Management 3.0 in China

In Europe I have asked many people for their favorite management practices. But I never expected to find the most inspiring example of Management 3.0 practices in China.

Haier

Haier is the largest producer of white goods (refrigerators, washing machines, etc) in the world. I was invited by Haier because Haier’s famous CEO, mr. Zhang Ruimin, likes my book so much that he has been promoting it in China. He also wrote the foreword for the Chinese translation, which was released last week.

Note: The book launch of Management 3.0 takes place on 22 February at 19:00 in Shanghai. Contact me if you want to be there.

What's so special about this company?

Management 3.0 Practices

Haier has 80,000 employees, who are organized in 2,000 self-organizing units (“independent operating entities”). These units compete and collaborate with each other, very much like a regular free market. The company internally publishes a thermometer of the performance of those 2,000 units, so that everyone always knows their own performance compared to all the others.

The managers of these 2,000 units are encouraged to act as their own CEO’s, with wide responsibilities and full accountability. The managers are all subject to approval ratings, based on their performance and feedback from employees. This means that employees can vote their managers away, if they think they’re not doing a good enough job.

The independent entities, including R&D, manufacturing, and marketing units, sign contracts with other units for supporting services, such as quality management, and human resources. This too is a market. With multiple service units competing for the favors of the production units, which means they see production teams as customers, and not as departments.

So, I’ve asked myself, why does this happen in China?

Why is modern management so hard to achieve in Europe and the US?

Practice, Not Theory

In my book and Management 3.0 course I’ve been telling people for more than a year that HR and PMO departments should see Agile teams as their customers. But Haier is the first company I come across to actually do it! Same with internal markets and approval ratings. While I have been writing about it, Zhang Ruiming has been implementing it.

It's great to see that a Chinese manufacturing company is more Agile than most Agile organizations I know.

(Click here for more pictures from Qingdao, China)