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of Haier as a truly Internet-based
company, open to the world in a way that
few other companies have attempted, let
alone realized.
Haier is
reinventing
itself as a truly
Internet-based
company.
Zhang Ruimin, CEO and chairman of Haier
the 30 years of his tenure, his sharp
focus on customer service leadership has
given the company consistency even as it
propels Haier through dramatic changes.
Zhang was the leader who proposed that
Haier should never see itself as just a
manufacturer of products, but instead as
a provider of solutions to its customers’
problems. In the earliest years, that
meant bringing new levels of quality and
reliability to Chinese products. Later,
it involved increasingly sophisticated
forms of customization and new types
of services. Through its simplicity and
continuity, this principle has given all
employees a reliable compass with which
to make decisions, even in the face of
disruptive market challenges such as new
technologies or new competitors.
To accomplish its goal, Haier has
consistently cultivated and rewarded
high-quality talent; the company has
been a magnet for many of China’s most
capable engineers and businesspeople.
This approach is especially noteworthy
within China’s cultural and social context.
In a country that was just beginning to
emerge from a Maoist mind-set when
Zhang took the helm, the idea that
success depended on the entrepreneurial
efforts of individuals, recognized for
114
world monitor
their differences and rewarded for their
achievements, was relatively unfamiliar.
Haier has thus invested a great deal,
especially for a Chinese company, in
training its employees and demanding
innovative ideas.
Despite the success it has achieved, and
its willingness to stick to one core value
proposition (and one CEO) since the
1980s, the company has never become
complacent. Zhang established early on
that changes would be a way of life, not
soon-to-be-completed episodes that must
be traversed. “The only thing that we
know is that we know nothing,” he says.
“If you don’t overcome yourself, you will
be overcome by others.”
Indeed, Haier has reinvented itself at least
four times. The first reinvention, in the
1980s, was the decision to differentiate
the company by the quality of its
products. The second, in the 1990s, was
the adoption of consumer-responsive
innovation, starting with (but not limited
to) products for particular customer
needs. The third, which took place in
the 2000s, was the reorganization into
a bottom-up structure, in which self-
managing teams led decision making. The
fourth, going on today, is the reinvention
Zhang did not develop this management
approach on his own. From the beginning,
he displayed a fervent curiosity about
management and high performance, and
he studied the work of leading scholars
and observers, especially eminent
management writer Peter Drucker. He
took from Drucker, for example, the idea
that the purpose of a business is not
making money, in itself, but attracting
and meeting the needs of customers. If a
customer wins by gaining a better product
or service, then everyone else should
win as well, including the organization’s
shareholders through increased profits,
and the employees through increased
income. A visit to Qingdao with Zhang
and his associates can take the form
of a management seminar; visitors are
subjected to relentless questioning on
management innovations that might be
of interest to Haier. Zhang often takes
his own notes, and he frequently applies
the concepts to Haier — first in small
experiments, and then rolled out through
the company.
Building a Quality Brand
Haier, founded in the 1930s, was
nearing bankruptcy in the early 1980s,
when Zhang brought it back to life.
At that time, demand for appliances
was slowing down in the West after
35 years of growth. Looking to recoup,
Western manufacturers cast covetous