China’s electronics manufacturer Haier has become one of the world’s leading firm in renewing its way to organize production. IMD-professor Bill Fischer explains in Entrepreneur.com how workers are organized like entrepreneurs, working on their own fate.
Fischer: Zhang Ruimin, the chief executive officer, will tell you there’s a very Confucian element in what they do because there’s respect for order, there’s discipline and people get along because they have a shared tradition. I will tell you that it stems from choices by management that created this culture. The managerial choices at Haier are very thoughtful. They’re all aimed at the vision and the vision has been consistent for 30 years. I think you can do this even if you’re not Chinese.
Entrepreneur.com: The official work hours at Haier are 9:00 a.m. to 6:00 p.m., six days a week, but teams rarely leave before 8:00 p.m. Investment bankers and entrepreneurs in United States can relate to those kinds of hours, but how would this go over at most U.S. companies?
Fischer: The difference is the people at Haier think of it as working for themselves. They’re really running small businesses under the corporate umbrella. What Haier has done is say to people: ‘You are the masters of your own fate. You’re going to run this business and you’ll succeed economically as a direct result of your performance.” There’s a saying at Haier that Haier doesn’t give you a job, it offers you an opportunity. That’s different from serving your time or clocking in and clocking out. These people really feel they are CEOs of small businesses and they are, actually.
Entrepreneur.com: Yet, this isn’t a free-for-all.
Fischer: Not at all. Performance is being measured in the marketplace and it’s also being measured by the colleagues who have a direct financial stake and career stake in the outcome of the unit’s performance. It’s a very performance-driven atmosphere. At Haier you get every day a sense of what your total salary will be based on the performance of your unit. Every day they’re facing those realities for better or worse.
One thing I hear a lot from people is “We could never give up that much control.” My sense is you need discipline and creativity but they don’t have to be mutually exclusive. The most creative organizations I see are also very disciplined.
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