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Huawei is rotating its CEO every six months to stay fresh

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Huawei (STOCK)
Huawei (STOCK)

Huawei, the multibillion-dollar Chinese telecom infrastructure and mobile device maker, just announced a new CEO — but only for the next six months. Eric Xu will be the acting CEO of Huawei from October 1st to March 31st under the Huawei rotating CEO system, an experimental management strategy that the company revealed last year.

Under the system, three executives take turns acting as CEO. The temporary position entails leading meetings with the board of directors and executive management as well as taking the primary role in operations and crisis management. The executives bring expertise from different parts of the company, such as marketing, wireless, and research and development. Their normal duties do not change while acting as CEO, and they retain "considerable authority" even when not acting as CEO.

Three executives take turns as CEO

The reasoning for this highly unorthodox system? Huawei and China are in a period of rapid change, and having three CEOs will keep the company nimble. Founder and longtime CEO Ren Zhengfei wrote in April of 2012:

In times when social changes were not so dramatic, emperors could reign for several decades and create periods of peace and prosperity. Such prosperous periods existed in the Tang, Song, Ming, and Qing dynasties. The rotational period for each emperor lasted several decades...

Today, tides rise and surge; companies are springing up all over the place while others are quickly being swept away. Huawei hasn't found a way to adapt well to a rapidly changing society. Time will tell if the rotating CEO system is the right move or not.

Xu, a 10-year veteran of the company, is the third acting CEO to be named under the new system. He will take over for Guo Ping, who took over in March of 2012 from Ken Hu. Hu took over in late 2011 from Ren, who founded the company in 1987.