On September 19th, Haier held a conference to mark the 10th anniversary of its Rendanheyi business model. During the meeting it was announced that the company will start phase 2.0 of the model. Haier adopted Rendanheyi – otherwise known as the Win-Win Model of Individual-Goal Combination – in 2005 as a business model to allow the company to transform in step with the impact that the Internet was bringing to the traditional economy. The model re-imagined the connections that should exist both between its employees and its users and between the company and the market. It did this primarily by providing greater autonomy and decision-making power to front-line employees to respond speedily to fast-changing user demands.
Among the methods to motivate its employees to shift their work processes in line with the tenets of the model, Haier has encouraged its employees to establish separate micro-enterprises. Almost 200 such internal start-ups have been established to date, with 77 percent of these micro-enterprises realizing more than CNY 100 million (USD 15.7 million) in annual revenue last year. Just nine years after the Rendanheyi model was adopted, Haier Group’s 2014 financial year profits were twelvefold those made just prior to the transformation, amounting to a 28 percent compound growth rate over this period.
