How Haier, Bayer and Roche unblock value at scale with Mission Based Teams
The Chinese company Haier employs more than 110,000 people and is ultra-flat. Only two layers separate the CEO and everyone else. Can you believe that? It’s true. Here’s how they do it.
Haier is the world’s largest and fastest-growing kitchen and home appliance manufacturer; it makes refrigerators, washing machines, air conditioners, and many similar products.
For decades, Haier was a relatively traditional hierarchical company. However, as the company grew, it introduced more layers and management structures. CEO Zhang Ruimin felt they were losing competitiveness, and their conventional management practices were unfit to respond to the complexity of the rapidly changing digital age. He said:
“Bureaucracy was ruling, and no one took real responsibility”
In 2005, Zhang introduced a new model to minimize the distance between employees and customers and enable everyone to become entrepreneurs. He deconstructed the hierarchical pyramid and asked the company’s 12,000 middle managers to take on a (non-managerial) role in an ME or leave.
Haier restructured into more than 4,000 self-managing ‘micro-enterprises’ (MEs) — autonomous, customer-focused units comprising an average of 10–15 people. The MEs own their P&L (profit and loss), set their (product) strategy, and decide who to hire and fire. The ME teams use an election to determine who will be their leader. The ME member’s pay depends on the success of their ME — everyone is directly accountable to the customer and has skin in the game. To scale their services, MEs form collaborative networks.
At Haier, everyone (both inside and outside the company) can post a business idea and invite people to help. If they can secure seed funding and attract initial team members, they become the owners of their newly formed ME. They can secure more funding after running a successful pilot. If a ME is unsuccessful, it gets disbanded, and its members can apply to join other ME’s.
Their radical organizational model contributed to Haier becoming the number one global brand in major appliances for ten consecutive years.
Should you follow Haier’s example?
Several organizations have already started to adopt the model. Should you transform your organization to replicate Haier’s model of networks of self-managing teams like Bayer is doing? If you can, you totally should. But, likely, you don’t have the appetite or authority to overhaul the whole organization’s structure, and you don’t need to.
You can reap some benefits by starting a marketplace of Mission Based Teams, within the existing structure. Read the full article to learn how to do it.
Join me to learn about Roche
It is exactly what pharmaceutical company Roche did. Over the years, they have launched over 1,100 self-managed Mission Based Teams in 89 countries. They work alongside the formal organizational structure and bring faster, better solutions to patients. By facilitating collaboration across the organization, Roche enables people to apply their talents where they make the most impact, beyond their formal roles and departmental and geographic boundaries.
Join me next week in a conversation with Hemerson Paes (Senior Global Network Catalyst) on 📆 December 4th, 16:00-17:00 CET. Register here to attend or watch the video after the event.
Unblock book launch
Those who follow me on LinkedIn see that it was a busy couple of weeks with our book launch party, online launch, and many podcast appearances. I’ve also had many interesting conversations with leaders about embracing new ways of working at Rabobank, leadership at Bol, and pioneering AI at RTL.
The reception has been great. I especially loved this comment by Christian Barnhausen:
If you haven’t done so already:
Order a copy at Managementboek or Amazon
That’s it for now!
Cheers, Jurriaan