Haier

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Bill Fischer and Simone Cicero on Haier and the entrepreneurial organisation

...of all, to both of you for being on the Leadermorphosis podcast — I’m really looking forward to talking to you and I’ve been following the example of Haier with quite a lot of fascination over the last few years. So it’s really fun to get the opportunity to talk to two people who have been immersed in th...more
...ith quite a lot of fascination over the last few years. So it’s really fun to get the opportunity to talk to two people who have been immersed in the Haier world, at least for the last few years — but I know Bill that you’ve also known Haier and Zhang Ruimin for several decades now. B Fischer: So I thin...more
...opportunity to talk to two people who have been immersed in the Haier world, at least for the last few years — but I know Bill that you’ve also known Haier and Zhang Ruimin for several decades now. B Fischer: So I think it goes back to 1997 I think when we first met but I was living close-by when they s...more
... a great differentiator at that time in China. But there was a wonderful ‘fix it’ community that could change anything. And that was the beginning of Haier’s commitment to thinking further and bigger than the rest of the people in the industry, and very dramatic. Even today when I go back to China and ta...more
...he talk of the town and everyone’s really enamoured with this new structure. So I’m curious what, to both of you, is the most interesting thing about Haier. Because there’s so much we could say — but what do you think are the really unique or interesting aspects? S Cicero: Well, it’s hard to just talk a...more
...t what do you think are the really unique or interesting aspects? S Cicero: Well, it’s hard to just talk about one thing. For me personally, I think Haier is a special organisation probably because of the leadership that it has. Not just when you compare it with other traditional Western organisations, ...more
...k about the exciting firms of China’s future, it’s always it’s always the same collection — it’s Alibaba, it’s Huawei, it’s Xiaomi perhaps Lenovo and Haier — and you know, the other four, they are high tech new economy companies, they’re very exciting. And Haier is an old economy, home-appliance manufact...more
...t’s Huawei, it’s Xiaomi perhaps Lenovo and Haier — and you know, the other four, they are high tech new economy companies, they’re very exciting. And Haier is an old economy, home-appliance manufacturer — you know, commodity industry, mature. And yet what’s going on there is extraordinary. So when we tal...more
...there is extraordinary. So when we talk about innovation…we tend to pay lip service to product and service and business model innovation — and here’s Haier off on the side, doing really organisational innovation on a consistent basis — as a differentiator. I teach at a business school [IMD] where most o...more
...is often you know, kids running around in Silicon Valley in flip flops. But that’s not the reality that they’re going to face when they go back. But Haier is 70,000 real people making real things. And so for me, it’s a wonderful, wonderful opportunity to talk about how you change large, complex organisa...more
...L Gill: Thank you. Let’s, let’s talk a little bit about the leadership then because I mean, Zhang Ruimin has a legacy already at Haier — 35 years or so I think he’s been in the organisation — and this is now the sixth evolution or reinvention, I believe, of the organisation. So, it t...more
...e is consumed by this curiosity. So every time you go to see him, he’s just met everybody you’re reading now. Nothing is allowed to get in the way of Haier accessing fresh insights and then testing them, putting them to work right away. S Cicero: Yeah, I think one thing that I can just add on top of thi...more
...rase about creating a system where everyone can be a CEO of themselves. And I’m interested in what your experience is of leadership more generally at Haier and how leadership emerges. What does leadership look like elsewhere in the organisation? How is leadership encouraged? What does that look like? Do ...more
...d leadership emerges? S Cicero: Well, I think there is an interesting aspect, which is the constraint definition. And there’s a lot of leadership in Haier that goes through these architectural aspects. So for example, I think a lot of Zhang Ruimin’s actual leadership is an organisational design leadersh...more
...ts people to step into the entrepreneurial void at the frontline with the customer and fill it…I remember some years ago when there was a period when Haier was releasing control to people within the organisation — it was called de-hiring. And I remember that there were people celebrating being de-hired b...more
...o along. I think that it has been a blend of the new and the old. So I think that there’s always been familiar pieces in the changes. At no time has Haier ever asked its employees to take a flying leap into the unknown. They’re still using the same performance management system they used 35 or 40 years ...more
...ouch with people that have been hired lately, I see that there is such a now such a strong culture, that it is impossible that you end up working for Haier with a hierarchy or control perspective. It’s mathematically impossible. You won’t be at Haier. You won’t be actually attractive because the employer...more
...ure, that it is impossible that you end up working for Haier with a hierarchy or control perspective. It’s mathematically impossible. You won’t be at Haier. You won’t be actually attractive because the employer branding that they have created is so strong. The people that end up working there are entrep...more
...rs, the people who hate change are no longer there for the most part. So this is a huge advantage. Because I really do believe people come to work at Haier thinking, “What can I do today that would be a small innovation in the way in which we work?” Or, “How can I drive this venture forward?” They’re not...more
...xample, if you create a micro-enterprise — at the moment of creation, you need to commit to goals, you need to commit to tangible results. Working at Haier, you never hide passively. You always respond to what they call. You create what they call a bid for an order. When there is an order, you bid for it...more
...L Gill: Talking about cultural code, it’s interesting now that Haier is acquiring new businesses. And I believe you’re supporting in teaching the cultural code to some of the people who are in the European part of the ...more
... is acquiring new businesses. And I believe you’re supporting in teaching the cultural code to some of the people who are in the European part of the Haier business now. I think back to, you know, when the Americans went over to study Toyota and what they were doing with Lean and kind of took it back and...more
...hinking about what you were saying earlier as well about Taoism and how that’s influenced this kind of mindset, if you like. B Fischer: What I think Haier has done, as it’s moved towards hiring more entrepreneurial workers — and that that didn’t start at the beginning…at the beginning they basically nee...more
... people to be able to become more successful. And I think that’s really interesting, when we deal with managers of large companies — not necessarily Haier, but large companies in general — and we talk about the Haier experience, they often think about their own internal problems: why they can’t do this,...more
...t’s really interesting, when we deal with managers of large companies — not necessarily Haier, but large companies in general — and we talk about the Haier experience, they often think about their own internal problems: why they can’t do this, or you know, whether it’s…work council restrictions, or whate...more
...roblems: why they can’t do this, or you know, whether it’s…work council restrictions, or whatever the reason is. But in fact, I think what happens at Haier is they’ve put their workforce in a position now where it thinks first about the customer, the outside stuff, and then begins to draw the changes to ...more
...: Well if I can add just a couple of reflections more to the nuance of clashing of culture…so the West and the East… I think one interesting point of Haier when they take over existing companies… Zhang Rumin once said to me that they don’t really do helicopter management, or they don’t bring you the mana...more
..., which is fairly common when Chinese companies are taking over European companies. So these are the three pillars. It’s a kind of simplification of Haier’s cultural code. It’s like a simplified version that you can apply. **So: creating micro-enterprises (profit or loss); setting leading goals (being a...more
...this culture in the West of being independent, and the culture in China in particular as being collective. And yet the behaviour that we’re seeing in Haier is, in a sense, almost the reverse of what we see in the western analogues. I think that when we look at what Haier has been trying to do with Gener...more
...e behaviour that we’re seeing in Haier is, in a sense, almost the reverse of what we see in the western analogues. I think that when we look at what Haier has been trying to do with General Electric in the US, and I think even what we’ve seen with Haier in Europe as well, when you give people the prospe...more
...tern analogues. I think that when we look at what Haier has been trying to do with General Electric in the US, and I think even what we’ve seen with Haier in Europe as well, when you give people the prospects of really using what they know, and having more autonomy to do that, they become fascinated by ...more
...to do that, they become fascinated by it, it becomes energising, and then you begin to see very imaginative responses. So I’m very hopeful that when Haier is transferring the RenDanHeYi model to its associates in the West, I think it’ll be a different interpretation. I don’t think it’ll look exactly the...more
...people closest to the customer need the power to make decisions” and so on. And it never really took off. And so, perhaps, it will be an example like Haier — this kind of Chinese, incredible sort of giant and success story — that might, as you say, revitalise an interest in that. And then for people to t...more
...then for people to think, “Oh, actually, maybe there’s something in this”. And I think also perhaps the technology aspect as well, because I know how Haier and organisations like Buurtzorg are using technology as a way of kind of decentralising, in a way of kind of being able to get rid of a lot of the m...more
...eviously managers might have done. So yeah, hopefully it will inspire… B Fischer: I’m interested in how Simone would react to this, but I think that Haier has not used technology to replace managers. I think that there was a large exit of managers in the early 2000s. But that was because they changed th...more
...ecided that they would rather be middle managers somewhere else, than go through that trouble. But I think that the other thing that has happened at Haier is that Haier has not only changed the organisational structure, and the power within the organisation, but they’ve also changed the distribution of ...more
...ey would rather be middle managers somewhere else, than go through that trouble. But I think that the other thing that has happened at Haier is that Haier has not only changed the organisational structure, and the power within the organisation, but they’ve also changed the distribution of wealth. So at ...more
... has not only changed the organisational structure, and the power within the organisation, but they’ve also changed the distribution of wealth. So at Haier the way that value is distributed makes it economically worthwhile or rewarding economically for people who are inclined to take these chances. And ...more
..., they changed the organisation, they gave people autonomy, but they didn’t necessarily change the way in which rewards were distributed. And I think Haier has done that. **What do you think Simone? S Cicero: Well, I think technology at Haier is being used to destroy the organisation not to not really t...more
...change the way in which rewards were distributed. And I think Haier has done that. **What do you think Simone? S Cicero: Well, I think technology at Haier is being used to destroy the organisation not to not really to destroy bureaucracy only. I think Haier has been already accepting the idea that agai...more
...imone? S Cicero: Well, I think technology at Haier is being used to destroy the organisation not to not really to destroy bureaucracy only. I think Haier has been already accepting the idea that again, it’s a no bullshit culture — so they are really destroying the bureaucracy. They’re really on track t...more
...hang Ruimin, he will tell you maybe companies or organisations will disappear. So the question now starts to be really hard now to understand what is Haier and what is not, for example. When you think about it… they are investing in companies that are technically outside of it. So, of course, there are s...more
... one is… you know, a few years ago, I went to visit a small organisation in the UK called Matt Black Systems, who have kind of a micro version of the Haier model, I suppose. But they are micro enterprises of one person, in the aerospace industry. And the owner there said to me that he was worried about t...more
...anisations, you know, the types of people that you’ve just been describing — people who are entrepreneurial, who are able to take initiative… And as Haier grows, one question I have is: are we creating a class of people who won’t be useful in the world of work if many organisations start to go in this d...more
...ntrepreneurial types will really thrive in this kind of environment? S Cicero: That’s a good question. You know, to some extent, I mean, I feel like Haier is just becoming smarter and more efficient at capitalism than any other company in the world. And capitalism means also technology. So essentially, ...more
...estion is, is there a risk that you just create an organisation this is a master of destroying the planet? But to some extent, I can also see that in Haier, there are some interesting seeds of transcending the organisation, as I said. So, it’s the same culture that is about no bullshit, you know, making ...more
...here is also the seedbed for the independence and interdependence. And so, for example, one person asked me, you know, would I be more excited about Haier if they were into doing a smarter home — more about something like sustainability. And so, I said, you know, maybe a smart home is a sustainable home...more
...ike sustainability. And so, I said, you know, maybe a smart home is a sustainable home to some extent. There is another example where employees from Haier were working on water purifiers. And there is an anecdote on the website that mentioned that when they were working with communities, about the quali...more
...sn’t just depend on the purifier. It depends on many other systemic aspects. So, you know, that’s the point — there are some seeds in how, you know, Haier is making people self-organise, making entrepreneurs emerge, and letting go of the control from the centre…and this idea that you need to just create...more
... industrial organisation. We don’t know how yet, but I believe that this question of how we transcend, modernity, it’s an open question…not just for Haier, it’s an open question for our civilisation. And Haier is one place where I see a potential to start, you know, to see some sparks of how we really j...more
... believe that this question of how we transcend, modernity, it’s an open question…not just for Haier, it’s an open question for our civilisation. And Haier is one place where I see a potential to start, you know, to see some sparks of how we really just transcend the industrial organisation and modernity...more
...be resilient, and reconfigure themselves to adapt to an unpredictable world that we seem to be living in today. B Fischer: My response would be that Haier is very simple relative to the total population of organisations around the planet, most of which are organised around traditional command-and-contro...more
...structures with a goal of reducing variants — getting the surprises out of whatever happens in order to be more efficient. And what I think that the Haier model is doing is encouraging more leadership imagination throughout the organisation, not just relying on the top. But also, there’s a great deal of...more
... a lot of reasons, not just economic reasons, but you know, because it’s a good idea to support the community. And my sense is that the way in which Haier is structured and the ease with which three colleagues can come up with an idea and form a micro-enterprise to pursue is really wonderful. Because no...more
...put is different, and it’s no longer as linear and sequential as traditional value chains are. I think there’s a lot of promise for the future in the Haier model. The problem is Haier is one of a handful of companies around the world that are experimenting with this. So how much impact will this experie...more
... longer as linear and sequential as traditional value chains are. I think there’s a lot of promise for the future in the Haier model. The problem is Haier is one of a handful of companies around the world that are experimenting with this. So how much impact will this experience have? I don’t know, not e...more
...terested in pushing responsibility throughout the organisation. But the workforce was not prepared to accept that. And what I worry about is when the Haier model gets transferred, will there be acceptance of engagement, or will there be reticence and fear over being visible and therefore vulnerable? ...more
...ot to provide the conditions for them to really explore and learn this new way of working and being and relating to each other. And it seems like in Haier, at least, that that has been facilitated by architecting the organisation in a very particular way, in all of the facets that we’ve just talked abou...more
...cets that we’ve just talked about, that help, you know, bend people towards that kind of way of behaving. And I imagine those people who have been in Haier in China have kind of evolved with the organisation. So it’ll be interesting to see those people who haven’t come up in that world, fresh from the so...more
...y. B Fischer: So, one of the things is for sure — the people who run the micro-enterprises, quite a number of those people have come from outside of Haier. In the course of one week, I interviewed 10 or 14 of these micro-enterprise owners, and there were no two career paths in common. You know, it was ...more
...own idea, at their own risk to some extent, I mean, it’s not a free ride — and see, and see if it would work or not. But I think the way in which the Haier culture works is that if you join the organisation, no matter whether you’re joining as a young, first time employee or mid-career transition…it come...more
...e a lot more freedom than would probably be ever experienced before in your professional life. So, if you think about the broader ecosystem in which Haier exists — we don’t do a very good job in the education or training world, preparing people for this. We prepare them for the historical model, which i...more
...is that we recognise the tremendous potential that’s available within human ingenuity. And we go about creating mechanisms to free it up. And I think Haier is one way to do that. RenDanHeYi is one way to do that. ...more
...L Gill: Yeah, I guess I’m always coming back to… how do you help people to be successful? Because yeah, I can imagine when you’re entering into Haier, chances are you know you’ve had an experience of a traditional, top-down organisation. It also often the case with these kinds of organisations that...more
...they’ve come from some other context, which is so different that they’re not kind of porting over any of those learned habits. But for those who join Haier, who have had that kind of context, I just wonder if they get any support. What sort of training or are there particular skills or tools or things th...more
...r are there particular skills or tools or things that help them, you know, with that jolt, so to speak? B Fischer: So, so I think nobody winds up in Haier by chance. So I don’t think you have anybody who’s unsuspecting and thinks, “Oh, you know, how did I get here?” The employer brand is so strongly ent...more
...ion very effectively. Source: from the EEEO Toolkit https://platformdesigntoolkit.com/eeeo-toolkit/ S Cicero: Yeah, I mean, in general, I feel like Haier has eliminated a lot of the boundaries between inside and outside. So, you know, for example, if you make a comparison between Zappos and Haier, both...more
... like Haier has eliminated a lot of the boundaries between inside and outside. So, you know, for example, if you make a comparison between Zappos and Haier, both of these companies are using micro-enterprise structures. Of course, Zappos is much more immature, let’s say, with respect to Haier. And both o...more
... Zappos and Haier, both of these companies are using micro-enterprise structures. Of course, Zappos is much more immature, let’s say, with respect to Haier. And both of them are all about self-management. So for example, to be hired at Zappos, you go to three months training, and then if, at the end of ...more
..., you will be fired. And then if you fit, you get your stipend and you can create maybe part of your bonuses through the structure. When it comes to Haier, you get, I think it’s easy to be hired to some extent, you know.In China, your stipend or basic income is set by the state. So then if you don’t fin...more
...ired by a micro-enterprise at first, but you’re not there just to work in a micro-enterprise. You are there because you can leverage the systems that Haier has created to lead to becoming an entrepreneur. So it’s kind of a system that offers you several things. It offers you what they call this Shared Se...more
...nk, asking you to try something else and giving you feedback and so on — so I’m thinking about, and maybe it’s because I’m not the ideal employee for Haier (laughs), but again, I think about this diversity question that I mentioned earlier… In some ways, it feels kind of harsh, that that only a certain t...more
...’s kind of a wondering that I have. B Fischer: But I think that if you’re one of those people that -needs a little bit more time, and you wind up in Haier, as long as you demonstrate energy and commitment and curiosity, you’ll get the extra time. I mean, the goal is not for everybody to run a micro-ente...more
...ime. I mean, the goal is not for everybody to run a micro-enterprise. I think that that would be an interesting goal. And I think many people come to Haier with that as their objective. But I also think that if you get hired into a micro-enterprise, the beauty of that is you’re — assuming the micro enter...more
...are, how energised you were, how much of a colleague you are. So in in a sense…you gave the spectrum of directors in drama. I mean, my sense is that Haier is a mix of both of those. There are absolutely clear-cut success and failure criteria. And at the same time, there is a lot of ambiguity in between ...more
...something happen. That’s how it works with a start-up — you need to put yourself into something and create something new, and this is basically what Haier is trying to do on a large scale. And to do it on a large scale it’s a matter of designing the right pieces, and putting the right pieces together — ...more
... that it works. The other thing I have to say, as someone who is not as young as you two, is that when I go round and talk to entrepreneurs — not at Haier — but entrepreneurs, whether it’s in Silicon Valley or you know Shenzhen or wherever, there’s a uniformity there in the message that they send, the c...more
... another rendition of the same show. So I think that what you don’t want is too much homogeneity going into the future and my sense is that so far at Haier given the breadth of the platform orientations on which these micro-enterprises are embedded that there’s quite a bit of variety in terms not only of...more
...L Gill: Yeah thank you for sharing that, that’s clarifying because I think I sometimes look at examples like Haier and it can feel, I don’t know if this is reductive to say, but it can feel quite masculine, I suppose, as a concept and my biases are always looking ...more
...y for you to become an entrepreneur. It’s a way to be much less violent towards the employee. So when you speak about the masculine organisation and Haier, here is where Taoism can help. Because this is a different type of thinking — it’s didactic. Whereas you always put all the nuances together, there ...more
...c. Whereas you always put all the nuances together, there cannot be a masculine organisation if it’s not also feminine. And this is more or less what Haier is doing. You know, to some extent it’s masculine, telling you, you know, you need to be entrepreneurial. But on the other side it is also feminine i...more
...y of kind of wrapping up this conversation…I imagine you get this asked a lot: what are some practical, actionable insights that we can take from the Haier model? So people listening to this podcast tend to be people who are interested in self-management or more decentralised ways of working, or maybe t...more
...’s also a very rewarding way to work — both professionally and also financially as well. And I think that those sorts of things, that’s what I see in Haier. I see the same sorts of mechanisms working there. The last thing I would add is, for me the biggest change in my life over the last two years is wo...more
...es. It’s really changed the way I think about how to put these organisations together. -L Gill: Yeah and I think it’s also quite a unique thing that Haier is doing in terms of, you know, opening up to outsiders like you and asking outsiders to sort of teach this and make it open-source. I think that’s a...more

Aaron Dignan on being complexity conscious and people positive

...w. We ended up collecting close to 68 cases for the book. The more famous ones are quite interesting - somewhere like a W.L. Gore, or a Buurtzorg, or Haier. They all have a lot in common. You know, W.L. Gore - they talk about the waterline, which I know you're familiar with. Things that happen that might...more