How the Internet subverts the times

Text / Xu Guoyun WeChat public number "Xu Fu Ji"

This is Mr. Zhang Ruimin, chief executive officer of Haier Group, at the first China Innovation and Development Forum yesterday, who understood the innovation in the Internet age.

First summary of the core ideas for everyone, of course, I personally feel patiently read the full text to benefit more.

The driving force of the traditional era, the driving force is what? Is the size and scope of the scale to achieve maximum, the scope of the most extensive.

Now that a driving force into the platform, and why changed to platform? I think that the platform is a framework for quick allocation of resources because there is a platform on the Internet where all kinds of resources can communicate without obstacles and then the traditional one can not think of it anymore. We do not know but can interact with each other on the Internet. This platform brings the original driving force Subverted.

Now, the biggest thing for us now is that it's hard for us to set foot on the internet now. Because of what? Subvert the traditional all the classic things.

The zero distance of the Internet now requires zero distance between users and businesses. This is a zero distance to meet the needs of individual users, the large-scale assembly line manufacturing needs today, mass customization, how to make each user what he said.

This is true for every business, but now the Internet is overturned and what is subversive? To center. The so-called decentralization is everyone's center, your internal staff is the center, and why? He is not symmetrical with you, he may know more than you. External users are decentralized. Each user is the center, can be posted on the Internet, you can put his experience, you can instantly become a global live.

Now the hardest thing to do is to organize the adjustment. Because I said earlier that the task of flattening this organization is very heavy. Very difficult, especially in China.

First, the entire system to change.

The second is intelligent manufacturing.

The third is to remove the middle management, I just said that enterprises have become flat from the pyramid, the middle of many management should be removed, and why? Not that you have to get rid of, but the Internet forcing him to make him feel he is useless.

Information of all together, the amount of this person is very large, which should be different. There are many other differences, but in the end all the subversion of people, he is not an end. What is the purpose? The purpose is to subvert a concept that turns everyone, every business person into an entrepreneur. What is the original business everyone? Is an executive. What is business? Enterprise is a management and control system. It is management and control. Now what should be business? Now the business should be a platform for entrepreneurship.

Well-known is not a true knowledge of the things that past success may become a kind of thinking that restricts your transition to the Internet today, really know what? It is truth, but it is true that there is no one thing that needs to be explored.

【Speech】:

Mr Ai has been acquainted with me for more than 20 years and can be very helpful in this process. He is my teacher, he wants me to come. After this meeting, the theme is clear. Is the innovation and development. As Haier, it has been exploring the transition from the traditional business to the internet business for many years. Today I want to share some of my experiences with you. But the time, I would like to focus on three o'clock, three topics. What, why, what to do.

First of all, I want to say something. What is it now? I think it is a subversive era. Why is a subversive era, because the driving force for development was subverted, the driving force of the traditional era, the driving force is what? Is the size and scope of the scale to achieve maximum, the scope of the most extensive. I do a lot of industry, I do the largest, but also the most extensive, high barriers to entry, others have no way to compete with me, so I did so. Now that a driving force into the platform, and why changed to platform? I think that the platform is a framework for quick allocation of resources because there is a platform on the Internet where all kinds of resources can communicate without obstacles and then the traditional one can not think of it anymore. We do not know but can interact with each other on the Internet. This platform brings the original driving force Subverted.

Now the most innovative platform is the electricity supplier, Ali can do a trillion. Wal-Mart to do a trillion is a physical store, Wal-Mart to do so many years, Ali can be done soon. So this platform can be quickly introduced resources can be subverted. What is the state now for us? Just as English writer Dickens said in the twins, this is the best and best time. If you keep up with the times are the best times for us, if you can not keep up with the worst times for us.

There is an analogy very good, broken eggs from the outside must be people's food, if broken from the inside must be a new life. Now for us, what is needed is a break from the inside. Self-break, self-subversion, self-challenge. So this is the first point, and the second point I want to make is why. Why must we subvert ourselves? Because companies have always been to adapt to the times, but no time to adapt to the enterprise. You can adapt to the times is a success, so we have a saying Haier is not successful companies only era enterprises. So the so-called success, you do not think I succeed, no success of this child. There will never be any success in the business, because as long as you are successful, others say you succeed simply because you have embarked on the beat of the times, but you can not always step on the beat of the times.

Now, the biggest thing for us now is that it's hard for us to set foot on the internet now. Because of what? Subvert the traditional all the classic things. First of all, what is the basis of the first traditional management theory? Adam? Smith division of labor theory, his first chapter in the Wealth of Nations in 1776 is the division of labor, an example is the needle, a small workshop needle may not be able to do one day, but the division of labor can do a lot, hundreds of thousands . Well, your theory of division of labor is from a small workshop to a large industrial transformation, what is it now? Now that the big industry has been transformed into the Internet, this basic theory can be subverted. The three pioneering theories of classical management theory that grew up in basic theory are also to be subverted. The first is Taylor, Taylor's theory is what? Scientific management, small workshops without scientific management, large industries have scientific management, management what? Is the study of action time, each action is decomposed, after the decomposition set the time to finally form a what? It is today's pipeline. What is the pipeline? People no longer have any creativity, is the machine vassal.

Today's die, who gave it upside down? The zero distance of the Internet now requires zero distance between users and businesses. This is a zero-distance to meet the needs of individual users, the large-scale assembly line manufacturing needs today, mass customization, how to create what he said to each user, so Haier is now exploring is the user participation in front-end design, and why? Because the past after the first manufacturing sales, sales must be made after the first sale, no sales, there is no first what you want the user to create your own thing. Therefore, all the traditional manufacturing enterprises are manufactured for the warehouse, because it is manufactured out of the warehouse and then re-promotion, and now the first user to have you a manufacturing. So I say this is the first point. Is subverting Taylor's scientific management.

The second pioneer of classical management theory was the German Max Weber, known as the father of organizational theory. He invented bureaucracy, layers, also known as bureaucracy. Today we are still using. The whole organization is like a pyramid, where all levels are ranked. I went to the United States to ask GM how many levels there were and he told me there are 14 levels. At that time, I received a joke that he joked that you have risen one grade in five years and may not rise to the highest level before you retire. This is true for every business, but now the Internet is overturned and what is subversive? To center. The so-called decentralization is everyone's center, your internal staff is the center, and why? He is not symmetrical with you, he may know more than you. External users are decentralized. Each user is the center, can be posted on the Internet, you can put his experience, you can instantly become a global live. Can you control him? He said you are not good. A person can spread all over the world, employees did not lead, the user is not a business-centric. The entire organization is going to be flattened.

Haier's current organization to what extent? Has changed a lot of small groups of independent innovation, so there is no level in Haier. There are only three kinds of people, the first one is called the platform master, you can quickly configure resources. What is the second person called? Called the entrepreneurial group called the first small micro-master, is the entrepreneurial team, we have thousands of entrepreneurial team. The third person is a member of small micro. If this one minute to you, you can come in, do not you, you can leave. So, like the original pyramid of this business organization, it has now been crushed, without leadership. No employee leadership, employee leadership who? Not your current superiors, staff leadership is the user. If you have users, you can survive, if you create value for the user you can survive, why we explore so many years, this one is very difficult. Management Drucker once said that each business to ask you two questions, first of all, is your customer, the second you create value to customers is what, for the enterprise to do these two very difficult, as each person in the enterprise To be able to imagine the difficulty.

The third is who is the forerunner of the theory of management and the Frenchman of France. He put forward the general management theory. What is the general management theory? Is the rebalancing of internal functions. There are many functions within the enterprise, many departments, some high and some low, I ask them to balance. Speaking of home is closed inside to do this thing. But what now the Internet to subvert it? It is distributed. Distributed My Resources must be here, I can be around the world. The United States has a very famous Joey law, he said a word is very place. That is, smart people will never be inside your company. Is your company impossible to cover the world's most intelligent people, where you can hire? Online. Available online, we now, for example, our research and development changed, so I R & D to engage in a research and development center, very mysterious, very tight now facing the world. So they have an interface to interface with the best resources in the world.

I went to the Massachusetts Institute of Technology, and their dean said we would love to do one thing with you. We are engaged in basic research. How to turn it into a commodity is your business. So distributed is no longer closed, is open, the world's resources can be yours. There is a saying that the world is my R & D department, the world is my human resources department. So from this one said, I say why, because of these three, that is, the zero distance of the Internet to decentralize, distributed, subverting the classical management theory of Taylor, Max Weber, Fayol.

What should we do in the third? I only talk about one time. Now the hardest thing to do is to organize the adjustment. Because I said earlier that the task of flattening this organization is very heavy. Very difficult, especially in China. Two years ago I met with Gerstner, former IBM president, in Florida, USA. At the time, I said we were going to prepare the organization for such a change. Gerstner said that when I was at IBM, I was thinking of this thing. But I have not done, why? This is the whole system to change. This is one of them.

The second involves two dozens of people, once the incident disappeared throughout the enterprise. We also think for many years, a lot of preparatory work, beginning in 2013. At the beginning of 2013, we were 86,000 people. By the end of the year, we have become 70,000, a decrease of 16,000, and we expect to see a further reduction of 10,000 this year. Many people have made a lot of discussions about this one, because this one is incredible. This one is very dangerous and there are many objections. But if we say that we parse it, you have to do it and reduce it less. why? We can see that the first is that the Internet is forcing you to do that.

In several parts, the first one we outsourced is very much, we divide the main business. We are not as good at manufacturing as outsourcing. Why can not it, outsourcing a large number of people. These people are outsourcing units, outsourcing units may also continue to use them. This is the first one. The second is intelligent manufacturing. Sure to reduce people, we have a model to do every day, the original 108 people, this is called a black light workshop in Germany or no light workshop, there is no light, a lot of things do not need. Inside are robots, many people say people are down, but today do not do this thing may not exist tomorrow. Now that everyone in the world is learning the industrial revolution in Germany 4.0 and 4.0, the robot can talk to the production line. This does not mean that it is more efficient and mainly to meet the individual needs of users. This is very difficult. In addition, you can not do it. The United States relocated two hundred enterprises last year, which is the home appliance in our industry.

GE, the United States, moved a large number of its foundries' water heaters and washing machines in China to Louisville, USA. What's important is that he published an article where I made the product locally in the United States more than 20% lower than the cost of foundry in China. Price also increased. why? I meet the needs of local users. The topic is even more shocking, the title is called Made in China go. If you do not transform the last not to say that today, how to reduce the number of companies, tomorrow you may not have a business. Maybe you are transitioning well today or are you going to be Detroit tomorrow? So this is the second one I want to say. The third one is outsourcing, one is an intelligent manufacturing. The third is to remove the middle management, I just said that enterprises have become flat from the pyramid, the middle of many management should be removed, and why? Not that you have to get rid of, but the Internet forcing him to make him feel he is useless.

For example, in the past our country more than thirty thousand stores. All these thirty thousand stores all the information is up layers. The same as the national administrative system from the county to the city, to the area to the province, to our headquarters. But now that the internet is available, why do I need these people to connect to every store at once? Why he wants the above intention to implement the following situation to collect up, and this information is not accurate. Information of all together, the amount of this person is very large, which should be different. There are many other differences, but in the end all the subversion of people, he is not an end. What is the purpose? The purpose is to subvert a concept that turns everyone, every business person into an entrepreneur. What is the original business everyone? Is an executive. What is business? Enterprise is a management and control system. It is management and control. Now what should be business? Now the business should be a platform for entrepreneurship. We will have everyone starting a business, we have three children after 80, it should be the bottom level but out of, I start my own business. Engaged in a Raytheon computer game notebook, six months ago, we are obscured in this area, all of a sudden the trio of entrepreneurship has come, and now become the top few in the industry. Top

In addition to this category, others do? Not pushed to the community, can start a business, to create conditions for you, such as sales management, not the team, out of their own to set up a start-up company that can serve Haier can also serve the community, more space, there are actually some to do The better now they have a substantial increase in revenue, the creation of higher value. This one is actually very, very important. At the same time there is a very important concept, we are now internally divided into staff and on-line staff. Can you create more entrepreneurial opportunities on this one, can create more platforms. The so-called online integration of this resource in the world, so long as you are in business development, growth, no matter within the enterprise or how to reduce the whole created by the community is to create employment and create value. In the past this business is less people, you are closed, now open to the whole of the overall view is not the case. For example, we now have the national logistics, we have 90,000 trucks, a driver for each car, a loader, a repairman. Add up is 180,000 people, this 180,000 people are not in the roster of Haier inside, but they accept Haier orders, accept Haier's salary. Is it to create more social jobs, so it is not the kind of concept of the past.

So I think both business and society have to change their concepts. In the end, I finally conclude my sentence with only one sentence. It is a sentence in Hegel's small logic. It is not a matter of fact that things are not known. The things that used to be successful may become a way of thinking that restricts you Today, the transition to the Internet, really know what? It is truth, but it is true that there is no forming thing that you need to explore. We hope that today we will all be pioneers in the Internet age and become Internet winners, thanks.