Background
Liu Chuanzhi was born on April 29, 1944, Zhenjiang, Jiangsu, China.
传志 柳
Liu Chuanzhi was born on April 29, 1944, Zhenjiang, Jiangsu, China.
Liu graduated with an engineering degree from Xian Military Communication and Engineering College of China in 1966 and began his career as a research scientist at the Institute of Computing Technology, Chinese Academy of Sciences.
He founded the Legend Group in 1984 with ten other engineers and a capital of 200 000 yuan (approximately US$25 000) borrowed from the Chinese Academy of Sciences, his employer from 1970 to 1984. The company began producing its own personal computers in the early 1990s and by 1996 had surpassed IBM as the largest seller of PCs in China. What had started out as a business venture designed to overcome the frustration of the scientists at not being able to commercialize their research efforts soon became one of the most important companies in China. It now employs around 20 000 people worldwide and has a turnover in excess of US$13 billion.
The humble beginnings of Liu’s company in a small room – barely 20 square yards in size in Beijing are often compared with the origins of Apple Computers in Steve Jobs’ garage in California in the 1970s. The firm’s early years were a period of slow growth and consisted of many bumpy rides. Slow because Legend could only grow by distributing foreign-made computers and peripherals and bumpy because its staff was comprised primarily of scientists who did not understand the market. The management team often differed on which commercial road to travel, leading to serious discussions. They learned from trial and error, and Liu studied experienced and successful companies such as Hewlett Packard and IBM to learn from their management structures and techniques. One of the early tasks of Legend involved research into magnetic storage technology for computers with the aim of finding commercial applications for these discoveries. In its early days, in 1985, Legend developed a character set for computers that incorporated the vast number of Chinese characters on a keyboard. In the 1990s, it developed a technology that provided character recognition of the Chinese language that allowed users to write Chinese characters on a digital pad and translate the characters onto a computer screen.
China’s move from a planned to a market economy both posed a challenge for Liu Chuanzhi and presented opportunities. The Chinese government granted Legend per- mission to brand and sell its own PCs, at the same time it also reduced tariffs that allowed foreign computer makers to gain access to the Chinese market. Liu had to compete with the very same companies that he had studied and learned from. However, Legend had the competitive advantages of owning the Chinese character set that it had developed in 1985, lower Chinese wage levels, lack of tariff and shipping charges, and freedom from various other taxes on computer-related products that its foreign competitors had to pay.
Liu ensured that his company would remain competitive and at the top of the market by introducing innovations. Legend was one of the first Chinese companies to offer its employees stock options and Liu promoted talented young people to higher-level staff positions. By 1996 Legend had surpassed IBM in terms of China’s market share in computer sales, its managers were young and the company had a strong entrepreneurial spirit. Liu made sure that Legend remained on the cutting edge of technology by beating its competitors in introducing innovations like the Pentium II processor, taking advan- tage of the internet to boost sales, and focusing its attention on marketing computer services in addition to equipment very much along the same lines that IBM followed in the 1980s.
In 2003 Legend officially changed its English name to Lenovo Group. This was prompted by the company’s initial attempts at selling computers in Europe, where the name ‘Legend’ had already been trademarked in the United Kingdom and Germany by its competitors. The first two characters, ‘Le’, were taken from its original name ‘Legend’ and ‘novo’ to signify the spirit of innovation that is central to the company’s mission. Another step in its strategy to achieve growth from international markets was the acquisition of IBM’s PC division in 2004. Liu has been the principal architect behind this acquisition and though relatively small when compared with the scale of the usual global mergers and acquisitions, it is of significant importance to China, marking the arrival of Chinese companies on the global economic scene.
The growth of Lenovo has been possible because of Liu’s bold vision and what Liu himself describes as his ‘very authoritarian management’ style. Liu has been heralded by The Economist as a leader of a ‘corporate cultural revolution’ in China because of the role he has played in his company’s development and growth; such accomplishments also earned him the titles of ‘Star of Asia’ from BusinessWeek and ‘Asian Business Man of the Year’ from Forbes in 2000. In November 2001 Liu was selected as one of the ‘Twenty-five Business Leaders with Global Influence’ by The Times, the only executive from China to be thus honored. The awards have not been limited to the business world: in 2006 Liu was named the Distinguished Executive of the Year by the Academy of International Business, the leading association in the world of researchers and scholars in the field of international business.
Unlike many other Chinese business leaders, Liu has often spoken out on political issues. Liu has criticized this tendency. He said, "when it comes to the inappropriate actions the government takes, businessmen don't have the courage or capacity to go against them; second, they lack the social responsibility to care for the whole world and what they do is to 'mind their own business.'"
During an interview with Caijing in October 2012, he advocated for what he called "elite selection" of political leaders. He said, "I’m not sure how practical it would be to have universal voting in the near future. I hope the country's leaders could be elected by the elites of the society." Liu is also deeply concerned with the rule of law. He said, "My biggest worry is an unlawful world. I tell my employees to be careful all the time; don't disrespect the government or bribe anyone - even so, I'm still not at peace because there are always some corrupt individuals coming along to cause problems."
In December 2013 Liu expressed optimism about economic reform in China. He said, "Now if the market is to play a central role and the government only plays the referee, only you will decide if you are going to win the race."
Liu is married and has three children. Liu's daughter Liǔ Qīng is an alumna of Peking University. Liu Qing joined Didi Chuxing as chief operating officer in July 2014 after working at Goldman Sachs for 12 years.