China's Haier Group, an appliance maker with a fast growing global market,
interacts with customers to tailor its products to distinctive needs.
It makes large washing machines for Pakistani robes, small ones for
delicate garments, and a durable one for large hoses for washing
vegetables on Chinese farms. It also sells water purifiers designed to
remove specific pollutants in each of the 220,000 communities across
In an interview with Strategy+Business editor Art Kleiner, Haier CEO Zhang Ruimin
explains how he took the top post at the company in 1984, studied
business management and philosophy, and used his insights to transform a
troubled operation into a leading producer of household goods and
services. Kleiner writes that the Academy of Management
invitation to Zhang to give the keynote address at its 2013 annual
meeting signals that China "had produced its first philosopher-CEO."
Zhang says Haier has a culture of continual self-questioning and entrepreneurial spirit.
the arrival of the Internet Age, Zhang explained, the company
eliminated hierarchical structure, got rid of most of middle management,
shed 4,000 jobs, and created 2,800 small county organizations with
seven or fewer people each. As the company becomes platform based,
each part of the organization makes autonomous decisions, reaching out
to customers, potential employees and collaborators. He wants to make
the operation truly "borderless," and says in his vision the company no longer has an inside and an outside.
are using Internet technology to connect everyone," he told Kleiner.
"As a Haier executive, my goal is no longer to be a maker of home
appliances but to be an agent of interaction and networking among people
who might be anywhere."
the long run," he said, "there won't be any company employees to speak
of-only the Haier platform." His idea is, "Whoever is capable, come and
work with us." That could include entrepreneurs, people who want to
partner with the company, and customers engaged in the process of
product development. As an example, he cites the Air Box,
a Haier device that lets people use smart phones to control their
environment inside a building by connecting to heating, cooling and air
filtering devices. Customer input guided the company in having air
conditioning units that test and monitor air cleanliness, and the
company brought in Samsung and Apple to help meet user requirements. All
Haier products are integrated with the internet and Zhang asserts "If a
home appliance can't communicate with the Internet it shouldn't exist."
Zhang said the idea of a company as platform
represents a stark contrast from past management practices. "It should
allow us to bring in and integrate greater quantities of resources-all
contributors will be able to enter unhindered," he said, adding that
operating this way, "we at Haier are no longer the ones directing
things. We are the glue binding everything together." He describes an
interactive water quality platform as an example of how the company can perform that difficult task: it can collect and incorporate insights from water treatment companies around the world and resolve users' individual needs through direct interaction with them.
A Harvard Business Review blog by Mark Bonchek and Sangeet Choudary
says in today's networked age, business competition is increasingly
about having the best platform. The authors describe elements for
successful platform strategies, with examples, and what they call
Microsoft CEO Satya Nadella
recently told all employees that "At our core, Microsoft is the
productivity and platform company for the mobile-first and cloud-first
world." Read his speech here. Read Kleiner's Strategy+Business piece here.