# Haier - Ecosystem Leadership article  [Article Link](x-devonthink-item://55933FB4-C4D5-46B5-89A5-9A81039116A0) ## Summary - Moving into an open architectural model, with collaborative economic ecosystems - Need to have a primary relationship with customers. Curate customer expereinces. - Ecosystem - establishes cooperative principles - establishes revenue sharing agreements - Provides a brand and digital experience to end users. - Internet enables "zero distance" between customer and company. Ensures direct contact with the market. - New strategy focuses MEs on being one with the customer. Co-production is key. Aim is loyal, lifelong customers. - Hair particularly good at: - superior market sensing and timing; - asset reconfiguration and orchestration; - entrepreneurial management; - creating and capturing value from ecosystems; - global brand building and multinational operations in a broad range of market contexts; - strategic acquisitions and open innovation. - Incubate new growth platforms and microenterprises at scale, - pull-based mass customization manufacturing - vanguard capabilities in user interaction and value co-creation. ## Highlights - had been trumped by a bold new logic predicated on open organizational architectures and collaborative economic ecosystems. (Page 1) - scores of industry sectors and value chains will converge into a dozen or so multitrillion-dollar digital ecosystems (Page 1) - organizations across virtually every industry are competing to have a primary relationship with customers, positioning themselves to not only provide their own products, but as a curator of customer experiences. (Page 1) - The ecosystem host plays a keystone role in establishing cooperative principles and revenue sharing agreements among ecosystem partners and in providing an identifiable brand and coherent digital landscape and experience to end users. (Page 1) - He believed that in a world of “zero distance” enabled by the internet, every employee should have direct contact with a market—whether an internal or external market—to understand the value of products and services from a customer’s point of view. (Page 2) - the “Rendanheyi” model in 2005 which loosely translates as “employees and users become one.” Ren refers to employees, dan to user value and heyi to connecting employees with users in a process of co-creation. (Page 3) - He formed a dynamic network of microenterprises run by employees who interact directly with end users, transforming them from one-time, transactional customers, into life-long users who help conceive products and services jointly with Haier’s innovators. (Page 3) - into three categories — platform owners, employees fall microenterprise owners and entrepreneurs (Page 3) - Microenterprises operate autonomously and are self-employed, self-organized and selfmotivated. They make decisions independently without having to gain prior approval from senior managers; they elect their own leaders hire and fire team members and procure services from internal or external providers (Page 3) - esembles a federation in terms of power and authority, motivation and incentives.[7] (Page 3) - As a key part of its new strategy, Haier grouped its independent microenterprises into “Ecosystem Micro-Communities” (ECMs) of loosely connected, multi-disciplinary capability clusters organized around end users (Page 4) - Microenterprises were tasked with evolving their businesses from selling products via onetime transactions with customers to using ecosystems to cultivate a loyal base of interactive, lifelong customers whose service revenues, generated in conjunction with ecosystem partners, would in time exceed hardware revenues (Page 4) - Zhang recognized that the leadership models of the industrial era would be counterproductive in the emerging world of ecosystems (Page 4) - his new role as that of gardener, tending to the biodiversity of a rainforest to “create favorable conditions and mechanisms for species in the Haier ecosystem to prosper on their own in a sustainable way (Page 5) - organizational ambidexterity at Haier allows seemingly conflicting business mindsets and strategies, such as efficiency and emergence, scale and customization or sunrise and sunset businesses, to co-exist harmoniously with little organizational angst or infighting. (Page 5) - one-time customers into life-long users. (Page 5) - All new offerings must be co-created with users. (Page 5) - help a firm sense subtle market shifts, seize opportunities and transform itself as needed to rapidly scale opportunities in fast changing market environments (Page 5) - enterprise-wide capabilities Zhang had developed over several decades.[15] These include superior market sensing and timing; asset reconfiguration and orchestration; entrepreneurial management; creating and capturing value from ecosystems; global brand building and multinational operations in a broad range of market contexts; strategic acquisitions and open innovation (Page 6) - Haier’s capabilities affirms its ability to incubate new growth platforms and microenterprises at scale, its advances in pull-based mass customization manufacturing and its vanguard capabilities in user interaction and value co-creation. (Page 6) - Rosabeth Moss Kanter and Nancy Hua Dai, “Haier: Incubating Entrepreneurs in a Chinese Giant.” Harvard Business School Case 318-104, February 2018. (Revised May 2018.) (Page 6) ## APA Reference Schoemaker, P. J. H. & Kuhn, J. S. (2021). Haier: ecosystem leadership. Strategy & Leadership, 49(5), 16–22. https://doi.org/10.1108/SL-09-2021-0087