Why was He Xiangjian's handover to Fang Hongbo so successful?

Why did He Xiangjian insist on completely withdrawing from Midea’s daily operations?

He Xiangjian’s handover with Fang Hongbo was not simple.
First, because He Xiangjian handed over a company with a scale of hundreds of billions of yuan ( in 2011, Midea Group’s operating revenue was 134.1 billion yuan, with a net profit of 6.7 billion yuan ) to professional manager Fang Hongbo, rather than to his son He Jianfeng, who is of similar age to Fang Hongbo.

Second, the handover was very thorough; He Xiangjian no longer held any position in Midea Group.
Some suggested that He Xiangjian follow the practices of some companies, serving as honorary chairman ( like Lenovo’s Liu Chuanzhi, who continued to serve as honorary chairman after retiring in 2004 ), but He Xiangjian refused.
The He family only retained one director seat for He Jianfeng on the Midea Group board.

Liang Chengxian, a master’s degree in business management from Hunan University, wrote in the heavyweight annual book “The Billion-Yuan Code” that at that time, He Xiangjian said:
"Honestly, I can say that I will not turn back after this withdrawal.
After I step down, Midea will not have problems. Midea must adhere to the professional manager governance model and continue along this mechanism.

“I have been continuously promoting, mobilizing, and emphasizing decentralization and delegation of authority, pushing to establish standardized systems and processes.
To cultivate professional managers, I must do this. Without these measures, how could I step down today?”

“I have invested my entire life’s energy, ability, and wisdom to achieve today’s success.
With my current ability, I cannot keep up with social development and Midea’s next steps.
So this time, my withdrawal is first and foremost responsible to myself, second to Midea, and third to everyone.”

Someone asked him to participate in some meetings, and he said:
“If you invite me to dinner, I will go, but if you interfere in others’ work, what should they do in their positions? What should they say?”
Someone suggested he become honorary chairman, but he felt that would cause misunderstandings, so he declined.

He Xiangjian said it, and he did it that way.

He Xiangjian did not turn back.
Moreover, in July 2024, He Jianfeng, He Xiangjian’s son, resigned from his position as director of Midea Group.
The 2024 annual report of Midea Group shows that among the nine board members, only Zhao Jun is from Midea Holdings ( He family enterprise, and Zhao Jun also served at Midea Group for many years ).
Four are current professional managers at Midea, and four are external independent directors.

There was no lengthy media coverage or grand handover ceremony internally; the transition of a company with a scale of hundreds of billions of yuan was quietly completed like a routine appointment change.
Since then, the He family, the actual controlling shareholder of Midea Group, has completely exited the company’s daily operations, entrusting all management to a professional managerial team.

“The Billion-Yuan Code” analyzes that many companies face operational difficulties and stagnation after succession, forcing founders to re-enter the scene.
For example, Foxconn’s Terry Gou, who withdrew from daily management in 1997, returned to the front line shortly after due to company issues and took full control.
Another example is Lenovo; in 2004, Yang Yuanqing succeeded Liu Chuanzhi as chairman, with Liu serving as honorary chairman.
In 2009, Lenovo faced a management crisis, and Liu Chuanzhi re-emerged to serve as chairman again.

However, since 2012, when professional manager Fang Hongbo took over Midea, the business has been thriving, with growth in revenue, operational quality, and future potential reaching new heights.

(This is an excerpt; the full content can be found in the annual new book “The Billion-Yuan Code” by Zhenghe Island.)

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