RESEARCH TRIANGLE PARK – A company without a country?
Lenovo Chief Executive Officer William Amelio is generating headlines again with his “world sourcing” strategy. Both the Wall Street Journal and Fortune magazine are out with stories today in which Amelio touts the world’s No. 3 PC maker as a company not linked to one individual country.
The idea of a home country for a firm is “outdated,” he told the Journal.
Lenovo has its world headquarters in Morrisville where it plans to construct a third building in the near future. But the stock is still traded in Hong Kong, most of its employees remain in China (Lenovo’s birthplace) and various company functions are scattered around the world. For example, as we’ve reported in the past, Lenovo placed its marketing operation in India.
Amelio is also pushing Lenovo ahead as an entity no longer associated with IBM. IBM logos are no longer included on Lenovo products even though the company had rights to use Big Blue after buying its PC division two years ago.
"It’s really hard to work at a company looking at someone else’s logo every day,” he told Fortune.
In talking with Fortune, Amelio said building a stateless company has helped the merger of cultures that occurred as part of the deal.
“His biggest initial challenge in merging the two firms was simply where to locate the united company: ThinkPad operations were based in Raleigh, while Lenovo was headquartered in Beijing. Instead of picking one place, Amelio decided to go with no headquarters at all,” Fortune wrote.
“He works out of Singapore, Lenovo chairman Yang Yuanqing relocated to Raleigh, and top executives hold meetings in a different location every month. (They’ll convene in Phnom Penh in March.)”
Amelio told the Journal that having one headquarters would slow the company down.
“Lenovo is incorporated in Hong Kong, where its stock is listed. But its top managers and corporate functions are scattered across the globe,” the Journal reported. “Mr. Amelio is based in Singapore. Chairman Yang Yuanqing lives in Raleigh, N.C. The chief financial officer is in Hong Kong and the human-resources head is in Seattle; world-wide marketing is coordinated in India. Lenovo’s top 20 leaders meet monthly, in a different place.”
A strong earnings report for the last quarter is a sign that “world sourcing seems to be working,” Fortune added.
As for loyalty to a specific country, Lenovo disclosed last week that it was passing on millions of dollars in tax incentives from North Carolina. The company said new jobs expected to be created when Lenovo decided to build a new campus in Morrisville won’t meet the incentive timeline.
Will N.C. ever see those jobs? Well, a new building could mean more people. And Lenovo is building a new distribution center in the Triad.
But Amelio is making clear that his stateless company will put people, places and things where they will have the best impact for Lenovo. Period.
Welcome to the new flat world economy.