese technology firms today, the true “backup plan” is not a specific technology stack, but a disturbance-resistant governance and process architecture. This kind of soft infrastructure—not hardware alone—is what makes reconstruction after the fire not only possible, but inevitable.
From Heroes to Systems: The Organizational Core of U.S.–China Tech Rivalry
Today’s U.S.–China technological rivalry is no longer primarily a contest of individual genius, heroic entrepreneurs, or singular breakthroughs. It is increasingly a competition between organizational models—between systems that rely on exceptional individuals and those built on stable, replicable, and continuously evolving processes. The shift from “hero-driven” innovation to “process-driven” capability marks a deeper transformation in how great powers compete for technological leadership. In this sense, Huawei’s evolution offers a revealing case of how institutional design, rather than personal authority, can become the ultimate source of strategic resilience.
Huawei has deliberately weakened personal authority within its leadership structure. The rotating CEO system is largely symbolic, while real power is distributed across tightly governed functional departments under strict process supervision. This represents a conscious break from traditional models of charismatic, centralized leadership. Ren Zhengfei’s oft-quoted remark—“If Huawei were burned to the ground someday, as long as the systems and processes remain, we can rebuild it”—captures the company’s core belief: survival and competitiveness no longer rest on individuals or even on specific technologies, but on an internal “process immune system.”
This process-centered architecture proved decisive after 2019. Huawei’s Integrated Product Development (IPD) system sustained continuous product launches in areas such as 5.5G and AI processors. Its Integrated Supply Chain (ISC) system enabled a rapid restructuring away from U.S.-dependent inputs, raising localization rates from under 10 percent to over 60 percent. Meanwhile, the internal “Blue Team” mechanism institutionalized stress testing by simulating extreme supply disruptions in advance. These mechanisms, rather than stockpiled chips or short-term improvisation, explain Huawei’s capacity to absorb shocks and continue operating under severe external pressure. The company’s resilience thus reflects not technological self-sufficiency alone, but organizational anti-fragility.
At the national level, this highlights the contrasting strengths of the U.S. and Chinese innovation systems. The United States remains unmatched in “inventing the future,” driven by an agile ecosystem of universities, venture capital, and startups that excels at original breakthroughs. China, by contrast, increasingly excels at “industrializing the future,” combining national strategic guidance, large-enterprise engineering systems, and scenario-based deployment capabilities. The competition between the two is therefore not merely between firms or products, but between institutional architectures for turning knowledge into power.
The broader implication for national technological security is clear: future advantage will favor countries that move beyond fragmented, project-based problem solving toward national-level process infrastructures. This includes building standardized life-cycle regimes for large AI models, creating dynamic semiconductor supply chain resilience maps with automated risk warnings, and adopting full life-cycle cost accounting for scientific research. In essence, the central strategic question of U.S.–China technological competition is no longer “who has better ideas,” but whose system depends less on irreplaceable individuals and more on scalable, inheritable, and continuously improvable organizational mechanisms. From this perspective, Huawei’s process revolution represents an early and influential experiment in China’s search for institutional innovation dividends.
Against the Dictator Frame: Rethinking Eva Dou on Huawei
Eva Dou’s House of Huawei advances a familiar Western interpretation of China’s most powerful technology company: that Huawei’s rise is fundamentally the product of secrecy, centralized authority, and a founder exercising opaque, quasi-authoritarian control. In this account, Ren Zhengfei appears as a shadowy behind-the-scenes operator whose dominance mirrors the political logic of the Chinese state itself. Yet this narrative, while rhetorically compelling, reflects a recurrent analytical shortcut in mainstream Western writing—one that attributes institutional complexity to personal dictatorship and reduces corporate evolution to political metaphor.
A markedly different assessment came from Wang Shi, founder of Vanke Group, who in a 2019 domestic interview described Huawei not as predatory or authoritarian, but as low-key, disciplined, and strategically restrained. Wang emphasized that Huawei, like Vanke, emerged from Shenzhen’s early entrepreneurial ecosystem and never sought to “eliminate” rivals through brute force. He characterized Ren Zhengfei as extremely discreet and strategically “cunning” in the classical sense—comparing him to Erwin Rommel—someone who avoids public spectacle yet understands how to communicate internally at crucial moments to stabilize expectations and prevent destructive speculation. This portrait stands in direct tension with the image of a power-obsessed autocrat.
More fundamentally, Eva Dou’s interpretation underestimates the degree to which Ren Zhengfei pursued a deliberate project of self-demystification and institutional self-negation. As early as 2005, Ren argued that a company reaches true vitality only when the entrepreneur becomes dispensable, warning explicitly against the danger that “the people live, the policies continue; the people die, the policies cease.” He defined Huawei’s long transformation as a process of systematically eliminating personal authority in favor of institutional authority. In governance practice, this philosophy took material form: Ren withdrew from daily operations, established rotating CEOs, retained only rarely used veto and impeachment powers, and placed real control of resources in process-bound R&D and supply-chain leadership subject to cross-departmental checks. His oft-cited remark—that the “atomic bomb only has deterrent power if it does not explode”—captures the constitutional nature of his residual authority, not its autocratic exercise.
Huawei’s internal transformation further contradicts the idea that its success rests on the unchallenged will of a strongman. Beginning in the late 1990s, the company consciously subjected itself to radical “Westernization” through IBM-led reforms such as IPD, ISC, and IFS. Ren explicitly forbade ad hoc localization and intuition-driven improvisation during this phase, insisting that everyone “cut their feet to fit the shoes,” even at extraordinary consulting cost. Dozens of senior figures were sidelined or removed for resisting these process revolutions. This was not the suppression of dissent for personal control, but the suppression of cultural and cognitive path dependence in favor of replicable, auditable, and inheritable systems—precisely the opposite of dictatorship, which thrives on irreplaceable personal judgment.
This institutional philosophy is crystallized in Huawei’s adaptation of Ford Motor Company’s “Whiz Kids,” reimagined internally as the “Blue-Blooded Ten.” While Ford’s original group used data, systems engineering, and cost control to modernize a family-dominated corporation after World War II, Huawei elevated the concept into an enduring institutional symbol rather than a fixed set of heroes. As Ren put it, Huawei has “no gods and no heroes, only blue blood”—professionalism, rationality, and disciplined self-criticism. Unlike Ford’s technocratic efficiency revolution, Huawei’s “blue blood” functions as an internal constitutional antibody against organizational entropy, hero worship, and the “curse of the successor.”
Finally, Huawei’s global learning strategy—systematically hiring top American experts, copying U.S. corporate systems without shortcuts, localizing and optimizing them, and then out-executing at scale and cost—further undermines the claim that its rise can be explained by authoritarian control. The often-quoted description of Huawei as “an IBM operating system running inside a Chinese war machine” captures not political coercion, but organizational hybridization. The company’s competitiveness arose not from secrecy alone, but from its capacity to absorb, discipline, and surpass the very institutional logic of U.S. corporate modernity.
In this light, House of Huawei ultimately falls into a form of cultural determinism: because Huawei is Chinese and its founder is powerful, it is presumed to be dictatorial. The empirical record suggests the opposite. Ren Zhengfei’s central life project has been to build a Huawei that does not need Ren Zhengfei—a company governed less by personal will than by what might be called a “republic of processes.” When the founder willingly steps back and the organizational river continues to flow, what emerges is not authoritarian entrepreneurship, but institutional maturity.
Final Thoughts
Ren Zhengfei’s oft-cited echo of Confucius—“Time flows like a river, never to return”—is not an expression of personal melancholy, but a reminder of impersonal, irreversible motion at the level of civilization. By consciously dismantling the myth of the entrepreneur as a solitary “sage,” Ren redirects attention from individual brilliance to systemic continuity, allowing Huawei to evolve as a living process rather than a personal legacy. In this sense, the company’s most formidable strength has never been confrontation, but self-dissection: its willingness to institutionalize reflection, reform, and discipline as permanent capabilities rather than episodic reactions.
This is also where popular hero-centered narratives, including Eva Dou’s stylized framing, reveal their limitations. Huawei’s resilience is not the product of a one-man show, but of a governance structure that more closely resembles a constitutional monarchy guided by technocrats and secured by process-based constitutionalism. Its long-termism does not lie in loud declarations of “replacement,” but in the slow construction of civilization-level infrastructure—organizational, technical, and institutional—that remains stable amid leadership turnover, external blockades, and market upheavals. In the turbulence of 2025, this systemic clarity, rather than charismatic will, emerges as Huawei’s rarest and most decisive strategic asset.
References
- House of Huawei: The Secret History of China’s Most Powerful Company, Eva Dou, 2025
- Will Huawei Be The Next To Fall? (xia yi ge dao xia de hui bu hui shi hua wei), Tian Tao, Wu Chunbo, 2017