Restart – A Letter to Sharecold Employees

Dear Sharecold employees,

In the past twenty-six years, Sharecold has grown with the continuous growth of China’s refrigeration industry and has gradually become a leading and highly reputable brand in the industry. Through continuous efforts to expanding market share, we have reached the current enterprise scale with the help of the core management. Regrettably, in the past few years, we have gradually slowed down our business undertaking due to our failure to innovate in accordance with market changes, which has led to a continuous decline in business undertaking and a loss of talent. Therefore, at the same time as the current management changes, Sharecold’s unprecedented organizational restructuring will be initiated. We expect that this organizational restructuring will las for 6 to 9 months. During this process, we will make all-round adjustment to work methods, work interfaces, work processes, corporate culture, and values. This change will give Sharecold a new look and become the most competitive and influential engineering service company in the industry.

We define these changes as the “Restart” of Sharecold, which is our determination to change the unsustainable and unrepeatable development model in the past. For Sharecold to solve these problems, it is necessary to adopt a brand-new management model, a brand-new mode of thinking, and a brand-new organizational structure. In response to this need, the “Engineering Project Coordination Guideline” and other guideline related to each stage of project undertaking have been issued in WeCom WeDisk. These guidelines are company policies and specific requirements for work interfaces and processes. The corporate culture-related guideline centered around “Comprehensive Continuous Improvement Guideline” and “Objective and Key Results Guideline” will become our core method for assessing the capabilities of our employees. After the transitional period of organizational reorganization, those who still cannot carry out work in accordance with the company’s guidelines and policies will carry out “Performance Improvement Plan” as required by the “Labor Law of the People’s Republic of China” and will be terminated from the labor relationship if the performance improvement plan cannot be met.

In addition to changing the management mode and thinking mode, we will set a new company vision and core strategy to “Accelerate the world’s transition to continuous cold chains”. From “Sharing Cold Chain and Improving Live” to “Accelerate the world’s transition to continuous cold chains”, this marks the changes that reflects our clearer strategy. While the refrigeration industry has become a national strategic development industry and has attracted the attention of many investment institutions, it has prompted many companies to expand their businesses by means that affects quality and safety and has led to disordered and fierce competition. This kind of chaos also occurred in the air-conditioning industry more than ten years ago. Under the constant low-price competition and reshuffle, consumers ultimately chose several brands with good quality and high-cost performance. Therefore, Sharecold must also adopt the same thinking, choosing to reduce costs instead of technological breakthroughs, choosing to ensure quality rather than pursuit of speed. Only by continuously outputting projects with reliable quality and controllable costs can we be able to last forever.

At the same time, we must eliminate some wrong thinking in the company. For example, the company does not have the ability to undertake project due to fund advancement or insufficient manpower. These problems are synonymous to the famous paradox in “Catch-22”. If you are afraid to undertake project due to insufficient funds or personnel, it will lead to self-defeating strength and deterioration of customer relationship, which will further fall into a vicious circle. Therefore, all departments should not carry any form of colored classes and intend to predict the business value of projects that meet the acceptance conditions in the “Engineering Projects Undertaking Guideline”. In the work cooperation, protectionism and inherent thinking must be discarded, and the burden of subsequent work processes must be reduced while significantly improving the overall work efficiency of the company. If the project encounters various obstacles after meeting the undertaking requirements, it will lead to failed bids. Additionally, most Sharecold project are lost due to this reason in the past three years. Therefore, under the current limited resources, every opportunity should be made to cooperate with other personnel. If you cannot achieve this requirement, you should take the initiative to leave the Sharecold team.

We firmly believe that a group of talented, passionate, energized, efficient, and creative people can erupt world-changing power. In this regard, we will continue to evaluate project capabilities in the manner described in “Compensation and Comprehensive Capability Evaluation Guideline” during the process of organizational restructuring and determine whether he/she meets the Sharecold value and capabilities requirements. If it is confirmed that he/she meets our long-term sustainable development needs, his/her salary will be adjusted according to highest industry standard and at the same time enjoy annual salary adjustment and year-end bonus system as described in the guideline. After this adjustment, the bonus system for projects other than Project Manager (or Sales Representative) will be gradually removed to realize the transition to the “employee lifecycle management” organization development management model. We will also launch a management trainee program and encourage inter-departmental rotation to train Project Managers and Senior Engineers through methods described in “Engineering Project Management Trainee Program Guideline”. Our management trainee program will make Sharecold a rare example industry that enjoys sustainable and reproducible business model.

In terms of capital operation, we will adopt “Engineering Project Construction Management Guideline” and the “Funding Schedule” with automatic calculation capabilities as core policies and tools to rationally plan and arrange revenue and expenditure schedules and continuously cultivate supplier relationships. We understand that there are many uncertainties in the construction process, so the Site Manager needs to perform daily work on the principle of quality first and time second in his/her work. Sharecold’s quality requirements are the core of our strategy in prevention of later reword or maintenance risks, and our time requirements are the core of company-level capital flow management. In the selection of quality and time, Site Manager should understand that quality problems may cause time extension in the later stage and should therefore occupy a more important position. In the management model after the reorganization of Sharecold’s organizational structure, Project Manager would become the person in charge of comprehensive project management, and any project-related issues need to be communicated in the designated WeCom project team. When it involves the cooperation of personnel outside the project team, Project Manager should actively seek the cooperation of personnel from relevant departments. If the project problem is not resolved in time or delayed due to communication through other channel, it will be a significant work error and will be subject to internal disciplinary action.

Cold chain logistics and its infrastructure construction will fully stimulate the development of the refrigeration industry as it becomes part of the country’s “14^th Five-Year Plan”. When cold-chain goods account for only 20% of fresh transportation volume, they are faced with the problem of disconnection during the transportation. This problem will be gradually solved in the next 5 to 15 years, and the business volume brought about by solving these problems will increase year by year and would become considerable in size. As the industry leading pioneer in refrigeration industry, Sharecold will reorganize in its organizational structure and regain the strongest market competitiveness, sustainability, and reproducibility. While we pursue excellence in projects, we will continue to output high-quality and cost-effective projects that will enable us to fully “restart”. We will rely on seamless cooperation between departments, brand-new organizational development model, and reasonable mode of capital operation to realize our vision of accelerating the world’s transition to continuous cold chains.

Best regards,

William Gerald Lynn

November 21st, 2021