The Little Haier That Could

Appliances For Everyone

That is a fascinating look at the Haier company. It’s Chinese. I thought it was German. (As it turns out, its name is inspired by German.)

Some excerpts:

Reaching the top has been Zhang’s goal since the famous day in 1984, when having just taken over the state-owned Qingdao Refrigerator Co., he cursed the terrible workmanship, lined up 76 faulty refrigerators and gave each of his 800 workers a sledgehammer to demolish the fridges on the spot.

I wonder what the workers thought of that?

Did they feel their work was wasted? Or did they always want to do better but didn’t know how? I also wonder if there might have been one worker there who felt liberated, finally seeing the shoddiness and excuses for shoddiness put to death.

These two are perhaps the most important in the entire article:

Zhang, 63, might seem an unlikely management guru. Unlike many other top executives, he never studied abroad, nor does he surround himself with newly minted M.B.A.s. He acquired his philosophy largely on his own, through reading and relentless self-improvement.

Boldfaced emphasis added by me.

And:

The son of poor factory workers in Laizhou, north of Qingdao, Zhang never had a chance at a proper education. “Like many at that time, I was unable to complete my schooling,” he says. “During the Cultural Revolution the schools were all closed.” Instead, he joined the Red Guards and made a pilgrimage to Mao’s birthplace. At 19 he started work at a state-run construction company in Qingdao, a coastal city best known for the German colony that flourished there a century ago and the beer it brewed, Tsingtao. During off hours he would hop on his bicycle and pedal to whatever business and self-improvement seminars he could find.

Boldfaced emphasis added by me.

That reads as if it came out of the bio of a company founder from late-1800s, early-1900s America! It’s as if the spirit of Horatio Alger has migrated to China.

This is also telling about the man:

“I already knew that I wanted to do something very important, to make a good product,” says Zhang. “In Germany there was zero tolerance. If one thing, even the smallest thing, was wrong, they wouldn’t accept it.” The game changer was spotting a manhole cover. “Even that had a number! Everything had clear criteria. In China we had nothing like that.”

What regular person would even bother to look at a manhole cover?

This guy is a like a Chinese version of Jeff Bezos in one important way:

“Our philosophy: We always think we are wrong,” he says, as he pours tea, hosting lunch at his headquarters. “We only take the customer’s need as right.”

What I love about a story like this is that it’s a reproach to the systematization American companies rely on to attract talent. “Wait. You have no degree and you want a job here?” Even if someone like Haier’s Zhang Ruimin managed to get a job in a corporation here, his prospects would likely be limited until he took the repeated hints to seek a college degree — likely an MBA — during off-work hours.

Yet with his limited education, he has managed to build a powerhouse of a global company that has been taking business away from established — and even entrenched — competitors.

One man of limited formal education versus armies of MBAs and trained specialists.

And he is beating them!

David triumphs over Goliath again.

Additional:

The Chief Executive

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