Wednesday, August 6, 2014

He can move mountains

And he, Yan Jiehe, China. Of course his methods won't be liked by Thomas Piketty--as they aren't by diehard Maoists--because he uses money as an incentive to get the jobs done;
For years the government had wanted to raze Lanzhou’s surrounding mountains. Part of the reason was to relieve pollution; the hills hemmed in the city’s thick, sooty air. A more pressing concern, though, was to create new living space in a city that is nearly as congested with high rises as Shanghai. A number of SOEs [state owned enterprises] tried and failed to decapitate the mountains in the ’90s. Funding always seemed to dry up. When Lanzhou’s government resurrected the idea recently, estimating that another 1 million residents would move into the city of 3.9 million over the next five to 10 years, Pacific [Construction Group] was the only company willing to take on the challenge.
Since Yan didn't stand on Communist (nor Piketty-ist) ideology;
“The way it used to be, you can’t fire people and you can’t promote good people over the people who have worked there for a long time,” he says. ....
To attract better personnel, he paid better performers more, even as he boosted the minimum wage by 50%. And most important, he changed the management structure so that middle executives didn’t always need to come to him for approval.
He decentralized, and incentivized;
The company pays salaries five times those of its competitors and ferries its execs in a fleet of black Mercedes-Benzes. “The key difference between private companies and SOEs isn’t low-level workers,” says Xuan Xiaowei, an expert on SOEs at China’s Development Research Center. “The key is the upper-level workers. The culture is different—how they promote. SOE culture is a bureaucracy.”
Bold by HSIB, in the above paragraph.

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