Haier

       An analysis of the historical background: The development of the first generation of the Haier Spirit was closely related to the distinct characteristics of the times. In 1984, Zhang Ruimin and other founders were faced with a difficult situation“none of the glasses in the workshop was intact; most of the workers defecated indiscriminately; the factory had a huge deficit of 1.47 million CNY and was on the brink of bankruptcy; no funds for workers' salary; three predecessors were appointed to manage the factory in only one year's time, but to no avail”. It is under such harsh conditions that Haier Ren (people) embarked on the journey of entrepreneurship. Without the support of capital, technology and talents, Zhang Ruimin and other founders devoted themselves fully to the transformation of the factory and seized the opportunities brought by the Reform and Opening-Up. After setting higher standards and the introduction of the Brand Building Strategy, they have achieved fast growth that lasted for nearly twenty years. 

       In contrast with other contemporary enterprises, Haier has, from the very beginning, developed a customer-oriented corporate strategy and culture, which is the focal point of organizational excellency. Within Haier, highly efficient procedures that align with the creation of customer values were established; the“customer is always right”principle was enforced to the fullest extent; an innovative daily clear management method was developed which later evolved to Overall Every Control and Clear (OEC) Management ideology.  

       Externally, Haier puts emphasis on“the customer is always right”and "customers' problems are the targets of our innovation”. 

       Internally, Haier highlights “quality products made by quality people” and “every employee can be a talent; every employee can race to the number one position”, which have activated the potential of employees to the maximum. 

       Zhang Ruimin and other entrepreneurs have earnestly practiced the spirit of “Selfless Devotion, Nonstop Excellency” in a “Fast Response, Quick Action” style. Their exemplary performance has turned the spirit and style into the core values of Haier. Influenced by such a corporate culture, each employee enriched these values with their own practice and experience. 

       At the same time, a world-class management model was developed in the U.S. with reinforced customer satisfaction, innovation and business excellency as the core. 

       In 1997, Haier, as China's number one home appliance brand, entered its internationalization stage. In this context, in order to increase the morale of employees and aim higher, Haier made a minor change to Haier Spirit from “Selfless Devotion” to “Patriotic Dedication".

       During this period of time, Haier went through three strategic stages, namely the Brand Building Stage, the Diversification Stage and the Internationalization Stage. Haier started with nothing, grew from a small factory to a large enterprise and expanded from China to the world markets. Throughout the whole process, all decisions made, including management, research & development and operations, were centered around the development of China. Therefore, that period of time was defined as the age of “Haier – Made in China”.   

       The most vivid and popular narrative about the first generation of the Haier Spirit is the story of smashing fridges. The Haier Spirit “do our best or don't do it at all” still stimulates each Haier people who is not satisfied with the status quo and brave enough to challenge themselves.

       An analysis of the historical background: Haier kept expanding its business domain in the first three development stages. By 2005, in terms of industrial layout, Haier has achieved a comprehensive industrial structure that covers all aspects of home life, including home appliances, furniture and home decoration; in terms of market layout, Haier has established its presence around the globe through glocalization. 

       On 26th December 2005, on the 21st anniversary of the establishment of Haier Group, Haier announced the fourth development strategy – Global Branding Stage which differs from the previous three stages and features a transition from “the internationalization of Haier” to “the globalized Haier”. Haier's global branding strategy envisions a glocalized Haier that is deeply rooted in different countries of the world and serves the local customers through the utilization of resources. The strategy also aims to build domestic brands that are recognized by respective mainstream markets. Together, those locally-renowned brands will uphold Haier as a world-class brand.  

       During that historical period, two major changes were transforming the world economy – one was China's admission to WTO, the other the rise of data-driven economy in the wake of internet technological development and applications. 

       The power of globalization and internet brought as much opportunities as challenges. The aim of Haier's global branding strategy was to seize the opportunities amid the internet era when different countries were woven into the same web and a globalized Haier flourished in all parts of the world. 

       It is a grand vision – Global Reputation. It's also a role that Chinese enterprises are going to play in the world economy. In the global markets, the benefits of a large population, lower labor cost and reforms in the domestic market of China were losing its comparative advantages, creating barriers for international brands to maintain the status quo. It was thus imperative that Haier people attract new customers and take over markets by way of resource creation. That period of time was defined as the age of “Haier – Made in the World’

       The new Haier Spirit was a complete iteration compared with the previous one. Accordingly, Haier Style also went through an upgrade. With "fast response" as the prerequisite, RenDanHeYi has ushered in a new era of management. The fragmented user demands brought by the internet called for radical changes to the internal organizational structure and procedures. As a result, the organizational structure of Haier evolved from an inverted pyramid with zi zhu jing ying ti (ZZJYTs, self-management teams) as the basic unit to a flat management structure which later evolved into a grid organization with microenterprises as the basic unit. While Haier keeps redefining management, it also brings new definitions of the enterprise. Once again, Haier takes the lead in transforming enterprise into an entrepreneurial platform and employees into entrepreneurs. 

       During that period of time, Haier's reform has challenged classic management theories in terms of theory and practice. Top overseas scholars and research institutes became Haier followers instead of Haier sceptics . They first recognized Haier's development and then Haier's management methods and tools. The acquisition of GE home appliance business, a representative enterprise of US industry, has trained the spotlight on Haier in the management world. The whole world was waiting to see how the next world-class management and social model will transform the living fossil of the American industry.  

       An analysis of the historical background: The previous period can be called the age of internet. Starting with communication, internet technology brought radical changes to traditional media industry, retail industry and created a myriad of new business models driven by free and co-sharing concepts. Traditional manufacturing industry will be the next to undergo these changes. While internet has become part of the infrastructure, the age of IoT is just around the corner. And zero-distance, decentralization, and distributed system will continue to play a bigger role in the economic development.   

       The future is here. Traditional empires are collapsing to make room for ecosystems. The post e-commerce age predicted by Zhang Ruimin two years ago is now turning into a reality. Desktop internet has removed the hurdles of information asymmetry; mobile internet has increased the speed of information transmission. In the era of Internet of Everything, the top priority is business integrity. Against the new backdrop, Haier Spirit and Haier Style serve as the guidelines for Haier's transition from a follower in the age of traditional industry to a leader in the age of IoT. 

At this historical moment, Haier people will take full advantage of the benefits of IoT-powered socialnomics. 

       At this historical moment, Haier is faced with a bottleneck: It has been 17 years since the introduction of IoT. However, its development does not translate into an enhanced user experience. Looking closely, the root cause of the stagnation lies with the separation between production and sales. Now, Haier is exploring the best user experience from appliances to internet and to websites. Haier Spirit is not only the shared vision of Haier entrepreneurs but also an answer to the call of the times. 

       Honesty has become ever more important in the fast development of traditional e-commerce. Honesty and integrity will no doubt be the core competency of the next era. In the early period of entrepreneurship, Haier introduced the philosophy of “Sincere Forever” which can be easily adhered to as long as Haier itself upholds the principle, because enterprises at that time were cut off from the outside world and the production was just assembly line work. But  in today's context, it's no longer possible. Each enterprise must transform itself from a self-contained organization to an open ecosystem which requires higher level of honesty and integrity. Only when the whole ecosystem can be trusted can users have a truly faithful experience. A trusted ecosystem is essential to the construction of a co-sharing platform. Only when stakeholders uphold honesty and integrity can the open resources of the ecosystem be utilized to co-create and win together. An ecosystem does not necessarily turn into a platform, but a platform must be based on a trusted ecosystem.     

       A trusted ecosystem and a co-sharing platform come from reforms in organization models. As the internet prophet Kevin Kelly says “companies will disappear, cities will survive”. Management guru Drucker once pronounced that enterprises will eventually go into oblivion, but organizations are here to stay. Enterprise is also a kind of organization. But future organizations will not be hierarchical and closed enterprises but self-organizations. Many enterprises have realized the importance of platforms but what impedes the transformation is the organization itself. 

       RenDanHeYi is a business model that adapts to the future. Self-powering/organizing microenterprises with self-entrepreneurship constitute a basic unit in the creation of user values. RenDanHeYi is also a dynamic balance powered by users. In an iterated ecosystem formed by microenterprises, users experience is constantly improved and enhanced. 

       RenDanHeYi and Microenterprises for Exponential Growth characterize the attitude and style of Haier ecosystem entrepreneurs. Powered by microenterprises, Haier Spirit will be strengthened and RenDanHeYi will be the leader in the third epoch-making management revolution after the industrial revolution. 

       The fourth generation features an upgrade from a co-sharing platform to a win-win evolution and from Microenterprises for Exponential Growth to EMC Contract. 

       A win-win evolution means Haier evolves with users, which is an important feature of blockchain – decentralized automated user trust. After decentralization, users can choose to trust the enterprise in order to achieve a win-win evolution. In some sense, users are also creators. 

       EMC Contract reflects another important feature of blockchain - decentralized automated value transmission. In an EMC contract, all values and all nodes are interconnected.