School Teacher Creates Capitalist Miracle
An interview with the CEO of New Oriental Education & Technology Group
By Tian He , Interview by Zhang Linlin, Tian He, and Xu Li
Upon stepping into the magnificent building of Beijing New Oriental Headquarters, we encountered a slim, ordinary-looking guy. He spoke rapidly; his eyes were sharp and he had the air of a literati. As we’d heard from teachers at New Oriental, his favorite mode of dress is T-shirt and jeans, with a pair of sneakers.
Believe it or not, this man, who looks like the last person in the world you would expect to be a leader, happens to be the CEO of the New Oriental Group—Yu Minhong.
We couldn’t help asking: Is he really the richest teacher in China with HK$2 billion worth of assets? As the head of a Nasdaq-listed cooperation, why is does he look so different from how we imagined?
HK$2 Billion worth of assets—the Richest Teacher in China
Up to the time of this report, the Nasdaq-listed New Oriental Education & Technology Group’s stock price had reached $24. This means that Yu Minhong, the founder and CEO of New Oriental Group and Chairman of its board, has undisputedly become “the richest teacher in China”, with more than HK$2 billion personal fortune.
On the evening of September 7, 2006, (Beijing Time), New Oriental Education & Technology Group arrived on the New York Stock Exchange, with an opening price of $22, almost 50 percent higher than the $15 launching price, thus successfully netting $112.5 million. As Chairman of the Group’s board, Yu will retain 31.18 percent of the company’s stock after it has come into the market. According to one calculation, his fortune has reached over $240 million.
Some critics say that as a commercial organization, New Oriental lacks the recognition of Peking or Tsinghua Universities, which have over time earned the respect of the public and even special support from the government. Others point out that since it acts only as an assistant to the education industry, New Oriental is detached from the country’s true public education system. We couldn’t help asking: Without a single penny from the government and without the century-old prestige of public universities, how could New Oriental still be acknowledged by international capital?
A Hard Beginning
On November 16, 1993, Yu Minhong pasted crude advertisements in Beijing’s various streets and hutongs against the freezing wind. In a bungalow that was built against the regulation, New Oriental English Training School was born.
Yu Minhong was born in a peasant family in Jiangyin, Jiangsu Province. Though his mother was illiterate, she earnestly hoped that her son could become a teacher in the future. Yu took the College Entrance Exams twice, and failed both times. Back then, English was his weakest subject. In his first Entrance Exams, he only scored 33 points out of 150. Luckily, in his third attempt, he learned from his failures, and surprised people with his own “Cinderella story”—he was admitted to the Department of Western Languages of Peking University.
The years in Peking University weren’t easy, though. Raised in an underdeveloped countryside seperated from all modernizing influences, Yu realized for the first time his insignificance in a brand new environment. Surrounded by classmates who could elaborate eloquently on Kant, Nietzsche and Wittgenstein, he suddenly felt the chasm between himself and them, and consequently began to feel lost. In his own words, he spent four years of “gloomy” university life. But he also said that the four years in PKU were profoundly meaningful. As students of PKU ourselves, we sensed in Yu Minhong a strong temperament that belongs merely to this university, even after a 20-year remove from the campus.
After graduation, Yu remained in PKU as a young teacher. But because he took a part-time teaching job outside the campus, he was punished by the school authorities.
Just as his life seemed somewhat hopeless, he audaciously stepped out of the university gate and started his own career by posting fliers for a small, English training school.
Even today, after 20 years, Yu still cannot forget how “shabby” New Oriental was at the beginning: “There was only one desk, one chair in a rented bungalow serving as the classroom. And the simple tools for publicizing the establishment were a bucket of glue and a stack of advertising paper.”
That winter, he carried the glue bucket and traveled on his bike through almost all the roads and streets in Haidian District, pasting advertisement during the freezing nights when temperatures dropped below ten celsius degrees. Often, before all the advertisements were put up, the glue had frozen hard. Apart from that, Yu Minhong was frequently threatened by competitors in the same business circle. The start of his career went hand-in-hand with countless hardships.
Success Comes From Strategy
“Benefit the students; benefit the teachers; benefit the managers; benefit the society.” Yu Minhong never even tries to hide the secret behind his ability to conquer these hardships and find success. When New Oriental was launched, there were already tens of enterprises specializing in the training for overseas-student qualifications. In order to survive the fierce competition, Yu coined a strategy named “sharing the benefit”. As a result, he stood out among the crowd.
His book GRE Glossary has gained a more popular name among students—“Red Bible”. This name is no exaggeration for the popularity it implies, because almost every student preparing for GRE test in Chinese mainland has a “Red Bible” and several cassettes of his lectures on GRE vocabulary.
Since Yu Minhong is good at creating chances from failure, after 10 years of hard work, New Oriental has finally grown into a magnificent tree. At the same time, he has made himself the richest teacher in China, and a “godfather” in the hearts of millions of Chinese students preparing to study abroad. We can say that he has made it.
Owing his success to PKU
As schoolmates, we were quite curious about his perceptions of Peking University. He answered with pride, “PKU is forever my spiritual hometown.”
In spite of some criticisms of PKU students’ conceit and slack, Yu Minhong insisted that we might as well look at it from another perspective. Keeping some personal pride is not necessarily that bad when it can drive an individual away from convention. During his college days, Yu Minhong started a periodical called “Collection of PKU students’ poems”. Cultivated by the humanistic atmosphere in Peking University, he however, became a “cool-headed observer”—a thinker with the ability to form his own ideas and carry them through despite the circumstances. It is this persistence of idealism that pushed him through the hardest stages at the beginning of his career to the place he is today.
Mr Yu added with a smile that if he managed his business solely for the purpose of making money, it could hardly have reached its current position. Just as a result of his persistence in melding both English education and spiritual philosophy into New Oriental, the training organization is able to enjoy huge popularity among students because of its unique ‘life encouraging’ style.
At the end of the interview, we know that Peking University is still the “holy place” in Yu Minhong’s heart and will be forever. What he enjoys most is a stroll along the Nameless Lake in the drizzle.
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