additional content
(such as the number and layout of
shelves in the refrigerator), and ancillary
design elements (like the pattern of
sparkles on a high-end appliance).
Factories routinely make them to order.
The process is not unlike choosing the
accessories on a new car, except that
there tend to be more choices.
The Internet connection also makes
customers more likely to buy a water
purifier — which is sold only by
consultation. Haier reps are trained
to look up the complex data on
China’s water problems, which vary by
neighborhood, and to install the filters
that guard against that neighborhood’s
mix of chemicals and pollutants.
On its website, which has an active
consumer-to-consumer dialogue,
the company posts water quality
information for 220,000 communities
in China. “We want people to be able
to find all their water-related answers
at Haier,” says Qu Guinan, the general
manager of the Haier water treatment
company. Building on its success to
date, the company is now exploring
partnerships with local communities to
manage their water purification efforts
community-wide.
The Internet has enabled the company
to expand its service diligence; it
provides intensive installation as part
of any appliance sale (a rarity in China),
and, using monitoring signals from the
appliances, it conducts follow-up calls with
customers when the equipment is not
working. The company also keeps in touch
personally just in case the monitoring has
missed some cause of dissatisfaction.
The connection to customers has
helped Haier migrate many people from
their medium-value line of household
appliances (the original Haier) to the more
upscale Casarte brand. The phrase “the
information is more valuable than the
product” has already become a slogan
throughout Haier.
“We’re providing information to Chinese
households,” says Jiang Hanke, social
media director for the water purification
platform, “but we’re also benefiting from
these interactions. They give us a better
understanding of users’ needs. Users
can see what the water-quality situation
is in their communities and use that
information to select filtration products
that suit them best. Although we didn’t
set up the online resource with the direct
goal of making sales, it has had that
effect; sales in this still-young business
have risen by a factor of four since we’ve
introduced the online resource.”
Zhang recognizes the high stakes that are
involved in changes of such magnitude:
“There will be an earthquake [within our
company] if it is not properly handled.”
But he also believes it is the only course
of action that will allow such a large
company to succeed in an era when each
new triumph leads to new problems. The
goal of a large company, he says, is to
“lose control step by step.” In other words,
Zhang believes that Haier isn’t unique.
Every major organization will have to
learn how to maintain its identity, the
quality of its products and service, and
its customer relationships, while being
prepared to give up everything else.
Haier’s role in this new world will be as
a pathfinder: It’s already the first leading
global consumer manufacturing company
from China. Soon, if Zhang is once again
correct, it will be the first company from
anywhere with its distinctive, innovative
form of management.
Author Profiles:
• Bill Fischer is a professor of
innovation management at IMD in
Lausanne, Switzerland. Previously, he
was the executive president and dean
of the China–Europe International
Business School in Shanghai. He is a
coauthor of Reinventing Giants: How
Chinese Global Competitor Haier Has
Changed the Way Big Companies
Transform (Jossey-Bass, 2013).
• Umberto Lago is an associate
professor of management at Bologna
University in Italy and a coauthor
ofReinventing Giants.
• Fang Liu is an investment analyst at
Lombard Odier Asset Management, a
former research associate at IMD, and
a coauthor of Reinventing Giants.
Resources
1. Bill Fischer, Umberto Lago,
and Fang Liu, Reinventing Giants:
How Chinese Global Competitor
Haier Has Changed the Way Big
Companies Transform (Jossey-Bass,
2013): Comprehensive story of
Haier’s management philosophy and
influence; this article draws on that
book.
2. Jeannie Jinsheng Yi and Shawn
Xian Ye, The Haier Way: The Making
of a Chinese Business Leader and a
Global Brand (Homa & Sekey Books,
2003): First substantive book on the
company, with a great deal of detail
on its early days and quality ethic.
3. Art Kleiner, “China’s
Philosopher-CEO Zhang Ruimin,”
strategy+business, Winter 2014:
In-depth discussion of management
thinking and the company’s identity
through change.
4. George Kohlrieser, Susan
Goldsworthy, and Duncan Coombe,
Care to Dare: Unleashing Astonishing
Potential through Secure Base
Leadership (Wiley/Warren Bennis
Books, 2012): Leaders can take a
group through extraordinary turmoil
by building trust and inspiring focus.
5. Zhang Ruimin, “Raising Haier,”
Harvard Business Review, Feb. 2007:
“A leader whose existence is unknown
to his subordinates is really the most
brilliant one.”
based on Strategy &
Reference: www.strategyand.pwc.com
supported by EUROBAK
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