Meet the CEO: Zhang Ruimin, Haier

z-830x553Zhang Ruimin is one of the top 50 global management thinkers, a world renowned enterpreneur, founder of Haier Group, Secretary of the Party Committee of Haier Group, Chairman of the Board of Directors and CEO of Haier Group.

In recognition of his achievements in management innovation, Zhang Ruimin has received many awards from the international management field including “Inspired Leadership Award”, “IMD Management Thought Leader”, “Asia Brand Eternal Spiritual Leadership Award”, “Dale Carnegie Leadership Award” and Fortune “The World’s 50 Greatest Leaders”.

In 2015, Zhang Ruimin received the “Best Practices Award” by American Best Practices Institute (BPI); he is also awarded the prestigious “Ideas into Practice” by Thinkers50 known as the “Oscars of Management Thinking” and was selected into the 2015 Thinkers50 ranking of the top 50 global management thinkers at the same time. This makes Zhang Ruimin the only Chinese entrepreneur to have won two Thinkers50 honours.

In 1984, Zhang Ruimin took the post as Director of Qingdao Refrigerator Factory – predecessor of Haier, thus starting the prologue of Haier’s entrepreneurship. Through 31 years of development, with his innovative entrepreneurial spirit and advanced strategic decision-making in conformity with the trend of the times, he has turned a small collectively-owned factory with a 1.47m Yuan loss into a global enterprise with global turnover of 188.7b Yuan (2015). In 2015, Haier achieved a global turnover of 188.7 billion yuan, and a total profit of 18 billion yuan with a 20% year-on-year growth; the online trade volume reached 157.7 billion yuan, a year-on-year growth of 188%. According to the 2015 world’s major home appliances survey data from Euromonitor, Haier tops Global Major Appliance Brand rankings with No. 1 retail volume for seventh consecutive year. In 2015, Haier entered the list of World Brand Top 100 and was ranked No 1 in the global white goods industry.

In the management practice, Zhang integrates the essence of China’s traditional culture with western modern management concept, insisting on “taking in everything, growing innovatively and having one’s own style”.

His innovative management philosophies and exploration has provided the global management circle with business models and cases fitting with the times and also forged highly competitive Haier culture. Zhang Ruimin was also the first Chinese entrepreneur giving speech in Harvard.

Zhang Ruimin believes that successful enterprises move with the times. The so-called successful enterprises only result from keeping pace with the times. Therefore in the Internet age, Haier has transformed from an enterprise that manufactures household appliances to a platform that incubates entrepreneurs for the whole society.

But this is not the end of the story. Haier became such a lean organisation that it is able to rapidly change the nature of its products depending on the customer’s need. In Jugaad Innovation, the authors recount Haier’s approach when they had to respond to complaints from people in rural areas who had issues with washing machines.

Surprisingly, the technicians found out that many used washing machines to wash potatoes, not just clothes. A traditional approach would lead to reprimand customers, who were doing improper use of the appliance. On the contrary, Haier’s management decided to release a special washing machine, which could wash clothes and vegetables, and in 2009 they even launched a model that required no soap to work.

“There is no such thing as being successful. It’s not about success. It’s about adapting to changing times. We try to change before a crisis strikes us. Many years ago I learned from western management philosophy how to organise into silos, divisions and strategic business units. But times have changed, and complexity is rising. These factors cause user demands that can no longer be satisfied by traditional management ideas. Organisation models can no longer be rigid. They need to be ‘alive’” (Zhang Ruimin)

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