Forest will live forever, plants will die every day

Zhang Ruimin, the chairman of Haier group.

Zhang wants to destroy the traditional corporate structure, though this means more than simply getting rid of middle management and flattening the chain of command.  He wants to turn Haier into a giant incubator and transform employees from executors of orders into innovators.

The company is only a platform for innovation and every employee can be their own boss,” according to an op-ed he penned that appeared in the influential Chinese business magazine Caijing.


His dream is to turn Haier into an open ecosystem. Forest will live forever, plants will die every day but they will be replaced with new plants everyday as well. Every employee is like a tree and everyone can be a start-up. The boundary of this company will be great and they can suck in seeds, water and fresh air. They will grow strongly,” he wrote.

This is a great way to think about the idea of creating innovation. To unleash the potential of innovation, you have to make literally make each employee a start-up.

From another article:

Industry and trade companies used to be Haier’s control mechanisms,” Zhou Yunjie said. But last year, we started converting them into micro-enterprises.”

Ultimately, Zhang wants an overhaul at Haier that significantly limits its business arena. Essentially, what’s now a brand developer, manufacturer and marketing giant would become a business platform that provides capital, machinery and other support for a vast network of micro-enterprises that do most of the work. Every Haier employee could eventually become a platform chief, or work for the company as a micro-enterprise chief or micro-enterprise staffer.

Zhang also sees Haier as an entrepreneur incubator. Successful companies that emerge from the micro-enterprise system may one day join Haier on the stock exchange as a publicly listed company.


Time will tell whether the experiment will work. At the moment, no one in the world of business administration theory can predict if this is the correct path for survival,” said financial columnist Wu Xiaobo.

This is very true but at the same time in the brave new world, we need new management models. The state of South Australia is losing the big manufacturers but at the same time, there are no new start-ups in the manufacturing space. Is this one way?


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