their manufacturing prowess and, more recently, for their pragmatic approach to innovation. Now it’s time to recognize how they are also reinventing the role of management through an approach we call “digitally enhanced directed autonomy,” or DEDA.
HStyle sets task indicators for each team annually. The team controls product development, new product launches, discounts, and promotions. It can continually adjust the products to improve the consumer’s experience. The company ranks team performance every day, and teams’ results are accessible to everyone in real time, putting each team under pressure to deliver. The data and thus the rankings change very quickly. The daily rankings are at the core of HStyle’s internal competition model.
More recently, Haier has adapted to its evolving market by developing a new organizational format: ecosystem microcommunities . An EM is a community of microenterprises that exists to address specific sets of user needs. Haier uses contracts to determine the rights and responsibilities of different microenterprises and stakeholders.
GE Appliances adopted a new structure, a decentralized leadership model more focused on coaching than on commanding, a new compensation model, and most important, a more entrepreneurial culture. To attract entrepreneurial people, GE Appliances changed its hiring criteria and process. Indeed, the promotion to CEO of Nolan, the appliance unit’s chief technology officer under GE ownership, was the first application of the new HR approach.
At Handu, for example, a digital platform connects autonomous teams to both internal and external factories, using cloud-based supply-chain-management software. This allows Handu to do small-batch production at high speed and scale up easily when a product line proves successful. The platform also allows external partners to produce goods on an as-needed basis for HStyle but frees them up to serve other customers.
Part of the hesitation in Western companies comes from managers having precisely defined roles and responsibilities, a result of decades spent tailoring operations to use resources efficiently. By contrast, Chinese management systems tended to standardize tasks far less because low labor costs gave them more scope to be flexible with their processes. The legacy of that mindset has survived, though the cost differential has diminished.
The story of the auto and electronics company BYD illustrates the concept. In late January 2020, when the pandemic was raging in China, the founder of BYD, Wang Chuanfu, charged his key leaders and division heads with finding a solution to the mask shortage.
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