Most Chinese entrepreneurs are not interested in interacting closely with academia for a long time. Zhang Ruimin is an exception. After Zhang Ruimin resigned, he was more suitable to be a teacher than Ma Yun.
Author | Ho Ivan
Source | Box Lunch Finance (id:daxiongfan)
The 1149th in depth article | 18 min read
Pre-Editor's Note:
On November 5, at the 8th Employee Congress of Haier Group, Zhang Ruimin officially resigned as chairman of the board of directors and was invited to serve as honorary chairman, and Zhou Yunjie was elected as the new chairman of the board of directors and was hired as chief executive officer. This means that the 72-year-old Zhang Ruimin has completely retreated into the background. Haier Group commented that he has pioneered a new inheritance mechanism that enables Haier to continue to evolve sustainably after transforming into an ecological enterprise.
What do entrepreneurs do when they retire? Most of the founders of this year's Internet manufacturers have chosen to engage in life sciences. What will Zhang Ruimin do? He rarely talks about it in public, but in my opinion, he is one of the few founders in China who has interacted closely with academia for a long time. He does not mix circles, does not participate in forums, but especially likes to communicate with first-class economists and business school professors. His own speeches were also full of philosophical speculation and adept at making concepts.
He also held the Tao Te Ching highly regarded. His understanding and application of the "Tao" is also highly consistent with Haier's change trajectory of "Rendanheyi". The "Rendanheyi" model, which he first proposed in 2005, has also become a management paradigm leading in the era of the Internet of Things after 16 years of exploration.
In addition to the unity of man-billed, he also created more concepts, but we will not talk about these today, only about how Zhang Ruimin's mental model was established.
At a banquet in 2019, I sat behind Zhang Ruimin and looked at him with a smart head with gray hair. They include Eric Maskin, winner of the 2007 Nobel Prize in Economics, W. Brian Arthur, founder of complex science, 2016 Nobel Laureate in Economics, Bent Holmesstrang, professor of economics at the Massachusetts Institute of Technology, and Bill Fisher, professor of innovation management at the International School of Management Development in Lausanne, Switzerland.
This is a battle for the world's top academic forums, but they are not traffic stars in China. If it wanted to make this third Haier single-in-one conference more disseminated, Haier could have made the guests more diverse.
Most Chinese entrepreneurs are not interested in interacting closely with academia for a long time. They were all masters of fighting from the battlefield of Shuluo with one sword and one shot, and they didn't quite believe in sitting and talking. Although he also goes to various emb classes for further study, in addition to socializing, he often only absorbs the most utilitarian landing programs in the academic school.
Zhang Ruimin is an exception.
After he resigned, he may be more suitable to be a teacher than Ma Yun. He has few records of public interaction with other entrepreneurs in China, does not mix circles, does not participate in forums, but especially likes to communicate with first-class economists and business school professors. His own speech is also full of philosophical speculation, and he is good at creating concepts, and this time he proposed a "win-win evolutionary ecology of chain groups". The so-called "chain group" is haier's initiative, that is, an ecological chain of small and micro enterprises and small and micro partners to jointly create user experience iteration. Of course, to understand this concept, you must first understand what is "small and micro" and what is "rendanheyi", which is also Haier's initiative.
In his more than 40-minute speech on September 21, 2019, Zhang quoted Hindu doctrines, Michael Porter's value chain theory, Taleb's Asymmetric Risk, Hammurabi's Code, Plato's Republic, Shakespeare's play, Holmstrang's theory of the complete contract, Schumpeter and Drucker's discourse on entrepreneurship, Na Zohar's quantum management, and the atomism of the ancient Greek philosopher Democritus. He absorbed the essence of a large number of ancient and modern Chinese and foreign ideas, and integrated them, which required a kind of "meta-thinking" as a basis, which was like the "Little Wuxiang Divine Gong" in the Eight Parts of the Heavenly Dragon, which operated the seventy-two skills of Shaolin, and for Zhang Ruimin, it may be Taoist thought.
Brian Arthur, the heavyweight speaker at the event, also studied Taoist thought for 33 years, and he not only studied Lao Zhuang, but also practiced monasticism. He and Zhang Ruimin met for the first time, the two had a common topic, chatted happily, and Zhang almost missed the opportunity.
"Complex Economics" has the flavor of the Tao Te Ching, and the core is that the economy will be in an unbalanced state. In this system, actors constantly change their actions and strategies in response to the results they have created together. That is to say, in this system, the actor will constantly create an "ecology" that the creator himself must adapt to.
Complex economics is too advanced in the West, but Zhang Ruimin resonates with this, he believes that the "self-organization" promoted by Haier is a "necessary condition" to deal with complexity and imbalance, and through the establishment of a small and micro ecology in Haier, it can break the spell of diminishing marginal benefits of traditional organizations and achieve "marginal return increase".
Zhang Ruimin greatly admired the Tao Te Ching, and once quoted a sentence in the "History of Tai Shi Gong Self-Introduction": "It is easy to refer to the covenant, and it is easy to do less and more to do." This is Sima Qian's evaluation of Taoism, referring to "the main idea is simple and easy to grasp, and the things are few and the achievements are great." In Sima Qian's view, the schools of thought such as yin and yang, Confucianism, ink, fame, and law have their own advantages and disadvantages, and only Taoism covers the advantages of these several, and there are no shortcomings of their own.
In a paper entitled "Taoist Philosophy and Zhang Ruimin's Management Thought", it was mentioned that on May 4, 1999, the Qingdao Youth League Municipal Committee invited Zhang Ruimin to write a webpage preface for young people, and Zhang wrote a sentence: "Proud of the form, frustrated without losing attitude." This comes from The Tao Te Ching chapter 13: "What is insult? Spoiled, gained as a surprise, lost as a surprise, is a pampered humiliation. Chapter Twenty-Six also says, "The weight is the light root, and the quiet is the restless king." It is a saint who walks all day long without departing from the weight, although there is a view of glory, the swallow is transcendent. Why should he be the Lord of all multiplications, and lighten the world with his body? The light is lost, and the impetuous is lost. ”
The Tao Te Ching expounds the Tao Te Ching, the Way of Society, and the Way of the Universe, and is the fundamental classic of Taoism. People who do not understand often think that the Tao Te Ching is a negative hermit philosophy, but it is actually a positive doctrine, including governing the country, self-cultivation and many other aspects. According to the evaluation of Mr. Hu Fuchen, professor of the Department of Philosophy of the Chinese Academy of Social Sciences and an expert in Taoist studies, Taoism and Confucianism have different characteristics of "home-country isomorphism" and are a kind of "body-country isomorphism" learning. "Persisting in unifying the masses" and "keeping the middle and making peace" are the characteristics of Taoism's "morality." This is a book of salvation, and the crux of the matter lies in taking "doing nothing" as the body, using "nothing for nothing", taking a "sheng" character as the source, taking a "hua" character as the background, taking a "cause" word as the cardinal, taking a "medium" word as the outline, taking a "he" character as a tone, responding to world affairs with a "forbearance" character, practicing Dan Dao with a "reverse" character, and pursuing the highest artistic realm of life in harmony with the Tao.
The Tao Te Ching has a strong vitality in modern enterprise management, and the book "Twenty-Two New Management Tools" written by the American management master Abbot Chette quotes Lao Tzu as "the good use of people is an indisputable virtue, it is said to be the power of people", and commented: Lao Tzu has spoken these words for more than 2500 years, which shows that knowledgeable managers have been working hard for a long time, but no one has been able to approach the realm of this Tao. Robert Mundell, the father of the euro, believed that what Chinese believed was the Tao, the way the universe worked, the laws of nature, a unified and spontaneous action. Many Japanese entrepreneurs have drawn nourishment from the Tao Te Ching, and there is a bronze statue of Lao Tzu in the garden of Panasonic Electric Company, and the stone seat is engraved with the Chinese: Dao Ke Dao, Very Dao.
According to the article "Taoist Philosophy and Zhang Ruimin's Management Thought", in early April 1997, Zhang Ruimin was invited to visit Panasonic. When visiting the Panasonic Museum, the conversation quoted a poem by the Tang Dynasty poet Jia Dao, "The Seeker Does Not Meet": "Panasonic asked the boy, and the teacher took medicine, only in this mountain, the cloud is deep and unknown." Then he explained: "Mr. Matsushita Konosuke's business philosophy is as deep as this poem says, but it is not fixed, in general, and as for the effect, it depends on each person's own understanding and application." In fact, people who are successful in enterprises often have the feeling of 'only in this mountain, the clouds are deep and unknown'. ”
A remark made Panasonic executives very impressed. Less than a week after Zhang returned to Qingdao, he received a fax from Panasonic and earnestly hoped to come to Qingdao for corporate cultural exchanges.
Zhang's understanding and application of the "Tao" is highly consistent with Haier's change trajectory of "Rendanheyi".
He has promoted "water" management at Haier. Lao Tzu said in terms of water, the so-called "good is like water", "water conservancy of all things without dispute" (Tao Te Ching, Chapter VIII), "The reason why Jiang Hai can be the king of the hundred valleys, with his goodness, can also be the king of the hundred valleys" (Tao Te Ching, chapter 66).
The Tao Te Ching regards water as the material prototype of the Tao, and the Tao is the philosophical sublimation of water, which derives the meanings of submergence, spiritual change, accumulation of energy, open convergence and endless life (quoted from "Zhang Ruimin's Water Management Philosophy and Its Theoretical System", by Hu Guodong and Li Miao, published in Foreign Economics and Management, No. 3, 2019). In 1994, Zhang Ruimin wrote a majestic essay "Haier is the Sea", which can be regarded as a deduction of the "water virtue" management version of the "Tao Te Ching": Haier should be like the sea, only the sea can absorb hundreds of rivers with a broad mind without being afraid of its delicate currents; it can tolerate dirt and can be purified into clear water. It is precisely because of this that there are rolling Yangtze River, turbid Yellow River, trickle, at the expense of thousands of twists and turns, scrambling to come. Convergence into a vast blue wave, inexhaustible, unparalleled magnificence!
He later proposed that "the organization has no boundaries", turning the original pyramid-shaped bureaucratic system into a network organization, breaking the lock of power, changing the management structure of "up", "middle" and "bottom", which is also an interpretation of "Haier is the sea". In 2015, he said in "A Letter to Makers": When he wrote that Haier was the sea, now Haier is a cloud, no matter how big the sea is, there is still a margin, and the cloud is small, and it can be connected to thousands of ends. This can be seen as an upgrade in the understanding of water.
He applied the concept of "doing nothing" to "self-driving, self-organizing, self-evolving." The idea of "the Tao always does nothing, and nothing happens" (Tao Te Ching, chapter 37) runs through the Tao Te Ching, and the "nothing" here is not "nothing", not inaction, but no trace, and goes with the flow. Zhang realized that the organization as the center learns to let go, and self-organization can do it.
The essence of "unity of man" is to regard "man" as an end rather than a means. "Rendanheyi" sounds a bit mysterious, simplified, "people" is employees, "single" is user value, employees and user value are integrated. A win-win situation is achieved when each employee is responsible for the user, not for the superior.
To release the value of everyone, it is necessary for front-line employees to truly have the "three rights", that is, decision-making power, human rights and distribution rights, and find a new balance between control and autonomy. Throughout Haier's transformation in the past two decades, the essence is to explore how to redefine the role and meaning of people in the organization, the new relationship between people and organizations, and how to truly respect human nature and recognize the independent value of the individual itself.
He also has a "weak positioning", proposing that enterprises are always weak and users are strong. Chapter 40 of the Tao Te Ching says: "The movement of the opposite tao, the use of the weak tao", which is the core of the scripture, Zhang believes that enterprises will develop in the opposite direction when they are large, and no large enterprise has always stood firm. Putting yourself in the position of the weak may become stronger. We must regard users as strong and always meet user needs. "User-centric" is Haier's belief that customers, consumers, and end users are value arbiters, and enterprises pay according to the value created by employees for users.
To do this, the most important mindset is "self-righteousness" rather than "self-righteousness." The first of Haier's values is self-righteousness, always taking users as right and self as wrong. Zhang spoke at the Third Haier Congress of The Unity of the Haier people, talking about self-denial as Hegel's philosophy. "Why self-denial? Human beings want to pursue the absolute spirit, and no one has an absolute spirit and does not know what the absolute spirit is. The path to the pursuit of the absolute spirit is to reflect and reconstruct. Reflecting on what has been done wrong in the past and needing to be changed, refactoring is to make changes and establish new mechanisms. Hegel concludes with the negation of affirmation, negation, and negation. Self-denial is not self-denial, because affirmation is contained in negation, and it will continue to move forward."
This corresponds to the Tao Te Ching in which "all things bear yin and embrace yang, and the breath thinks that it is harmonious" (Tao Te Ching, chapter 42). Zhang interpretation: "Everything is negative yin and yang - everything has two sides of yin and yang, which is system theory. The punch thinks that the sum - 'rush' is conflict, 'and' is not at the end of the peace, 'and' is to achieve dynamic equilibrium. When the business is high, it's like surfing, can you always be at the top of the wave? You can't stand it, you can only keep pursuing dynamic balance."
Zhang's understanding and application of the Tao Te Ching is seamlessly integrated, not fragmented, because the system theory itself is a characteristic of the Tao Te Ching, and even the advantages of Eastern philosophy. The Tao Te Ching advocates looking at problems from a holistic and dialectical point of view, and chapter 2 writes that "there is no symbiosis, difficulty and ease, long and short, high and low, sound and sound, and back and forth", which is about the unity of contradictions. When Zhang talks about Haier's "unity of people and singles", he also mentions many times that "the big system does not cut" (chapter 28 of the Tao Te Ching), which emphasizes the integrity of the mechanism and cannot look at the problem in pieces.
The Tao Te Ching solves the problem of "the fox and the hedgehog" in Western philosophy. In his new book "On Grand Strategy", the famous American scholar John Cadiz discussed the logic of war and strategy, starting with the metaphor of the fox and the hedgehog. This allusion first appeared in the fragment of the Greek poet Archilox: "The fox knows a lot, and the hedgehog has a lot of knowledge." Later, it is interpreted as a fox chasing multiple goals, and its thinking is scattered and centrifugal; while the hedgehog has a single target and is stubborn, and its thinking adheres to a one-way, universal principle to regulate all words and deeds.
Cadiz believes that the human mind is often in a confrontation between the two ways of thinking of hedgehogs and foxes. The former attaches importance to the unity and purity of the goal and ignores the coordination of means; the latter attaches importance to changes in the environment and the assessment of their own capabilities, but often blurs the goal and focus. This confrontation and contradiction are shown throughout the book "On Grand Strategy", and the conclusion is that if the hedgehog is understood as the planning of strategic goals and visions, and the fox is understood as the assessment and regulation of its own capabilities, then the balance between goals and capabilities is strategy. This balance is difficult to reconcile in the dichotomous philosophical system, and the Tao Te Ching sees it as a driving force for social progress.
Zhang Ruimin embodies the balance of "fox and hedgehog". Too mysterious management concepts are difficult to land, and there must be specific mechanisms to cooperate. In order to break through the performance evaluation problem, Haier has created a two-dimensional lattice human capital measurement method, which is a management tool to promote the upgrading of the autonomous operating system with the idea of strategic income statement.
The vertical axis of the dot matrix chart reflects the strategic performance, which comes from the strategic income statement, and the horizontal axis shows the traditional performance, which comes from the traditional income statement. The strategic income statement focuses on off-balance sheet assets, that is, human capital and intangible assets, while the traditional income statement focuses on on-balance sheet assets such as income, profit, cost, etc.
Vertical axis for the cause, horizontal axis for the effect, through the two-dimensional lattice, to drive each employee to interact with the user, in any node to create value to interact, through interaction to let users participate in value creation, so that the product truly reflects the needs of users.
There are many similar innovative management tools, which is a big era of "folding": the most traditional bureaucratic company model is still the mainstream, the Internet has promoted the birth of new platforms, and began to try to subvert the traditional corporate system, and Haier believes that organizations in the era of the Internet of Things should be ecological organizations, able to adapt to the changes of "everything is possible". Zhang Ruimin wants to set off a management revolution in this folding era, and must find unity among various contradictions.
In this way, Zhang Ruimin was limitedly influenced by Confucianism, and he himself said that before 2000, he managed Haier the most from Confucianism. After 2000, especially after 2008, he used Taoist ideas the most. But from another point of view, he still retained the spirit of the "soldier" in the neo-Confucian merchants.
Zhang is an efficient reader who reads more than 100 books a year, including a large number of Confucian classics, and he is also a practical reader who puts himself in reading. When reading traditional classics, he distilled the neo-Confucian spirit into "Inner Saint and Outer King", and later changed the order to "Outer King Inner Saint". "Outer King" is the goal of creating a world famous brand, thus forcing the "Inner Saint", that is, forcing self-learning.
In "The Biography of Su Dongpo", Lin Yutang once briefly talked about his understanding of Buddhism, Taoism, and Confucianism, believing that Buddhism denies life, Confucianism confronts life squarely, and Taoism simplifies life. Without the courage and perseverance of Confucianism, Zhang Ruimin would have been unable to use his great mental strength to turn Haier into a global testing ground for change.
I have been cautious about Haier's new concepts, and their strategic validity needs to be tested over a longer period of time. However, the formation and iteration of Zhang Ruimin's thinking model is a more fascinating part.