The success of the world's biggest white goods manufacturer, Haier, is based on five foundations. Discover what they are.

1. SUCCESS BASED ON
The world’s biggest white
goods manufacturer, Haier,
has become a benchmark
of innovative management.
Its success is based on
five foundations.
FIVE FOUNDATIONS

2. 2
Case study
The challenge of change is to instigate it from a position
of strength. Repeatedly companies attempt to change
things as their performance deteriorates. Not Haier.
Indeed, the more successful it has become, the greater
its apparent appetite for change.
CHANGE THEN CHANGE AGAIN1

3. 3
Case study
During the ‘80s, Haier built its
brand. In the ‘90s, it diversified
and thereafter localised R&D,
manufacturing and marketing.
Using technology, today it aims
to build a collaborative win-win
networked ecosystem.
CHANGE THEN CHANGE AGAIN – THE HAIER HOW

4. 4
Case study
Self-managed teams are the dynamos of constant
change at Haier. It’s thought that they create
organisational mess, a chaotic free-for-all of talent
and ideas. But this is the point at Haier: innovation
and leading-edge thinking is not a tidy business.
SMALL, SELF-MANAGED TEAMS2

5. 5
Case study
Haier’s 80,000 or so
employees have been
reorganised into over
2,000 self-organising units,
creating competition,
but also fuelling
entrepreneurship.
5
SMALL, SELF-MANAGED TEAMS – THE HAIER HOW

6. 6
Case study
“If, in the past, the mission of a company was to create
customers, today the mission should be to engage
customers from end-to-end,” said Zhang Ruimin, Haier’s
chairman. “The bosses are not customers, why should
the workers listen to them?”
USERS FIRST3

7. 7
Case study
Haier talks of moving
from “complete
obedience to
leaders” to “complete
obedience to users”.
Its future priority is to
meet the personalised
demands of its
consumers. In white
goods the only colour
is no longer white.
USERS FIRST – THE HAIER HOW

8. 8
Case study
The company is an open marketplace for ideas
and talent. The traditional pyramid structure has
all but flattened. “Haier doesn’t offer you a job but
offers you the opportunity to create a job,” runs the
company’s slogan.
CREATE A MARKETPLACE OF IDEAS4

9. 9
Case study
Haier has reinvented the role of managers
to become entrepreneurs and “makers”.
It has a “Win-win Model of Individual-
Goal Combination,” which means that both
employee and company objectives are on
the same trajectory. Haier employees identify
opportunities and an expert team is built to
develop the product or service, meeting the
user’s need.
9
CREATE A MARKETPLACE OF IDEAS – THE HAIER HOW

10. 10
Case study
Management is a magpie science, borrowing ideas from
psychology, sociology and elsewhere. Haier has proved
adept at borrowing ideas and giving them a fresh and
distinctive spin of its own.
BORROW AND ADAPT5

11. 11
Case study
After acquiring the Japanese company,
Sanyo White Goods in 2011, Haier rejected
the seniority-based compensation system it
inherited, instead, it rewarded people according
to how much value they created for users.
Managers who created value found themselves
promoted.
BORROW AND ADAPT – THE HAIER HOW

12. 12
Case study
Zhang describes a future Haier as a service-oriented
platform of innovative groups and creative individuals
with an array of Haier teams offering niche services
to customers. In this model the CEO is a coordinator
rather than a dictator, working with the consent of
self-managed teams.
21ST-CENTURY MANAGEMENT
Summary

13. 13
Case study
Collaborating with “communities of interest”
(users, academics, designers, competitors
and anyone who has useful insight), helps
creates bright ideas to develop new business
models. This is the Haier way: “The entire
world is our R&D department.”
It is 21st-century management.
21ST-CENTURY MANAGEMENT – THE HAIER HOW
Summary

14. The full article was published in
London Business School Review
Volume 26, Issue 1 2015.
Visit the website: www.london.edu/lbsr