The organizational structure of most enterprises is a "regular triangle", which looks like a pyramid-grass-roots employees are located at the bottom of the tower, middle-level employees are located in the middle and senior employees are located at the top. As business people, we are no strangers to this, and even suffer from the pain caused by this hierarchy-rigid organization, poor adaptability, lack of vitality, lack of innovation, lack of decision-making power of employees, and so on. To this end, some enterprises will carry out internal changes, for example, introducing network organization structure into project management and establishing small-scale borderless departments, but these changes are partial and cannot fundamentally solve the problem.
In order to completely eradicate the disease of large enterprises, some knowledge-based enterprises in the United States began to try to establish an "inverted triangle" organization, which is completely opposite to the traditional organization and is usually called an "inverted triangle organization". For example, NovaCare, the largest rehabilitation nursing enterprise in the United States, has established an "inverted triangle" organization, turning every employee (therapist) into a "boss". This structure basically eliminates the hierarchy and delegates power to experts who directly face customers, which greatly enhances flexibility and competitiveness. Of course, there are also cases of failure. For example, PeopleExpress, although it reversed the organizational structure, failed in the end because it lacked a system for employees to adjust themselves with the development of the organization.
The attempts of these enterprises have made multinational giants see hope, but few people have tried, because they are worried that if the "reversal" is unsuccessful, thousands of organizations will have big problems. After all, the implementation of the "inverted triangle" structure is mostly small and medium-sized enterprises, with thousands of employees at most.
However, Haier Group from China made a breakthrough. After nearly seven years of exploration, it has reversed the traditional "regular triangle" organizational structure and become the first large multinational company in the world to adopt the "inverted triangle" organizational structure. So, why does Haier want to reverse its organizational structure? What is its "inverted triangle" organizational structure? More importantly, how does it ensure the effective operation of the "inverted triangle" organization? This paper will try to uncover these secrets.
Haier's "inverted triangle"
Haier's "inverted triangle" organizational structure reform began in 2006. In the same year, at the invitation of a British management consulting company, I participated in Haier's strategic performance management consulting project and worked in Haier for nearly half a year. Since then, Haier and I have formed an indissoluble bond. In order to track the change process of Haier, even after the consulting project, I go to Haier for investigation and interview every quarter or half a year to obtain "real-time data" of organizational change.
Even if they are all "inverted triangle" organizations, different enterprises still have different practices. Let's get to know Haier's "inverted triangle" first.
From the sidebar "Schematic Diagram of Haier's Inverted Triangle Organizational Structure", we can see that "Inverted Triangle" has made subversive changes to the traditional organizational structure.
In the "inverted triangle", customers are placed at the top of the organization, which highlights the "customer-centered".
It is the first-class business entity that directly contacts customers, directly faces the needs of users and provides solutions for users. The first-level operators are mainly divided into three categories: R&D, users and manufacturing.
In the middle of the organizational structure, there are secondary operators-providing resources and service support for front-line operators-including human resource management, supply chain, marketing, quality system, strategic management and so on. So it is also called platform operator.
The bottom of the organizational structure is a three-level management organization, which is responsible for internal coordination and external discovery of new strategic opportunities. Therefore, it is also called the strategic management organization.
In Haier, self-management is the basic unit of an enterprise. Every self-employed enterprise is like a micro-company, which has the right to use human rights, make decisions and distribute profits. By the end of 20 12, more than 80,000 employees in the world belonged to 2,233 self-operated enterprises. Like the whole group, each individual business entity is a small "inverted triangle" organization.
On the surface, Haier's organizational level has been reduced to three levels. I prefer to use "flattening" to describe Haier's organizational level, because its organizational level has almost disappeared. The leader's position was completely subverted and became the lowest level of the organization. Of course, this is not only a change in form, but also a great change in the role and responsibility of leaders-from the traditional "commander" to "server and supporter"
At this point, we have a basic understanding of the four elements of Haier's "inverted triangle" organization, namely customers, independent operators, management levels and leaders. Compared with the "regular triangle" organization, Haier's "inverted triangle" redesigned the core elements of the organizational structure, and its impact and influence on enterprises were also subversive. As a result, many people will have questions: Can such an organization play well?
In fact, any organizational structure includes "explicit part" and "implicit part". The former is a visible structural element, such as department setting and management level, just like a hardware system. The latter is a mechanism to ensure the effective operation of various elements and belongs to a software system. The reason why Haier's "inverted triangle" can stand up but not fall down lies in the software system-a good operating mechanism.
Four mechanisms to keep the "inverted triangle" running continuously
There is only one word difference from "positive triangle" to "inverted triangle", but the two types of organizations and their derived management models are completely different. In this regard, Zhang Ruimin has a deep understanding: "The traditional' regular triangle' structure can make the organization very stable, but it lacks vitality. The' inverted triangle' is unstable, and the static' inverted triangle' is untenable. Just like a gyro, it has to turn to keep it going, and it has to keep turning. It takes two forces to make the' inverted triangle' rotate continuously, namely external driving force and internal driving force. "
In order to ensure the stable and effective operation of the inverted triangle, Haier has formed four core mechanisms through long-term exploration and practice, which constitute the external driving force and internal driving force for the effective operation of the inverted triangle structure, and each mechanism focuses on solving the persistence problem in traditional organizations.
Customer-driven mechanism
In the Internet age, customers' needs are fragmented and personalized. How can we quickly capture these needs? If your company is an "elephant", driven by leaders, then its footsteps may be too clumsy. By establishing a customer-driven mechanism, Haier has a system that can quickly perceive and meet the needs.
In the "inverted triangle", the first-level management organization plays a vital role. They are in the front line of the market and know what customers think. More importantly, they have the decision-making power whether to develop products or services.
In the process of meeting customers' needs, tier-one operators can force tier-two operators to provide resources and process support. For example, when refrigerator operators develop refrigerators, R&D platform can provide technical support and quality management platform can provide quality control support. If there is not enough manpower, operators who undertake human resources functions can be recruited. Similarly, the second-level business entity can also force the third-level business entity. The third-tier operators no longer "give orders", but should ensure effective coordination among different operators, and at the same time pay attention to the general trend and look for strategic opportunities.
Facts have proved that when you approach customers effectively, you can find and even create demand. The birth of Haier baby appliances is an excellent case.
At the beginning of 2009, Diao Yunfeng of Haier International Trading Company discovered the distress of young mothers-when making milk powder for their children, the water was either hot or cold, and there were bubbles. Diao Yunfeng believes that there are business opportunities in customer distress, not to mention that there are nearly/kloc-0.80 billion newborns in China every year. So, under his leadership, Haier set up a baby appliance stakeholder (this stakeholder usually needs several independent operators to cooperate), and Diao Yunfeng wants to work with (platform interface person) and Shi (marketing interface person) to provide solutions for mothers.
In fact, they don't know what the solution is, so they go to the baby tree, the largest online platform for mothers and babies in China, and ask their mothers. The exact users of "Baby Tree" exceed 1 10 million. How can we get the real thoughts of mothers? Shi found three maternal and child experts and six maternal and child experts to provide services for mothers together with "Baby Tree".
Haier builds a virtual network platform "Youzhi Mami Hui" to share users' resources with "Baby Tree"-mothers ask a question in "Youzhi Mami Hui" and synchronize with "Baby Tree". Online interaction attracted hundreds of thousands of mothers to participate in the discussion.
In the process of interaction, mothers spoke their minds: "It's inconvenient to adjust milk in real life", "If only there was a milk churn", "There should be a scale on the milk churn to observe the water quantity", "The water in the milk churn must be at a constant temperature" and "no bubbles will be generated" ... So the idea of a constant temperature milk blender came into being.
Finally, Haier developed a constant temperature milk regulator, which is unique in the baby appliance market. Because the whole product development process is open online, it has attracted more than 5.6 million users' attention before the end of product creative interaction. 20 12 12, the product was officially put on the market, and before that, there were already 30 thousand reservation orders.
In Haier, there are many similar cases. The essence of their similarity is to set goals based on customer needs, such as "zero defect" in quality and "24-hour limited delivery". And through these goals, the internal value chain links and operating systems are forced to achieve zero distance with customers. Obviously, this is an external driving force.
Contract mechanism
How to turn the external customer demand into the goal of every employee inside? Haier explored the contract mechanism, which is an important source of the internal driving force of the inverted triangle.
In large enterprises, too many layers are like layers of walls, which leads to difficulties in cooperation and low efficiency. Contract mechanism breaks hierarchical management and promotes internal coordination.
In Haier, different business entities are customers, and each business entity serves and enjoys the services of other business entities. For example, among the first-level business entities, the R&D business entity signs an exclusive sales contract with the market business entity, and the market business entity signs a customized contract with the production business entity. The same is true between the first-order operator and the second-order operator. Both parties need to be clear about what resources and services need to be provided in a certain period of time, what the cost is, and how to share the excess profits if any.
20 13, 13 in June, Haier crystal drum washing machine landed in the European market and achieved great success. This product is developed, designed and sold by "washing machine stakeholders"-this "stakeholders" includes several independent operators, including first-level R&D operators, production operators, sales operators, procurement operators, as well as second-level human resources operators, financial operators, strategic operators, procurement operators and so on.
Crystal washing machine is led by R&D operators, and all operators have begun to participate in the product design stage. Based on customers' demand for "quiet and clean" washing machines, R&D operators refine their value proposition into a series of goals and tasks, and outsource them to relevant operators. For example, the purchasing operator is responsible for purchasing related parts to reduce noise, the production operator is responsible for producing low-noise products, and the sales operator is responsible for obtaining orders from the market ... If the operator fails to complete the contract, the R&D operator can file a claim according to the contract.
In other words, the relationship between independent business entities is not a hierarchical relationship in the traditional sense, but a contractual relationship-the essence of this relationship is the exchange and appreciation of value. Zhang Ruimin said: "In Haier, the relationship between superiors and subordinates has become a contractual relationship. Haier's contract is full, and every employee signs a contract with the user, which will become the internal driving force of the whole. Everyone will be self-driven and the whole system will run around users. "
In the contractual relationship, "survival of the fittest" is the highest law. An employee who has worked for nearly eight years said: "In Haier, everyone should find their own customers and create value." When I interviewed the human resources department of Haier White Goods (Haier kept the department name for communication), the person in charge here told me that the employees of the human resources department need to integrate into the front-line operation and work with the employees of the front-line operation: "They evaluate the performance of the human resources department. If we can't provide support, there will be no budget and no salary. "
In the contract mechanism, how to price is a sensitive and complicated problem. In order to solve this problem, Haier reconstructed the financial management system, which is different from the traditional financial management system in three aspects: First, it can not only calculate the self-operated enterprises according to quantitative indicators such as profits and costs, but also calculate the value according to qualitative objectives such as tasks. Two, financial management personnel including business finance, professional finance and * * * services. Among them, business finance personnel are mainly integrated into various business entities such as market and R&D, providing decision support for independent business entities, accounting for 70%. Thirdly, establish a huge database to track the data of various businesses, including enterprises in the industry, so as to provide a basis for pricing.
"One person, one prize" mechanism
Most enterprises adopt "post salary", and the basis of this system is position. Haier, on the other hand, has adopted a completely different mechanism-"one person and one salary". This mechanism and contract mechanism work together organically and become the internal driving force of "inverted triangle".
So, what is "single salary"? In Haier, every self-employed entity and individual is a node in the process of value creation, and this node is highly dynamic, and the basis of its existence is "single", that is, the goal. Each node needs to identify its own customers (external customers or internal customers), convert customer requirements into its own "single", and then get paid according to the completion of the "single", which is called "one person pays". So there is a very popular saying in Haier: I create my users and share my added value.
For self-employed entities, it is necessary to identify and complete valuable "orders", otherwise they may be merged, reorganized or eliminated; As far as employees are concerned, their work is highly dynamic. Because of the "single" change, everyone needs to find valuable goals to integrate into an independent management body.
In Haier, each business entity and employee has a "single payroll", which closely combines the salary of the business entity or employee with the value it creates for customers. The "one person, one salary" mechanism includes two key links:
The first link is prepayment, that is, "winning ahead of time"-every self-employed person or employee needs to lock in his own profit space in advance. According to this principle, they first need to be clear about their customers and promise to achieve the goal of first competitiveness. Only by taking the goal as the first competitiveness can we share the "added value".
The advantage of this is that it can stimulate the vitality of employees and create greater value for customers. "Internally, we call advance payment' raising bills and highlighting high salaries'. Capable people will strive to get high orders and high salaries. This mechanism is transparent and can stimulate everyone's enthusiasm. Because we need to win ahead of time, we are forced to think about the paths and methods to achieve our goals. " An employee said.
The path and method mentioned by this employee is called "pre-planning" by Haier, and together with "budget" and "advance payment", it forms Haier's unique "ternary system". The management logic behind it is that if we want to motivate employees, we must make clear the standards and direction of motivation in advance and help employees determine their goals and the path to achieve them.
The second link of the "single salary for everyone" mechanism is "narrowing the gap", that is, narrowing the gap between the status quo and the goal. Through advance payment, employees already know the salary standard and sharing mechanism. However, there may still be a gap between the actual salary and the advance payment. There are usually four situations: (1) The goal achieved is lower than the industry average, and employees can only get the basic salary and must be promoted within a time limit, otherwise they may be eliminated; (2) When the achieved goal is at the industry average level, the corresponding salary is 90% of the industry salary level, and employees must make improvement plans; (3) When the target is slightly higher than the industry average, the corresponding salary is the industry-leading salary level; (4) When achieving the goal belongs to the first competitiveness of the industry, the corresponding salary is the first competitiveness salary of the industry.
The essence of narrowing the gap is closed-loop optimization and continuous improvement. An interviewed business manager said: "In the prepaid link, we set the goal of the first competitiveness and the realization path. If we don't get the corresponding return, it must be that there is something wrong with the path and method. This requires us to improve our work and rethink the target path, thus narrowing the gap between the previous payment and the result return. "
Mechanism of "mutual election of officers and men"
Compared with the traditional organization, the biggest change of the "inverted triangle" is to subvert the position of the leader, and to subvert the leader from the traditional "commander" to "server and supporter". "De-leadership" is an important topic of Haier's organizational change, and "mutual selection of officers and men" is an important means of "de-leadership".
Among the dozens of managers I interviewed, most people think that "mutual election of officers and men" has established a driving mechanism of up-and-down interaction in the "inverted triangle" organization. This mechanism is another important source of the internal driving force of the inverted triangle.
In the traditional "regular triangle" organization, the driving mechanism of enterprises is from top to bottom, and the driving force mainly comes from senior leaders. As the saying goes, "When the leader pushes, the following moves." This mechanism relies too much on the personal ability of the leader, and once the leader makes mistakes in the strategic direction, it will be fatal to the organization. At the same time, this driving mechanism makes the enterprise's target management system also "top-down"-usually senior leaders set goals and decompose them into employees layer by layer. Due to the lack of interaction between superiors and subordinates, this system makes employees have almost no say in their own goals and can only passively accept them. Obviously, this will reduce employees' sense of identity with the goal, thus affecting the achievement of the goal.
Haier's "inverted triangle" subverts the traditional leadership appointment system. In Haier, leaders are not appointed by superiors, but are selected and optimized through the mechanism of "mutual election of officers and men".
First of all, determine the operating period, and anyone can come up with an implementation plan, including "three pre-plans" (budget, pre-plan, pre-payment) and so on, and openly compete for posts. Zhao Feng, the manager of Haier Qingdao Community Store, said: "My body length is not specified, but is produced through the' mutual selection of officers and men'. There were many people participating in the competition at that time. The company has a special Committee to choose. "
The committee mentioned by Zhao Feng is composed of horizontal departments, employees and customers. Their main responsibility is to choose the management length according to the implementation plan provided by the candidate.
When the manager is selected, he can form his own team. "The manager will post a specific' single' online. We need to make a plan according to the requirements of' single' and accept the body length examination. In Haier, we call this process' grabbing orders'. " An employee said.
In self-employed enterprises, employees have an important right-to optimize their operating years. If the self-employed entity fails to achieve the expected goal, the employee has the right to "dismiss the class". Usually, if more than two-thirds of employees don't recognize their body length, they can start the recall procedure and re-select the person in charge.
Because managers do not have a fixed term of office, they are always subject to the test of results and the "election of officers and men." So a manager said: "In Haier, the pressure of being a leader is quite great, unlike the leaders of some enterprises who can cope with everything. In Haier, employees will be forced, and we need to accept the assessment of employees. If you can't provide good service and support, you may be dismissed. Of course, we are not a leader now, just a node. What we have to do is actually leadership. "
The Power and Challenge of "Inverted Triangle"
Haier's "inverted triangle" subverts our understanding of the traditional organizational structure, making this traditional household appliance enterprise increasingly open and developing into a more open network organization.
It is painful to subvert the tradition, but the "inverted triangle" has also brought rich returns to Haier. From 2007 to 20 12, Haier's annual compound profit growth rate reached 38%, more than twice the income growth rate. The cash turnover days reach MINUS ten days, while the peer companies usually have about thirty days.
Why is the inverted triangle organization so powerful? As mentioned above, first of all, the "inverted triangle" puts customers first and establishes a customer-driven mechanism, thus greatly shortening the distance with customers. Zhang Ruimin regards "zero distance with customers" as the primary goal of organizational change. He said: "The personalized needs of users are fragmented, just like a colorful mosaic wall. Therefore, the enterprise cannot be monochrome, and it must correspond to the mosaic wall. " Secondly, through the establishment of contract mechanism, the zero distance of internal coordination is promoted. Finally, Haier reconstructed the value distribution system and power system, reshaped the relationship between people and organizations, and released everyone's vitality through the mechanism of "one single reward for each person" and "mutual election of officers and men". Yang Mianmian, former president of Haier Group, said: "The most difficult thing for people to accept is management, and the best management is that there is no passive management. The purpose of Haier's transformation is to let everyone manage themselves, drive themselves and operate themselves. "
Of course, there is no such thing as a free lunch. Compared with the traditional "regular triangle" organization, "inverted triangle" organization will also bring some special challenges. If it cannot be identified and handled, enterprises may "subvert" themselves while subverting the organizational structure.
First, the "inverted triangle" will lead to the loss of authority of leaders, and leaders must change the traditional management methods. In most enterprises in China, the "leadership-centered" management model has a far-reaching impact on the organization. Eliminating authority requires leaders to start from themselves.
Second, the "inverted triangle" puts employees in an important position and maximizes their strength. The increase of power means the improvement of freedom. How to balance the relationship between freedom and control will become crucial. Facts have proved that if decentralized enterprises do not establish an effective information and management control system, it is likely to lead to management out of control.
Third, the "inverted triangle" regards "customer first" as the core gene of the enterprise and the driving force of change, requiring organizations to constantly open their own boundaries and quickly identify and meet customer needs. Enterprises must honor their commitments to customers and effectively integrate customer resources, otherwise they may lose the trust of customers.
Fourth, the "inverted triangle" takes employees as the protagonist and enterprises as the platform for employees to "start a business". Among them, the important management mechanism is to maximize employee compensation and performance. This model greatly increases the risk of employees and poses a great test for their risk tolerance.
Fifth, the "inverted triangle" takes "flattening" as an important goal of reform, greatly reducing the middle management level and leadership positions, and bringing new challenges to internal communication, information transmission and decision-making mode. If the enterprise can't build an effective communication system, it may lead to an increase in communication cost and difficulty, and even a chaotic situation of "leaderless".
Can your organizational structure be reversed?
Has Haier's organizational change reached the end of success? The answer is obviously no, Zhang Ruimin thinks: "There is no such thing as success, all success is just a self-image."
W.EdwardsDeming once pointed out: "People are born with passion, achievement motivation, self-esteem, dignity, curiosity and happiness in learning." However, why do these things disappear without a trace in many enterprises?
In management, we believe in the most basic principle-structure determines behavior. In other words, any human behavior is the product of structure and system. We firmly believe that every employee has the motivation to succeed and wants to contribute to the enterprise. The external force that destroys employees' creativity and passion is obviously related to the traditional organizational structure and management system.
The "inverted triangle" organization undoubtedly provides a new direction for solving this problem. So, can Haier's "inverted triangle" structure be replicated? This may be a question that many people will ask. Frankly speaking, there is no management model in the world that can be completely copied from one organization to another.
Why? There is a simple reason. Only tools and methods can be copied and imitated, that is, the "iceberg emerges from the sea" in management mode, while the management system and management concept, that is, the "iceberg sinks into the sea" in management mode, cannot be copied and imitated. We can't copy the management environment and ideas of Haier people, and naturally we can't copy its organizational management model.
However, not being able to copy does not mean not being able to learn. On the contrary, abandoning copying thinking and adhering to a learning and open mind can effectively absorb and learn from the essence of Haier's management model and use it to guide enterprises themselves. I believe that in the process of organizational change, other enterprises can also find their own model, whether your organizational structure needs to be reversed or not.
Summary of opinions
The organizational structure of most enterprises is a "regular triangle", which looks like a pyramid, but Haier has achieved a breakthrough. After nearly seven years of exploration, Haier has reversed the traditional organizational structure and become the first large multinational company in the world to adopt an "inverted triangle" organizational structure. Haier's "inverted triangle" can stand but not fall because it has designed four core mechanisms.
Customer-driven mechanism: from leadership-driven to customer-driven; Goal: Zero distance with customers.
Contract mechanism: from superior-subordinate relationship to equal contract relationship; Goal: internal coordination zero distance.
"One person pays alone" mechanism: from post salary to one person pays alone; Objective: Closed-loop optimization.
The mechanism of "mutual election of officers and men": from superior appointment to equal election; Goal: lead.
Nothing for nothing. Compared with the traditional "regular triangle" organization, "inverted triangle" organization will also bring some special challenges. If it cannot be identified and handled, enterprises may "subvert" themselves while subverting the organizational structure.