Zhang Ruimin, CEO of the Haier Group, named the first 2015 recipient of the coveted Best Practice CEO Award,
Zhang Ruimin, CEO of the Haier Group, Qingdao, China, has been named the first recipient in 2015 of the Best Practices CEO Award, presented annually by Best Practice Institute (BPI), Florida USA.
Each year BPI, one of the world’s leading talent management associations, presents the award to a select few of the world's top CEOs, who have demonstrated a commitment to developing talent in innovative ways.
Best Practice Institute announced the selection of Zhang this week. A more formal announcement will be made at Talent Management Asia Conference next week. Louis Carter, founder and CEO of Best Practice Institute, will be the featured speaker at the conference, which will actually be a series of events in Malaysia, Singapore and Hong Kong during the last two weeks of April.
“Zhang Ruimin is exactly the kind of chief executive BPI's CEO Award is all about," Carter said. "What Mr. Zhang did 30 years ago to rescue and revitalize his company was heroic. Even more important, though, is what Mr. Zhang is doing today to point the way to what talent management looks like in the Internet era."
Best Practice Institute is a leadership and management association with more than 42,000 subscribers, including executives and employees of more than half of the Fortune 500 companies. BPI began presenting its CEO awards in 2006. Previous recipients include Phil Martens, CEO of Novelis, and Steve Reinemund, CEO of PepsiCo.
From dilapidated factory to global powerhouse
Haier Group is a home appliance and electronics manufacturer of refrigerators, washing machines, air conditioners, microwave ovens, computers, televisions and mobile phones. The company has 70,000 employees worldwide. The company’s turnover in 2014 was US $32.09 billion with a profit of US $2.4 billion.
Mr. Zhang became director of Haier's predecessor company, Qingdao Refrigerator Factory, in 1984, when he was 35. The dilapidated factory was deeply in debt and on the verge of bankruptcy. With no money to pay employees, Zhang had to turn to private lenders just to make the payroll during his first months at the helm.
By simultaneously supporting but challenging employees and by continually adapting the company's business model to changing times, Zhang has led Haier to become the largest home appliance brand in the world. Sales revenue has increased by more than fourfold since 2000.
Zhang's covenant with employees
In his first years as CEO, Zhang made it a top priority to improve worker conditions: paying salaries on time, increasing salaries, providing transportation to and from work and enforcing standards that resulted in a better workplace.
Having improved things for his workers, Zhang expected something in return: an improvement in work quality. Zhang first attracted attention beyond Qingdao in 1985, when he had 76 substandard refrigerators hauled to the factory yard. He handed the workers who had made them sledgehammers and told them to destroy the shoddy products. The dramatic episode drove home the message that Haier was now a company where quality mattered.
Management in the Internet era
Thirty years later, Zhang has drawn attention from around the world, not only for his remarkable success at Haier but for his innovative management concepts. In a speech last year, he briefly reviewed 200 years of modern management principles, concluding, "With the arrival of the Internet era, I think all these theories have been overturned” - a statement that embodies Zhang Ruimin’s approach to adapt to the continually changing global business environment.