Lenovo Completes Leadership Change, Yang Uninspired 联想完成高层调整，杨元庆难鼓舞人心

By newsdoug on March 6, 2012

Lenovo's Yang: just another bureaucrat? Ambitious PC maker Lenovo (HKEx: 992), arguably China’s best known global brand, is sending out signals that it has completed a transition that will see founder and longtime leader Liu Chuanzhi formally bow out of the company, though the first comments from new head Yang Yuanqing are hardly inspiring. Liu was notably absent at the opening of the National People’s Congress that started this week in Beijing, with media citing an unnamed illness for his failure to attend an annual event he has gone to for years alongside the nation’s top politicians and business leaders. (Chinese article) At first I thought this might be cause for concern, as Liu was the main force that built Lenovo from a small PC seller in Beijing to the world’s second biggest brand through a series of acquisitions and strong focus on developing markets. But now we’re seeing that Yang, his hand-picked successor, is speaking for the company on the sidelines of the NPC in Beijing. That, coupled with the Hong Kong stock exchange’s disclosure yesterday that Yang has recently exercised a large number of options to buy Lenovo shares, seem to be the company’s way of saying that Yang is officially taking over at the helm of Lenovo and Liu will no longer take part in major decisions, following his formal retirement last year. (previous post) So, what exactly did Yang say at his first NPC since taking over at the helm? Instead of making grand visionary statements about where he sees the company going or what products and markets will power it into the future, he chose to talk about the more mundane subject of the burdens of China’s high value added tax and how that is making its products more expensive. (Chinese article) Clearly this issue is an important one for Lenovo, which still counts on China for half of its sales, and it’s also quite possible Yang also made some visionary remarks that reporters simply chose to ignore. But from my perspective, these kinds of remarks don’t offer the most reassuring sign for investors, reflecting more the kinds of things a bureaucrat and manager would focus on rather than the bigger issues we should expect from the chairman of such a major company. Obviously you can’t draw too many conclusions from just one set of remarks like this. But history watchers will recall that Yang was formerly given the chairman’s job after Lenovo’s landmark purchase of IBM’s (NYSE: IBM) PC assets in 2005, only to have to step aside and let Liu return after the company ran into numerous problems several years later. The same could soon happen if Yang continues to perform like a bureaucrat and mid-level manager, boding poorly for the company’s longer-term future. And this time, Liu won’t be there to fix things if the company runs into problems.

Bottom line: Remarks by Lenovo’s new chairman at his first National People’s Congress reflect a lack of broader vision, boding poorly for the company’s longer term future.

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