Haier - Insights, Learnings and Experiences (Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies)

Mirko Kleiner - As a Thought Leader in Lean-Agile Procurement and a Registered Scrum@Scale Trainer, my personal mission is to unite various movements—Agile Leadership, Extreme Manufacturing, Scaling Agile, Lean-Agile Procurement, and more—to push the boundaries of Business Agility across organizations.

One company that stands out, and perhaps the only one of its kind globally, is Haier. With over 50 years of history as a white goods manufacturer, Haier has undergone its sixth major transformation, evolving into a network of over 4,700 Micro Enterprises (ME), all interconnected within Ecosystem Micro Communities (EMC).

Each ME operates with its own balance sheet, its own people, and collaborates closely with partners who share in the ECM’s success. This win-win philosophy, implemented on such a massive scale, is truly unprecedented and sets Haier apart as a pioneer in organizational and management innovation.

For over two years, the LAP Alliance has partnered with the Haier Model Institute (HMI), itself a Micro Enterprise within the Haier Group. Its mission is to spread the word about Haier’s New Economic Engine, or RenDanHeYi, which serves as the foundation of Haier's management model. For those unfamiliar with Haier, it is arguably the most disruptive and successful organization in the world, operating with virtually no bureaucracy and achieving an impressive annual growth rate of 20% over the last decade.

In this series of blog posts, I’ll be sharing key insights, learnings, and experiences from my visits to Haier, and why I believe the future of business lies in a New Economic Engine driven by AI and Business Ecosystems.

image source: HMI

Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies

September 20th 2024 the Haier Zero Distance Excellence Awards 2024 have taken place in Qingdao, China. In this post, I’d like to give you more details about our four outstanding nominees, one of them has been awarded—each of whom has already implemented a New Economic Engine.

Stay tuned for an inside look at their remarkable journeys and how they are transforming their industries with innovative, user-centric ecosystems.

Ecosystem Case Studies

Find below a list of our nominees and further applicants from all around the world.

SINAA (Social Innovation Academy)

• Uganda🇺🇬

• Education / Not-for-profit

eRevo - Energy Revolution

• Switzerland🇨🇭

• hydrogen power storage technology

NET Engineering

• Italy🇮🇹

• Engineering in Construction Industry

Miles AS

• Norway 🇳🇴

• IT Services

Further participants & pioneers

Further Applications have been nominated by an international group of HMI Experts, such as Alidad Ebnoddin Hamidi, David Witney, Emanuele Quintarelli, Joost Minnaar, Ross MacIntyre, Saar Ben-Attar, William Malek.

Alongside with our nominees has Stuart and the Business Ecosystem Alliance, the IMD and Gary Hamel supported the Awards.

Find the full list of winners here.

We might extend the list of detailed Ecosystem Case Studies to a later stage.

Conclusions

The New Economic Engine and this list of Ecosystem Case Studies, that already have applied it, will serve as a huge inspiration for organizations worldwide. All the participants and winners have proven that these principles are universally applicable, regardless of the size, industry, or culture of the organization. It has also reinforced that we’re on the right path with our movement, the LAP Alliance, but at the same time, there is still so much more to do and learn.

Next Post - How to setup your own Economic Engine with the Lean Ecosystem Canvas

Stay tuned for the upcoming posts in this series!

All Posts of this Series

Post 1 - Visiting Haier in Qingdao China

Post 2 - The New Economic Engine

Post 3 - Preview of the Haier ZeroDX Awards

Post 4 - The Haier ZeroDX Awards 2024

Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies

Haier - Insights, Learnings and Experiences (Post 4 - The Haier ZeroDX Awards 2024)

Mirko Kleiner - As a Thought Leader in Lean-Agile Procurement and a Registered Scrum@Scale Trainer, my personal mission is to unite various movements—Agile Leadership, Extreme Manufacturing, Scaling Agile, Lean-Agile Procurement, and more—to push the boundaries of Business Agility across organizations.

One company that stands out, and perhaps the only one of its kind globally, is Haier. With over 50 years of history as a white goods manufacturer, Haier has undergone its sixth major transformation, evolving into a network of over 4,700 Micro Enterprises (ME), all interconnected within Ecosystem Micro Communities (EMC).

Each ME operates with its own balance sheet, its own people, and collaborates closely with partners who share in the ECM’s success. This win-win philosophy, implemented on such a massive scale, is truly unprecedented and sets Haier apart as a pioneer in organizational and management innovation.

For over two years, the LAP Alliance has partnered with the Haier Model Institute (HMI), itself a Micro Enterprise within the Haier Group. Its mission is to spread the word about Haier’s New Economic Engine, or RenDanHeYi, which serves as the foundation of Haier's management model. For those unfamiliar with Haier, it is arguably the most disruptive and successful organization in the world, operating with virtually no bureaucracy and achieving an impressive annual growth rate of 20% over the last decade.

In this series of blog posts, I’ll be sharing key insights, learnings, and experiences from my visits to Haier, and why I believe the future of business lies in a New Economic Engine driven by AI and Business Ecosystems.

Post 4 - The Haier Zero Distance Excellence Awards 2024 & the Winners

September 20th 2024 the Haier Zero Distance Excellence Awards 2024 have taken place in Qingdao, China. In this post, I’d like to give you a sneak peek about the winners, some behind-the-scenes insights from the pre- and post-events, and introduce you to our four outstanding nominees, one of them has been awarded—each of whom has already implemented a New Economic Engine.

Stay tuned for an inside look at their remarkable journeys and how they are transforming their industries with innovative, user-centric ecosystems.

image source: HMI

Summary of the visit

During the Haier ZeroDX Awards 2024, we had the privilege of experiencing a rich lineup of pre- and post-event activities. These offered valuable insights not only from Haier but also from leaders around the globe. Below is an initial summary of the program, followed by more detailed information about the awards, the winners, and my key takeaways.

I arrived in Qingdao, China, late the day before the official program kicked off, following a journey from the Agile Prague Conference via Dubai and Shanghai. Awaiting me in my room was a delightful surprise: my badge, signifying my official recognition as a Haier Model (HMI) Expert. Holding it for the first time, I couldn’t help but feel a sense of pride. Is it selfish to feel that way? Maybe, but it’s also a moment of deep personal significance.

Image source: Mirko Kleiner

Day 1 - Visiting & Learning from Haier’s RenDanHeYi Lighthouse Practices

It all began with the pre-event on September 19, 2024, where we had the opportunity to visit the Haier Ecosystem Experience Center. There, we learned about Haier's rich history and its six major transformations. Following that, we explored the IoT Smart Home Experience Center, where we experienced firsthand what Haier envisions with real-world user scenarios.

Image source: Mirko Kleiner, contents by Haier

Equally fascinating was our visit to one of Haier's more than 2,000 Quantum Shops, which are deeply embedded in local communities and serve over 10,000 households daily. These Micro Enterprises are part of several Ecosystem Micro Committees (EMCs) and play a vital role in identifying and capturing new customer and user needs.

Image source: Mirko Kleiner, contents by Haier

The day concluded with a visit to one of Haier's Lighthouse Factories, where we had the chance to experience firsthand what mass customization truly means.

Image source: Mirko Kleiner, contents by Haier

I might write separate posts about day 1 experiences and learnings. Stay tuned!

Day 2 - Haier ZeroDX Awards 2024

The main event, the Haier ZeroDX Awards, took place at the InterContinental Hotel in Qingdao on September 20, 2024. It was a dynamic blend of meetings, knowledge-sharing among thought leaders, and recognition of both internal and international nominees. The over 70 nominees, representing six continents and various industries, have all embraced the principles of zero distance. Like Haier, these organizations are management pioneers, eliminating bureaucracy to create flat, open, and highly empowering environments.

The event was moderated by Gary Hamel (Founder of MLab and Visiting Professor at London Business School) and Stuart Crainer (Founder of Thinkers50 and Co-Founder of the Business Ecosystem Alliance). In addition to the awards ceremony, international and Haier’s internal leaders presented the next stage of the New Economic Engine, RenDanHeYi 2.0, including its practical applications. A definite highlight was the opportunity to meet Haier's Chairman and Founder, Zhang Ruimin, along with Zhou Yunjie, CEO of Haier Group.

Day 3 - Discovering & connecting with the city & culture of Qingdao

After the awards, we had the opportunity to immerse ourselves in the local traditions, culture, and environment. Haier offered three unique experiences: Traditional Wellness, a Beer & Culture tour, and a Sailing Adventure.

Overall, the three-day program was an incredible experience, providing numerous opportunities for networking, knowledge exchange, and collaboration between business leaders and subject matter experts. I can wholeheartedly recommend attending. From my personal experience—and I've been to many similar events globally—this gathering had one of the most forward-thinking and progressive audiences I've ever encountered.

The Haier ZeroDistance Excellence Awards 2024

Before the formal ceremony, we had a gathering with the international HMI experts, and I was truly impressed by the depth of knowledge in the room, with experts from all over the world. Even more remarkable was the presence of senior leaders from Haier who joined the conversation. I had the honor of speaking first with Zhou Yunjie, the CEO of Haier Group, followed by an inspiring conversation with Zhang Ruimin, the Chairman and Founder of Haier.

Image source: Mirko Kleiner

To be honest, I was a bit shocked when Chairman Zhang took a seat right next to me, and suddenly, the press swarmed around us. Fortunately, Anika Steiner, who was sitting beside me, and I began the conversation, asking him a few questions and sharing some of our ideas. I have to say, both Chairman Zhang and CEO Zhou are immense figures in driving Haier's New Economic Engine. They are true leaders—highly knowledgeable and an invaluable asset to both the organization and everyone who had the privilege of engaging with them.

Image source: Mirko Kleiner, contents by Haier

Gary Hamel and Stuart Crainer kicked off the event, and we then moved on to announce the winners in the ZeroDX Incorporated category:

Image source: Mirko Kleiner, contents by Haier

• raizen from Brazil - Is an integrated energy company with more than 46,000 employees operating across the entire bioenergy production chain. Over the last year, Risen created empowered end to end teams and processes to serve its largest fuel station customers, resulting in a 36 percent reduction in service times, a 40 percent increase in customer loyalty scores, and far less bureaucracy.

• SD Guthrie from Malaysia - Is one of the largest producers of certified sustainable palm oil of operations in over 90 countries. The company shifted to a customer focused one stream model, empowering cross functional teams to act autonomously across functions and delivering new customer value.

• SeamosUno from Argentina  They described themselves as a liquid organization. Founded during the pandemic to rapidly distribute critical supplies to people across Argentina. They revolutionized crisis management by bringing together more than 300 organizations and ecosystem, including religious and social entities and state agencies in a highly networked management model. They allowed autonomous units to work at unprecedented speeds.

• Ingersoll Rand from USA - Over the last five years, the company has embarked on a remarkable journey of entrepreneurship at scale. Employees now receive substantial equity ownership and take part in hundreds of empowered cross country teams, which have generated over three billion dollars worth of value.

• ASA Group from San Marino - This is a metal packaging company with production sites across Europe specializing in tin plate cans. They employ 500 people and they're implementing micro enterprises and ecosystem micro communities that have full autonomy to decide their strategy, their goals, their investments, profit sharing, and coordinate activity with the group functions.

• VARGROUP from Italy - A system integrator with over 3,800 employees across 13 countries in 2023. The company started a journey to become a platform organization and began implementing small independent business units called Micro Enterprise, with their own profit and loss responsibilities, shared service platforms to support these units and ecosystems across the collaboration.

Image source: Mirko Kleiner, contents by Haier

The next category focused on the Benchmark Innovators. These are companies that have embraced the principles of zero distance from their very inception—they were, to quote the famous Lady Gaga song, "born that way." Like Haier, these management pioneers have never been burdened by bureaucracy. Instead, they've built organizations that are flat, open, and highly empowering. And the winners are:

Image source: Mirko Kleiner, contents by Haier

• Morningstar from USA - Founded by Chris Rupert, Morningstar is America's and the world's largest tomato processor. At Morningstar there are no managers at all, no titles.  Employees negotiate their contracts with each other in what they call a colleague letter of understanding. And they have become a benchmark for self managing organizations around the world.

• hoxby from UK- hoxby is a community based feed board. A business balancing profits with social impact and it delivers creative and strategic services with a distributed workforce across 43 countries. hoxbys associates work according to their own work style. Organizing around client needs, full autonomy, and participating in a profit sharing scheme.
  
  

  „We started hoxby where each person is a micro entrepreneur to prove that everybody can have their work style that fits the unique nature of each person's lifestyle.“

  — Alex Hirst, co-founder hoxby
  
  
  

• BuurtzOrg from Netherlands/Global - The leading Dutch home healthcare organization. They have a hyper flat structure with more than a thousand teams and ten thousand nurses delivering services across the Netherlands. They have become one of the most benchmark healthcare organizations in the world. They deliver better patient care at lower cost, peer beating service, and there's much to learn from them.

  „We focus also on creating healthier & better neighborhoods for people to live in “

  — Thijs de Blok, CEO BuurtzOrg International

• Social Innovation Academy (SINA) from Uganda - 81 social enterprise in Africa having been born in SINA so far, and we have 16 communities in 6 African countries,  that empowers marginalised youth and refugees to become social entrepreneurs. At SINA, participants practice free responsibility, combining freedom and responsibility to create their own curriculum and launch social enterprises within a self organized community.

  „We unleash the potentials of disadvantaged, marginalized young people, as well as refugees, to really become the change they want to see in the world, as social entrepreneurs “

  — Etienne Salborn, Founder SINA

Image source: Mirko Kleiner, contents by Haier

I’m incredibly proud to announce that SINA, one of our nominees, has truly earned this recognition through their purposeful work! Their achievements have already been highlighted in Forbes. You can find more details in the recent article „Zeros For Heroes: New Awards For Organizational Innovation” by Bill Fischer.

We’ve also published their Ecosystem Case Study here.

Image source: Mirko Kleiner, contents by Haier

The next category is Emergent Excellence. Each change within an organization is significant, but the first step is often the most challenging, the most dangerous, and also the most important. These organizations have bravely stepped into the future, and the winners, hailing from countries such as Poland, Japan, Australia, and others, are:

Image source: Mirko Kleiner, contents by Haier

The winners have been asked some idea or principle that has helped them as they’ve been through this journey.

• We focused on the employee's well being and the impact on our sales and our customer service after 30 years later was and still is very positive.

• We decided to be radically transparent about salaries, revenue, profit, and people utilization. So people could understand the why behind the decisions.

• I think everything started when I fired myself. So firing the boss is the key, so that the rest can really Running company. Getting out of the way.

• Change is very hard, you have to start with yourself.

Image source: Mirko Kleiner, contents by Haier

The first round of international awards were followed by a Keynote „Celebrating today to Build the Future“ by Zhou Yunjie, CEO Haier Group.

Image source: Mirko Kleiner, contents by Haier

He spoke about the evolution of RenDanHeYi, Haier’s New Economic Engine, highlighting the reasons for its application and the urgent need for a new management model in the ever-evolving AI era. He also introduced the next phase, RenDanHeYi 2.0, Haier’s updated management model, which likely deserves a separate blog post of its own.

A key inspiration: they’ve shifted one of their core principles from "Zero Distance" to "Zero Boundaries", which now extends to collaboration with suppliers and other ecosystems. There’s so much more to share—wow!

Image source: Mirko Kleiner, contents by Haier

The next category was the ZeroDX Pioneers, individuals who have made outstanding contributions and achievements either in theoretical research and consultation or in practical innovations.

Image source: Mirko Kleiner, contents by Haier

Interesting to mention a new ISO standard is on its way!

Image source: Mirko Kleiner, contents by Haier

The next category was the ZeroDX AI, which aims to acknowledge the outstanding organizations within Haier, that have taken the lead in creating a new economic engine through the implementation of RenDanHeYi model and the zero-distance transformation.

• San Yi Nico EMC - Trailblazer Award

• EU HVACS EMC - Explorer Award

Image source: Mirko Kleiner, contents by Haier

The awards were followed by another very inspiring keynote by the founder and chairman of Haier Zhang Ruimin. He took as back to the thinking of Peter Drucker, the various industrial revolutions and his point of view of the future of Management.

Image source: Mirko Kleiner, contents by Haier

He outlined the three dimensions of Zero Distance, and I was particularly captivated by the concept of "Zero Signatory". When discussing excellence, he emphasized the idea of self-evolution and emergence—processes that never truly end. What resonated most with me was the focus on human value and a win-win mentality, which Haier takes so seriously that they operate under the principle of "Shareholders Last." Another key point was that even in highly digital organizations, such as those utilizing AI, governance and ways of working are equally, if not more, important. These will become increasingly critical as organizations adapt to new changes and market demands.

One noteworthy aspect of RenDanHeYi 2.0 is its broader inclusion of players beyond just customers. Haier applies the same win-win mentality to everyone, including suppliers, other ecosystems forming alliances, and even communities.

In the afternoon, the New Engine Roundtable Forum provided deeper insights into Haier’s strategic industries, including Medicine, CARtech, and Home Appliances.

It's truly impressive to see the capabilities Haier has developed. For instance, Haier can deliver a personalized car in under 15 days—from order to delivery—thanks to its advanced digital platform, which connects all internal and external ecosystem players in real time, alongside its mass customization capabilities. They can even manufacture different models and car types, from sedans to buses, on the same production line.

Another example, shared by Kevin Nolan, CEO of GE Appliances USA, highlighted how they are taking modular design to the next level, both in their products and organizational structures. They've started partnering with other ecosystems—such as menu providers, shops, and delivery services—which will make them unbeatable in the market.

I may write a separate blog post diving deeper into this later. Stay tuned!

Image source: Mirko Kleiner, contents by Haier

Gary Hamel closed the second day with his signature thought-provoking remarks—no surprise there! Seriously though, he made some excellent points about identifying the current challenges and key leverage points for change in management, organizations, and cross-company collaboration. He emphasized the need to start addressing these areas by engaging with relevant institutions far beyond our usual scope, such as investors, regulators, business schools, and government departments. The idea is to form a movement similar to how the medical community collaborates to combat diseases like cancer. Well, count me in, Gary!

Our Nominees

We are proud to of each of our nominees. You are leading examples with the New Economic Engine:

• SINA (Social Innovation Academy) 🇺🇬 w/ Etienne Salborn -> their Ecosystem Case Study

• eRevo AG 🇨🇭 energy Revolution w/ Gregor Zust -> their Ecosystem Case Study

• Miles AS 🇳🇴 The value-based IT Company w/ Camilla Amundsen -> their Ecosystem Case Study

• NET Engineering 🇮🇹 Engineering Agility w/ Silvia Furlan -> their Ecosystem Case Study

We’ll be sharing more details about their Case Study in separate upcoming post of this series, so stay tuned!

Conclusions

This was, without a doubt, one of the best events I’ve ever attended, and I’ve been to many across all kinds of domains. The maturity level of the participants—whether they were business leaders, researchers, or consultants—was exceptional. More people need to see and hear what we had the privilege to experience. The combination of engaging with the most disruptive, world-leading companies and connecting theory to real products and people was outstanding.

Content-wise, I’m a firm believer that the New Economic Engine will serve as a huge inspiration for organizations worldwide. The nominees and winners have proven that these principles are universally applicable, regardless of the size, industry, or culture of the organization. It has also reinforced that we’re on the right path with our movement, the LAP Alliance, but at the same time, there is still so much more to do and learn.

Book references

At the event the following books have been mentioned:

• Management Challenges for the 21st Century by Peter F. Drucker

• The Fourth Industrial Revolution by Klaus Schwab

• Humanocrazy by Gary Hamel

• The Startup Factory by Corporate Rebels

• Global Business Model Shift by Umberto Lago

• The Silicon Valley Model by Anika Steibler

• Proximity by Robert C. Wolcott & Kahn Krippendorff

Next Post - Our Case Studies in more Details

Stay tuned for the upcoming posts in this series!

All Posts of this Series

Post 1 - Visiting Haier in Qingdao China

Post 2 - The New Economic Engine

Post 3 - Preview of the Haier ZeroDX Awards

Post 4 - The Haier ZeroDX Awards 2024

Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies

Haier - Insights, Learnings and Experiences (Post 3 - Preview of the Haier ZeroDX Awards)

Mirko Kleiner - As a Thought Leader in Lean-Agile Procurement and a Registered Scrum@Scale Trainer, my personal mission is to unite various movements—Agile Leadership, Extreme Manufacturing, Scaling Agile, Lean-Agile Procurement, and more—to push the boundaries of Business Agility across organizations.

One company that stands out, and perhaps the only one of its kind globally, is Haier. With over 50 years of history as a white goods manufacturer, Haier has undergone its sixth major transformation, evolving into a network of over 4,700 Micro Enterprises (ME), all interconnected within Ecosystem Micro Communities (EMC).

Each ME operates with its own balance sheet, its own people, and collaborates closely with partners who share in the ECM’s success. This win-win philosophy, implemented on such a massive scale, is truly unprecedented and sets Haier apart as a pioneer in organizational and management innovation.

For over two years, the LAP Alliance has partnered with the Haier Model Institute (HMI), itself a Micro Enterprise within the Haier Group. Its mission is to spread the word about Haier’s New Economic Engine, or RenDanHeYi, which serves as the foundation of Haier's management model. For those unfamiliar with Haier, it is arguably the most disruptive and successful organization in the world, operating with virtually no bureaucracy and achieving an impressive annual growth rate of 20% over the last decade.

In this series of blog posts, I’ll be sharing key insights, learnings, and experiences from my visits to Haier, and why I believe the future of business lies in a New Economic Engine driven by AI and Business Ecosystems.

Post 3 - Preview of the Haier Zero Distance Excellence Awards & our Nominees

In less than a week, the Haier Zero Distance Excellence Awards 2024 will once again take place in Qingdao, China. In this post, I’d like to give you a sneak peek of what to expect, some behind-the-scenes insights, and introduce you to our four outstanding nominees—each of whom has already implemented a New Economic Engine.

Stay tuned for an inside look at their remarkable journeys and how they are transforming their industries with innovative, user-centric ecosystems.

image source: HMI

Review - How it all started

During one of our regular calls, the Haier Model Institute (HMI) surprised me with the exciting news that I had been appointed as an HMI Expert and Partner—an unexpected and humbling honor. As part of this new role, I was invited to support the Haier ZeroDX Awards 2024, which I gladly accepted. The international judging panel was tasked with nominating leading individuals, organizations, or cases that have developed a New Economic Engine similar to Haier’s groundbreaking model.

image source: HMI

The ZeroDX Awards are one of the ways the Haier Model Institute (HMI) spreads inspiration about the New Economic Engine worldwide. I was deeply honored to be part of this mission and immediately began reaching out to my global network and clients. Soon after, we convened for the first time as the judging board.

Historically, the Haier Awards primarily celebrated Haier’s own success stories. However, with the inclusion of the international judging board, our goal is to broaden the scope—opening up the Haier ZeroDX Awards to recognize anyone who has applied similar principles of the New Economic Engine, regardless of industry or affiliation.

image source: HMI

Our Assessment

At the core of our assessment was RenDanHeYi and its foundational values and principles. These served as the guiding criteria for evaluating nominees, ensuring that each individual or organization exemplified the spirit of innovation, empowerment, and user-centricity that defines Haier’s New Economic Engine.

image source: HMI

The Haier Model Institute provided us with a comprehensive assessment framework designed to distinguish the good from the truly exceptional individuals, organizations, and cases. As an experienced coach, I’ve encountered many maturity models, but this one offered a fresh perspective, pushing the boundaries of what I had seen before.

Here are a few selected example questions from different domains of the assessment:

Level of Organizational Autonomy - Leadership

image source: HMI

image source: HMI

Level of Organizational Autonomy - Organizational Structure

image source: HMI

image source: HMI

Level of User Value - Ecosystem

image source: HMI

When my colleagues from the Haier Model Institute refer to the New Economic Engine, they are talking about the integration of the AI Economy with an Intelligent and Interactive Ecosystem. At its core is the Zero Distance Organization, where entrepreneurship and the principles of RenDanHeYi form the foundation for a thriving Ecosystem Economy. This combination enables seamless interaction between businesses and users, driving innovation and growth in a dynamic, user-centered environment.

image source: HMI

Our Nominees

We are proud to announce our nominees to the Haier ZeroDX Awards 2024. Four leading examples with the New Economic Engine:

• SINA (Social Innovation Academy) 🇺🇬 w/ Etienne Salborn -> their Ecosystem Case Study

• eRevo AG 🇨🇭 energy Revolution w/ Gregor Zust -> their Ecosystem Case Study

• Miles AS 🇳🇴 The value-based IT Company w/ Camilla Amundsen -> their Ecosystem Case Study

• NET Engineering 🇮🇹 Engineering Agility w/ Silvia Furlan -> their Ecosystem Case Study

We’ll be sharing more details about their submissions in separate upcoming post of this series, so stay tuned!

The nominees were evaluated based on the comprehensive values and principles of the Haier Management Model (RenDanHeYi)—the driving force behind success, rapid growth, and win-win outcomes within a partner ecosystem.

image source: HMI

Let’s keep our fingers crossed and wish the four nominees the best of luck at the upcoming awards! Regardless of the outcome, they are already shining examples for their employees, users, and ecosystem partners, showcasing the power of innovation and collaboration.

Big thank you to Bjarte Bogsnes, Paolo Sammicheli, my colleagues on the judging board panel Junhui (Sylvia) Guan Alidad Hamidi David Witney Emanuele Quintarelli Joost Minnaar Ross MacIntyre Saar Ben-Attar William Malek and the whole Haier Model Institute.

Conclusions

I’m always amazed when talking to like-minded leaders; regardless of the industry, region, culture, or size of the organization, they all reach the same conclusions. The connection between a strong Economic Engine, business success, and the positive impact on people / society, and the environment never fails to fascinate me. It makes me wonder—why isn’t this the standard ways-of-working everywhere?

The Haier ZeroDX Awards and the remarkable examples set by its nominees will hopefully inspire more people to adopt this mindset. After all, don’t we all prefer environments built on a win-win philosophy?

I’m really looking forward to meeting my esteemed colleagues from the judging panel, the Haier Model Institute, and all the like-minded leaders from all the nominated organizations.

Next Post - Learnings from the Haier ZeroDX Awards

Stay tuned for the upcoming posts in this series!

All Posts of this Series

Post 1 - Visiting Haier in Qingdao China

Post 2 - The New Economic Engine

Post 3 - Preview of the Haier ZeroDX Awards

Post 4 - The Haier ZeroDX Awards 2024

Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies

Haier - Insights, Learnings and Experiences (Post 2 - The New Economic Engine)

Mirko Kleiner - As a Thought Leader in Lean-Agile Procurement and a Registered Scrum@Scale Trainer, my personal mission is to unite various movements—Agile Leadership, Extreme Manufacturing, Scaling Agile, Lean-Agile Procurement, and more—to push the boundaries of Business Agility across organizations.

One company that stands out, and perhaps the only one of its kind globally, is Haier. With over 50 years of history as a white goods manufacturer, Haier has undergone its sixth major transformation, evolving into a network of over 4,700 Micro Enterprises (ME), all interconnected within Ecosystem Micro Communities (EMC).

Each ME operates with its own balance sheet, its own people, and collaborates closely with partners who share in the ECM’s success. This win-win philosophy, implemented on such a massive scale, is truly unprecedented and sets Haier apart as a pioneer in organizational and management innovation.

For over two years, the LAP Alliance has partnered with the Haier Model Institute (HMI), itself a Micro Enterprise within the Haier Group. Its mission is to spread the word about Haier’s New Economic Engine, or RenDanHeYi, which serves as the foundation of Haier's management model. For those unfamiliar with Haier, it is arguably the most disruptive and successful organization in the world, operating with virtually no bureaucracy and achieving an impressive annual growth rate of 20% over the last decade.

In this series of blog posts, I’ll be sharing key insights, learnings, and experiences from my visits to Haier, and why I believe the future of business lies in a New Economic Engine driven by AI and Business Ecosystems.

Post 2 - RenDanHeYi the New Economic Engine

In Post 1 - Visiting Haier, I briefly mentioned the New Economic Engine, and in this post, I’d like to dive deeper into its details. This should also demystify how thousands of Micro Enterprises (MEs) are effectively organized within Haier.

It all began over 50 years ago when Haier’s former CEO, Zhang Ruimin, introduced the first wave of groundbreaking improvements. He firmly believed that true transformation must start at the management level and focus on how people are treated, setting the foundation for what Haier has become today.

image source: HMI

RenDanHeYi an overview

After years of continuous refinement, a New Economic Engine emerged, rooted in the Haier Management Model, RenDanHeYi. It’s important to note that the development of RenDanHeYi is still evolving—and may never truly be "finished." This flexibility and constant adaptation are part of what makes it so powerful and future-proof.

image source: HMI

RenDanHeYi is a blend of three elements: Ren (the people), Dan (user value), and HeYi (the combination of employee and user value). At Haier, there are no traditional employees—everyone is treated as an adult or, as they put it, an entrepreneur. At the heart of all their activities is the user and their needs, whether that’s an internal user or the ultimate customer.

While many companies have shifted towards customer-centric models, Haier’s approach stands out. They place equal value on their employees (entrepreneurs) and users (customers), creating a win-win mindset where everyone, including third-party partners, shares in the success. This goes far beyond traditional gain-sharing models, putting shareholders last and focusing on long-term user relationships rather than one-off transactions.

“We are paid by the user”
— ME Owner

The key to this system’s success lies in the alignment of thousands of Micro Enterprises (MEs). Each ME operates completely autonomously, fully empowered, and accountable to the user—literally, as they often say, "We’re paid by the user." Since each ME manages its own balance sheet, this is very much the reality.

This extreme decentralization is unified by the user scenarios. MEs form Ecosystem Micro Communities (EMCs) to ensure maximum alignment and collaboration. The glue that holds these EMCs together is the EMC contract, which ensures clear roles, responsibilities, and shared objectives.

Strategy lies within the ME

I’ve had the privilege of meeting and exchanging ideas with Kevin Nolan, President and CEO of GE Appliances, a Haier Company, on two occasions. What he shared about Micro Enterprises (MEs) might sound unsettling to anyone unfamiliar with full empowerment. He explained that he's no longer the one to direct or overrule the MEs in terms of strategy, objectives, or decision-making. Instead, the MEs—being closest to the market and the users—are the ones who own and define their strategies and goals.

Can you imagine the speed and motivation this level of autonomy unleashes? It’s a radically different way of working, where those with the most direct insight into user needs are fully empowered to act.

image source: HMI

In fact, under Kevin’s leadership and by applying first principles of the RenDanHeYi model, GE Appliances went from being on the brink of bankruptcy to becoming the market leader in the United States in just a few short years. It’s a testament to the power of this approach, where empowering Micro Enterprises and aligning them with user needs has driven remarkable transformation and success.

image source: HMI

Haier itself has now fully transformed into nearly 5,000 Micro Enterprises (MEs), with a total of over 80,000 entrepreneurs. This shift significantly reduced the need for more than 10,000 middle management roles, creating a streamlined and minimum viable bureaucracy. By eliminating excess layers of management, Haier has built a more agile, empowered organization focused on innovation and rapid decision-making.

3 Rights of a ME

For a Micro Enterprise (ME) to be fully empowered, it must possess three key rights:

1. The Right to Make Decisions

2. The Right to Assign Resources

3. The Right to Reward Performance

These rights enable MEs to operate autonomously, driving their own strategies, allocating resources, and rewarding success, which fuels motivation and agility within the organization.

image source: HMI

These three rights are crucial for enabling the independence of Micro Enterprises (MEs), allowing each to operate like a startup. During their setup and beyond, MEs are enabled by shared platforms for finance, HR, and other resources, as well as initial funding. Interestingly, ME owners and their entrepreneurs can also invest their own money if they choose, further aligning them with the entrepreneurial mindset. Haier only provides a base salary, typically below market average, with the opportunity for entrepreneurs to significantly increase their income by sharing in the ME’s success.

Interestingly, in all my conversations with ME owners, colleagues at the Haier Model Institute, and others, money was never the key driver for motivation. However, the opportunity to be treated as a true entrepreneur, with both the risks and rewards, was a major motivator, showing that recognition and autonomy are what really matter.

A ME Isn’t Enough

As I mentioned in Post 1, Haier and its MEs are deeply focused on user scenarios. Let’s take another example: Smart Cooking. Clearly, no single ME can design, manufacture, sell, ship, and maintain something as complex as an oven. This is where MEs form temporary alliances with other MEs, creating Ecosystem Micro Communities (EMCs). In my conversations with colleagues from the Haier Model Institute, they shared that, in the early stages or RenDanHeYi, many of the Micro Enterprises (MEs) were primarily focused on their own interests and success.

The key tool for aligning multiple MEs is the EMC Contract. This mutual agreement is regularly updated, typically on a monthly basis. It lays out joint objectives, investments, and potential wealth sharing, along with a structured performance management system. What’s truly unique is that if an ME underperforms, it can be replaced—quickly and without hesitation. This may sound harsh, but it has a powerful side effect: it ensures that if an alliance isn’t producing the expected results, the EMC and even the MEs can swiftly reorganize themselves.

The EMC Contract served as the inspiration for our new Lean Ecosystem Canvas, which I'll explain in more detail through the eRevo success story. Thanks to the canvas, eRevo was able to set up their EMC in just a single day!

Image Source: LAP Alliance

This dynamic system eliminates the possibility of “riding dead horses,” something all too common in traditional projects. At Haier, if something isn’t working, the system adapts, reconfigures, and keeps moving forward—ensuring continuous progress.

image source: HMI

Haier categorizes Ecosystem Micro Communities (EMCs) into three distinct types:

1. Experience EMCs – These focus on interacting with users through touchpoint networks, capturing new user needs to continuously upgrade the user experience.

2. Solution EMCs – These are responsible for developing specific solutions designed for implementation, iterating based on user feedback to meet evolving needs.

3. Shared Service Platforms – These provide essential enablement to the EMCs, such as finance, HR, IT, and legal assistance.

A crucial element of Haier’s RenDanHeYi model is the principle of Zero Distance to the User. This means that all EMCs—whether focused on user experience, solutions, or shared services—are encouraged to establish direct contact with users or customers. Everyone in the ecosystem is responsible for staying closely connected to user needs, ensuring that the entire organization remains aligned with the ultimate goal: delivering value directly to the customer.

Example: Internet-of-Food Smart Cooking EMC

The visualization below illustrates how Haier is organized. In this example the overall topic is the Internet of Food, that includes a user scenario around Smart Cooking driven by an EMC. The EMC consists of multiple ME's including external partners.

image source: HMI

The colleagues at the Haier Model Institute shared a fun story about how this particular EMC has extended their mission. Haier has a long history in the appliances business, but what truly sets them apart is their relentless focus on user needs. One day, an employee remarked that while Haier made excellent ovens, it was still difficult to cook a perfect Beijing Roasted Duck—a dish beloved by almost every Chinese household.

Inspired by this insight, a new Micro Enterprise (ME) was born. This ME partnered with the existing Haier Smart Oven ME and collaborated with a "Super Chef" to fine-tune the oven settings specifically for this dish. The result? An EMC that not only improved the user experience but also catered directly to a cultural favorite!

In almost no time, this initiative addressed a significant user need and enhanced an existing Haier product, integrating it seamlessly with their IoT Menus platform and beyond. This rapid response not only enriched the product but also reinforced Haier's commitment to user-driven innovation.

Conclusions

As a senior Agile Coach, I’m deeply familiar with concepts like empowerment, customer centricity, and scaling team-of-teams. With Lean-Agile Procurement, we've extended these values and principles across organizations. However, RenDanHeYi truly represents a New Economic Engine, taking the best of existing practices and pushing them to the next level. What I admire most is its win-win mindset, the profound trust it places in both internal people and external partners, and its unwavering focus on user needs.

You might be thinking, “This sounds impossible in my context!”—but it’s not. In an upcoming post, I’ll share how Haier approaches the transformation in acquired companies and how you can start small and gradually build towards implementing this New Economic Engine, with big ambitions in mind!

Next Post - Learnings from the Haier ZeroDX Awards

Stay tuned for the upcoming posts in this series!

All Posts of this Series

Post 1 - Visiting Haier in Qingdao China

Post 2 - The New Economic Engine

Post 3 - Preview of the Haier ZeroDX Awards

Post 4 - The Haier ZeroDX Awards 2024

Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies

Haier - Insights, Learnings and Experiences (Post 1 - Visiting Haier)

Mirko Kleiner - As a Thought Leader in Lean-Agile Procurement and a Registered Scrum@Scale Trainer, my personal mission is to unite various movements—Agile Leadership, Extreme Manufacturing, Scaling Agile, Lean-Agile Procurement, and more—to push the boundaries of Business Agility across organizations.

One company that stands out, and perhaps the only one of its kind globally, is Haier. With over 50 years of history as a white goods manufacturer, Haier has undergone its sixth major transformation, evolving into a network of over 4,700 Micro Enterprises (ME), all interconnected within Ecosystem Micro Communities (EMC).

Each ME operates with its own balance sheet, its own people, and collaborates closely with partners who share in the ECM’s success. This win-win philosophy, implemented on such a massive scale, is truly unprecedented and sets Haier apart as a pioneer in organizational and management innovation.

For over two years, the LAP Alliance has partnered with the Haier Model Institute (HMI), itself a Micro Enterprise within the Haier Group. Its mission is to spread the word about Haier’s New Economic Engine, or RenDanHeYi, which serves as the foundation of Haier's management model. For those unfamiliar with Haier, it is arguably the most disruptive and successful organization in the world, operating with virtually no bureaucracy and achieving an impressive annual growth rate of 20% over the last decade.

In this series of blog posts, I’ll be sharing key insights, learnings, and experiences from my visits to Haier, and why I believe the future of business lies in a New Economic Engine driven by AI and Business Ecosystems.

Post 1 - Visiting Haier in Qingdao, China August 2024.

During one of our regular calls, the Haier Model Institute (HMI) surprised me with the news that I had been appointed as an HMI Expert and Partner—an honor I hadn’t anticipated. As part of this role, I was asked to support the Haier ZeroDX Awards 2024 by nominating leading individuals, organizations, or cases that have developed a New Economic Engine similar to Haier’s. I was deeply honored and immediately began reaching out to my global network and clients. Before long, I had gathered a handful of outstanding candidates—but that’s a story for another post.

Around the same time, I was in the final stages of planning my business trip to Melbourne, Australia. I explored the possibility of altering my return itinerary to include a visit to Haier. Once I got the green light from my travel agency, I quickly contacted my colleagues at HMI. They were thrilled and put together an exciting two-day program for my visit.

Arriving in Qingdao

Despite having traveled to countless countries, this was my first trip to China. I was a bit nervous, not knowing what to expect since I don’t speak the language. I arrived late at night at Qingdao International Airport. Qingdao, considered a small and relatively new city by Chinese standards, still boasts a population of over 8 million. I was immediately blown away by the city's modern infrastructure and quickly fell in love with the rich Chinese culture and cuisine.

1st Day at Haier

On my first day at Haier, I finally had the pleasure of meeting my colleagues from the Haier Model Institute (HMI) in person. We kicked things off with a strategic discussion, sharing experiences, diving into the details of RenDanHeYi, which I’ve explained in more depth in the Post 2 - The New Economic Engine.

After a pleasant lunch, I had the privilege of visiting the Haier Exhibition Center, an experience that truly showcased Haier's innovation and impact.

This is how I was welcomed at Haier—truly awesome! The Haier Exhibition Center is something everyone should experience. Beyond showcasing Haier's rich history, it highlights the four major transformations the company has undergone. A key turning point was the dismantling of the traditional hierarchy, freeing employees and empowering them to act as entrepreneurs—one of the core principles of RenDanHeYi.

This pivotal moment occurred back in 2006, when Haier turned its traditional hierarchy upside down, revolutionizing the way the company operated.

Haier became the world’s first IoT ecosystem brand, and create a new paradigm of global brand in the IoT eary.

As I walked through the exhibition, I struggled to keep up with the overwhelming number of insights, lessons, and success stories. Beyond Haier’s impressive journey of continuous improvement and disruptive changes, I was introduced to their innovative platforms. One standout example is their energy platform, which connects a wide range of energy consumers, producers, and transportation facilities for various types of energy, including gas, oil and electricity.

Imagine a portal capable of managing the energy needs of an entire country—it’s truly mind-blowing. It made me reflect on a recent sourcing project I was involved in for smart meters in gas pipelines, which now seems incredibly small in comparison. What’s fascinating is that Haier’s platforms are designed to empower their Ecosystem Partners, like power producers, allowing them to maintain their independence while benefiting from the platform’s success. It’s a true win-win model, where everyone gets a piece of the pie!

2nd Day at Haier

On my second day at Haier, my colleagues from the Haier Model Institute (HMI) invited me to visit one of their ecosystem partners—a point of sale for consumer goods within the Smart Building user scenario. Just like Haier's platforms and ecosystems, everything is viewed in connection, and their approach to products is no different.

Traditionally, Haier focused on producing and selling individual products, like refrigerators. However, their perspective has evolved. Instead of focusing solely on products, they now design user scenarios, where products are interconnected and work seamlessly together to enhance the customer experience.

An example of Haier’s evolution in the appliance product line can be seen through four transformative waves:

Wave 1: Smart Appliance – Connecting individual products to the internet.

Wave 2: Smart Home – Enabling products to communicate with each other through IoT.

Wave 3: Smart Living – Creating a seamless user experience across all products.

Wave 4: Smart Building – Designing an integrated user experience throughout entire buildings.

This represents just one of Haier's paradigm shifts. Imagine in Wave 4, renting a flat that was fully built, maintained, and equipped by Haier, where all appliances are included in your monthly rent—essentially eliminating competition.

To make this vision a reality, Haier’s Micro Enterprises must collaborate around these user scenarios, continuously adapting and reorganizing based on market demands. In essence, the entire organism consisting of internal and 3rd party ME's becomes fluid, responding dynamically to shifting needs.

The advantage being also a screen manufacturer is that even your point of sale can stand out, creating an inviting and immersive experience for your clients.

In the store, I finally realized just how serious Haier is about their user scenarios. The store was designed like an actual flat, allowing us to walk through and experience different rooms and scenarios firsthand. For example, I could simulate waking up, standing on a smart scale, and receiving my key information directly from the mirror. It was a seamless blend of daily life and technology, showing how deeply Haier integrates user-centric innovation into their products.

By the way, the moment I stepped off the scale, the refrigerator automatically recognized my body metrics and adjusted the suggested menu plan based on the available food. I’m not entirely sure if that’s something I want or if it’s truly necessary, but it was undeniably impressive to see how seamlessly everything works together. Despite being developed by thousands of independent Micro Enterprises, every component is perfectly in sync, showcasing a remarkable level of alignment.

In the afternoon, we had the opportunity to meet with a Micro Enterprise owner for a deeper exchange. What started as a conversation with a few typical questions quickly evolved into a session at the whiteboard, sketching out the organization’s structure and ways of working. That’s a topic worthy of its own dedicated post!

Conclusions

I was already quite familiar with Haier's New Economic Engine and its foundation, the Haier Management Model (RenDanHeYi). However, seeing it in action left me truly blown away. The way it is applied, its profound impact on people, and its commercial success are remarkable.

It’s fair to say that Haier is at least 20 years ahead of any competitor and stands as the most disruptive organization in terms of ways of working. Their unwavering focus on user scenarios, the empowerment granted to Haier’s entrepreneurs and 3rd party ecosystem partners, and the unmatched pace of innovation—both in products and organizational structure—set them apart from the rest of the business world.

Next Post - Learnings from the Haier ZeroDX Awards

Stay tuned for the upcoming posts in this series!

All Posts of this Series

Post 1 - Visiting Haier in Qingdao China

Post 2 - The New Economic Engine

Post 3 - Preview of the Haier ZeroDX Awards

Post 4 - The Haier ZeroDX Awards 2024

Post 5 - The Haier ZeroDX Awards Ecosystem Case Studies