Thinkers50 and HAIER have announced six inductees to the Thinkers50 Hall of Fame.

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Zhang Ruimin, CEO of the Haier Corporation, says: “It is a great pleasure and honour for Haier to host the Thinkers50 Management Hall of Fame. I am hugely influenced by many of the thinkers in the Hall of Fame. The new six new inductees are worthy additions to this pantheon of great management thinkers.”

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Thinkers50 Hall of Fame Announces New Inductees

SHANGHAI – 20 September 2019. Thinkers50 (thinkers50.com), the global platform for management thinking, today announced six new inductees to its Management Hall of Fame hosted by the Haier Group.

The Thinkers50 Hall of Fame honours the legacy of an elite group of thinkers whose work has had a profound and lasting influence on the world of management. The new inductees are being announced by Thinkers50 co-founder Stuart Crainer at Haier’s annual forum which this year is held in Shanghai.

The new inductees are:

Clay Christensen

The Harvard Business School professor has been named as the world’s leading management thinker on two occasions by Thinkers50 (2011 and 2013). Originator of the innovator’s dilemma and co-author of The Prosperity Paradox.

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Bill Fischer

New York-born professor at IMD in Switzerland. Previously president and dean of the China Europe International Business School in Shanghai. Co-author of Virtuoso Teams, The Idea Hunter, and Reinventing Giants.

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Vijay Govindarajan

Professor at the Tuck School of Business at Dartmouth College. Born in India, he is known for his work in the field of innovation. Co-author of Reverse Innovation, The Three Box Solution and Ten Rules for Strategic Innovators.

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Hermann Simon

German founder and honorary chairman of Simon-Kucher & Partners. Author of more than 35 books including Hidden Champions, Power Pricing, Manage for Profit and Hidden Champions of the 21st Century.

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Don Tapscott

Canadian visionary on emerging technology. Co-author of The Digital Economy, The Blockchain Revolution, Wikinomics and Digital Capital. Co-founder of the Blockchain Research Institute.

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Chris Zook

Bain consultant best known for his work on growth. Author of Profit from the Core, Beyond the Core and The Founder’s Mentality.

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“To be inducted into the Thinkers50 Hall of Fame someone must have had a long-term impact on the way people think about and practice management,” explains Thinkers50’s Stuart Crainer. “These six thinkers have all made a profound contribution to how we understand management and how it is practiced globally.”

Zhang Ruimin, CEO of the Haier Corporation, says: “It is a great pleasure and honour for Haier to host the Thinkers50 Management Hall of Fame. I am hugely influenced by many of the thinkers in the Hall of Fame. The new six new inductees are worthy additions to this pantheon of great management thinkers.”

The Thinkers50 Management Hall of Fame

The Thinkers50 Management Hall of Fame was founded in 2009. Members are: Chris Argyris, Warren Bennis, Ram Charan, Peter Drucker, Howard Gardner, Marshall Goldsmith, Daniel Goleman, Charles Handy, Andrew Kakabadse, Rosabeth Moss Kanter, Robert Kaplan and David Norton, Philip Kotler, John Kotter, Nirmalya Kumar, Edward Lawler, Henry Mintzberg, Ikujiro Nonaka, Kenichi Ohmae, Tom Peters, Jeffrey Pfeffer, Michael Porter, CK Prahalad, Doug Ready, Richard Rumelt, Ed Schein, Fons Trompenaars, and Dave Ulrich.

Read the full press release

 

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The Thinkers50 Hall of Fame honours the legacy of an elite group of thinkers whose work has had a profound and lasting influence on the world of management. From September 2018, the Haier Corporation will host the Hall of Fame at its headquarters in Qingdao, China.

To mark the occasion, two new management thinkers were inducted into the Hall of Fame. Peter Drucker and CK Prahalad both topped the Thinkers50 ranking in their lifetimes. They will be the first to join the Hall of Fame posthumously, and they were honoured at a ceremony hosted by Haier in Qingdao. They take their places in an elite group of management thinkers, which includes Charles Handy, Rosabeth Moss Kanter, Henry Mintzberg and Tom Peters.

Read our tributes to Prahalad and Drucker.

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Another presentation about great companies and another mention of WL Gore.  I have distant memories of WL Gore being held up as an exemplar of best management practice many years ago.  Tom Peters venerated the company’s leadership and culture in the 1990s.  Since then many others have enthusiastically endorsed Gore.  Visiting the company has become something of a light industry.  Thousands have now made the pilgrimage.

But have companies put the Gore ideas into practice? Perhaps some have but only a small number and only to a very limited degree.  Suffice to say, they are not household names.

Similarly, the Chinese company Haier is now the subject of a huge amount of interest in its innovative management practices.  Gurus and practitioners alike make the pilgrimage to the Chinese coastal city of Qingdao to learn more about zero distance to the consumer and Haier’s Rendanheyi model.

But even though the model has attracted international media coverage, a Harvard Business School case study and a steady succession of books (including Haier Purpose, published by Thinkers50) Rendanheyi has yet to be adopted by another large corporation.

So why does this happen time and time again?  Why does best practice fail to make the leap into general practice?

First, there is a widespread belief that management is a pick and mix discipline.  You don’t have to buy into the complete theory but can take a little bit of it and apply it to your company.

This has a big element of truth.  Management is a magpie science, stealing great ideas from sociology, psychology, philosophy, military thinking and any other discipline it can.

But, when best practice is a well-articulated and comprehensive approach to running an organization, pick and mix doesn’t get you very far.  All embracing organizational theories, such as Rendanheyi or Toyota’s lean production, are resistant to only a single element being extracted and implemented.  Alone and isolated they tend to be somewhat empty experiences.

The second factor which prevents best practice becoming universal is that individuals and organizations continue to have little interest in instituting major change.  They like to think of change as a programme or an initiative.  In doing do, change is contained and constrained.  Adopting an entirely different way of thinking and working is far from easy — something the employees of GE Appliances will be finding after the company was taken over by Haier in 2016 and the Chinese company slowly and sensitively began the process of educating its new employees in the Haier way.

Another element to this is that best practice is always history.  You may make the pilgrimage to Google to discover how it innovates, but by the time you have returned home and briefed the troops, Google will have moved on. Best practice is always backward looking so, to embrace it, any organization has to build in a means of updating it.

The final obvious stumbling block is that in many instances trips to ogle at organizational best practice is merely corporate voyeurism.  Executives enjoy the trip and then shake their heads, ‘I’m not sure it would work in Derby/Des Moines/Durban/Delhi, it is a whole lot more complicated and difficult here.’ They might be right, but the passive acceptance of mediocrity can never be a good thing whatever your business.

Stuart Crainer is co-founder of Thinkers50.

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Stuart Crainer reports from the first International Rendanheyi Model Forum in Qingdao, China.

Trust looks like being one of the big business ideas of our times.  Rachel Botsman, one of the champions of the sharing economy, examines the concept of trust in her new book. And it is at the heart of discussions on the future shape of organizations. Last week, I spent a morning in Qingdao, China listening to entrepreneurs and executives from the Chinese company Haier discussing creating an “ecosystem of trust”.

Haier is turning itself into a sprawling network of entangled businesses.  It doesn’t like to be described as an incubator, even though that is what it appears to be to the uninitiated outsider.  It prefers the term “growth accelerator”.

In practice, Haier gives funding, resources and encouragement to business ideas and their creators from within the company’s employees.  The trust element is high.  The system itself appears ambiguous, but happily so, in a very Chinese way.  It is difficult to see when the corporate apron strings are cut and how long they might be.  Haier retains small stakes in some of the spun off companies.

The trust element is enormous. It is unclear whether the objective is to grow Haier’s business or to spawn start-ups to create further growth in the Chinese economy. The assumption is that what is good for Haier is good for the companies which it nurtures and vice versa.

To Western eyes, the vagueness is disturbing.  Interestingly, in assessing the different companies which it has taken over in recent years, Haier CEO Zhang Ruimin praised the team ethos of the Japanese company Sanyo.  When it came to the company’s most dramatic purchase that of GE Appliances in the United States he cited the “contractual spirit” of the Americans.  Herein might lie the answer to the riddle of trust.  In the Western world, business has become transactional, focused on screwing the final dollar out of a deal, nailing every detail down in a contract.  Left to multiply, many of these elements go to create the managerial bureaucracy bemoaned by Gary Hamel and others.  They create a low trust environment.

Trust is the antidote to bureaucracy. Try it.

Stuart Crainer is co-founder of Thinkers50.

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Some thirty years ago I went to interview Peter Drucker in London. At the time, I knew very little of his work.  He was an old man who had written a few important books.  When you are young you tend not to worry about such details.  Suffice to say, I was sketchily prepared to interview the founding father of modern management in any vaguely intelligent way.

During the interview, my eyes were opened. Drucker was a veritable fount of knowledge and stories.  As a child in Vienna he had met Sigmund Freud. He was also an expert on Japanese art.  And he re-read Jane Austen annually to remind himself of what great writing is.

There was much more. Drucker talked for an hour or two. Along the way he commented that the book we all want to write is, ‘How to make a million and still go to heaven’.  I would still like to write this.  I escorted him down the road to a pharmacy — as I remember, he needed something for an old skiing injury.

I left my meeting with Drucker convinced of the timeless nature of management — after all, it took management to tend the Hanging Gardens of Babylon or to build the Great Wall of China.  Drucker taught me that management was also universal and had the power to change the world.

I was not alone.

Also during the 1980s in Qingdao in China, a young man by the name of Zhang Ruimin discovered an old, battered copy of Drucker’s The Effective Executive.  The book opened his eyes.

Fast forward to 2017 and I am sitting in a state of the art conference venue in Qingdao and alongside me is Zhang Ruimin, chairman and CEO of the world’s largest white goods manufacturer, Haier.

Under Zhang’s hugely innovative leadership, Haier has evolved from a basically bankrupt manufacturer of poor quality fridges to one of the most innovative companies in the world in terms of its management.

Haier’s business philosophy is called ‘Rendanheyi’.  To the outsider it appears hugely complex, a large company basically deconstructed into a freewheeling entrepreneurial spider’s web. Middle managers (some 13,000 of them) were eliminated in one dramatic swoop.  Instead of forming another line in the hierarchy, they now have the opportunity to be CEOs of their own businesses within the company.  This has spawned hundreds of micro-enterprises. Wages are directly linked to the amount of value generated by individuals, all individuals.  The author Danah Zohar describes Haier as a “quantum organization”, one in line with the laws of quantum physics rather than the linear world of Newton.

Haier’s model has developed its own — sometimes perplexing and lost somewhere in translation — language but at its heart are a number of key points:

1: Change leads to change.  Haier seems addicted to change.  At every stage when it looks as though a period of calm would be the answer, the energetic Zhang Ruimin has driven through even more change.  Instead of being an isolated initiative or a programme, change is viewed by Haier as a fact of life. It is.

2: Level 5 management: Jim Collins refers to Level 5 leaders.  These are leaders characterized by humility rather than the over-arching egos often on display in the C-suite.  What is interesting about Haier is that humility has become a core part of the company’s culture as well as Zhang Ruimin’s personality.

This is manifest in a variety of ways.  For example, when it takes over companies it does not send over a large swat team to convert the acquired company to their Haier way.  Instead it plays a long and gentle game of persuasion.  A handful of Haier executives may be sent to the acquired company.  Their role tends to be passive rather than active.  It is not missionary work. Instead they wait to be asked, ‘How would you handle this at Haier?’ When Zhang Ruimin visited the United States earlier this year he didn’t visit the company’s most eye catching acquisition, GE Appliances. He was content to let the company find its own way. It is difficult to imagine a Western CEO employing such an arms-length approach to assimilating a business into an already successful organization.

3: Learning constantly.  The lead, as ever, must come from the top.  Zhang Ruimin is a voracious reader.  One of his aides shakes his head at the very thought of how many books he gets through. ‘If we are sitting in an airport lounge he will be there reading a new book he has just picked up. Five a week he gets through sometimes.’

Talking to Zhang the truth of this is quickly apparent. He is hugely well read.  His conversation moves easily from quantum physics to Henry Mintzberg, from Drucker to blue ocean strategy.  He quotes from Kant and Frederick Taylor as well as Chinese inspirations. For a senior business leader, this is highly unusual – perhaps unique.  CEOs, for one reason or another, generally prefer to spend their time differently than devouring the latest business blockbuster.

To the self-educated Zhang Ruimin learning is as natural as breathing.  From early on in Haier’s development he has traveled to meet up with the world’s leading thinkers.  He picks their brains and cherishes the conversations.  Hardly a week goes by without a business luminary visiting Qingdao to meet with Zhang.  Some, such as Gary Hamel, have become intellectual sparring partners.  Hamel’s anti-bureaucracy message has found a willing disciple in Zhang.

And Zhang is not alone.  Listening to the CEOs of Haier micro enterprises it is clear that they are enthusiastic converts. They are effectively creating their own businesses under the Haier umbrella.  The corporate home is reincarnated as an incubator, a platform for individuals and the organization to grow. And so, entrepreneurial energy and dedication — ‘You may see the marks under my eyes, I have been awake for 30 hours,’ one of the microenterprise leaders confides — becomes part of the corporate fabric, or the very loose and large tent which now constitutes a modern corporation.

~~~~

A few weeks ago, we had a tortuous problem with our bank.  We talked to low level employees who were very pleasant but essentially powerless.  Emails to senior directors were rejected.  This situation is all too common in large organizations.  People on the frontline have been stripped of independent decision making and organizational power. Meanwhile, senior executives come up with strategies and seem careless of their execution. In such organizations there is a managerial vacuum.

Management is at a crossroads.  The robotic age will alter the world of work in fundamental ways. The negative perception is that jobs will be lost and that is the end of the story.  Jobs will, indeed, be lost, but therein lies an opportunity.  It frees up workers to assume the innovative position of responsibility created by Haier.

Companies exist to create and retain customers.  Zero distance to the customer is one of many Haier mantras. It is one which Peter Drucker would have approved of.

Stuart Crainer is co-founder of Thinkers50.

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When it comes to organization and management, the most innovative company in the world is not a high- tech start up from Silicon Valley, but a Chinese white goods manufacturer.

In the 1990s the Brazilian business leader Ricardo Semler wrote a book entitled Maverick! about his bold and exciting experiments in management at the family company Semco. When the youthful Semler took over the company he immediately dispensed with 60 per cent of the managers. He went on to make rewards and remuneration at the company transparent and democratic, and much more. Today, Semler continues to lead Semco Partners.

I interviewed Semler in the 1990s as he brought his unique brand of management to the world. He was an inspiring and fascinating interviewee, but not to everyone’s taste. I remember Sir Owen Green, who had created the British conglomerate BTR, was highly dismissive of Semler’s notions of workplace experimentation and democracy. He was not alone. Mavericks get the column inches but they tend not to be warmly embraced by the corporate status quo.

There have always been experiments in running organizations. The Glacier Project in the UK from 1948 until 1965 sought to bring democracy into the workplace and to better understand employee engagement. It failed to make inroads into management practice.

Usually, such experiments are carried out at the margins of the corporate world. They are outliers. Big corporations plough relentlessly forward, largely unwilling to countenance experimentation in how they manage and organize themselves. If they dabble in alternatives, they tend to be geographically distant from headquarters or in unimportant start-ups they have inadvertently purchased along the way.

Consider the corporate titans of our times. Companies like Apple, Facebook, Google and Amazon are not famed for their managerial innovations. Indeed, if you remove the gimmickry of free food and the like, and the often eye catching architecture, then the twenty-first century corporate behemoth closely resembles its twentieth century counterpart.

And that is what makes the Chinese company Haier a truly unique story.

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