Haier’s Revolutionary Rendanheyi Model Discussed and Praised


How can businesses, especially large-scale enterprises, react efficiently to today’s rapidly-changing market and technology landscape?

Haier, China’s electrical appliance giant, has found its answer one and a half decades ago — the Rendanheyi model.

The model, introduced by Haier’s CEO Zhang Ruimin, transitioned the traditional bureaucratic structure to a parallel one consisted of microenterprises. The model has significantly shortened the distance between users and employees and created an ecosystem that enables all parties involved — users, stakeholders and enterprises — to work together and achieve a win-win result.

Haier uses two words to summarize the distinctiveness of its business model — “autopoisis” and “co-evolution”, which are themes of this year’s 4th International Rendanheyi Model Forum that is taking place this Sunday.

Zhang, the founder of the model, is joining business leaders, scholars and experts in Qingdao, China’s Shandong, to discuss the model and how it has matured and responded to this Internet of Things (IoT) era.

“I am constantly enhancing user experience and understanding their new needs — we are playing an infinite game that cannot be replicated,” said Zhang.

“When people look at Haier from the outside, what they see is they see a company that has great human resources practices … great advanced processes for sales, for manufacturing, for distribution,” said James Moore, founder of Business Ecosystem Theory.

Moore described Haier’s model as very advanced, with people working all the time to improve not only their processes and their products, but themselves as well inside the Haier microenterprises.

Bill Fischer, professor of Innovation Management at IMD, noted that Haier started the system by making workers responsible for their work, which grew over the years into ever more clearly defined entrepreneurial roles for everybody in the organization.

Experts noted the model’s capability to maximize each individual’s value and minimize the gap between product manufacturers and consumers.

“Interestingly, I think almost uniquely, they’ve blurred the boundary not just between suppliers and other people in the ecosystem, which is something that’s often done in good business ecosystems, but they’re blurring the boundary to the customers,” said Moore.

“As founder and head of the company, I try to make no decisions. Instead, I encourage those at the front-line, those closest to the customers, to take full responsibility,” said Henry Stewart, founder of London-based training company Happy, which follows Haier’s model.

The microenterprise structure is not only bringing changes to individual companies, but also transforming some industries in the broader term.

Take Haier’s Internet of Clothing ecosystem for example.

Haier has established an ecosystem that connects a lot of laundry businesses across the country. It thus gains insights into consumer preference over clothes and other related products.

“By gaining insights and by creating an alliance between consumers and laundry shops, we’re building an ecosystem,” said Zhang.

In the case, laundry detergent producers are actually about to sell at a greater margin for the customized products as Haier’s ecosystem helped them interact more and gain more insights into user needs, added Zhang.

“Haier is taking a stand for collaboration and cooperation and working together across the world,” said Moore, who saw that as all the more important with all the challenges faced by today’s world.

The efforts taken by Haier and other industry experts to build platforms and hold events about Rendanheyi model are laying the ground work for organization transformation in today’s business world.

They “help move transformation from being more merely aspiration to being more precise and analytical so that we now share a common framework and a common vocabulary,” said Fischer.

“I’m sure they’re going to carry us into the future. So what I would say is, fasten your seat belts, sit back and welcome to the future,” he said.