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Management case

Haier's platform organization and small and micro entrepreneurship

Founded in 1984, Haier has grown from a small collective factory on the verge of closure to a global group of companies with more than 80,000 employees worldwide, a 2016 turnover of $201.6 billion and profits of $20.3 billion. Haier has been the world's No. 1 brand of white goods for three consecutive years.

From 2005 to 2012, Haier introduced the concept of "autonomous management body" to establish an organizational structure that meets customer needs from a distance. On December 26, 2012, Haier announced that it had entered the fifth phase of its development strategy - the networked strategy phase. In the second half of 2013, Haier introduced the concepts of "online employees" and "entrepreneurs". In the second half of 2013, Haier introduced the concept of "online employees" and "entrepreneurs" to connect resources inside and outside the organization, allowing employees to become creators and find entrepreneurial opportunities on Haier's platform. At the same time, with the internal venture capital mechanism, employees are encouraged to organize their efforts in the society to set up small and micro companies, thus pulling off a wave of small and micro entrepreneurship.

I. Organizational structure of platform and micro and small companies

Based on the principle of "unity of people and single", Haier first transformed more than 2,000 independent operators into micro and small companies to provide services directly to the society. The most suitable personnel were allocated to the micro and small by single aggregation and dispersion. Haier has only three types of employees: platform owners, small micro owners, and small micro members. Small micro is divided into user micro, node micro and functional micro. User micros refer to independent micro enterprises oriented to specific user groups; node micros refer to departments outside the market in the original production chain, such as R&D, manufacturing, sales, logistics, etc.; functional micros are micros evolved from the original public functions, such as finance, production, manpower, etc., which are also public micros. The operation of the platform system is led by the user needs discovered by the user micros, which are then imported into R&D, production and other links.

There are four stages of micro development: In the first stage, after the micro signed the betting agreement, it enters the start-up period. At this stage, the only part of the micro members' salary is the cost of living, which takes the form of micro account advance or self-financing. In the second stage, after reaching the next inflection point target in the two-dimensional dotted line, the micro members can get profit sharing in addition to the basic salary. In the third stage, after the small micro reaches the triggering point, i.e., it develops rapidly in the industry, the small micro members can follow a part of the small micro's virtual shares and get dividends in addition to basic salary and profit sharing. In the fourth stage, Xiaomei achieves leadership in the industry and attracts external capital for investment, Xiaomei can be separated from Haier to become an independent company, and Xiaomei members can be allotted shares according to their contribution.

Small micros that fail Haier's assessment will become red zone small micros and face the risk of being eliminated. After platformization, Haier will be promoted by user interaction externally and guaranteed by user pay mechanism internally.

2. The design of mechanism to realize platform organization

This is mainly the "three" mechanism. (1) Platformization of the enterprise, which is expected to make Haier a platform connecting more high-quality resources and having the ability to allocate resources quickly to attract bilateral markets; the micro and small enterprises on the platform can share information and resources through the platform, and the platform plays the role of support and service for the establishment, development and operation of the micro and small enterprises 0 (2) Personalization of users, in which users participate in the whole process of the enterprise from design, manufacturing to marketing, so that the user experience becomes seamless, transparent and visualized; small micros and users constantly interact online/offline, and enterprises transform from large-scale manufacturing in the past to personalized tasks. (3) The creation of employees, to stimulate their vitality, transforming them from task performers to internal entrepreneurs and from employed to dynamic partners.

In order to achieve the "three", Haier has successively adopted the "human-unit integration", "betting agreement", "two-dimensional dot matrix" assessment and "parallel platform ecosystem" and other strategies.

1- "People in a single" strategy. The "single" does not only mean the order, but also the source of the order - the user, the "single" is the user's needs and values. The "people-unit" is the combination of employee and user value, and the employee's salary depends on the size of the value created for the user, promoting the matching of people and tasks. The "people-per-unit" redefines the work content and compensation system, and only when the user's needs are met and the user's value is realized, can the employee receive more compensation.

2. "Betting agreement" strategy. Taking micros as the basic unit, a betting contract is established with the platform or other micros beforehand to determine the target and sharing criteria; then, after the betting target is reached according to the two-dimensional dot matrix evaluation, the betting value is shared according to the agreed sharing criteria, and the betting value is automatically distributed to each micro member within the micros. The cooperation payment details of the betting agreement include: (1) the enterprise value target and user target of Micro Micro; (2) the value sharing plan after the betting target is reached; (3) the respective responsibilities of each node, such as human resources and finance. Through "betting", an internal market transaction mechanism is established between micro and platform, and between micro and micro according to the contract to realize the collaboration process. The "betting" strategy also forces micro and small organizations to become more independent.

3. "Two-dimensional dot matrix" assessment strategy. In order to promote the user micros to explore more potential consumers, the micros are evaluated through the "two-dimensional dot matrix". The "two-dimensional dot plot" is the performance of micros in accomplishing the indicators of "organizational independence", "same payroll", and "same target". The performance of Micro and Small in achieving the indicators of "organizational independence," "same payroll," and "same goals. The goal of "organizational independence" is to establish a micro and small company and achieve capital marketability. This is a gradual process; "the same source of pay" and "the same goal" refers to the user pay, from the original nodes are only responsible for their own work to the same goal. Only when we create value for users together, we can share the salary.

4. "Parallel platform ecosystem" strategy. Establish an ecosystem based on parallel platforms, which is composed of consumers, suppliers, partners, internal platforms and micros. In the ecosystem, all nodes are required to participate in the creation of user value, to achieve a "win-win, co-creation" relationship between the interests of all parties involved.

1. How do you see Haier's platform organization and micro-entrepreneurship model?

2. How has Haier transformed its organization into a platform?