Haier

At the Annual Innovation Conference of Haier Group dated January 17, Zhou Yunjie, Chairman of the Board and CEO of Haier Group delivered a speech themed by Create a Bright Future with Unwavering Persistence. He looked back on the extraordinary journey and called on colleagues across the globe to pursue the shared ideal.

In the new stage of development, Mr. Zhou announced the setup of 5 committees in the board of directors: Strategy and Investment Committee, Science and Technology Committee, Compensation and Nomination Committee, Audit and Rick Control Committee, and RenDanHeYi Leading Committee. Haier will respond to the changing situation and open up new fronts with development, creating the leading innovation ecosystem in the era of IoT.

Strategic concentration with unremitting effort

Leveraging the booming development of digital technology and digital economy, the Board of Hair Group founded the Strategy and Investment Committee for the following purposes: strategically, by focusing on real economy and enhancing the main business, Haier aspires to be the explorer and leader in the age of digital economy.

Haier has made a foray into three industries including Smart Home, Industrial Internet and Comprehensive Health, and will keep increasing investment on innovation and reinforce its leading superiority, so as to lead in the digital era; meanwhile, Haier will seize new development opportunities in new energy and circular economy to establish itself a pioneer in green development, with its capability to discern and grasp opportunities.

Smart Home: Become a world leader in IoT-based smart home ecosystem

Built on Haier Smart Home, two core competence platforms, namely, THREE WINGED BIRD Experience Cloud and Smart Home Brain, will be prioritized in future development; besides, 4 scenarios, including smart kitchen, smart air supply, smart water supply and whole-house intelligence, will evolve at faster pace, for realizing exponential growth of ecosystem revenue. In addition, Haier will further promote connectivity and seamless integration with Eoroom and RRS Supply Chain, and leverage digital technology to deliver smart home solution featuring design, implement and services, thus delivering a better user experience throughout the whole process.

Industrial Internet: make COSMOPlat a world-class industrial Internet platform

The fourth industrial revolution is sweeping the world and transforming almost all industries worldwide, which is indicative of a challenge and opportunity. Centered around "One Body & Two wings" platform capabilities (One Body: AIoT + capability of digital innovation; two wings: capability of allocating resources procured across the world and capability of empowering mass order customization), COSMOPlat industrial Internet platform will delve into industrial sectors and thoroughly explore in every aspect. Setting a new paradigm where digital economy empowers all industries, areas and cultural systems in all respects, COSMOPlat is expected to stand as a go-global industrial Internet solution proposed with Chinese characteristics.

Comprehensive Health: Achieve differentiated leadership in IoT-based health

So far Haier has two listed comprehensive health companies: Haier Biomedical and INKON Life:

Specialized in bio-safety and based on such scenarios as vaccination safety, smart blood safety and smart laboratory, Haier Biomedical tailors smart solutions for five scenarios by integrating technological innovation and becomes a leading ecosystem brand in digital healthcare infrastructure.

Dedicated to digital healthcare, INKON Life lays equal emphasis on two things: one, with technical breakthroughs made in high-end medical equipment, it takes aim at pioneer in developing Chinese high-end oncotherapy equipment with independent intellectual property rights instead of importing equipment overseas; two, by furnishing innovations in digital healthcare services and catering the needs of both doctors and patients, it plans to build an IoT/5G/AI-based big data smart platform - INKON healthcare service network that covering hospital treatment and home care.

The new board with strategic resolve and composure shall pool efforts to expand and strengthen real industries and foster competence of innovation nonstop to lead in technical field in the future, Mr. Zhou noted in particular.

Scientific and technological self-reliance

Facing a new round of technological revolution and industrial reform, the Board of Haier Group founded the Science and Technology Committee, for the following purpose: making best use of three institutional strengths in scientific and technological innovation, intensifying its capabilities of technology and innovation and addressing intractable technical problems prevailing in the industry.

Strength in open innovation system. Right now，Haier has pooled resources from over 20 states/regions across five continents and gathered over 200,000 experts for open innovation via "10+N" innovation centers worldwide.

Strength in transformation from original technology to formation of industrial chain. In the recent decade, Haier originated around 170 original technologies making a great difference on the industry, all of which have been commercialized in the industry chain and brought users new experience.

Strength in integrative innovation of technology and business incubation. Haier’s HCH entrepreneurial accelerator platform is a business incubator blended with scientific and technological innovation, arising out of which are 5 listed companies, 90 gazelle companies, and 38 Little Giant Enterprise. In a word, it sets up a new pattern of integrative innovation that characterize "Technology promotes entrepreneurship, while entrepreneurship accelerates technology innovation".

In the following three years, Haier will allocate special industrial fund of 40 billion Yuan and R&D investment of 60 billion Yuan to five key common technologies: carbon dioxide emission & carbon neutrality, privacy and compliance, specialized chips and operating systems, AIoT/sensing and interaction, and data productivity. With such technical advances, it is expected to tackle such core technical problems in the industry as Smart Home Brain, smart home OS, industrial intelligence BaaS engine and line accelerator radiotherapy system.

Institutional innovation inspiring dynamism

Embracing soil makes Mount Tai a vast mountain; the ceaseless inflow of rivers makes the ocean deep. Evolving from a small factory on the verge of shutdown, Haier’s current success is attributable to its effort of upholding innovation and entrepreneurship and seeking utmost value of people.

To meet requirements for realizing strategic objective in the new development stage, Haier Group founded the Compensation and Nomination Committee, for the following purposes: drawing top talents across the world to start up their own businesses at Haier platform through institutional innovation of "incentive & restriction for entrepreneurs"; building an innovation and entrepreneurship platform for all its employees so as to help them realize their dreams. In this way, Haier Group can create a positive cycle where talents who are attracted by promising causes achieve great success and make such platform even more inspiring. Under "incentive & restriction for entrepreneurs", everyone may become an entrepreneurship partner granted with three benefits: income from working, income from sharing, and income from capital investment. The three types of incomes are distributed under the principle of “income sourced from value-added contribution only”.

On the premise that the collective ownership remains unchanged, the system is an ingenious system designed for motivating vigor and vitality of all in innovation and entrepreneurship. It features two radical movements: one, an entrepreneurship partner may earn from sharing right of management even though he/she has no equity therein; and two, an entrepreneurship partner with equity therein is not entitled to income from capital investment if making no contribution to appreciation. Data show that Haier’s entrepreneurship partners earning via share or equity distribution rose to 14,681 in 2021; and Haier saw an increase of 81% in the number of co-investors in startups and listed companies from a year earlier. Indeed, Haier did make valuable exploration in the journey of seeking common prosperity.

Preparing for worst-case scenarios ensures proper risk prevention

Confronted with new challenges posed in digital economy and digital transformation, the Board of Haier Group founded the Audit and Rick Control Committee, for the purpose of building three capabilities in a world-class audit risk control system: one, risk evasion, specifically the capability of avoiding fluidity risks through various aspects of institutional building and refining, digital system application, organization and mechanism guarantee; two, risk warning, namely, the capability of utilizing digital technology in recognizing and preventing risks as early as possible, and delivering related solutions by category and level of risks, so as to nip problems in the bud; three, risk mitigation, precisely the capability of building a closed-loop risk system where the risk manager can intervene and resolve risks incurred in time, in a bid to attain high-quality development in a severely uncertain situation.

Trend-setting Model with Chinese characteristics

Haier’s transformation towards the IoT has now yielded remarkable results. Accordingly, the original "Transformation and Reform Committee" is now renamed as "RenDanHeYi Leading Committee". The committee is a unique type of board committee, initiating the world’s first-ever business management pattern. Committed to making RenDanHeYi model a world-leading management philosophy, the committee is intended to promote standardization and globalization of the model and institutional transfer of results concerned, apply successful practice to enterprises around the world and spotlight China’s management model in the world. Zhang Ruimin, Founder and Honorary Chairman of the Board of Haier Group, will assume the Principal Consultant of the committee.

Riding through the storm and embracing changes

“When you come out of the storm, you won’t be the same person who walked in”. The fourth industrial revolution, carbon dioxide emission & carbon neutrality, green energy, digital transformation and the latest craze of "metaverse" bring great opportunities to enterprises but only those with the sense can recognize and seize the opportunities. Currently landscapes at home and abroad is undergoing major changes unseen in a century and world economy is at slack growth. In the context, Zhou Yunjie called on all entrepreneurship partners to be ready to adjust the approach when necessary. Essential for growth is reform. And complacency is the biggest hazard. There is a classical analogy: government is "visible hand", market is "invisible hand", and "self-organization" is "invisible heart" in response to uncertainties. Haier takes a self-organized approach to build and strengthen resilience of enterprises in the storm.

Zhang Ruimin, Founder and Honorary Chairman of the Board of Haier Group, made similar remarks earlier: Haier employees turned crises into opportunities at critical moment for being goal-oriented and staying focused. In a word, Haier puts users first consistently while making provision for the future. Standing in the crest, those successful never look back; instead, they step on a new journey for believing "The sun is new each day".

"Create a Bright Future with Unwavering Persistence" throws a light on the relationship between inheritance and innovation. Haier’s RenDanHeYi model and ecosystem brand paradigm have been well acknowledged in national/international academia and business circle. Mr. Zhou pointed out, given Haier's current status as a leader in the IoT-based ecosystem, "maintain previous achievement" or path dependence may put Haier at risk. Inheritance is all about development which entails innovation.

Mr. Zhou's speech sounds the trumpet of moving forward for all Haier entrepreneur partners. Facing a future full of uncertainties, trust Haier’s new board will guarantee continued progress of innovation and entrepreneurship and ensure sound implementation of Haier--a model in China's reform and opening-up.