The Rendanheyi Model of Haier
Haier, the worlds largest appliance maker, has developed a very innovative way of organizing their multinational firm. The corporation has been divided into 4.000 self managing micro enterprises
, of which about 250 are market facing ("users"). The others are called "nodes". These are supplying the "users" with components and services such as HR, finance and IT.
The users may hire or fire nodes or outside providers as they see fit. All micro enterprises are ultimately accountable to the company's customers and a highly entrepreneurial culture is cultivated.
The Rendanheyi model has several innovative attributes:
1. OPEN SYSTEM OF MICROENTERPRISES: The enterprise has been transformed from a closed system to an open system, a network of self-governing microenterprises
with free-flowing communication among them and mutually creative connections with outside contributors.
2. CUSTOMER-ORIENTED: Purchasers of our offerings are transformed from customers to lifetime users of products and services designed to solve their problems and increase their satisfaction.
3. LEADING TARGETS: A dynamic system in which each microenterprise is charged with pursuing ambitious goals for growth and transformation, not simply based on last year's results.
4. OPEN CONTRACTING: no internal monopolies of supplying departments like legal, IT, HR, etc., but freedom to shop outside if a better solution is available.
5. VOLUNTARY COOPERATION in so called "platforms". Platforms are aimed at serving a business industry (category, i.e. washing, gaming) or at developing a new capability, without top-down coordination.
6 OPEN INNOVATION: R&D has heavy involvement of clients, outside institutions and experts ("solvers"), and crowdsourcing is used for funding and feedback.
7. EMPLOYEE OWNERSHIP: Employees are transformed from executors of top-down directions to self-motivated contributors, in many cases choosing or electing the leaders and members of their teams.
Please add a reaction if you can contribute additional insights about this very interesting organization model.
Zhang Ruimin, "Why Haier Is Reorganizing Itself around the Internet of Things", S + B, Summer 2018, Issue 91
Gary Hamel and Michel Zanini, "The End of Buraucracy - How a Chinese appliance maker is reinventing management for the digital age", HBR Nov-Dec 2018, pp. 50-59