The Top 500 companies have disappeared in half in 20 years. How does Haier solve the paradox of big companies?

“Who says elephants can’t dance? If it can, the ants must leave the dance floor.”

Former CEO of IBM, Louis Gerstner used this statement to describe the plight of large companies, which means that large companies could maintain a long-term competitive advantage if they master the flexibility to manage.

Thinkers50 is the first-ever global ranking of management thinkers, and attracts the prominent management thinkers around the world. Zhang Ruimin, Chairman of Board of Directors and CEO of Haier Group, was successfully shortlisted for the list for three consecutive times.

Stuart Crainer once asked his friend Bill Fischer: what is the most interesting company in business management around the world? The answer is: Haier.

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In 2015, Stuart Crainer, was amazed by Haier’s entrepreneurship on his first visit. Then Zhang Ruimin made the 2015 Thinkers50 list. In 2017 and 2019, Zhang Ruimin became a “regular customer” of Thinkers50. “Haier gives employees a lot of freedom to inspire their entrepreneurship,” says Stuart Crainer. These flexible management innovations may be an effective way to make elephants dance.

Nobel Economics Prize laureate Bengt Holmström publicly said that the Rendanheyi Model coined by Zhang Ruimin was a very disruptive and revolutionary model.

For Haier, through using the scenario to take the place of products for ecosystem transformation, the unique competitiveness has been shaped. For example, at Haier Smart Home 001 Experience Center opened in September, household appliances are no longer sold by “set” but by “scenario”; users buy more than a single refrigerator or air conditioner, but the whole family food and air solution.

On the other hand, through ecosystem enabling, Haier has also transformed more industries. In the Internet of Clothing ecosystem, relying on the IoT, the clothing enterprise receiving and delivery efficiency has increased by 10 times, and the labor cost has reduced by 50%, which proves the strong vitality of the ecosystem brand in the world.

The IoT has brought great uncertainties to the business, and more and more wordwide companies have known this and showed interest to learn from Haier’s successful experience. Zhang Ruimin and his management ideas are deeply exerting the profound influence on the world. But for Zhang, Haier’s successful practice is just the first step, and how to use the Rendanheyi Model to support more enterprises to create ecosystem brands is the new requirement.

Molly joined the editorial team in March 2019. She has several years’ experience working in broadcast and journalism, as well as marketing and PR. Past experience includes working for the BBC and independent publishing houses. If you have a story you think Molly might be interested in, please email: molly@eventindustrynews.com