Haier’s Micro-enterprises

HAIER changed from Monolithic Businesses to Micro-enterprises.

In most organizations there’s little that supports bold thinking and doing. Old assumptions get challenged only once the business has hit a wall. Not so at Haier.

Every Micro-enterprise is charged with pursuing ambitious goals for growth and transformation – known internally as “leading targets”. Rather than taking last year’s performance as a starting point, objectives are set “outside in”. A dedicated research unit collects product-by-product statistics on market growth rates around the world and then uses that data to establish targets for the Micro-enterprises.

Market-facing Micro-enterprises are expected to grow revenue and profit four to 10 times faster than the industry average. In product categories where Haier lags, the bar is set the highest, since there’s plenty of room to increase share. In areas where Haier leads, the target is more modest but still a multiple of the market baseline. “If you’re number three or four in the market, leading targets force you to think about how to become number one, and if you’re the number one, they force you to think about how to extend your lead.”

HBR Nov-Dec 2018, p. 53-54