12th April 2021. Haier | Mourning
Haier reinvents the enterprise; Displays of grief
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#1: Haier reinvents the enterprise
The most radically structured company in the world is probably the Chinese business Haier. It’s not a tech business or a knowledge business. It makes appliances and electronic goods. It has been growing at 20% per year for more than ten years.
But it has also been pursuing a radical model of decentralisation, based on two principles: zero distance to customers, and everyone is an entrepreneur. Its 80,000 employees are split into 4,000 micro-enterprises of around 20 employees each.
Each micro-enterprise has control over what they decide to do, contracting with each other to make things happen. They decide on their own strategy and their own reward structure. Some micro-enterprises are customer-facing, some are specialist support functions (marketing, engineering, etc). Some succeed, some fail.
From behind a paywall, the management writer Simon Caulkin has previously described this transformation in this way:
Zhang’s model for Haier’s next structural makeover was an unlikely one: the iPad.…But the secret of the iPad wasn’t a conventional killer app for users. The killer app was Apple’s when it opened the device to developers who could turn a standard platform into anything anyone wanted it to be. What if, Zhang mused, Haier could become an organisational iPad, a spine or skeleton on which anyone could graft any kind of commercial operation, inside or outside Haier’s traditional spheres of activity? That would change what a company could be used for, just as the iPad had changed the scope of computing. Instead of being a closed system, an ‘iPad company’ would dissolve boundaries and act as a ‘co-creation platform’ for a myriad of micro-enterprises in which Haier would take an equity stake.
Every time I look at how it works, I start mentally listing the reservations, which are based on the notional reasons we have large businesses (Co-ordination? Allocation of capital? Knowledge flows?)
But the fact is, it’s the largest appliances business in the world, it’s growing in a sector where growth is tough, and has acquired a lot of businesses from better known companies along the way—like the GE appliances division in the US, for example.
Anyway, the Corporate Rebels have put together a short (6m) video to explain the way the business is run:
They’re mildly obsessed about Haier, and if you want to know more, there is a whole lot of resourceson their site. I’d probably start with this historyand maybe follow up with this, which looks at it through the perspective of one of the micro-enterprises.
I know one of the promises of Just Two Things is that I won’t focus on local issues, but the science fiction writer Charles Stross has an interesting observation on his blog on the vast displays of public grief that seem to be expected in the UK following the death last Friday of Prince Philip, the Queen’s Consort.
(Buckingham Palace flags at half mast. Photo by Sanshiro Kubota, CC BY 2.0, Wikipedia)
It is this: that long formal public displays of public mourning were demanded in the 19th century, whereas no-one ever mentioned sex:
Everybody did it, but nobody wanted to be known for it, and the taboos surrounding it were many and punishment for infractions could be savage. But mourning was a huge social spectacle, acted out in public: there were special clothes, ritualized stages of mourning with defined time frames within which certain behaviours were expected and other normal activities suspended.
Today, it’s more or less exactly the other way around:
Today we're relatively open to discussions of sex--at least to talking about it and portraying it openly in the media. (I'm not sure we're having more of it--the Victorians were hyperactive furtive shaggers--but we're not trying to hide it, for the most part.)… Grief and bereavement is a very private thing these days, not a fit subject for sharing. The normal thing to do this century is to leave the bereaved family decently alone with their grief in private.
He also reminds us how strict the Victorian protocols on grief were (although there may be a class element to this). Widows would wear black for six months, and retreat into the seclusion of their homes. A veil would be worn if going out.
A decade ago, after working on a set of a hundred year scenarios and going into some of the social history of 1900 London, I wrote a blog post that suggested that the 21st century would be less strange than we like to imagine to a time traveller from 1900.
Vaclav Smil suggested something similar in a recent podcast when he said that an engineer from 1910 would be up to speed with the modern world pretty quickly, whereas an engineer from 1840 who showed up in 1910 would be baffled. (The big change was the electrical and chemical revolution of the mid-19th century.)
A colleague responded to my post by observing that I’d missed something: the 1900 time traveller would certainly be shocked by the amount of flesh on display in the 21st century, and this is a reminder that values often change more visibly than anything else.
Stross suggests in his post that the decline in public grief has happened because we’ve become a low birthrate/low deathrate society.
To which I’d add: It’s possible that the advent of modern medicine (in which death is more often a managed business) and better social safety nets make death less of a surprise and less of a catastrophe. Sex, meanwhile, has lost most of its connection to unwanted pregnancy and the church has mostly lost its power to stigmatise such mistakes.
He’s writing about the death in the Royal Family, and asks why he is expected to join in a 150-year old set of rituals:
I never met Prince Philip, or his wife and kids… And yet I'm expected to join in an orgy of vicarious synthetic grief and mourning and wrap myself in either a flag, or a black armband, or both (I'm unclear).
Well, we know that most of our Royal rituals are inventions; most of them date from the middle of the 19th century; and they were invented to legitimate the Crown in the face of social conflict. The legitimation strategy of the modern Royal family has been to add the tropes of (carefully managed) celebrity, with the media management that goes with it. That’s a powerful reinforcing loop.
j2t#074
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