Hello from Hamburg,
"Our people need to think more entrepreneurially!", "We need more entrepreneurs in the company!" I often hear such sighs from company owners or management teams. They are an expression of a longing for more speed and flexibility in the organization.
Now, entrepreneurs in companies are one of those things. Real entrepreneurship means dealing not only with successes, but also with setbacks, defeats and personal financial losses. Very few employees want to do that. And those who are prepared to do so either set up their own company. Or they want a share in the company they work for. However, this is not affordable for most ambitious employees because the company value is too high. The call for entrepreneurs in the company therefore sounds like squaring the circle.
The Chinese household appliance manufacturer Haier, with its 80,000 employees, has been demonstrating how entrepreneurship can still work for 20 years. The group is divided into around 4,000 independent micro-enterprises (MEs) with up to 20 team members. There are manufacturing MEs, those responsible for research and development, those with direct customer contact and others with support functions. Each ME has budget and personnel responsibility, sets its own targets and competes with external companies. Each ME is free to purchase services from Haier or elsewhere. For larger tasks, several MEs and external companies temporarily join together to form so-called Ecosystem Micro Communities (EMCs), which, if successful, divide income among themselves according to a predetermined key.
Employees' entrepreneurial freedom pays off. From 2008 to 2018, Haier recorded annual growth rates of 20 percent. And is very quick to develop new products. These include the ultimate recipe for a Peking duck on Haier's Smart Kitchen app, which customers can use to order everything they need to make it a success: from the duck from partner companies to logistics and the Haier oven. Or an app that Chinese students can use to book slots in the laundromats at their universities and which is open to third-party providers for their products in return for a commission. Successful innovations are spun off early on as their own MEs. Team members can invest in these companies and become co-entrepreneurs.
Under the motto "Zero distance to our customers", Haier took a radical step to dissolve the middle management hierarchy level. In a traditional organization, its task is to "cascade down" instructions, targets and key figures from the top into the company. The 10,000 or so middle managers were given the choice of becoming co-entrepreneurs or leaving Haier.
Now, you don't have to be Haier to enable entrepreneurship. In my company, we have been digitizing and automating tried-and-tested processes for organizational and leadership development for some time now and have started to develop software-as-a-service products from them. Colleagues who help to drive these or other new businesses forward can become co-partners of spin-offs in conjunction with their own investment.
Perhaps the sighs mentioned at the beginning don't have to be taken at face value. I know excellent salaried managers (and was one myself) who make their job their own as if it were their own company. For colleagues who want to be entrepreneurs directly and for their organizations, the Haier model offers a double win. In uncertain terrain, speed, agility and a willingness to experiment are key. Exposing new businesses to the challenges of the market in a protected space as a spin-off allows them to be tested under real conditions at an early stage. And for entrepreneurial top performers, co-ownership in an existing company offers attractive prospects.
