Top management thinker tells business bosses how to be guided by customers

The rise and fall of an enterprise depends not on its assets but on its people, according to Zhang Ruimin, chairman and CEO of Haier Group, who spoke at a management ideas sharing event in London on Monday that was part of the Thinkers50 Awards Gala.

The event, which is held every two years, attracted more than 100 business managers, scholars from world-renowned business schools including Columbia Business School, and media guests from the Financial Times, Harvard Business Review, and others.

Zhang has been included in the ranking of top thinkers since 2015 in recognition of his innovative management philosophy that "blends the essence of traditional Chinese culture with modern Western business concepts", according to the Thinkers50 website.

He has developed his own management ideology, Rendanheyi, which he explained to the audience as "two connections".

"Rendanheyi means that we connect each employee and each user, and we connect the employee and the value being created," he said. "Through this way, Haier's employees are led by users. Demands of users are their working directions. Also the employee's payment depends on the value he creates for his users."

Zhang recalled that when he joined Haier 35 years ago, in order to make employees aware of the responsibility they had for the product they produced, he asked them to destroy 76 unqualified refrigerators.

"It's not the destruction of the refrigerator that improves the quality of the product," he explained. "It's about employees being able to realize the importance of being responsible for their products, for the users."

Under Zhang's leadership, Haier transformed from a bankrupt small factory to a world-leading home appliances company. Now, it is working on providing smart solutions for clients, rather than just selling products.

"In the era of the Internet of Things, users' needs are becoming more and more personalized, and enterprises need to provide users with solutions in different scenarios," he said.

"Instead of a refrigerator, users need a complete solution in the kitchen, which can tell them how to cook, what to eat and so on. In the era of the Internet of Things, products will eventually be replaced by solutions, and the industry will eventually be replaced by ecosystem," he said.

When it was launched in 2001, Thinkers50 was the first-ever global ranking of management thinkers. The listing has been published every two years since then, and remains the premier ranking of its kind.