Undoubtedly, Haier Group and its automatic top-loading washing machines will be a driving force of change in China’s manufacturing industry. Just a few decades ago, Haier saw its transformation under the radical vision of Zhang Ruimin, who cultivated a strong corporate culture and a “western-like” emphasize on quality. As the legend goes, in 1985, Mr. Zhang was appointed CEO of Haier and he initiated the smashing of 76 faulty fridges in public.
Much of the company success can be credited to Mr. Zhang’s implementation of a strong corporate culture, which encouraged employees to invent and to innovate. He now eliminated middle management altogether. Haier’s workers are organized into self-managed teams that have full control over their operations and are paid based on performance. Employee’s ambition and innovation are rewarded and lead to new products, such as the automatic top-loading washing machine.
This is a system that every Chinese manufacturer should consider implementing. Haier’s change in corporate structure is very much in line with the changing attitude of Chinese workers. As workers ask for higher wages, it will be difficult to rely on cheap manufacturing for foreign investments. There is so much potential for the Chinese workforce to create innovation through design and research. Haier set a great example and it’s up to others to follow.