Abstract In the Internet age, if you can keep up with the best times, if you can't keep up, it's the worst era. With its huge "inclusive" power, the Internet contains all the resources of good or bad, can quickly achieve a business, and it is not a fantasy to destroy a company in an instant. Bring to...
In the Internet age, if you can keep up with the best times, if you can't keep up, it's the worst era. With its huge "inclusive" power, the Internet contains all the resources of good or bad, can quickly achieve a business, and it is not a fantasy to destroy a company in an instant. Bringing you all the possible price is to constantly innovate to adapt to its rapid changes. Traditional manufacturing industry adheres to the "tradition" in the Internet era, does not actively transform and seeks innovation and development, and becoming the next "Detroit" is not alarmist. 
When Zhang Ruimin, CEO of Haier Group, gave a speech at the "First China Innovation and Development Forum", he quoted a metaphor: the break of eggs from the outside must be people's food. If it is broken from the inside, it must be a new life. For Haier's manufacturing industry, what is needed is to break from the inside, that is, self-breakthrough, self-subversion, and self-challenge.
Putting this metaphor into the context of Haier's current development is quite meaningful. At present, Haier's “one person, one win and one win model†innovation is entering the deep water area, “touching the most difficult thing to do and the most important thing to do – organizational adjustmentâ€.
In this speech, Zhang Ruimin systematically explained Haier’s position. The three major parts are all around "subversion":
First, this is an era in which self-subversion must be made.
Second, why must we subvert ourselves?
Third, how to carry out self-subversion?
In the end, he quoted Hegel's famous saying "Familiarity is not true knowledge", it seems that it is intentionally or unintentionally reminding people that in the face of the Internet era, it is necessary to get out of the mindset.
It should be confessed that the Internet age is an era of rapid change, and there is no so-called truth set for one. As Zhang Ruimin said, "I don't know that there is a thing that looks like you need to explore."
If you can keep up with the best times, if you can't keep up, it's the worst time.
This is an era in which self must be subverted. Why? Because the driving force of economic development has been subverted.
The driving force and driving force of economic development in the traditional era is the scale and scope (Chandler). The scale is to achieve the maximum, the scope is to be the most extensive, thus raising the threshold to make it difficult for competitors to enter.
In the Internet era, the driving force for economic development is the platform. The platform is the framework for quickly configuring resources. On the Internet, various resources can be communicated without barriers.
Now e-commerce is the most typical platform. Ali can achieve a trillion scale in a short time, and a physical store can also achieve one trillion, such as Wal-Mart, but after many years. The reason why e-commerce can quickly subvert traditional chain stores is the result that resources can be quickly configured online.
What kind of era is this? Just as the British writer Dickens said in the first volume of The Tale of Two Cities, this is the best and the worst. If you can keep up with the best times, if you can't keep up, it's the worst time.
The Internet has subverted the classic management theory
Why do you have to subvert yourself? Because companies have always adapted to the times, and there is no time to adapt to the enterprise. So Haier has a saying, "There is no successful enterprise, only the enterprise of the times." If you think that you have succeeded, it must be the beat of the times, but you can't always step on the beat of the times.
The beat we are going to set now is the beat of the Internet. It is difficult to step on this beat because the Internet has subverted many of the traditional classic management theories.
The basis of traditional management theory is the theory of division of labor. In the first chapter of "The Wealth of Nations" in 1776, Adam Smith talked about the division of labor. It used the example of needle making. One person may not be able to do one needle a day, but the division of labor can do a lot. The theory of division of labor guides the transformation of small workshops into large industries.
Now facing the transformation of large industries into the Internet, the original basic theory has been subverted, and the three classical management theory pioneers that have grown up in this basic theory will also be subverted.
Must be manufactured by the user first
The first one is Taylor. Taylor's scientific management theory is known for his action time research. The results of action time research form today's assembly line. On the assembly line, people are not creative and become a vassal of the machine.
Subverting it is the zero distance of the Internet. There must be zero distance between the user and the enterprise. Only zero distance can meet the individual needs of the user. The pipeline represents large-scale manufacturing, and users on the Internet require mass customization.
Haier is now exploring the user's participation in front-end design. In the past, the company first manufactured and sold it. It was produced for inventory, and now it must be made by the user. This subverts the traditional scientific management theory.
Haier now has only three types of people: "platform master", "small micro-master" and "small micro-members"
The second is Max Weber. He is known as the father of organizational theory, the inventor of the bureaucracy (also known as bureaucracy). This pyramidal organization is still in use today. When I went to the United States to visit GM, I asked them how many levels they had. The host told me to tell the 14th floor. I was joking with him. If you upgrade to the next level in five years, you will not have the chance to rise to the highest level before you retire.
But now it has been subverted, subverting it is the decentralization of the Internet. The so-called decentralization means that everyone is the center. For the internals, every employee is the center. Because the relationship of information asymmetry has changed. In the past, the leadership has a lot of information. Now on the Internet, the information that your employees have mastered may be More than you. Every user outside is a center, and he can instantly turn his consumption experience into a global live broadcast. Employees are not led, users are not centered on the enterprise, and the entire organization is flattened.
Haier's organization has now become a small team of independent innovation. There are only three types of people in Haier. The first one is the “platform masterâ€. His single is to quickly allocate resources, and the second is “small micro-master†(small Micro is a small and micro enterprise, every entrepreneurial team is a small micro), and the third person is a "small micro member." The employees go to stay in Xiaowei, Xiaowei needs you to stay, do not need to leave. The original pyramid was squashed, and the employees did not lead. In the past, they listened to the superiors and now listened to the users.
The world is my research and development department.
The third is Fayol. The general management theory he puts forward emphasizes the rebalancing of internal functions of the enterprise, but no matter how balanced, it is internally closed to do one thing.
Now it has been subverted, subverting it is the distribution of the Internet. The famous Joey Law says that the smartest people are always outside the company. It is impossible for a company to cover the smartest people in the world. How to find these people? Online.
For example, our R&D center is very mysterious in the past, and no one can go in. Now it is an open system, and internal people become interface people and access the best resources in the world. "Distributed" turns the closure open, the world is my research and development department, and the world is my human resources department.
The three characteristics of the Internet: zero distance, decentralization, and distribution have subverted the theories of the three pioneers of classical management theory, Taylor, Weber, and Fayol.
Either transform or become the next "Detroit"
How to carry out self-subversion? For enterprises, the most difficult thing to do and the most important thing to do is to organize change. Organizational flattening is a very heavy task.
The year before, I talked with IBM's former president, Gerstner, in Florida. I told him about the flattening of Haier. He said that when I was at IBM, one thing was flattened, but there was never Do, why? Because the entire system has to change, involving more than 200,000 people, once the accident occurs, the entire enterprise is gone.
We have been thinking for many years and have been preparing for a long time. Since 2013, it has been reduced from the initial 86,000 to 70,000, and it is expected to be reduced by 10,000 this year. Many people have talked about this and thought it was incredible. It was very dangerous and there were many objections. But if you look at it carefully, you will find that not only must you do it, but the number of people who reduce it is not much, because this is what the Internet forces you to do.
First, outsourcing. Focus on the main business and the rest of the outsourcing. I am not doing what I do, but I am outsourcing. For example, if the computer is not as good as the Taiwanese business, then I will outsource it.
Second, intelligent manufacturing. We have a workshop, the original 108 people, now no one, only robots, so there is no need to turn on the lights, this workshop is called black light workshop in Germany. This is also a must, and today may not exist without tomorrow.
Nowadays, we are learning German Industry 4.0. Robots can talk to the production line. This is not just a question of efficiency, but mainly to meet the individual needs of users. In the US, there were more than 200 companies that moved back from China last year. In our industry, GE has relocated the heat pump water heaters made in China to Louisville, USA. According to their published articles, their manufacturing costs in the US are higher than those in China. It's still 20% lower, and the price is higher because it better meets the needs of local users. The title of the article is even more shocking - let China make it.
If you don't transform, it's not a problem for some people. Your business may not exist tomorrow. Either transform or become the next "Detroit."
Third, go to the middle layer. I just said that the company has been flattened from the pyramid. Many management in the middle have to be removed. It is not that you have to get rid of it, but that the Internet forces you to make him feel that he is useless.
For example, in the past, we have more than 30,000 stores across the country. The information of all these 30,000 stores is layer by layer, like the administrative system, from county to city, to province, to headquarters. But now that there is the Internet, I have to go to each store all at once. Why do these people need it? Why do he need to carry out the above intentions and collect the following situations, and this information is not allowed.
Enterprises should be a platform for entrepreneurship
All subversions are not an end. What is the purpose? The purpose is to turn everyone in the business into an entrepreneur and subvert the original concept.
Everyone in the original enterprise is an executor. The enterprise is a management system, which is management and control. What should the enterprise be now? Now the enterprise should be a platform for entrepreneurship, and everyone can start a business on it.
We have three 80-year-old children, started their own business, and built a Raytheon computer game notebook. Six months ago, we were obscured in this field. Three people suddenly started their business and now become the top few in this industry.
In addition to this category, other people are not pushed to the society, can start a business, create conditions for you, such as managing sales, and get rid of it to set up a startup company, can serve Haier or serve the society, the space is bigger, the actual Some of them have done a good job now, and their income has been greatly improved, and the value of creation has been higher. This is actually very, very important.
At the same time, there is a very important concept. We now divide employees into books and online, and the book is on the corporate roster. Online is the integration of global resources.
Enterprises create more entrepreneurial opportunities and create more platforms. Therefore, as long as the company is developing and growing, whether it is reducing people or not, the whole society is creating jobs and creating value. Can not be viewed in the concept of closed in the past.
For example, we have 90,000 trucks in the national logistics, two people per car (loaders and installers), which add up to 180,000 people. These 180,000 people are not in Haier’s roster, but they accept Haier’s orders. Accept Haier's salary. This is creating more employment opportunities for the society, so I think that enterprises and society must change their mindset.
Zhang Ruimin ended up with a sentence to conclude, which is a sentence in Hegel's "Little Logic": familiarity is not true knowledge. What has been successful in the past may become a mindset that will constrain your transformation to the Internet today. What is true knowledge? It is the truth, but I really don't know what it is. I need you to explore. I hope that today we can become a pioneer in the exploration of true knowledge in the Internet age and become the winner of the Internet.
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