Week 18, 2021 — Issue #150

Unpacking Rendanheyi, Part 1: Platforms, Ecosystems, and Boundaries

Photo by Surface on Unsplash

Each week: three ideas on the future of work. This week: three ideas Haier’s organizational model Rendanheyi (RDHY):

How Haier Works by Corporate Rebels

I’ve written about RDHY before (w42020). Start there for an introduction to the concept. Below: three takeaways from the RDHY Masterclass I recently completed:

1. Platforms

RDHY asks that we reenvision the organization as a platform. The concept of digital marketplaces provides the analogy. Marketplaces are in the commerce business, but they don’t sell their own products. Rather, they facilitate and enable others to sell theirs. RDHY is the same, except it isn’t limited to selling things. RDHY uses the principles of platform design to create the systems and support structures that enable entrepreneurs to start and scale new businesses.

2. Ecosystems

RDHY asks that we reenvision the organization as an ecosystem of Micro-Enterprises or MEs. The concept of microservices provides the analogy. In software engineering, a microservice architecture denotes a system made up of independent services that are loosely coupled by ways of lightweight protocols. RDHY is the same, except it isn’t limited to technology. RDHY applies the principle of microservice architecture to organizational design, allowing networks of MEs to effectively collaborate.

3. Boundaries

RDHY asks that we reenvision the organization as having no boundaries; as being boundaryless. The concept of Open Innovation (OI) provides the analogy. Organizations must innovate to stay relevant, but most keep it an internal affair. OI does not. OI argues that innovation is best done in collaboration with external parties. RDH is the same, except it doesn’t limit this approach to innovation. RDHY applies the principles of OI to everything it does, enabling external MEs to benefit from its platforms and ecosystems.

RDHY is not an organizational operating system (see w232019) in that it doesn’t prescribe specific tools and practices. RDHY is best described as a philosophy — a way to think about the fundamental nature of collaboration and organization.

But RDHY is still revolutionary. If we take this philosophy to its logical conclusion, we end up with an organizational model like Haier — a highly profitable organization with more than 80,000 people distributed across 4,500 loosely coupled yet highly aligned MEs that lack middle management.

There’s more. Much more. But that’s all for this week.
Until next time: Make it matter.

/Andreas