In the Fourth Industrial Revolution
A new paradigm of regeneration – ecological branding
——Zhang Ruimin, Chairman of the Board and Chief Executive Officer of Haier Group
Keynote speech at the 5th Rendanheyi Model Leadership Forum
The Fourth Industrial Revolution has arrived, which is a very big challenge for the whole world, in this challenge, either self-evolution and coexistence with the times, or self-rigidity, eliminated by the times. The symbol is whether it can create an ecological brand. Ecological branding is not a simple product brand, but an Internet of Things paradigm system.
The infinite cycle of "three self" and "three new"
Build an Internet of Things ecological brand system
The ecological brand system can be summed up as "three self" and "three new": "three self" - independent people, self-organization, self-circulation; "three new" - new model, new ecology, new paradigm.
The "Three Selfs" begin with the "Autonomous Person". All employees have changed from passive performers in the original enterprise to autonomous people. Only when you become an autonomous person can you reach the second "self"—self-organization. With the foundation of the autonomous person, it can become self-organization. Self-organization subverts the bureaucratic system. The basis of all small micro and chain groups is autonomous people. Realize self-organization and then enter the third "self" - self-circulation, self-circulation of ecological value. It turns out that the enterprise creates the value of the product, and the transaction is completed after the product is sold, and there is no "self" cycle. But what eco-branding provides is a scenario that keeps looping itself.
"Three self" corresponds to "three new". The first "new" is the new model, a new model based on the unity of the people. The second "new" is the new ecology, a new ecology based on the chain group contract, and the third "new" is a new paradigm, a new paradigm based on the ecological brand.
The creation of ecological brands is a very large system, and the "three self" and "three new" are not static, but infinitely cyclical.
It is very difficult to establish such a huge system, but the biggest difficulty lies in the change of concept. We need to reflect on what exactly we want to subvert? Hegel has a saying in Little Logic that everything that arises from reflection is the product of thought. In other words, the real thinking is not to follow the crowd, not to follow the classic model, but to reflect on themselves. Even if it has been successful in the past, it cannot be path dependent. Reflect on whether everything you do keeps up with the times.
Let's disassemble and look at the system of ecological brands.
A new model:
From the economic person in the industrial age to the autonomous person in the era of the Internet of Things
In the industrial age, people were assumed to be "economic people", and "round hole square wood" was the embodiment of the image. The era of industrial economy is like a round hole, every natural person is a square wood, originally everyone has their own shape, but in order to adapt to the times, they have become round, because they cannot survive without molding the appearance required by the times. Chaplin's last silent film, Modern Times, also illustrates this problem vividly. Man becomes a machine that tightens screws, and when he is caught in the machine, he still lies on the gear and tightens the screws. Max Weber once said that in the age of the industrial economy man is a cog in the machine, becoming like the machine, and man can be replaced at any time. Henry Ford, the founder of Ford Ande, once said, I don't hire you, but your hands. Therefore, Marx first proposed a concept in the 1844 Manuscript of economic philosophy - labor alienation. Labor should have increased the value of man, but in reality it was the opposite. He said that "the appreciation of the world of things is proportional to the depreciation of the world of man." The production line runs very fast, the products are produced more and more, and the value is getting higher and higher, but the value of people has not been reflected more.
01
The two main points of creating an "autonomous person" ecology
The most important thing about the unity of man is to turn "natural person" into "autonomous person". What Rendanhe wants to create is not a "walled garden", but a "tropical rainforest". Two important points are here:
The first is to make everyone the main body of entrepreneurship. The three elements of traditional enterprise management are the main body of management, the object of management and the tools of management. Management is divided into subject and object. The manager is the main body of management, and the managed is the employee, which is the object. However, there is no distinction between subject and object in the single-person model. The Internet of Things is decentralized, disintermediated, and distributed, and everyone is the main body of entrepreneurship, not the main body of management. Haier removed the middle management department and removed 12,000 middle managers, and all of them can become small and micro entrepreneurs on their own. This is the most important thing about rendanheyi, that is, to first let everyone become the main body of entrepreneurship.
The second is to maximize the value of each person. Everyone has value, but in the traditional industrial era, after entering the enterprise, you get a position, as long as the work in this position is done well, the enterprise does not care about your other value, nor does it give you the opportunity to create value. But in Haier, since everyone is the main body of entrepreneurship, then you can give full play to your imagination and your potential value.
These two points promote the unity of people to build an ecology that allows all people to become autonomous people.
02
The path to build an ecology of "autonomous people"
To build an ecology that allows all people to become autonomous people, the necessary condition is the release of vitality.
The release experience of vitality changes from natural persons to makers, to small and micro organizations, and then to the ecology of chain group contracts. Chain groups are small microgroups on the ecological chain. All small and micro enterprises can be combined according to the needs of the market. In 2016, a professor at Harvard Business School and I also mentioned that this was a pioneering achievement. This is a creative destruction of the bureaucratic system. In fact, the Harvard Business School professor is also curious, how to manage after removing the bureaucratic system, isn't it chaotic? Haier is actually creative destruction followed by creative reorganization – that is, chain group contracts. Under the premise of no leaders at all levels and no functional departments, rely on chain group contracts to make decisions independently.
To do this, it is necessary to return the three rights, that is, to return the three rights owned by the CEO of the enterprise, such as decision-making power, use human rights, and distribution power, to employees. Many CEOs of companies that come to Haier to study say that it is impossible to return the three rights. There is no such thing as how to control employees. Without these three powers, employees will not listen to commands. In fact, before the industrial age, all employees were originally an autonomous person, but after the industrial revolution, in order to adapt to large-scale manufacturing, managers took all the power, and employees became passive executors and tools. So now we have to return the three rights. Only by returning the three rights can employees become autonomous people.
The first sentence of the French Revolutionary thinker Rousseau in the Social Contract is that "everyone is born free, but he is in chains." "Everyone is born free, but after entering society, there are all kinds of constraints, all kinds of shackles, and they can't be free. To be free, the only way to break the shackles is to break the shackles. By returning the same three rights, employees can be autonomous, at least with the prerequisites for autonomy. In nature, mammals only exploded after the extinction of the dinosaurs. Because there are no natural enemies, food is plentiful. In the enterprise, if the power is in the hands of the CEO, then the CEO is the "dinosaur" of the enterprise. Such "dinosaurs" disappear, all talents may develop, and the vitality of all people can be released.
Creating lifelong users is a sufficient condition for the "autonomous person" ecology.
How do you create lifetime users? Haier has created a win-win value-added table (hereinafter referred to as the common table). Traditional enterprises have three tables - balance sheet, cash flow statement and profit and loss statement, and Haier has created a fourth table - a win-win value-added table. The CEO of the American Institute of Management Accountants said that all listed companies and startups should use this fourth table, because the value reflected in it is not in the traditional three tables. Enterprises around the world use KPIs for assessment, and the traditional three tables are converted into KPI indicators. However, the indicators of KPI assessment are not in the "common table", and the three tables of elements reflected in the "common table" are not.
For example, the first is user resources, and Haier wants to create lifetime users. The traditional three-sheet table has no users, only customers. The product is sold and the transaction is completed. The second is the resource side, Haier and all the resource parties in the ecosystem work together to create a user experience. In the traditional report, only the sub-supplier is reflected, which is the supply relationship. More importantly, the third - ecological value, the traditional three tables have no ecological value, only product value. What ecological value needs is scene and ecology. The fourth and fifth are revenue and cost, and the traditional statement has product revenue and product cost, but there is no ecological revenue and ecological cost. Finally, the most important thing is the marginal benefit. The marginal return in the traditional income statement must be decreasing, which is a core of traditional economics, and the profit of each product is definitely getting lower and lower, but Haier can achieve an increase in marginal return. Because it is constantly creating a new ecology, and this is a zero-friction market, and there is zero distance between users.
The goal of the "autonomous person" ecology is the model of the times, that is, the model of the Internet of Things. At present, there are 10 single-person research centers in the United States, Europe, Southeast Asia, Japan and other countries and regions in the world. These research centers were founded spontaneously by local scholars and entrepreneurs, and more than 320,000 companies have registered to join the Rendanheyi Alliance. Bloomberg, the world's largest financial information platform, said that Rendanheyi was proposed by Haier, but it is no longer Haier's exclusive term, and Rendanheyi has become a management revolution in the era of the Internet of Things that global enterprises have jointly held. The reason why it is no longer exclusive to Haier is because all enterprises in the era of the Internet of Things must carry out this management revolution, and rendanheyi is a good path.
Now the European Management Development Foundation has launched the international certification of Rendanheyi, and has also carried out certification work, 9,000 have entered the scope of Rendanheyi certification, and 8 have obtained the qualification of Rendanheyi certification.
Now the world's top 10 business schools all include Haier's cases, of which Harvard Business School has done 5 single-person cases in 5 years, which is the most done, and it is also the earliest contact with Haier, and they hope to really rewrite the MBA case. Now ISO, IEEE, IEC and other international standards organizations have determined that Haier will take the lead in leading some international standards, mainly in the field of Internet of Things.
The purpose of ecology is to maximize the value of each person. Haier's global M&A model we call it salad-style cultural integration. The mergers and acquisitions of enterprises have their own culture, customs, and different corporate cultures, they are like different vegetables in salads, with different forms, but salad dressing is unified, that is, the unity of people. This is acceptable to businesses all over the world. Because it can highlight the value of human beings, this is accepted by no matter what nation or culture.
In 2016, Haier acquired General Electric Appliances (GEA) in the United States. GEA CEO Kevin Nolan says that the one-in-one is not a manual, but a philosophy. It turns out that GE is the most famous in the world is Six Sigma, which is a kind of operation book, a kind of instruction manual, but the person-in-one is a philosophy. So he can combine the actual situation and do it according to local conditions. Very good results have been achieved. In the five years since Haier's acquisition of GEA, revenue has nearly doubled and profits have nearly tripled, which has also caused a big sensation in the United States. Or the original people, we did not send people, or the original equipment, there is no large-scale transformation at present, but because of the use of the single-in-one, the potential value of each person is fully utilized.
To sum up, the four paths sublimated into autonomous people: first, the necessary condition is that the three rights must be returned; second, the sufficient condition is to create a lifelong user; third, it is the goal, which becomes the model of the times, and only when it becomes the mode of the times can there be the power to survive and the power of evolution; but the goal is not the goal, the purpose is to maximize the value of people, which is eternal.
There are two cases here that reflect the ecology of "autonomous people", one is Liu Zhanjie and the other is Zhang Yu.
Case:
From university teacher to Haier maker
Liu Zhanjie was a university teacher who studied low temperature refrigeration. Technology industrialization has always been a problem that Liu Zhanjie thinks about. After graduating with a doctorate, Liu Zhanjie chose to give up his job as a university teacher and join Haier.
In 2001, Liu Zhanjie became a maker in the R&D team of medical cryogenic refrigeration technology of Haier Academia Sinica. Here Liu Zhanjie is not simply concerned about technology, but more on how to promote technology iteration with user needs.
From maker to startup partner
Haier's entrepreneurship platform supports ordinary employees to set up small and micro companies. In 2005, Liu Zhanjie grabbed the order to become a small micro owner of biomedical small and micro enterprises, and registered an independent legal person company. Driven by the mechanism of user salary and value-added sharing, Liu Zhanjie's team aims to meet the needs of users and continues to innovate with the support of Haier platform technology, capital, talents and entrepreneurial mechanisms. In 2006, Liu Zhanjie and his team developed China's first ultra-low temperature refrigerator, breaking the monopoly of foreign brands in the field for more than 30 years.
Self-created shares: from a venture partner to a listed company "CEO"
In 2014, members of Haier Bio's team gave up Haier Zhijia's equity incentives and became independent from listed companies.
In 2018, Haier Biomedical opened up the introduction of resources, and 67 core management teams and technical team makers followed suit to accelerate the transformation of the Internet of Things. Haier Biomedical focuses on the pain points such as hospital blood collection difficulties and blood waste, based on low-temperature storage freezers, through the interconnection of network devices, to create blood networking scenario solutions, and copy the fission of vaccine networks, sample networks and other scene ecology, in the same year, Haier Biomedical has successfully transformed into a "gazelle" enterprise by virtue of its successful transformation of the life science ecological platform in the era of the Internet of Things.
In October 2019, Haier Biomedical was listed on the Science and Technology Innovation Board, becoming the first enterprise in Qingdao to land on the science and technology innovation board. Liu Zhanjie has achieved the transformation from an ordinary maker to the head of a listed company, and the 67 makers who participated in the bet in advance have also become partners in biomedical treatment. Since its listing, the market value of biomedical medicine has increased by more than 300%, and the company has been included in the first batch of sample companies in the "Kechuang 50" index, the Shanghai 380 Index and other blockbuster indices.
For Liu Zhanjie, the listing is only the beginning of Haier Biomedical's creation of an Internet of Things medical ecosystem, and it is also a new starting point for his entrepreneurial road. After the listing, Liu Zhanjie and his team aimed to become a "dragon enterprise" in the field of biotechnology ecology, with a view to creating and realizing greater value.
Liu Zhanjie and the team have achieved high returns through entrepreneurship, and more importantly, the non-entrepreneurial benefits that Phelps just said are spiritual and can reflect the value of individuals. Phelps said in the book "Vitality" that "a country's high level of independent innovation comes from the vitality of the people, that is, their desire and ability to innovate." Liu Zhanjie and his team have high entrepreneurial aspirations and abilities. Because although there will be failures, it may get high returns, which stimulates everyone's vitality, everyone comes to start a business and innovate, and the country has a really high level of independent entrepreneurship and innovation.
Phelps also has a book called The Great Boom, in which he says that all ordinary people can start a business. This concept is different from the traditional concept of entrepreneurship. The concept of entrepreneurial innovation accepted in the past is what Schumpeter called entrepreneurship, that is, creative destruction. But the limitation is that this innovation refers to a few people. Christensen also proposed the theory of innovation, which is disruptive innovation and continuous innovation, but these innovations refer to products. What Phelps is talking about is that everyone starts a business. He also put forward a very important concept in "The Great Prosperity" and "Vitality", that the modern economy has two elements: one is the foundation of the modern economy, and the other is the characteristics of the modern economy. The foundation of the modern economy is the effective functioning of the innovation system. If an innovation system is to function effectively, it requires the participation of all. Innovation is endless, and only by becoming an entrepreneurial innovation system can it be extended indefinitely. The second is the characteristics of the modern economy, that is, the value cycle embodied in Liu Zhanjie's case.
Case
Bet on millions, from an average marketer to a CEO
Zhang Yu is a post-85s maker who joined Haier in 2010. Initially, he was responsible for the marketing of Haier refrigerators. In 2018, he grabbed a single to become a small micro-owner of the smart kitchen, opening the exploration of the kitchen scene. At work, Zhang Yu found that having a high-quality kitchen does not mean being able to enjoy high-quality food.
In August 2020, Zhang Yu "lifted a single" to set up a smart cooking chain group, attracting chefs, gourmets, food factories and so on to join the co-creation. In November 2020, the one-click roast duck scene was born under the co-creation of the smart cooking chain group, chef Zhang Weili, and duck farm. More than 20,000 are sold every month, which is equivalent to the sales volume of a roast duck store for more than 2 years.
On November 5, 2020, Zhang Yu used the house as a mortgage loan, followed by more than 1 million yuan, and the entire chain group of 18 people contributed a total of 2.1 million yuan to establish an independent legal person company. Zhang Yu also went from maker to CEO.
The detonation of the roast duck scene has brought rich value-added sharing to the co-created ecological party, and the overall revenue of chain providers such as roast duck prefabrication, cold chain, and duck farm has increased by an average of 5%, and chef Zhang Weili has now received a value-added share of nearly 100,000 yuan. At present, the smart cooking chain group has attracted hundreds of ecological parties and hundreds of chefs such as Huifa Group, Xinhe Food, Hanrui Food, New Hope Liuhe and hundreds of chefs to co-create food.
With the continuous development of the smart cooking chain group, the market space of the smart cooking chain group is getting larger and larger. In order to attract first-class makers to join the smart cooking chain group to co-create, from the end of 2020 to the present, the smart cooking chain group advocates Yu to open up equity, take out 19% of its own equity, and attract 10 maker partners with rich industry resources (including 8 internal core teams and 2 external ecological partners) to rush into co-creation.
At present, the development of the smart cooking chain group has attracted the attention of many external enterprises and capital, and the smart cooking chain group is expected to get angel financing before October this year.
03
Conceptual reflection
Only what arises through reflection is the product of thinking.
Wang Yangming is the founder of Theory of Mind. His disciples asked him: How can the wisdom of the upper and the lower be immovable? This sentence originates from Confucius's saying that "the upper wisdom and the lower foolishness are inseparable." Shangzhi is the ruler, and Xiayu refers to the common people. These two types of people are not easy to change. Wang Yangming replied: It is not that it is immovable, but it is just that it will not be moved. Meaning that it can be converted. Every ordinary person has ingenuity and can create conditions for him to play, but if he does not want them to play, but only wants to control him, there is no way to change. So it's reluctant to move.
Gary Hammer and Michel giannini co-authored Co-Authored The Rule of Man, which became a bestseller after its publication in the United States. This book boils down to one sentence: "The purpose of human co-governance is to release the human spirit", which is the core of human co-governance.
2. New Ecology:
Subvert the new self-organizing ecology of the bureaucratic system
From walled gardens to "rainforests",
Solve the century-old problem of economics
The "walled garden" is an image metaphor for the modern enterprise. Under the rules, everyone's enthusiasm and creativity are stifled. Max Weber, who proposed the bureaucratic system, pointed out in Protestant Ethics and the Spirit of Capitalism that the bureaucratic system itself may suppress all private initiatives, but the bureaucratic system is one of the elements leading to rational capitalism. That is to say, Max Weber proposed the bureaucratic system, and he also agreed that the bureaucratic system would suppress people's innovative spirit, but it was still necessary to implement it. The reason is that it can lead to rational capitalism, that is, high efficiency is put first, and the innovative spirit of man is ignored and abandoned. Weber realized it, but there was no way to solve it, and he had to give up for the sake of high efficiency and high returns.
Many economists are talking about how to make everyone feel the initiative. Nobel laureates in economics Eleanor Ostrom and Oliver Williamson proposed a third governance force outside the market and government – autonomous governance. The power of the market is what we call the invisible hand, and the power of the government is the visible hand, but self-governance is the hand of self-evolution, that is, let each person evolve himself, and each person shows his value. But this is something they have been studying but not solving. In 1776, Adam Smith published The Wealth of Nations, which discussed the invisible hand of the market. But before that, in 1759, he wrote "The Theory of Moral Sentiments" and laid the philosophical foundation of classical economics. In the book, he believes that the market has a "selfless heart". The invisible finger is that can do everything for the sake of profit. But the "invisible heart" means that everyone has a heart that benefits him, that he has a selfless heart, and that he wants to lead the invisible hand with a selfless heart, but he does not do so. This is a historical necessity, but it is difficult to do.
Haier today uses chain group contracts to solve this problem.
The ecology of the chain group contract completely subverts the bureaucratic system. In the past, it was research and development, manufacturing, sales, after-sales, manpower and other departments, but now it has become a small micro, small micro around the user, aggregated into a chain group. One type is called the experience chain group, which is directly in contact with users; the other is called the single chain group, which creates user value. The experience chain group discovers a need of the user, integrates with the single chain group, and after the creation of the single chain group, it immediately perceives the user experience and optimizes iteratively according to user feedback, which also reflects the zero distance. There is no hierarchical reporting in between. Therefore, the chain group contract is both a creative destruction and a creative reorganization.
The PBIS certification is modelled on the RENDAN scorecard. The vertical axis and horizontal axis of the rendanheyi scorecard are two cycles: the vertical axis is co-evolution, centered on the chain group contract, and the leading goal is established according to the user's needs, and after the leading goal, the chain group contract is undertaken, and through the information Nissin to close the difference, after the difference, and then establish a new leading goal, forming a cycle. The horizontal axis is the value cycle, from innovative value, to reorganize new value, and transmit value, after transmission, according to user feedback and then create, the value created is shared by all parties involved, and then create updated value after sharing, which is a value cycle. The combination of horizontal and vertical axes eventually leads to exponential growth.
The chain group contract is a new ecology that creates a positive balance
The chain group embodies the "optimal strategic composition of all participants" as Nash equilibrium through the chain group contract. Now the price war is very fierce, but in fact, everyone is united together to develop a strategy, not to fight a price war, that will protect everyone's interests. But if someone breaks this rule, then the equilibrium is broken, it is not the optimal strategy, that is what it means.
However, the Nash equilibrium achieved by the chain group contract and the Rendanheyi scorecard is not a negative Nash equilibrium, but a positive Nash equilibrium. First, this enthusiasm is reflected in the continuous creation of new value, the continuous optimization of new chain group organizations, which constantly has a higher level of Nash equilibrium. Second, the embodiment is to achieve a real balance of value, that is, the value created by each person and the value shared are balanced. In traditional enterprises, no one knows how much value is shared after creating, it is how much salary can be paid in a month according to the position, even if the value created is large, it has nothing to do with me. Now the whole world is using the double-entry bookkeeping method invented in Italy in the fifteenth century, and the sentence is "there must be a loan, and the loan must be equal." "The financial statements are very simple, a piece of equipment, it is worth 1 million, the right side must be how the 1 million came from, whether it is debt or owner's equity, whether it is own funds or borrowed funds, the two must be paired, not a point can be worse." However, in the enterprise, the value created and the value shared are not equal. A designer designs a product that becomes a blockbuster, but can only get the designer's money. If in the chain group, after the product becomes a hit, it is also necessary to share the money of the value-added part. This is not marx's statement that the value-added of the world of things is directly proportional to the depreciation of the human world, but the chain group contract is to make the value created by each person directly proportional to the value shared.
The system of chain group contracts is completely in line with traditional Chinese culture and the current quantum management in the West. Traditional Chinese philosophy is embodied in eight characters, "overall correlation and dynamic balance", which is also embodied in the I Ching, the first of the Qunjing. In the Five Elements Diagram of Yin and Yang, wood, fire, earth, metal, and water are adjacent to each other, and the materials are interdependent. Water makes wood, wood makes fire, but water puts out fire. This is like an enterprise, becoming the first in the market because there are competitors and co-creators, can not think of themselves as the boss, in fact, is only a part of the ecology.
Professor Dana Zohar, the founder of quantum management, mentions in her new book that "there is no reason, only relationship". Relationships are embodied in quantum holism, that is, everything is connected. For example, the current failure of manufacturing companies is mainly due to two points, inventory and receivables. A bunch of inventory can't be sold, and the huge receivables can't be returned, so it went out of business. But if you want to check who is responsible for inventory and receivables, it is difficult to find out, because the various departments in the enterprise are divided, and anyone can say that there is no responsibility. Research and development is very good, it is not good to build, can not sell out has nothing to do with me; manufacturing to say that the quality is very good, sales did not sell; sales will say because it was not shipped in time, in short, everyone can find a reason. But the chain group contract is that everyone is connected together, coexisting and co-prospering, and it is impossible to find these reasons.
Chain group contracts are dynamically balanced contracts
Specifically, it can be summarized as ecological contracts, full contracts and unlimited contracts.
The chain group contract is an ecological contract. Ecological contracts mean that chain groups are not closed, but self-organizing without boundaries. The traditional contract is based on how much power there is within to design the goal, but the ecological contract is to first set the leading goal, and then integrate excellent talents into the ecology according to the goal. Not all of us in the ecosystem are our employees, but we can also be co-creators online. This is the biggest difference from the traditional closed contracts of the past. Because the chain group contract is a borderless self-organization, it embodies the three elements of ecology - co-governance, co-creation and sharing. Co-governance is co-creation, co-creation produces value after sharing, and then attracts more and better talents to participate in co-governance, forming such a cycle. In this process, there is no one to direct, it is self-directing.
Canadian author Steven Case proposed a concept in The Binary Enterprise – "functional perception". It is by integrating artificial intelligence into the machine that the machine can automatically perceive changes in the outside world, that is, the machine also has a perceptual function. After we communicated with him, he said that he did not expect Haier's people to achieve true functional perception, just like jellyfish. Jellyfish appeared earlier than dinosaurs and survived to this day. Interestingly, it has no brain, no central nervous system, and when its tentacles touch prey, the other tentacles automatically wrap up the prey and paralyze the prey with the toxins on the tentacles. It can be seen that jellyfish can reproduce and survive to this day, not relying on advanced brains and nervous systems.
Chain group contracts are full contracts. The full contract is the zero-distance self-driving and self-optimization of the ecological parties centered on user experience.
Nobel laureate in economics Oliver Hart proposed an incomplete contract. I had an afternoon of conversations with him in his Harvard Business School office. The meaning of incomplete contracts referred to by Hart means that it is impossible to incorporate all the factors involved in both parties when any contract is signed, so there will always be problems and differences in the process. But I told him that our chain group contract could become a full contract. A full contract is all ecological parties joining in, all centered on user experience. In this process, it is not the relationship of procurement, but everyone creates value, so there is no mutual game. Like the balcony scene, there are more than 160 ecological parties to join, and everyone has only one goal is to provide users with a balcony with the best experience. To this end, we have worked together to gradually launch pet balconies, fitness balconies, etc. from a washing balcony, and now 12 constellation balconies have been launched. If it is a contract in the past, there is no way to agree on these new scenarios. Therefore, our chain group contract is to agree on a direction, this direction is to create the best user experience, value-added sharing.
The chain group contract is an infinite contract. This is very important. The chain group contract continues to emerge, fission and evolve with the iteration of user experience. Business Ecosystem Theory Founder James M. F. Moore proposed the theory of business ecosystems in 1993. He argues that "co-evolution is a process in which interdependent species evolve in an infinite circle of interactions." So infinity means that co-creating user experiences, without end, infinite interaction, and infinite evolution. James Cass said in his 1987 book Finite and Infinite Games that "finite games are for the purpose of winning, and infinite games are for the purpose of continuing games". The chain group interacts with the user endlessly and creates the best experience for the user, that is, for the purpose of continuing the game, and the game of this experience iteration has no end. Many companies are now doing limited games, for example, this month set a sales revenue of 1 million target, and finally completed 1.2 million, began to celebrate the over-completion of the task. But does this win make sense? These 1.2 million are not the experience of users, even if they win every month, they may not necessarily grow in the end, and they are even likely to fail and go bankrupt. Kodak is an example, becoming the world's boss and finally going bankrupt.
To achieve an infinite contract is to emerge, to fission, to evolve. Self-emergence is from 0 to 1, and the original creation is not created. Self-fission is from 1 to N, like a balcony scene, from a balcony scene fission out of multiple, just like Mandelbrot proposed fractal theory. Self-evolution is from N to infinity, all the way to becoming an ecological leader.
During the 2020 epidemic, users hope to eat freshly roasted Peking duck at home. But the roast duck process is complicated and could not be made at home. In November 2020, Zhang Yu and Beijing roast duck chef Zhang Weili, pre-production factory, duck farm and others jointly developed the scene of "one-click roast duck".
The roast duck developed by the food network intelligent cooking chain group sold more than 20,000 in one month after it was launched, achieving market detonation. In the past year, some users have continuously put forward the needs of ducks such as too large, too fat, and inconvenient to slice, and the smart cooking chain group has successively iterated out low-fat roast duck, flavored roast duck, sliced duck and other dishes.
In order to better interact with the user, meet the user's experience iteration. On July 30, 2020, The Food Network launched "Alpha Fish", the only Internet of Things food platform for the prefabricated vegetable industry. The platform can open up the last mile of pre-made dishes for users from food supply, to purchase methods, to cooking methods. Up to now, the smart cooking chain group has attracted hundreds of ecological parties and hundreds of chefs, including Huifa Group, Xinhe Food, Hanrui Food, New Hope Liuhe, etc., to co-create food.
The case of roast duck is self-emerging, self-fissioning, and self-evolving. After the electrical network transformer, from 0 to 1, to create a key roast duck, this is self-emergence; after the launch, and according to the user's taste iteration of many types, from 1 to N, this is self-fission; now the launch of the "alpha fish" prefabricated vegetable industry food Internet of Things platform, self-research, brand research and development and other dishes can be done, began from N to infinite self-evolution.
04
Conceptual Reflection – Ashby's Law
Why should we do the new ecology? There are three laws of artificial intelligence, the first of which is Ashby's law: "Any effective control system must be as complex as the system it controls." "Now the scenario formed by artificial intelligence is very complex, so the corresponding control system must be as complex as it is." Wouldn't it be possible to control the complexity of artificial intelligence if more artificial intelligence was used? Not really. Cognitive scientist Margaret Boden proposed that artificial intelligence has three major cognitive powers: combinatorial cognition, exploratory cognition, and transformative cognition. She believes that artificial intelligence is effective for both combinatorial and exploratory cognition, like AlphaGo, which can defeat human Go players, using combinatorial innovation and exploratory creativity. Combinatorial innovation can combine all the chess scores, arrange them, and develop new chess scores on this basis. But the third type of innovation, transformative creativity, is what AI can't do. Because it needs to go from 0 to 1, creatively, artificial intelligence can't do it. The scene needs of the chain group to discover users are what artificial intelligence is not good at.
Three new paradigms: to create ecological value self-recycling ecological brand
Now many companies also want to become ecological brands, but it is difficult. Because the real ecological brand is not a brand created through good product quality. Eco brand is one. Haier has been named the world's only IoT ecosystem brand by BrandZ™ for three consecutive years because Haier has built such a system.
There are three kinds of brands, product brands in the industrial age, such as Nike, Adidas, Mercedes-Benz; platform brands in the consumer Internet era, such as Amazon, Ali, etc., as well as ecological brands in the era of the Internet of Things.
Ecological brands have very prominent differences from the first two brands: product brands are born out of the industrial economy, and platform brands rely on the traffic economy, but ecological brands are experience economies and create user experience; from the perspective of the times, product brands and platform brands are unilateral markets or bilateral (multilateral) markets. However, the ecological brand has formed a co-evolving ecology; from the value point of view, the product brand is the quality premium, the platform brand is the traffic premium, but the ecological brand is to achieve the value self-circulation; from the user point of view, the first two brands only have customer transactions and no users, while the ecological brand creates a lifetime user. These are all needed for the Fourth Industrial Revolution.
Two ecological values self-cycle to form a "tornado" of ecological experience
The ecological brand has formed two ecological value self-cycles: the value self-circulation of user experience iteration and the self-circulation of ecological value-added sharing. After Haier creates user experience value-added, it stimulates enthusiasm through value-added sharing, attracts more outstanding talents and ecological parties to join, and creates a better user experience iteration, which continues to rise in a cyclical cycle. A "tornado" that forms a scene experience. So Haier named the scene brand a three-winged bird. The three-winged bird is a self-portrait of chaos, a chaotic image that computers have evolved through millions of times. The butterfly effect is also a singular attractor. A small change in the initial state can have a huge effect. The butterfly effect image is that a South American butterfly flapped its wings a few times and then caused a tornado in Texas a few weeks later.
The cycle of ecological value is also reflected in the cycle of each person's own potential value. There is a very important dividing line in entrepreneurship - from angel round to A round, the failure rate is very high, so it is also known as Death Valley. Generally speaking, the success rate in the industry is about 10%, and the incubation success rate of Haier's entrepreneurial incubation platform is as high as 50%, the reason is that through the rendanheyi model, everyone can become an independent person, and the ecological brand value cycle and value-added sharing allow everyone to obtain greater value. At present, there are 183 companies on Haier's platform that have won the A round or above, 4 companies that have already been listed, and 18 companies that have pre-IPO.
The most important prerequisite for being able to do this is to maximize the value of human beings, that is, to embody human dignity. In his book Democracy is Possible, Ronald Dworkin writes, "There are two principles of human dignity: one is the principle of intrinsic value, and the other is the principle of individual responsibility." That is to say, everyone has their own intrinsic value to play, and, in addition, everyone has the responsibility to play out the value. But can this be realized in the enterprise, or even if it is, can such an opportunity be created?
Products will be replaced by scenes, and the industry will be "covered" by ecology
In the era of the Internet of Things, a single product may not be valuable, but the scene is valuable; a single industry should not think of becoming the industry boss, and all industries will be integrated. Therefore, the product will be replaced by the scene, and the industry will be "covered" by the ecology. Here a different word "complex" is used, and what I want to express is "reciprocating", that is, the meaning of constant change and circulation.
Separately, the way out for traditional industrial products should be product networking. Through the network device can be connected together, only to reorganize the new value, Haier electric appliance network transformer, reorganized the smart home, food network, clothing network, blood network, vaccine network and so on.
In "The Rise and Fall of American Growth," The American Robout Gordon said that the total factor productivity of the Third Industrial Revolution was only one-third of that of the Second Industrial Revolution. Because today there are not as many new inventions as the previous two industrial revolutions, the productivity of all-factor labor is not high now. Now, entering the Fourth Industrial Revolution is an opportunity to create new scenes through the combination of networkers.
Enterprises in traditional industries are competing with each other, but now they are not competing with each other, and they should form an industrial Internet ecology through the empowerment of the industrial chain and supply chain. Taking the chemical industry as an example, Haier's intelligent chemical industry comprehensive management platform for Shandong Province links 84 chemical industrial parks, which can reduce costs and improve efficiency through empowerment, and can also improve value externally. Internationally, Haier has also been invited to participate in the GAIA-X program in Europe. Haier is the only invited company outside the EU. Build a new system to help small and medium-sized enterprises empower. Germany first proposed Industry 4.0, and also made a lot of Industry 4.0 models, but now it has failed, and now I want to invite us to Germany to help small and medium-sized enterprises empower.
Conceptual Reflections : Understanding the Fourth Industrial Revolution
The theme of our speech today is to be reborn in the Fourth Industrial Revolution and become an ecological brand.
Now it is time for us to have a deeper understanding of what the Fourth Industrial Revolution is. The President of the World Economic Forum proposed that the Fourth Industrial Revolution is the convergence of technologies. Why do we talk about scenarios and ecology, because they are no longer separate products and separate industries, but various technologies are integrated together, eliminating the boundaries between the physical world, the digital world and the biological world. This fusion unfolds at an exponential rather than linear rate. Right now, the Fourth Industrial Revolution is disrupting almost all industries in all countries. All industries must subvert themselves in the Fourth Industrial Revolution, or they will be subverted.
Conclusion
"Know thyself" is inscribed in the Temple of Delphi. In November 2018, I drove two and a half hours from Athens to the Temple of Delphi. The temple, built in the seventh century BC, is now left with only large stone pillars. Once the door of the Delphi Temple was written on both sides of the oracle, on the left is "know yourself", on the right is "all things are not excessive", that is, no matter what not to overdo, a bit like Confucius said "too much", the way of moderation.
"Know thyself" is what Thales, known as the father of Western philosophy, said, but it was really known because of Socrates. Socrates' friends went to this temple to ask for an oracle, and what they got was that Socrates was the wisest man. Socrates listened and visited the very wise celebrities in Greece at that time to seek verification, but found that everyone thought that they had some kind of wisdom, so Socrates finally came to the conclusion that he was considered wise because he "knew that he was ignorant." Socrates never wanted to come up with any new ideas, but to be a midwife of new ideas, to help others produce new ideas. So, all of this today is to let everyone use their potential capabilities, to achieve what Drucker said, and to make everyone their OWN CEO.