Global Experts Discuss Model Innovation in the Internet Era Together Haier Convenes International Symposium on Haier’s Business Models-Innovation for the Internet Age

Global Experts Discuss Model Innovation in the Internet Era Together

Haier Convenes International Symposium on Haier’s Business Models-Innovation for the Internet Age

• This symposium is subject to “Shift Gears and Accelerate: Towards a Better User Experience and a Better Life”.
• Top global management innovation experts who came from America, Europe and China attended this symposium.
• Haier will focus on creating investment drive platform and user payment platform in the internet age.
• In 2014, Haier Group global turnover have achieved 200.7 billion RMB, up 11% from a year earlier; achieved profit of 15 billion RMB, up 39% from a year earlier; profit growth was three times the revenue growth.
• In 2014, Haier Group realized RMB 54.8 billion RMB amount of online transaction with an increase of 2391% year on year.

The “International Symposium on Haier’s Business Models-Innovation for the Internet Age” was officially convened in Ocean Hall of Haier InterContinental Hotels at 9:00 am on January 8^th, 2015. The symposium is subject to “Shift Gears and Accelerate: Towards a Better User Experience and a Better Life” and aimed at discussing business models innovation of Haier in the internet age and seeking for roads for Chinese enterprises meeting the challenges in the internet age.

Haier Exploration: perpetually recognizing its own fallibility

 “No successful enterprise but only enterprise of times” is a sentence often referred by Chairman and CEO of Haier Group Zhang Ruimin, and also becomes a landmark for leading innovation and development of Haier. Biggest immutability of Haier is constantly changing and stamping on the correct era beat in the constant process of entrepreneurial innovation.

Haier has constantly explored the Internet model innovation for more than 9 year Since Zhang Ruimin put forward Win-Win Model of Individual-Goal Combination in 2005, and has been keeping the ten billion of income growth every year during the period of transformation, and compound annual growth rate of revenue reaches 10%. Why Haier takes more than 9 years to explore model innovation constantly? In this symposium, Zhang Ruimin said that the past enterprise culture is execution culture, but the present culture is entrepreneurial culture. The entrepreneurial culture is to encourage the staff to become a maker, with the users’ better experience in the whole flow as a core driving force, making a creation constantly, and subverting it persistently.

It can be said that models innovation of Haier put forward by Zhang Ruimin is a process of seeking changes and overturning positively, and this transformation is just supported by innovative spirit that Haier’s employees perpetually recognize its own fallibility. At the beginning of rise of internet, Haier Group has been grown into the sole 100 billion class enterprise in this industry and kept stable development trend, of which its profit growth is twice as high as revenue growth in consecutive years. But the zero distance, decentralized and distributed characteristics in the internet age have overturned the industrial reality. In the face of gradual personalized user demand, Zhang Ruimin led Haier Group to open the road of models innovation, realize that everyone becomes into maker under the drive of enterprise culture, construct the open entrepreneurial drive platform, and openly attract the global maker resource to ecosystem.

As the world famous Economist and Business Strategy Master Don Tapscott said, the enterprise's organizational form is bureaucracy in the industrial age; it is closed internal type organization, rarely communicating with outside. But in the Internet age, enterprise development pattern must be redefined into the network and platform with self-organization and self-innovation ability. From this point, Haier are very innovative enterprise worldwide, which is the reason why Don Tapscott came to China to study and discuss Haier's innovation model.

Haier innovation: endless entrepreneurial ecosystem

In order to establish in the internet age, enterprise must be transformed to platform, attracting the world first-class resource with the open and inclusive attitude. At present, Zhang Ruimin expressed that the focused goal is to create two platforms, and the first is investment drive platform.

How to construct investment drive platform? It is precisely said that enterprise is turned over to endless entrepreneurial ecosystem from management and control organization, this view is reflected on staff composition attended this symposium. This symposium gathered platform owner, micro enterprises owner, makers, specialists and scholars as well as modular suppliers, first-class research and development resource, investors and other stakeholders. The above personnel are exactly constituted into entrepreneurial ecosystem of Haier, they are connected in parallel each other to become into entrepreneurial micro enterprise so as to adapt the zero distance, decentralized and distributed challenges brought by the internet age.

Under the joint action of the investment-driven platform and entrepreneurial ecosystem, Haier Group achieved a steady growth. In 2014, Haier Group global turnover have achieved 200.7 billion RMB, up 11% from a year earlier; achieved profit of 15 billion RMB, up 39% from a year earlier; profit growth was three times the revenue growth; online transactions achieved 54.8 billion RMB, up 2391% from a year earlier. Kevin Kelly, the author of Out of Control has proposed the "peak valley transformation paradox", namely in the Internet age, big enterprises will experience the process from peak to trough, and then climb up the peak. However, behind the fact that global turnover was 200.7 billion RMB, it embodies the constantly emerging growth vigor of Haier, which benefits from Haier's entrepreneurial ecosystem construction: "Thorc" game laptop achieved 250 million sales, and Iseemini also obtained external investment intention…It is these "open forests" constructed by Makers of Haier, make Haier's Internet ecosystem grow strong and achieve stable development in the wave of Internet development.

Marshall W.Meyer, the professor of University of Pennsylvania Wharton School, thinks that the management and creation system on the construction of the entrepreneurial ecosystem conducted by Entrepreneurial ecosystem is extremely innovative, surpassing the traditional management concept, this creation benefits from one key advantage, namely Zhang Ruimin - the Chairman and CEO of Haier Group, who is a great management thinker, devoting himself to promote the management creation, and subverting Haier into a great company rewriting the global theory. From the view of him, Haier will become an outstanding representative of the great company, and the management theory on the creation will have an influence on the whole world and management field.

Haier change: Users have the final say about the remuneration

The second platform is the user payment platform. If the investment-driven platform is a door knocked by Haier model in the process of innovation and exploration, the user payment platform is a path for the future laid by Haier. Since the remuneration of Maker is decided by users, this not only requires makers to find their own users, but also to continue to create paths to grow strong through interaction. Zhang Ruimin thinks that, from the enterprise payment to users payment, this cultural change is aimed to adapt to the challenges of the personalized needs of users brought by Internet. If the maker cannot go well on this road, they either achieve improvement, or to be optimized.

The user payment platform is an important exploration of Haier’s change; though full of challenges, it reflects the Haier’ determination of user-centered transformation. The famous scholar, Andrew Van De Ven, who is from University of Minnesota's Carlson School of Management, said that at the meeting, except Haier, he could not find any enterprises achieving strategic transformation for 5 times under the leadership of the same person; this benefits from Haier’s exploration in building a learning and innovative organization; this exploration is a kind of more comprehensive exploration for independent innovation, because it cannot draw lessons from others, it develops by keep learning through trial and error. Hu Yongze, the professor of School of Journalism & Communication, Peking University, thinks that at present Haier transformation is the user-centric innovation, namely the enterprises are reversed into full Internet companies, to strengthen the user interaction with the thinking of combine of labor, and thereby ending the contact lost state with the user. The network device being innovated now is the exploration toward the direction.

In the end, Zhang Ruimin, by referring to the old saying "change from closed situation to open situation rather than reversed by the closed situation" in the book of I Ching more than 2000 years ago, summarizes that the enterprise must take the initiative to reverse the closed situation, rather than reversed by the closed situation; just as Stuart Crainer, puts in The Management Century, that there is no final answer on the management, only the eternal questioning; facing the change of age, the enterprise must constantly questioning and pursuit to make Haier become a real enterprise of an age.