Haier Is the Sea: CEO Zhang Ruimin's Innovative Management

Extract

The chief executive officer of the Haier Group, Zhang Ruimin, wrote the philosophical text ‘Haier Is the Sea’, published in Chinese in 1994, and since then Haier has gradually built up a ‘sea culture’ that has guided its organizational transformations for over twenty years. The latest reform, in 2014, reorganized the giant corporation into the Haier Open Partnership Ecosystem (HOPE), which is like ‘a sea of entrepreneurs’, to achieve the goal of ‘management without leadership and organization without borders’ [管理无领导, 组织无边界] (see discussions in Schrage, 2014 and Ye & Teng, 2015). This radical organizational change astounded its peers and competitors at home and abroad. Even in the internet era, most white-goods companies still rely heavily on ‘economies of scale’ to reduce their costs to compete in the market, which in turn requires a pyramidal management structure. However, if we review the thinking of its leader for thirty years, we will understand that the 2014 reform was not radical but, rather, followed a smooth trajectory building on the past.