Stan Shih co-founded Acer with four partners in 1976. In the early 1990s, he led Acer to successfully be restructured and created the first famous computer brand in Taiwan as well as one of the seven major personal computer companies in the world. In 1995, he launched Aspire multimedia home computer, which became popular all over the world.
Stan Shih made outstanding contributions in promoting Taiwan's image and computer manufacturing. He won Taiwan's "Top Ten Outstanding Youth" and "Top Ten Outstanding Youth in the First World". Innovative, forward-looking and striving for common prosperity in the sense of social responsibility, he was acclaimed by Fortune magazine "25 must-know people for doing business in Asia" in 1989. In 1995, he was awarded the 15 most up-to-date entrepreneurs in the World Manager Digest. In early 1996, Business Weekly of the United States named him as “The 25 Top Managers of the Year”.
After Stan Shih retired in 2004, he founded Zhirong Group and Zhirong Foundation and devoted himself to project incubation. He believes that in the global business arena in the 21st century, Chinese enterprises should follow the "King-craft", create value and balance interests rise from the global competition and changeable markets and achieve long-lasting development.
Tracing back Acer's history finds Stan Shih a staunch practitioner and beneficiary of the "Philosopher-Kingly Way".
The key to running an enterprise of Goodness is indirectness, invisibility and future
The three core beliefs of "Philosopher-Kingly Way" are creating value and innovate, balancing the interests of all parties in creating common values and adapt to constant market changes and strive for sustainable development.
Stan Shih believes that an enterprise is to contribute to society and create value. "Don't make money before donating. You have done a lot of social responsibilities going about all your business.” He said that creating value could be explained with the "six-dimensional value theory", including directness and indirectness, visibility and invisibility, present and future.
Directness, visibility and present are more valued by ordinary enterprises. The whole democratic politics and capitalist management both take direct values as the core. KPI in corporate management is an example. However, Goodness after all is invisible and even beyond our common understanding. Outstanding business operation lies in the aspects of indirectness, invisibility and future. Besides creating values for society and practicing good core beliefs, good enterprises should also know how to train talents and furnish them with a space to bring the best of talents’ potential and even further sponsor their skill development for the enterprise or for society at large. Corporate culture is another important invisible corporate asset. Stan Shih believes that corporate culture is a framework for corporate growth and transformation and it is the practice of corporate values.
From the first day of starting business, Stan Shih regarded "human nature is fundamentally good to be trusted and authorized" as Acer's most important corporate culture. Stan Shih proposed "The dragons must be leaderless to fly high into the heavens" and launched a long-term talent strategy to train 100 general managers and accelerate authorization within the company. For instance, out of Taiwan's "I would rather be the head among chickens than the straggler among cattle", Shi put forward "achievement of being a small boss" sharing stocks and thus entrepreneurship with his employees. Shi promoted"not holding back a trick or two in teaching others and the able deserve" and encouraged employees to their leaders "masters" as in apprenticeship. To address shortsightedness and seeking quick profits, Shi proposed "relay marathon", hoping his colleagues to "sprint at full pelt in their posts and be conscientious in job handing-over for sustainable development of the company".
The middle-level cadres play an important role in shaping such corporate culture. They must know thoroughly the ins and outs of it and implement it top-down daily within the company. The employees’ opinions must be appreciated as fit and their abilities must be given full play. All cadres must be able to step into any breach and they all work as shareholders for the company and themselves. In this way, performance-wise, they would help check those prone to muddle along and help last corporate development.
Costumer-Oriented Branding
"Philosopher-Kingly Way" should lay equal stress on visible and invisible values. Stan Shih believes that an enterprise of Goodness should be visibly valuable in profiting to sustain its ideals. Goodness is not an over-blown concept, but a must in business. "Business" means "value exchange" and in buying and selling, both sides create value. The seller makes money whereas the buyer takes value.
Economically, enterprises needs to balance between supply and demand and be sensitive to market trends. They ought to act customer-oriented in providing products and services of socially meaningful and valuable.A product could go nowhere if it meets no market demands. If enterprises are money-minded, they might lapse into keen competition or cause ecological deterioration, resulting in product depreciation. In this case, they will no last long.
Stan Shih had a well-known "Smile Curve Theory". Smile Curve represents innovation plus brand. Acer holds that “Me too is not my style”. In the manufacturing industry, without the support of research and development and intellectual property innovation, the value of products will be limited; on the other hand, without branding and channel expanding, sales will be limited. Creating values in a field while branding corporate IP and profile, enterprises could carve their imitable and yet irreplaceable niche.
Reverse Thinking: Altruism Balances Multiparty interests
As regards balancing multiparty interests, Stan Shih mentioned that "altruism is the best self-interest". Most people think that people are not selfish, and the devil takes the hindmost. Normally, enterprises tend to prioritize their own interests, then shareholders, and finally customers’ and employees’. However, Stan Shih developed the "Acer One Two Three" theory, putting customers first, then employees and then shareholders. The reason for today’s victory could be the cause for the failure in future. Philosopher-Kingly Way however, balances multiparty interests. If leaders consider more for others, a balanced interest mechanism will be more possible. "Everyone will invest more efforts to make the cake bigger, and finally we all benefit from it," Stan Shih explained.
As a matter of fact, Acer's philosophy of "Philosopher-Kingly Way" and "altruism is self-interest" play an unsung hero in two major successful transformations of Acer. A Philosopher-Kingly-Way enterprise must keep updating itself to create new value. In the past 40 years, Stan Shih led Acer's reform and transformation three times under the ups and downs of the global financial environment and created new value.
At the beginning of Acer, it started with $35,000 and grew up by virtues of microprocessor technology. In 1987, when the company had enter its second decade, it began to build the brand of Acer. In the 21st century, it’ global marketing and operation has matured steadily. With its geographical strategy, it has gradually shifted its business from conventional PC manufacturing to e-commerce and IT services and had BenQ Group that specialized in extensive IT products and Wistron Group that focused on OEM, forming an IT aircraft carrier of Acer enterprise groups and elevating Acer once to the second largest computer manufacturer in the world. In 2014, as Acer faltered, Stan Shih, who had already retired then, was re-appointed as the chairman of the board. In eight months, he successfully realized Acer’s "cloud service" with the new model of "hardware+software+service".
In Stan Shih's view, the industrial chain relies on division of labor and cooperation, and vertical division of labor and horizontal integration was the trend. The enterprise should focus on certain segment and implement simplified and effective management. The industrial integrate should be based on sufficient economic scale. In the current “Cloud” era, the competition is becoming more and more fierce, and the division of labor and integration has made the world flatter. Winners need reverse thinking on how to innovate business models and benefit more interest parties. He believes that the integrator of global resources, or the leader in various fields and the choicest integrated party, will be the final winner.
Run a Marathon with Chinese-Western Philosophy
EOG advocates "altruism" and "harmony" in corporate operation, management with love, and design and make products for consumers with good faith, and cooperate with business partners in a harmoniously and inclusively. Enterprises should be firm slanting to the overall social interests for sustainable development when facing the conflict between business revenue and social good. This resembles much Stan Shih's Philosopher-Kingly Way philosophy.
Acer is combined with the Latin roots of "acute" and "sharp". It represents "positive and energetic" and "trump card" for "excellence and outstanding". In its Chinese counterpart 宏基, 基 means the game of Go, and 宏means "Great", so 宏基 means that the company is playing a grand, never-ending game of Go.
Looking to the future, Stan Shih believes that the biggest challenge may be how to extract the Philosopher-Kingly Way from the western systematic management, and boil it down to accessible, practical and localized business methodology for wide use in Chinese contexts and promote it in the world. He said to me that: "This is a relay marathon that can not be done by one person or one generation. We would try our best.”
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