Chapter 132 Whipping the Bull
Although Zhang Yunqi only said four words.

But these four words were like the strongest and fastest of the 2.5 million sperms that were ejaculated. It passed through the cervical track that was like a military obstacle race, hit the bull's eye directly, and poked at the pain point hidden deep in Duan Yongping's heart.

Yes.

For him, how to manage Rihua well, how to promote Xiaobawang nationwide, and how to make this company continue to grow like a snowball are not the most difficult problems. The real hidden disease hanging in his mind is the four words "Yihua Group".

Rihua Electronics Factory is a wholly-owned subsidiary of Yihua Group. When Duan Yongping first took over, the factory's performance was not good and no one cared about it. Yihua Group tried to sell it several times, but at that time, Rihua Electronics Factory was heavily in debt and had a lot of workers to deal with. No one was willing to take over such a hot potato.

Now, after two years of transformation under his leadership, the Rihua Electronics Factory is now operating well. However, as Subor grows faster and faster, its relationship with Yihua Group has become more and more delicate. What is most difficult for Duan Yongping to accept is that Yihua Group often withdraws Subor's profits and uses them elsewhere.

In fact, he also knew that for the Yihua Group as a whole, it was understandable to "whip the fast bull" or "rob Peter to pay Paul", but it would cause considerable harm to the development of Xiaobawang. Many of his decisions were constrained by the Yihua Group.

Duan Yongping has realized that if this core problem is not solved, some of his ideals will be difficult to achieve through the development of "Little Overlord".

Now that Zhang Yunqi mentioned this, he really wanted to hear the views of this insightful and thoughtful young man. He waved his hand to let Shen Wei go out. When he and Zhang Yunqi were the only ones left in the office, Duan Yongping said, "Since Boss Zhang mentioned Yihua Group, he must know something about the problems between me and Yihua Group. Do you have any advice?"

Zhang Yunqi smiled and said, "Then let me tell you what I think?"

Duan Yongping said: "Please speak freely."

Zhang Yunqi picked up the ceramic cup and drank a sip of tea, then said, "Mr. Duan, are you planning to propose a shareholding reform to Yihua Group?"

Duan Yongping looked at Zhang Yunqi and was silent for a long time before nodding and saying, "Yes, I have been thinking about this idea for a long time. After the first generation of Subor learning machine is launched, I plan to find an opportunity to discuss the shareholding reform with Chen Jianren, the president of Yihua Group."

Zhang Yunqi asked again: "Do you think this path is feasible?"

Duan Yongping subconsciously asked back: "Why not? I proposed the equity reform not for my own profit, but to make this factory develop better."

Zhang Yunqi was happy.

Today's young entrepreneur Duan Yongping is still a bit idealistic, perhaps because he wants to be the Panasonic Shinnosuke of China and wants to turn "Little Overlord" into the Panasonic of China.

Zhang Yunqi said: "I can understand, Mr. Duan, you just want to use management equity incentives to turn the purely employment relationship between you and the shareholders of Yihua Group into a cooperative relationship. This idea is not bad. After all, it can solve the constraints in the development of Rihua once and for all. But I think it is unrealistic, at least it does not conform to the strategy of Yihua Group. Yihua Group can give you money, but share restructuring? It is unlikely."

Zhang Yunqi was not making this up when he said this.

It is now 93, and he remembers very clearly that Duan Yongping had proposed to Yihua Group many times, starting from the beginning of 94, to transform "Little Overlord" into a joint-stock company - a property rights reform, in order to fundamentally solve the unclear property rights of "Little Overlord" and various related problems arising therefrom, but Chen Jianren, the president of Yihua Group, ignored Duan Yongping at all.

So Duan Yongping wanted to leave. At that time, out of recognition of Duan Yongping's personal value and in order to retain him, Yihua's shareholders not only gave Duan Yongping and his subordinates 20% of Xiaobawang's net profit in accordance with the pre-agreed distribution plan, but also proposed a generous salary increase plan. It can be said that the shareholders of Yihua Group were very generous, but they just did not agree with Duan Yongping's shareholding reform plan.

What is a joint-stock system?
To put it in the simplest terms, the core concept of the shareholding system is that participants each invest their resources to do one thing together. Through management equity incentives, the originally purely employment relationship between shareholders and professional managers is transformed into a deep cooperative relationship with capital as the bond. The corporate governance structure may therefore undergo disruptive changes, which has great benefits.

In fact, this kind of management equity incentive is used to bind talents for one's own use, and it has always been a common method used by later companies. Even many small business owners use equity to paint a rosy picture when brainwashing their employees. However, in the early 1990s, the socialist market economy had just begun. Unclear property rights were a feature of many companies at that time, and shareholding reform was definitely a new thing. It is normal that Yihua Group was unwilling to change this employment relationship, or it misinterpreted the core concept of management equity incentives. It is just that Duan Yongping's cognition was more advanced.

After Duan Yongping left, he founded BBK.

From the time the company was registered, he adopted the shareholding system. Almost all middle-level managers and some agents became shareholders of the company, forming a community of interests with property rights as the bond. With everyone working together, it replaced the dominant position of Xiaobawang in just three years. Duan Yongping's 70% stake at the beginning of the company was reduced to less than 1/4 under the policy of equity incentives for management. The continuous rise of BBK's performance and the continuous decline of Duan Yongping's absolute shareholding ratio are worthy of deep thought for all investors.

It can be said that in the mid-59s, Duan Yongping's departure from "Little Overlord" made many domestic entrepreneurs feel the strong shock of management equity incentives for the first time. Zhang Yunqi remembers someone saying that the two most milestone-making events in China's business community during that period were Duan Yongping's departure from "Little Overlord" and Chu Shijian's imprisonment at the age of .

In fact, looking back on this past, Zhang Yunqi felt that Duan Yongping's departure from Little Overlord was inevitable.

Because the shareholding reform is not feasible, the employment relationship between Yihua Group and Duan Yongping cannot be changed. If the employment relationship cannot be changed, the positions will be very different. Naturally, Yihua Group and its main manager Duan Yongping, as both labor and capital, will have serious differences in their strategic concepts about Xiaobawang.

Of course, from Zhang Yunqi's point of view, he hoped that Duan Yongping would leave Xiaobawang Company as soon as possible, and said: "The reason why your shareholding reform is not feasible is not a commercial problem, but because of the limited vision and rigid thinking of Yihua Group's shareholders. In their eyes, you are just an employee who earns money for them. If you don't believe it, you can come up with a shareholding reform plan to test their attitude."

Duan Yongping remained silent.

Perhaps he felt mixed emotions at the moment, but he didn't ask whether Zhang Yunqi was right or not. He just asked, "Then how do you think I should deal with this problem?"

Zhang Yunqi said directly: "Actually, you only have one way to go."

Duan Yongping looked up at Zhang Yunqi and asked, "What road?"

Zhang Yunqi waved his hand: "I don't need to tell you this. Mr. Duan should have thought about it in his mind."

Duan Yongping thought for a moment and asked, "Resign?"

Zhang Yunqi said with a smile: "If Mr. Duan is interested in creating another Little Overlord, then I will participate even if I have to sell my blood and kidneys to make a living."

　I have found a job and will start work tomorrow. The only thing left is to find a place to live. I hope to figure it out quickly and update you all.

　　
　
(End of this chapter)