Reborn, back to a small county town to become a wealthy family

Chapter 737 The Boss Has the Right to All Interpretations
From the time Wen Wan finished her report until after 3 p.m., Luo Yang spent most of the day dealing with all the backlogged tasks.

When he had some free time, he went to the tea table, brewed a pot of tea, lit a cigarette, and rested for a while.

A few minutes before four o'clock, Sun Dexiang and Chen Zhibin arrived at Luo Yang's office on time to report on their work.

"Hello, Chairman!"

"Don't be so formal, come, sit here and have a cup of tea."

Luo Yang waved to the two of them: "Let's drink and chat."

A boss can be kind, but a subordinate cannot be so casual.

Sun Dexiang and Chen Zhibin sat down on half of a chair, one opening his laptop and the other placing the bound documents on the table in front of him.

"Let's not rush into the main topic, let's chat for a bit first."

As Luo Yang rinsed the teacups for the two of them, he slowly said, "After a week of research, plus a few days of analysis and organization, you should have a clear understanding of the businesses under my name. Can you summarize it in a few simple sentences?"

Sun Dexiang and Chen Zhibin exchanged a glance.

"Let me go first."

Sun Dexiang spoke first: "This time, the team I led investigated the group headquarters and its subsidiaries. If I had to summarize it simply, it would be that only one company is truly making money, while the companies with greater potential are still losing money."

Luo Yang: "."

"Kunpeng Technology doesn't count, right?"

If you can say that, it seems you are unaware that the gray rhino has made a fortune in the US crude oil futures market.

Moreover, in Sun Dexiang's view, a fund company that has only recently started has neither a reputation nor a track record. Even if it has made some money in the stock market before, it cannot be considered a company with potential.

"Chairman, among all the subsidiaries under Ling Shi Palace, Kunpeng Technology has the best growth potential and the greatest growth rate. Moreover, it appears to have already started to make a profit. However, you should know that in the first half of the year, it was because of a shortage of working capital that we had to borrow 1 million yuan from the bank."

Sun Dexiang spoke frankly: "And since Kunpeng Technology was founded, you have never received any dividends from this company, have you?"

Not to mention dividends, there was also a capital increase in the middle, which resulted in a loss.

The data disclosed at the second-quarter financial meeting showed that the company made a profit, but all of that money has already been allocated to other projects.

Expanding into the European market will require a large sum of money, and investment in research and development will only increase. Not to mention that Luo Yang initially envisioned building a complete industry chain, so the investment in the coming period will not be small.

"Edifier Technology is another story. It is currently in its second round of financing and will undergo multiple rounds of financing in the future. Before the company goes public, its monetization ability can be ignored, so don't expect this company to generate profits for you in the next year or two."

Faced with such comments, Luo Yang couldn't refute them.

Who says that bike-sharing projects can't monetize before they go public?
When that day comes, you'll be slapped in the face!

"Chairman, I won't go into detail about the companies in Yang City."

When it was Chen Zhibin's turn, he said directly, "Last time in Yang City, you asked me to express my opinion. After conducting actual research, it is not much different from my previous opinion."

That concludes our casual conversation.

"Let me share my professional opinion."

Returning to the topic, Luo Yang asked earnestly, "What is your team's plan for this organizational restructuring?"

"Chairman, this is the first draft of the plan that our team has discussed and developed."

Sun Dexiang was prepared. He handed Luo Yang a copy of the bound documents on the table and then continued, "Next, I will explain each point of the plan. If you have any questions along the way, please feel free to point them out."

Luo Yang took the bound documents and turned to the first page.

"Firstly, regarding the principles of this organizational restructuring, based on our research, our team does not recommend establishing two group companies, nor does it recommend dividing industries according to geographical location."

Sun Dexiang, acting as the commentator, said: "First, we suggest that Kunpeng Technology, Zhengyang Group, Sunshine Culture and Tourism, Guoyang Real Estate, and Guobao Film and Television be spun off, and all other companies be incorporated into Lingshigong Group as subsidiaries of the group."

Just as he got to this point, Luo Yang interrupted Sun Dexiang.

Why is it divided this way?

Luo Yang frowned and asked, "Will the new energy vehicle manufacturing business also be placed under the group in the future?"

"The core principle of this division is controlling stake."

Sun Dexiang calmly explained, "The five companies spun off—Kunpeng Technology, Zhengyang Group, Sunshine Culture & Tourism, Guoyang Real Estate, and Guobao Film & Television—all have high potential, and you can hold absolute control of them."

Luo Yang was stunned.

He never expected it to be for this reason.

But thinking back on it, it really is true.

Although Luo Shengtang is currently the most profitable cash cow, Nayuki has 45% of its shares held by He Maosong and his group. Lemon CC is even worse; in addition to having 45% of its shares held by He Maosong and his group, it has also started to raise funds and introduced Sequoia Capital.
In Jiangxiaobai Liquor Industry, Luo Yang only holds 40% of the shares and doesn't even get involved in the company's operations.

Edifier Technology is a startup technology company currently in its second round of financing. At this rate, it would be good if the founders could eventually retain 20% of the shares.

The research team believed that Pinduoduo had limited potential, and since 20% of its shares had been dispersed, it would be better for it to remain under the group.

As for Qingyang Building Materials (formerly a premixed cement mortar plant), Guangfan Electronics, and Guangfan Wind Power in Yangshi, Jiang Yuanshan holds a significant stake in all of them, including in the future new energy vehicle manufacturing.

This division seems to make some sense.

"To further strengthen your control over the group, our proposed plan suggests registering an investment company overseas, which you will hold 100% of. This investment company will then control the Ling Shi Gong Group."

Seeing that Luo Yang did not offer any further comments, Sun Dexiang continued, "Due to the adjustments, the group company will form a new board of directors. According to our proposal, we will increase the number of senior executives from the group headquarters on the board and reduce the influence of subsidiaries on the board."

In their team's view, why should Luo Yang keep a position on the board of directors of a company like Jiangxiaobai, which he neither controls nor interferes with in its operation and management?

When relations sour, Jiang Xiaobai's vote on the board of directors could very well turn against him.

From an outsider's perspective, this is a case of taking precautions.

As for the few senior executives, it's simply a matter of giving them some equity incentives; with that, their entry into the board of directors will be perfectly legitimate. Luo Yang fell into deep thought.

Song Wan owns 5% of the shares in both Kunpeng Technology and Gray Rhino. As the group's vice president, she is entitled to equity incentives and will certainly have a seat on the board of directors.

Once the new group structure is in place, Luo Yang will promote Yu Haiping to the position of Group Vice President and will definitely also arrange for him to join the Board of Directors.

An Ying is now the CEO of Luo Shengtang. According to the original plan, Luo Yang intended to set up a new food company while selling Lemon CC, and then let her hold 5% of the shares in the new company, so that she could join the board of directors in this capacity.

Now that the research team does not recommend that Qiao Shi'an of Jiang Xiaobai join the board of directors, An Ying will join the board of directors in a different capacity.

With his promotion to Group Vice President, concurrently serving as CEO of Luoshengtang and the newly established food company, and overseeing Pinduoduo and C-Station, there would be no objection to his inclusion on the board of directors.

Adding Wen Wan, who serves as the board secretary, to the board would make things perfect.

"I think the suggestions regarding the board members are good."

Having figured all this out, Luo Yang came to his senses and looked at Sun Dexiang, saying, "You continue."

"The group's current structure is quite simple, which is to be divided into layers from low to high, according to P0 to P11, which does not reflect the functional differences at all."

Sun Dexiang continued his explanation: "What we've presented is a relatively common international solution, which is a dual-track career development system. Correspondingly, everyone in the company can find their place within this system."

Luo Yang remained silent, looking at the text descriptions in the bound documents while listening to the other party's explanation.

"One system is the expert route, which we call the P sequence, that is, technical positions, programmers, engineers, talents in a certain professional field. Currently, most companies in the world generally have 14 levels, that is, from P0 to P14."

Sun Dexiang looked at the document on his laptop and said unhurriedly, "The other system is the M route—that is, the management route, commonly known as management positions. Currently, most international companies set up an M series from M1 to M10."

Luo Yang had some recollection of this content, so it didn't sound unfamiliar or new to him.

They even accept it relatively quickly.

"In a detailed comparison, newly hired graduates are given the P4 level. After working for 1-3 years, based on their actual abilities and contributions, they can be promoted to the highest level, P6. This falls under the engineer category. P4 is a junior engineer, P5 is a mid-level engineer, and P6 is a senior engineer."

Sun Dexiang described it in a very formal way: "The next level up is P7, which is an expert; P8 is a senior expert; P9 is a senior expert; P10 is a researcher; P11 is equivalent to a senior researcher; P12 is a senior researcher; P13 is considered a scientist; and the highest level, P14, is a senior scientist."

He paused at this point.

"Chairman, in your industry, there are several companies that may need to be equipped with P13 or even P14 level equipment."

"New energy power batteries, Guangfan wind power, and Kunpeng Technology?"

After thinking for a moment, Luo Yang said, "To reach P13, one probably can't reach P14. That would require a national treasure-level scientist, researching fundamental technologies. Most of my businesses are application-oriented."

After thinking about it for a moment, Sun Dexiang nodded in agreement.

Indeed, even if Luo Yang were to manufacture a mobile phone, he wouldn't need a senior scientist at the P14 level, unless he builds a lithography machine or solves the source of the application software system.

"I changed the subject just now."

After Luo Yang finished speaking, he smiled and said, "Just take it as a listen and don't be influenced. Continue."

"In this system, everyone's promotion criteria must be based on factors such as years of service, length of service at each level, level of responsibility for core business, and whether they have made significant contributions to company projects. The human resources department must have systematic assessment standards!"

Sun Dexiang smiled and continued, "Our plan already provides a set of human resource assessment standards that the company can directly apply. Of course, in actual application, it needs to be adjusted according to the company's actual situation to ultimately form its own characteristics."

Managing this thing isn't about blindly following dogma.

Many companies' management often reflects the leader's personal style. Some leaders are gentle and kind, and their management is more humane. Other leaders are like the shrew, and you shouldn't expect their performance evaluation standards to be gentle.

With so many subsidiaries under the Ling Shi Gong Group in the future, each company's leader will have their own unique management style.

If we follow the template provided by their research team, problems will inevitably arise sooner or later.

Luo Yang also largely agrees with his explanation.

"As for the M route, M1 is supervisor, M2 is manager, M3 is senior manager, M4 is director, and M5 is senior director."

Because of Luo Yang's frequent interruptions, Sun Dexiang had to speed up his report: "M6 corresponds to Vice President, M7 to Senior Vice President, M8 to Executive Director, M9 to Vice Chairman, and M10 is Chairman."

This system clearly defines the salary levels, and specifies each person's salary, position, and promotion criteria.

For example, Luo Yang's sequence is M10, but he probably doesn't qualify as a P sequence.

However, many of the companies under his name are high-tech industries, such as Kunpeng Technology, Guangfan Wind Power, and future industries such as new energy vehicles and smartphones, which will all have dual-track employees.

"Let me interject."

When Sun Dexiang got to this point, Luo Yang interrupted him.

"If someone is a dual-track employee, should they receive two salaries?"

"not like this."

Sun Dexiang immediately explained: "At the senior management level, many of them negotiate their annual salary standards based on market levels when they join the company, as well as the content of bonuses and equity incentives. They do not receive two salaries."

These details were not included in the binding plan.

"At the grassroots and middle-to-low management levels, you need to look at the main work they do."

Sun Dexiang further explained: "If the focus is on management, technical positions will receive allowances according to national standards; if the focus is on R&D, management positions will only receive subsidies and project bonuses. Of course, the specific standards will depend on the company, that is, your opinion, Mr. Luo."

Why wasn't it written in?

For business owners, saving costs is of course essential.

Should Sun Dexiang and the others suggest to Luo Yang that he pay his employees more wages, even double the pay?
Even if I thought about it, I wouldn't actually do it.

Therefore, they did not write the specific details into the plan, but only explained it verbally to Luo Yang, adding that the boss had the right to interpret everything.

Luo Yang laughed after hearing that.

(End of this chapter)