Wong Wai Ming has helped to oversee Lenovo’s transformation from a local Chinese company to the largest computer supplier in the world. The Executive Vice President and Chief Financial Officer tells Nicky Burridge how he is leading the company through changes brought by the new economy, and how his accounting background still plays a pivotal role.
I t is hard to imagine the decision to go global was ever a difficult one for a company that today has a presence in more than 60 countries and sells its products in 160 different markets. But Wong Wai Ming, Executive Vice President and Chief Financial Officer at Lenovo and a member of the Hong Kong Institute of CPAs, remembers that the company’s decision to expand its reach through the acquisition of IBM’s personal computer (PC) business in 2005 was highly controversial at the time.
“Being in China and Asia Pacific was very profitable and people questioned why we were going global, especially as China’s economy was growing by high-single digits every year,” says Wong. “But the board and shareholders took the view that if we wanted to grow the company over a much longer period, we needed to think about the global market, and not just stay in one country or one region.”
While the decision to expand internationally has clearly paid off, with Lenovo currently the largest computer supplier in the world, Wong concedes that the global nature of its business does create challenges. “We have US$51 billion in revenue, which is spread pretty evenly between China, Asia Pacific, Europe, the Middle East and America. This means the clock is on 24 hours a day. You can never say, ‘it is evening now,’ and take a rest.
Something could happen at any time, in any part of the world.”
He adds that the challenges the business faces and the nature of his own work are also ever-changing. “I think it is literally different every day. That can be tiring sometimes, but it is rewarding when you overcome these challenges, see the result and generate value for shareholders,” he says.
A transforming business
Lenovo was founded in Beijing in 1984 and listed on the Hong Kong Stock Exchange in 1994. Wong joined the company in 1999 as an independent non-executive director, before becoming group CFO in 2007. His role involves running the overall financial operations of the group, including the financial control, financial reporting and treasury functions.
During his time at the company, he has helped to oversee significant change at the business, including Lenovo’s transformation from being a local Chinese company to what he describes as “a truly global firm.”
He was also involved in Lenovo’s decision to diversify its product range away from only PCs to include mobile phone handsets, data storage solutions and servers. This process began in 2014, when Lenovo acquired IBM’s x86 server business, followed in the same year by the purchase of mobile phone handset maker Motorola. “Although we still believed that PCs were a growing business, we were aware that the world was changing and if we were going to expand our activities, we needed to have more than one product line,” Wong explains.
The initial transition was not easy. “We went through a number of challenges because the market changed quite dramatically, and these were two new businesses that we were in, but after two to three years we started to gain momentum. It has given us a very solid foundation to capture business opportunities going forward.”
He adds that the acquisition of IBM’s back-end operations and capabilities gave Lenovo the “building blocks” to offer a fully integrated service, including data storage, servers and networks.
As part of its transformation, Lenovo has introduced what it calls its “three-wave strategy,” under which it focuses on three key areas: its core business, growth in key segments, and investing in emerging technologies.
“We have introduced an intelligent transformation process to capture the opportunities coming out of the new economy driven by technology,” Wong explains. He adds that Lenovo also recognized that its customers no longer wanted just devices, but they also wanted the infrastructure that was needed to support those devices. “We need to provide smart devices, smart infrastructure, smart verticals.”
He explains that smart devices need to be backed by smart infrastructure, such as servers, storage and networks, while these in turn need to be backed by smart verticals, namely solutions that enable different industries to make the best use of their smart devices and smart infrastructure.
“This really captures our belief that the world is getting smarter and we are building up our capabilities to meet those opportunities,” he says.
One of the biggest challenges Wong thinks Lenovo, as well as the whole industry, currently faces is keeping up with the speed of change in technology. “Many of the things that we thought were impossible in the past are here today. The key is how this technology will be applied in our daily lives, and how will it make our lives easier,” he says.
To keep up with this change, Lenovo is constantly investing in innovation and has numerous research centres around the world. “Given the pace of change, we will not be able to excel in every area, we need to pick where to invest. We are not a purely scientific research company. Our aim is to leverage technology to improve the lives of our customers,” Wong says.
The group is applying this philosophy to its PCs, which remain its most popular product. “One of the reasons people use smartphones more than computers is because they are always on and always connected,” Wong says. “We want to put those features into our PCs to make them smarter. But to do this, we need to overcome challenges, such as using computing power and limited battery life, in order to create a much more user-friendly machine.”
He jokes that his colleagues tease him that one particular laptop Lenovo makes, the ThinkPad X1 Carbon, is specially designed for him, as it has high computing power and long battery life, which means he does not need to recharge it on a flight from Hong Kong to New York.
Among Lenovo’s latest products, Wong is particularly proud of Moto Mod snap-ons, modular accessories users can attach to a Motorola smartphone. These devices have been released in the United States, and fit on the back of moto z³ smartphones, the first mobile phones to have access to a 5G network, to give them different functionalities, such as enabling them to be used as a film projector or a smart speaker with Amazon’s Alexa virtual assistant.
Another innovation breakthrough by Lenovo, unveiled in May, was a preview of the world’s first foldable PC in the ThinkPad X1 range.
Lenovo also works cooperatively with other firms to develop innovative solutions. Wong explains: “Today you have a term called ‘co-petition’ because nobody can do everything in one go, so you have to work with each other, and more openly, to get the most benefit. If you look at the history of technology, sometimes you have closed systems and sometimes you have more open ones. Most of the time the open systems are more successful. We subscribe to the view that a more open system will serve the needs of people better.”
A trusted partner
Lenovo places a high emphasis on corporate social responsibility (CSR), winning a Platinum Award in the H-share Companies and Other Mainland Enterprises Category and a Sustainability and Social Responsibility Reporting Award in the same category in the Institute’s Best Corporate Governance Awards 2018.
Wong explains that the driving force behind Lenovo’s approach to corporate governance is that it wants to be the most trusted partner for all stakeholders, whether these are customers, suppliers or colleagues within the company. “If we want to be a trusted partner, that has to be reflected in our culture and we have to build processes around it. Rather than just driving short-term profit, you have to drive sustainability.”
Its CSR strategy focuses on areas ranging from employee welfare, to maintaining high ethical standards, including respecting intellectual property, to taking action to reduce its greenhouse gas emissions. More recently, it introduced packaging material derived from renewable sources, known as bio-based product packaging.
Lenovo has published an annual Sustainability Report for the past 12 years, in which it sets out its objectives and targets in this area, as well as providing progress on its performance in relation to previous targets, such as reducing its global direct and indirect greenhouse gas emissions by 40 percent from 2010 levels by 2020. It has so far achieved a 32 percent reduction. The group is working on improving transparency in its supply chain, and it requires suppliers to comply with its own Supplier Code of Conduct. It has also joined the Responsible Minerals Initiative and supports the Responsible Minerals Assurance Process, with 82 percent of the minerals it uses having conflict-free status.
In addition to these measures, the group has launched the Lenovo Foundation, which aims to empower minority groups through giving them access to science, technology, engineering and maths (STEM) education. “I think if you have an open company that embraces different groups of people, and accepts them as part of the family, it helps people to come up with innovative ideas,” says Wong. “When you encourage people to work together and they have a sense of belonging and a platform where their capabilities are recognized, it gives them the ability to perform.”
Lenovo also strives to make sure the head of each of its regions is from that region, rather than being brought in from China or Asia. “People from different parts of the world have different cultures and we put a lot of effort into building that up. In that sense, we are a truly global company.”
Wong started his career as an accountant, and he credits the skills this gave him for enabling him to go on to undertake the many different roles he has done. “I think if I was not an accountant, I would probably not be in this position. Accounting gave me the basic training to understand what numbers mean. It is a very solid training for anyone to be successful.”
After graduating from the University of Manchester Institute of Science and Technology in the United Kingdom with a Bachelor of Science in Management in 1982, he joined accounting firm Moore Stephens in London, where he qualified as an auditor.
“At the time, everybody wanted to join one of the Big Eight firms because of their high-profile clients. Moore Stephens had a few high-profile clients, but a lot of their customers were small- or medium-sized businesses or even family firms. Working for them enabled me to gain experience in dealing with very small companies through to very big businesses. It was a wonderful three years,” he says.
After he qualified, he moved back to Hong Kong, taking up an investment banking job with HSBC, where Lenovo was one of his clients, before moving on to Bank of China.
Wong left the banking sector after nearly a decade to become chief executive officer at media group Sing Tao, which had also been one of his clients. He stayed there for five years, before taking up the post of CEO at investment holding company Roly International Holdings, and then moving on to be CFO at Lenovo.
He thinks his varied career has given him a deeper understanding of how businesses operate and the importance of understanding customers’ needs.
Despite his more than 30 years’ experience, Wong still considers qualifying as an accountant to have been one of the most memorable moments of his career.
His second most memorable experience occurred when he was working at HSBC. The Mainland was beginning to open up its economy and he was involved in helping one of the first batch of companies to list.
The company, Maanshan Iron & Steel Company Limited, was based in Anhui Province, and there was no direct flight there at the time, with Wong having to fly to Nanjing and then spend a further two to three hours travelling. Alongside its steel operations, the company had a range of other businesses, including hotels.
“We helped the company transform and segregate its commercial and non-commercial activity, raise money and build a new production line,” Wong remembers. “It was a challenging transaction because it was a very traditional industry in place that did not have a direct flight, but it turned out to be very successful and raised US$500 million.”
Wong’s current role does not leave him with much spare time, although he likes reading and enjoys watching football.
He describes himself as a “die-hard Manchester United fan,” following his days in the city as a student. “I have been a supporter of Manchester United for many, many years.”
This article was originally published in the May 2019 issue of A Plus. You can also read the digital version.