Rendanheyi: Building a Global Ecosystem of "Autonomous Persons" With the Power of Management

The Fifth Rendanheyi Model Leading Forum held in Qingdao, China on September 17 featured a star-studded speaker lineup, including a Nobel laureate in economics, renowned management thinkers, and business innovators. These leaders gathered to discuss how to promote organizational innovation in the Internet of Things (IoT) era and the fourth industrial revolution. Participants agreed that such an effort begins with changing the so-called standards in the era of hierarchy and inspiring each person's full potential for sustainable organizational innovation.

Todd Rose's research is in alignment with the changing trends of corporate talent in recent years ? Google's internal research shows that there is no real indicator of "effective employee recruitment". The management society goes one step further. In his book Humanocracy, Gary Hamel (the man who coined the core competency theory) articulated the importance of "autonomous employees" to companies in the new era. He argues that "autonomous persons" are no longer tools and symbols, but a source of corporate innovation.

The opening of new horizons has also contributed to novel scholarly insights. For example, Edmund Phelps, winner of the 2006 Nobel Prize in Economics, explained in his book Mass Flourishing that, "much of the creative progress in history has come from ordinary people," and that, "the creative dynamism in every ordinary person was at the heart of the success of the first modern economies". He goes on to show that Schumpeterian innovation was concurrently underway, but did not prevail.

Every sign suggests that, for the IoT era, management practices that treat employees as industrial products, and the traditional bureaucracy with measures that restrict people must be disrupted. Organizations need "autonomous persons" with innovation consciousness. After all, innovation is always "irregular". It is with this belief in mind that Zhang Ruimin, Chairman and CEO of Haier Group (600690.SS), launched the next step of his company's innovation and transformation with the Rendanheyi model. With this model, he has promoted a series of changes:

1. Remove traditional product labels, set the mission as delivering excellent user experience, and constantly create new growth.
2. Remove traditional labels of "people", put "human value first", enable the alignment of value creation and value sharing of employees. Respect that "everyone is his or her own CEO". In a traditional organization, the leader is the host and the followers are passengers, but in the Haier ecosystem, everyone is the host.
3. Remove the traditional organizational labels and disrupt hierarchy to establish an open and win-win IoT ecosystem, in which all competent stakeholders can join, innovate, and share value-added. Sub-ecosystems have been set up in 15 industries such as medical, chemical, catering, and clothing, covering 330 million users. Haier has become the world's largest platform of mass customization solutions.

Haier's achievements have attracted many enterprises seeking to learn from Haier's experience. So far, more than 300,000 enterprises have registered to study the Rendanheyi model globally. This year, the Rendanheyi Model Forum has accomplished its mission of "running a successful forum and triggering a revolution in management thinking". "Rendanheyi" has been included as a consensus in the textbooks of international business schools. The Forum has also become a conduit for exporting this Chinese management model to the rest of the world.