Haier, a Chinese multinational consumer electronics and home appliances company, has revolutionised its structure to focus on the end user. Adopting a ‘RenDanHeYi’ model, Haier has replaced traditional corporate hierarchy with self-managed microenterprises (MEs). Each ME, capped at around 10-15 employees, operates independently, responsible for their profit and loss. The MEs are encouraged to innovate and design products based on direct customer feedback.
The company also has a unique compensation system, with employees earning a basic salary and additional income based on their ME’s performance. This model has led to a significant increase in entrepreneurial spirit and innovation within the company.
Haier’s transformation has not been without challenges. Resistance to change, especially from middle management, and the need for a new mindset were significant hurdles. Yet, the company has managed to overcome these issues through clear communication, training, and a robust support system.
Haier’s innovative approach has resulted in a significant increase in revenue and market share, making it a global leader in the home appliances industry. The company’s success serves as a model for other businesses looking to foster innovation and customer-centricity.
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