This is where I first learned about Rendanheyi, at a Metaphorum online webinar. > This approach mirrors the dynamics of biochemistry more than that of architecture.
See Basic RenDanHeYi
YOUTUBE MvuTCG6xugk Exploring Haier’s RenDanHeYi and the Viable System Model at the Metaphorum: How can a global manufacturer with tens of thousands of employees not just survive but thrive in turbulent times? Guided by its CEO philosopher, the Chinese white goods appliance leader went through four decades of strategy, business, and organizational reinvention, rewriting everything we knew about management. Based on years of direct collaboration with Haier, Emanuele will conversate with Krishan to explore RenDanHeYi’s ability to get rid of hierarchical control, top-down people management, centralized budgeting, organizational bureaucracy, distance from the market. They will compare the foundational RenDanHeYi’s concepts with VSM pillars to show how more and more enterprises worldwide may embrace unprecedented levels of self-management, entrepreneurial initiative, customer centricity, diffused value sharing, and ecosystemic thinking.
Here I create a sloppy graph as I explore Rendanheyi developed by Zhang Ruimin at Haier Group. I learned about this through Emanuele Quintarelli at BoundaryLess in a talk he gave at the Metaphorum on June 26, 2024.
I think that BoundaryLess is in the business of helping organizations create platforms in the Rendanheyi ecosystem.
The two main ideas are: 1) the end customers and the producers (Micro Enterprise) act as one--no customer no micro enterprise.
2. Customer facing MEs (micro enterprises) partner with Support MEs in preference to classic supply chains, sharing the profits and losses contractually across the network.
Rendanheyi incorporates the benefits of sociocracy and solves the biggest problem of sociocracy--hierarchy or scaling.
The paradigm shift is from hierarchy (severely constrained networks) to self organizing networks--infinite networks. Cultures that understand networks and technologies that enable network scaling, searching, contracting are the enablers.
Here we create a minimalist diagram of Basic RenDanHeYi.
digraph { overlap = false; splines=true layout = dot 0 [label="Micro Enterprise", shape=oval, style=dashed, color=green3, penwidth=6, fillcolor=green tooltip=""] 1 [label="Customer" shape=egg, color=bisque3 penwidth=6 fillcolor=white tooltip=""] 2 [label="Problem" shape=box, color=red penwidth=6 fillcolor=white tooltip=""] 3 [label="Solution\n(Customer\nScenario)" height=1.1 margin=0.1 shape=signature, color=green penwidth=6 fillcolor=yellow tooltip=""] 4 [label="Reward" shape=box, color=gold penwidth=6 fillcolor=white tooltip=""] 5 [label="Ecosystem\nMicro-Community" shape=oval, color=green3 style=dashed penwidth=6 fillcolor=white tooltip=""] 6 [label="P&L" shape=note, color=black penwidth=2 fillcolor=white tooltip=""] 7 [label="Ecosystem\nAgreement\n('Contract')" height=1.2 margin=0.2 shape=signature, color=green2 penwidth=4 style=filled fillcolor=black fontcolor=white tooltip=""] 8 [label="Principles" shape=triangle, color=black penwidth=6 fillcolor=white tooltip=""] 9 [label="Goal" shape=rarrow, color=pink penwidth=3 fillcolor=white tooltip=""] 10 [label="Base Pay" shape=box, color=gold penwidth=6 fillcolor=white tooltip=""] 11 [label="Bonus" shape=box, color=gold penwidth=6 fillcolor=white tooltip=""] 12 [label="Industry\nPlatform" shape=oval, color=blue, penwidth=6, style=dashed fillcolor=white tooltip=""] 13 [label="VAM\nAgreement\n('Contract')" height=1.2 margin=0.2 shape=signature, color=green2 penwidth=4 style=filled fillcolor=black fontcolor=white] 14 [label="Unit\nIncubation\nAgreement\n(Contract)" height=1.5 margin=0.2 shape=signature, color=blue penwidth=4 style=filled fillcolor=black fontcolor=white tooltip=""] 15 [label="Shared\nServices\nPlatforms" shape=signature, style=dashed, shape=oval, color="#25a0e7" penwidth=6 fillcolor=white tooltip=""] 15->7 [style=dashed color=black penwidth=4] 12->14 [style=dashed penwidth=4] 14->5 [style=dashed penwidth=4] 13->0 [style=dashed penwidth=4] 1->2 [label="" labeltooltip="" ] 0->3 [label="" labeltooltip=""] 3->1 [label="" labeltooltip=""] 0->2 [label="" labeltooltip=""] 1->4 [label="" labeltooltip="" color=green2 penwidth=3] 4->0 [label="" labeltooltip="" color=green2 penwidth=3] 0->5 [label="" labeltooltip=""] 0->6 [lael="" labeltooltip=""] 0->7 [label="" labeltooltip="" style=dashed color=green2 penwidth=4] 8->5 [label="" labeltooltip=""] 0->8 [label="" labeltooltip=""] 7->5 [label="" labeltooltip="" style=dashed penwidth=4] 0->1 [label="" labeltooltip=""] 0->9 [label="" labeltooltip=""] 7->10 [label="" labeltooltip="" color=green2 penwidth=3] 7->11 [label="" labeltooltip="" color=green2 penwidth=3] 6->10 [label="" labeltooltip=""] 6->11 [label="" labeltooltip=""] 9->6 [label="" labeltooltip=""] 9->7 [label="" labeltooltip="" ] #12->5 [label="" labeltooltip=""] #7->12 [label="" labeltooltip="" color=green2 penwidth=3] }
RenDanHeYi reduces hierarchies to networks. All the decision-making is either within the nodes or between nodes and all participants are involved in the decisions, never separated by even one layer of bureaucracy. The microenterpirse (ME) drives everything. It lives or dies by the rewards it generates from satisfied customers. All the relationships are in support of creating value for the ME's customers. No one in the micro-community makes any money other than from the satisfied customers of the ME.
The boundaries of the ME and EMC are porous.
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I begin to speculate on how Rendanheyi for Superior AZ might work, looking at first at Food, Shelter, Transportation, Education, Child and Eldercare.
The pink arrows track the value/money from customers to all those who take risk and create value.
Micro Communities Micro Enterprise Customer Facing MEs Support MEs End Customers People Strategy Rewards
DOT strict digraph rankdir=LR node [style=filled fillcolor=lightyellow penwidth=3 color=black fontname="Helvetica"] HERE NODE node [style=filled fillcolor=lightblue] WHERE /^Next/ LINKS HERE -> NODE node [style=filled fillcolor=white] HERE NODE WHERE /^Next/ LINKS HERE -> NODE node [style=filled fillcolor=white penwidth=3 color=black] LINKS HERE -> NODE node [style=filled fillcolor=white penwidth=3 color=red] HERE NODE LINKS HERE -> NODE node [style="filled,rounded,dashed" fillcolor=white] edge [style=dotted] HERE NODE BACKLINKS NODE -> HERE STATIC
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