CHAPTER 5ZHANG RUIMIN

ON DECENTRALIZATION AND CUSTOMER-CENTRICITY

Zhang Ruimin has run Haier for 35 years. This world-renowned Chinese company sells white goods in a very mature market where products are most often commoditized. Perhaps because of this Zhang has adopted and even invented completely new management practices. Indeed, he has dramatically shaken up the organization of his company several times and, in doing so, he has accomplished something that might have been more expected of a leader in the new economy.

For Zhang, companies that fail to disrupt themselves are condemned to be disrupted by others. It is inconceivable to him that a company can eternally depend on the same business model. One day or another, it will find itself obliged to self-disrupt.

Zhang has forced himself to reinvent his company, continuously. This former Red Guard and civil servant was inspired by American and Japanese business literature. The works of Peter Drucker, Gary Hamel, and Kenichi Ohmae no longer hold secrets for Zhang, who was a serious business student. As a business leader, he applies the most pertinent ideas, following them to the letter. He complains that active sources of inspiration are drying up. According to him, American theoretical thinking is now at a standstill.

At Haier, Zhang sought to invent the company of the future. It proved to be an arduous task. The company he took over was provincial in scope, making products that were often defective. He had to fight against ...

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