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Focusing on innovation and developing a strong entrepreneurial culture to become the world’s leading white goods manufacturer

Key facts

  • World’s largest maker of white goods¹ – 10.2% retail market share in 2014 – with more than 70,000 employees.
  • Zhang Ruimin, the CEO of Haier, turned the state-owned fridge maker from the verge of bankruptcy to the world’s largest manufacturer by focusing on innovation.
  • Haier is using digital technologies in diversifying its products, optimizing business processes, reducing the distance to the consumer and developing new products.

Uniqueness

  • The company’s community management system, known as HOPE is an open innovation ecosystem across which 670,000 users communicate with suppliers and other customers searching for new business opportunities.
  • Haier launched a global Green Home Vision contest and a slogan contest on Facebook aimed at product development and marketing of its innovations through gamification and crowdsourcing.
  • Autonomy and empowerment of employees is crucial to take individual decisions. Haier rewards employees on the basis of performance, those providing winning ideas are elevated to senior posts.

Value

  • Sales from online transactions increased by 2,391% year on year (in 2014).
  • Haier Group’s global turnover was RMB 201 billion ($31 billion) in 2014, up 11% from a year earlier and profit of RMB 15 billion ($2.3 billion) and up 39% from a year earlier.
  • TRS over the past five years has grown at 23.6% annually. Haier is ranked among the most innovative companies by Fast Company and others.

Approach

  • Employees are actively encouraged to become inventors or “makers” and are guided to create new businesses; high customer engagement by involving them in discussions related to product design.
  • Employees are encouraged to bring fresh ideas, rewarding innovative ideas and empowering them to remove non-performing leaders.
  • Reorganized employees in 2,000 ZZJYTs – a Chinese acronym for independent, self-managed units, each having an own P&L.

Haier is one of more than 100 case studies identified as part of the World Economic Forum’s Digital Transformation of Industries initiative.  An overview of the DTI program can be found here.

  1. Source: HOPE – Haier‘s community management system known as Haier Open Innovation Ecosystem, haier.com, Capital IQ, WEF/Accenture Analysis
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