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Transformed a near-bankrupt refrigerator factory into the world's largest home appliance brand, then disrupted hierarchical management with the Rendanheyi model
Zhang Ruimin was born in 1949 in Laizhou, Shandong. In 1984, he became general manager of Qingdao Refrigerator Factory, taking over a heavily indebted, near-bankrupt state-owned factory. Just 4 months into his tenure, he personally smashed 76 refrigerators with quality problems in front of all factory workers, dramatically declaring the establishment of a quality culture. Over the following forty years, Zhang Ruimin developed Haier from a small factory into the world's highest-revenue home appliance company, continuously reshaping Haier's organizational form through successive management innovations including OEC management (clearing everything daily), market chain management, autonomous operating units, and Rendanheyi. Around 2005, Zhang Ruimin proposed the Rendanheyi model, transforming employees from controlled executors into entrepreneurs, and the company from a hierarchical organization into an entrepreneurship incubation platform, fundamentally disrupting the core assumptions of Western management theory. This theory attracted high attention from Harvard Business School, IMD, and other world-leading business schools; Zhang Ruimin was repeatedly invited to speak at Davos and other international stages on Chinese management thought. In 2021, Zhang Ruimin stepped down as Haier Group's Chairman, leaving one of the most important legacies of Chinese manufacturing management thought.
Zhang Ruimin believes that in the internet era, the traditional employer-employee relationship is obsolete; every employee should be an entrepreneur (ren) directly accountable for user value, directly connected to specific user needs (dan), while the company provides resources, platform, and ecosystem rather than a hierarchical organization that issues commands.
Source: 张瑞敏《人单合一》专著及系列演讲，2005-2020年 / 哈佛商学院海尔案例研究，2015年
Zhang Ruimin believes the industrial era created distance between companies and users through multiple layers of intermediaries; internet era companies should pursue zero distance to users — not understanding users through sales channels but having employees and entrepreneurial teams directly serve users and directly obtain user feedback.
Source: 张瑞敏在达沃斯论坛演讲，2018年
The 1985 refrigerator-smashing event established Zhang Ruimin's lifelong core conviction: defective products are not just product problems but systemic compromise of quality culture. Tolerating defects is the beginning of the entire quality system's collapse. This conviction pushed Haier to become one of the first Chinese home appliance companies to receive international quality certification.
Source: 张瑞敏自述，《海尔是海》，2017年
Zhang Ruimin believes every successful business model has its life cycle, and a leader's greatest danger is enjoying success while forgetting transformation. Pushing the largest organizational transformation (Rendanheyi) when Haier was at its most successful is a direct expression of this conviction.
Source: 张瑞敏接受麦肯锡季刊专访，2014年
Decompose large companies into countless micro-enterprises; each micro-team connects directly with specific user needs, operates autonomously, and is responsible for its own profits and losses; the large company provides a platform, not commands — completely eliminating hierarchical bureaucracy.
Haier broke traditional large departments into over 4,000 autonomous operating units (micro-enterprises); each micro-enterprise independently sets goals, distributes compensation, and makes decisions; Haier headquarters only provides platform resources and brand endorsement, no longer issuing commands. This enabled Haier to maintain large-company scale with small-company agility in the internet era.
Complete every task each day and improve 1% over the previous day; through small-step iteration and daily clearing, achieve continuous organizational progress without relying on large-scale transformation.
Haier implemented OEC management in the 1990s, requiring every employee to do a complete review of the day's work, with uncompleted tasks requiring explanation and completion the next day. This management culture made Haier one of the most execution-capable companies in China's home appliance industry in the 1990s.
A brand is not a label unilaterally created by a company but an ecosystem co-created by the company and users; in a platform company, brand value comes from users' continuous interaction and value co-creation on the platform, not advertising.
COSMOPlat, the industrial internet platform founded by Haier, allows users to participate in product design and customization, breaking the traditional home appliance company's one-way product push model and transforming Haier's brand from a home appliance brand to an industrial internet platform brand.
Zhang Ruimin conducted large-scale organizational transformations of Haier every few years, including implementing Rendanheyi at Haier's most successful point. This logic of exchanging destruction for renewal has extremely high short-term costs but is the key to Haier's lasting success in the long run.
The core paradox of Rendanheyi theory: after Haier became the world's largest home appliance company, Zhang Ruimin required it to be dismantled into thousands of micro-startup companies, using large company resources to serve small company agility — disrupting traditional management theory's assumptions about economies of scale.
1984-1993
From near-bankruptcy to quality first, building Haier's quality culture gene
Took over a loss-making factory, smashed refrigerators to establish quality authority, introduced German Liebherr technology, and made Haier the first Chinese home appliance company to win the National Quality Award.
1993-2005
Extending from refrigerators to all home appliance categories, from domestic brand to global market
Implemented market chain management and OEC, expanded Haier to all categories including washing machines and air conditioners, established manufacturing bases in the US, and became China's most internationalized home appliance brand.
2005-2021
Disrupting hierarchy, implementing Rendanheyi, transforming Haier from a traditional manufacturing enterprise to a platform ecosystem company
Proposed and continuously deepened the Rendanheyi model, dismantled Haier into over 4,000 autonomous operating units, acquired GE Appliances, Sanyo, Fisher&Paykel, and other international brands, and launched the industrial internet platform COSMOPlat.
2021-至今
After stepping down, propagating Rendanheyi management thought and influencing global management academia
Stepped down as Haier Group Chairman in 2021, continuing to promote Rendanheyi concepts at global business schools and corporate training, becoming the most important Chinese representative of management thought in dialogue with Western management theory.
Context: Born in 1949 in Laizhou, Shandong, the same year as the founding of the People's Republic of China, grew up during China's early industrialization, and this era deeply influenced his emotional identification with industry and manufacturing
Decision: Chose industrial management direction, devoted himself to building China's manufacturing industry
Reasoning: The historical background made industrialization the source of mission for that generation
Outcome: Became one of the most important management experimenters in the era of China's manufacturing transformation
Lesson: A person's achievements are often deeply bound to the historical mission of the era they inhabit
Context: In December 1984, became general manager of Qingdao Refrigerator Factory, taking over a state-owned factory with 1.47 million RMB in losses and near-bankruptcy
Decision: Accepted what seemed like an impossible challenge, determined to fundamentally change the factory's quality and culture
Reasoning: The mess that others don't want to take on is often the opportunity to change history
Outcome: Initiated Haier's legendary journey from zero to global number one
Lesson: True entrepreneurs don't wait for good opportunities but create conditions under the worst conditions
Context: Found 76 refrigerators in the warehouse with identified defects and announced their destruction in front of all factory workers; each was worth 800 yuan at the time — equivalent to two workers' annual wages
Decision: Preferred to immediately lose 60,000 RMB rather than send all employees an unshakeable signal: defective products are scraps
Reasoning: If compromising on this batch of defective products, one would compromise on all future defective products; quality culture can only be truly established through extreme events
Outcome: Haier's quality consciousness deeply penetrated the minds of all workers, becoming one of the most classic stories in the history of Chinese corporate culture building
Lesson: Cultural transformation requires extreme symbolic actions; a hundred lectures are less effective than one demonstration for everyone to see
Context: Haier refrigerators won China's highest quality management honor — the China Quality Management Award, becoming the quality benchmark in the home appliance industry
Decision: Transformed quality honors into brand assets and continued increasing technological R&D investment
Reasoning: Winning the award is not an endpoint but a natural result of quality culture establishment; must prevent taking awards as goals
Outcome: Haier established its quality-leading brand image in the domestic market
Lesson: Quality awards are results; building quality culture is the cause — don't manage for awards and forget the original intention
Context: In response to increased management difficulty as company scale expanded, launched the OEC management system, requiring every task to be completed each day and improved 1% over the previous day
Decision: Extended quality culture from refrigerator products to the entire management system
Reasoning: The quality of the management system determines the ceiling of product quality; systematic management is necessary to maintain quality consistency
Outcome: The OEC management system became the core framework of Haier's internal management and a management standard studied by Chinese manufacturing enterprises
Lesson: Good management methodology should be simple enough for every employee to understand and execute; complex theories often cannot be implemented
Context: Against the backdrop of the internet impacting traditional manufacturing, Zhang Ruimin proposed the Rendanheyi model, systematically articulating the vision of replacing hierarchical organizations with entrepreneurship incubation platforms
Decision: Initiated the largest organizational transformation when Haier was at its most successful, taking the enormous risk of disrupting existing success
Reasoning: Competition in the internet era will completely overturn the organizational logic of the traditional industrial era; Haier must self-disrupt before being disrupted
Outcome: Rendanheyi became the most important original management theory in the history of Chinese corporate management and was listed as case study material by Harvard Business School
Lesson: The best of times is also the best time to make the biggest changes, because this is when there are resources and time to bear the cost of transformation
Context: Acquired GE Appliances for $5.4 billion, making Haier a truly global home appliance leading brand
Decision: Replicate the Rendanheyi model in GE Appliances, verifying the global portability of the Chinese management model
Reasoning: Acquiring a world top brand is not just market expansion but an experiment to verify whether Chinese management thought can transform century-old Western companies
Outcome: GE Appliances' performance continued to improve under Haier's management, becoming the most important global test site for the Rendanheyi model
Lesson: The best test of management theory is not in academic papers but in actually integrating companies with different cultures and histories
Context: Announced stepping down as Haier Group Chairman, ending 37 years of leadership at Haier and handing the company over to the next generation management team
Decision: After completing key strategic moves in Haier's globalization and digital transformation, actively stepped down to prove through action that Rendanheyi does not depend on individual heroes
Reasoning: The essence of Rendanheyi is removing dependence on individuals; the founder's retirement is the most powerful proof of this theory
Outcome: Completely passed on the Rendanheyi management system, becoming one of the best practices for smooth succession of large Chinese enterprise founders
Lesson: Leaders who truly believe in their management philosophy will ultimately prove the correctness of their philosophy through their own departure
Zhang Ruimin has on multiple occasions clearly stated that Drucker is one of his most important management thought sources; Drucker's predictions in this book about knowledge worker self-management and organizational transformation are highly consistent with Rendanheyi's core ideas, and Zhang Ruimin has listed this book as required reading for Haier's management.
Gary Hamel and Zhang Ruimin have collaborated deeply in academia and practice multiple times; Hamel uses Haier's Rendanheyi as one of the most important empirical cases of his management innovation theory, and Zhang Ruimin has recommended Hamel's book on multiple occasions, considering it the Western management work that most mutually validates Rendanheyi thought.
Christensen's theory of disruptive innovation profoundly influenced Zhang Ruimin's determination to drive the Rendanheyi transformation — traditional manufacturing enterprises' core capabilities would become the greatest constraints in the internet era, and active self-disruption is necessary to avoid being disrupted. Zhang Ruimin has cited Christensen's disruptive innovation framework multiple times in Rendanheyi speeches.
Zhang Ruimin's own integrated management thought work, systematically articulating the complete philosophical evolution from smashing refrigerators to establish quality culture to Rendanheyi disrupting hierarchy — the most important primary source for understanding Zhang Ruimin's thought system.
Drucker's knowledge worker theory and corporate mission view had a profound influence on Zhang Ruimin's management philosophy; Zhang Ruimin has cited Drucker's corporate purpose theory on multiple occasions
Gary Hamel's theories on management innovation and creativity had a clear influence on the theoretical construction of the Rendanheyi model; the two have had multiple in-depth exchanges
Zhang Ruimin's Rendanheyi theory promoted systematic innovation in Chinese manufacturing management thought and influenced a large number of Chinese enterprises' organizational transformation practices
Gary Hamel has promoted the Rendanheyi theory globally, considering it one of the most important management innovations of the 21st century
张瑞敏是中国最具全球影响力的管理思想家，他的人单合一理论代表了中国管理学对西方主流理论的重要补充和挑战。
Zhang Ruimin's Rendanheyi model is one of the most significant management innovations of the 21st century, and it challenges fundamental assumptions of Western management theory.
