Recently, when asked to present a company as an example to describe what an ideal organization in the future would be like, Bill Fischer, the professor of Innovation and Technology Management at International Institute for Management Development (IMD) replied without hesitation, “I would say Haier.”
Technically speaking, the former Chairman of China Europe International Business School was not a big fan of Haier before. Although he had known Zhang Ruimin as early as 1997, he originally had some doubts about Haier's management innovations. That wide-eyed amazement was no less than the doubts many people have today about Haier's “in-flight engine replacement”. For a closer look at this company which likes restless changes, he has visited Haier several times for field research. Until today, Bill Fischer is still unsure whether he has “turned himself into a fan”. However, his famous statement which has been widely disseminated on the major media worldwide reveals what he really thinks: “Haier has long been a typical model representing the ideal organization in the future. It has set a benchmark for leading companies in China and even in the world.”
The rise of Haier is one of the most interesting events
“For a long time, I have been fascinated by how Haier restlessly reshapes itself in a ever-changing business environment.” said Bill Fischer.
This sentiment arises from Haier's on-going efforts to embrace uncertainties by taking a trial-and-error approach on the way exploring the network economy; more importantly, Haier, by rethinking its organizational structure, overturns the traditional roles of workers and entrepreneurs through incentive mechanism and even creates a unique organizational platform. The two facts are undoubtedly very attractive to Bill Fischer, who has been studying Haier.
Just as observed by Bill Fischer, “The transformation of Haier is bold, destructive, validated and inclusive. Meanwhile, Haier also rethinks its organizational structure and functions.”
Since the launch of its "RenDanHeYi" model in 2005, Haier has made changes in three aspects over the more than 10 years of exploration. The first change is about the company. Haier has transformed itself from a traditional enterprise into a networked one which serves as a node on the Internet. The second change is about the brand. In the past, Haier was often associated with home appliances. Today, Haier is more associated with entrepreneurs. The third change is about employees, each of whom has been gave the opportunity to become an entrepreneur who can start up his or her business on Haier platform to directly create value for customers.
“Haier has changed the way everyone thinks of management, leadership and organization in the future.” exclaimed Bill Fischer as he witnessed how Haier transformed itself from “a producer of products” into “a producer of entrepreneurs” and how it drives the upgrade of microenterprises through capital socialization throughout the process. Zhang Ruimin is turning Haier's employees into entrepreneurs running their own microenterprises. Bill Fischer called this a “great disruption”.
Over the past few decades, China has seen a dramatic economic growth with a number of well-known Chinese brands committed to the provision of products and services springing up. Bill Fischer is not much surprised at this, but takes Haier as a special case. Haier places top priority on product quality, and more, it is a pioneer in management thinking. Putting Haier's “radical” reform in the context of China's economic development, Bill Fischer said “the rise of Haier is one of the most interesting events.”
Haier is the ideal of how the future organizations should be like
Zhang Ruimin used to describe the objective of Haier's reform as the transformation from the original pyramid hierarchy into a networked organization. According to Zhang Ruimin's conception, the hierarchical management architecture will evolve from a cascade organization into parallel entrepreneurial ecosystems by undergoing decentralization and disintermediation. As opposed to being a self-contained system, the company fits into the Internet as a node that connects various resources with the aim of co-creation and winning-together.
The founder of Thinker 50, the “Oscars of Management Thinking”, said, “Haier grants maximum freedom to their employees to inspire more entrepreneurship, weaken the traditional hierarchy and eliminate the middle layer. Haier is more open, free and collaborative than other western companies.” “Haier has set an example for organizational management and academic research around the world.” commented Bill Fischer. Unlike some business managers or management gurus who often advocate a mechanism but rarely implement it, Haier firmly puts its ideas into practice. “Haier knows how it needs to change and makes constant effort to try and explore new ideas. This is what makes Haier different.” In Bill Fischer's opinion, Haier has found the key to dealing with the changes of global competition.
“We think that this is what future work and organizations should be like.” While setting Haier's model innovation as a benchmark for enterprises worldwide, Bill Fischer seems to reach a conclusion: Haier's management model is universally applicable across the world.
This is both exciting and controversial.
As the aging traditional management models prove unworkable everywhere in the Internet era, driven by inertial thinking, people tend to seek inspiration from Western companies. In fact, the most excellent company in management innovations is in the East. Bill Fischer is gratified to see Haier's model innovations have been uniquely verified by practical results. One of compelling evidences is Haier's acquisition of GE Appliances, which is not just an expansion initiative, but a realization of Haier's ambitious dream.
There have been two revolutionary breakthroughs in enterprise management since industrial civilization began - Ford's assembly line and Toyota's JIT Kanban management. Some experts believe that Haier's model of “co-creation and winning together” might become the third industrial revolutionary breakthrough following the models of Ford and Toyota. Even Gary Hamel, one of the world's top management masters, also commented, “Haier, as a leader among the world's pioneering companies, is reshaping the management science for the post-hierarchy and Internet era.”
In his book “Reinventing Giants”, Bill Fischer elaborates Haier's innovative model and mechanism characterized by on-going changes, giving a vision of what an ideal organization will or could be like in the future. Bill Fischer hopes that Haier's successful experiences can be reasonably applied to those enterprises being caught in a dilemma or getting stuck on the journey and help them become invincible global competitors.
