Zhengfei once said: In the past, Huawei used a system of elimination based on non-last positions. Later, it turned out that the ones eliminated under the “last-place elimination” were all employees. They would cut 10% of employees every month, but he found it didn’t work.

Later, he changed it: instead of eliminating employees, they eliminated managers. They eliminated 10% of managers every year. After doing that, he discovered the whole organization had changed. With a good store manager, you have a good store. You can’t just wear the store staff out and churn them endlessly—there’s no point in doing that.