make a big company small

In 2012, big companies were trying to make them small. In order to maintain its sensitivity to the market, Haier has transformed the pyramid of traditional organizational management into an inverted triangle. Close to the market are more than 2,000 self-operated entities. Responsible for the market.

Interactive topic:

"Inverted triangle" enterprises are more sensitive to the market?

The Internet industry has set off this wave. Whether it is Shanda, Sohu or Alibaba, each of their businesses simply adopts the management model of independent subsidiaries. Tencent and Baidu, which used to be only one company, also do small business. . The former split up Gao Peng, and Baidu split out Qiyi and Lekutian.

In the past, large companies could squeeze small and medium competitors by their own advantages, but today, with the help of the Internet and various IT tools, small companies have won a different competitive environment and flexible advantages, but large companies have too many internal management levels. , information transmission fails, the speed of response to the market slows down, and the "disconnection" between enterprises and the market is accelerated. How to maintain sensitivity to technology, trends and organizational vitality has become a must for leaders of many large enterprises.

Dr. Xie Zuchi, President of Booz Greater China, said that the strategic adjustment of reducing the size of large companies can promote business innovation and achieve refined management in business operations. Enterprises must ultimately gain a foothold in the market and win consumers through their own capacity building. Downsizing a large company can be regarded as an auxiliary measure to match capacity building at the strategic and organizational level. It can better utilize nonlinear thinking and capture changes in the general environment, rather than focusing on immediate problems and focusing on operational improvement.

The core of large companies becoming smaller is to make enterprises more competitive

As early as the 1970s, British economist EF Schumacher wrote a popular book - "SmallIs Beautiful ( Small is beautiful)", he believes that small enterprises are more dynamic and creative, while large enterprises that lack vitality and creativity are dying. At that time, it became a craze to "change from big to small" in order to overcome the various drawbacks caused by the large-scale enterprise.

By the 1990s, the "big company revolution" was back in vogue. With a series of management changes and transformations, many large enterprises have radiated new vitality and become an important force leading the development of the industry again. At that time, the big company revolution mentioned a word: Restructure. Contrary to the previous "mergers and acquisitions" that continuously expanded the scale of the enterprise, the means of "restructuring" include divesting non-core businesses, splitting the enterprise into several independent entities, and selling some assets. On the surface, it is trying to make big companies smaller, but its core is to make enterprises more competitive.

Professor Xue Qigong, Deputy Dean of the School of Management of Fudan University, said that the reconstruction is divided into three levels, one is business and strategy level, the second is financial level, and the third is organizational level. In fact, "refactoring" is very difficult, and a relatively simple and effective way is to achieve "decentralization" in governance. For example, ABB has divided itself into more than 3,000 independent accounting units, each accounting unit usually has only a few dozen employees, turning a huge company into an organization formed by many small companies, with both large enterprises The advantages of integration, but also the flexibility of small companies.

Dr. Sun Yongling, a partner of PricewaterhouseCoopers, believes that to solve these "big company diseases", first of all, it is necessary to optimize and reorganize the business structure at the strategic level according to the driving factors of industry development and the key elements of enterprise success. Shaping its own core advantages and enhancing market competitiveness; secondly, at the organizational level, through the implementation of the division system or the subsidiary system to moderately decentralize power and clarify the power and responsibility system; finally, at the operational level, it is necessary to optimize the process of business value chain integration, And through the customer-oriented assessment drive to achieve rapid response and effective response to the market.

In May of this year, Tencent, which announced the restructuring of its organizational structure, its leader, Ma Huateng, clearly understands its own advantages and market challenges. Tencent's success comes from its long-term attention to user needs and a high degree of change in external technologies and trends. sensitive. Today, however, Tencent has 20,000 employees, seven times as many as seven years ago. The organization is getting bigger and bigger, and small companies in the Internet field are surging with innovation. For Tencent to have long-term growth in the next five years, the adjustment of the organizational structure must adapt to the outside world. market is changing rapidly.

Ma Huateng said in his letter to employees: "The basic starting point of this adjustment is to form a series of more focused business groups according to the attributes of each business, reduce unnecessary overlap, and give full play to the "small company" within the business group. ' spirit, deeply understand and quickly respond to user needs, create excellent products and user platforms, and provide colleagues with better growth opportunities; at the same time, various business groups can share basic service platforms and create valuable services to users. Integrate services, and strive to give full play to the advantages of integration under the big platform of 'One Tencent'."

Organizational changes make the "elephant" dance lightly

Since 2009, Haier Group CEO Zhang Ruimin has been thinking about how to use the Internet in the Internet age. Create new topics for customers. Drucker's sentence gave him a lot of inspiration. The biggest influence of the Internet is to eliminate distance. He came to the conclusion that to create customers in the Internet era, it is necessary to have zero distance with customers.

"The employees who directly face customers are at the top, and the top leader becomes the bottom of the inverted pyramid."

How to get close to customers? Haier has changed its organizational structure for this purpose. In the past, Haier’s organizational structure was a positive triangle, with the top leader at the top and functional management down the hierarchy. Now, Haier has reversed it, with employees directly facing customers at the top, and the top leader has changed. The bottom of the inverted pyramid. Leaders used to give orders from the bottom up, but now leaders provide support from the bottom up. Organizational personnel exposed to the market have become the first-level management body. The original middle-level functional management department has been transformed into a second-level management body with service as its main task. The original top management has become a third-level management body. When they are responsible for long-term strategic planning, they are also responsible for the management mechanism. Innovation. The ability of each person is not evaluated by the leader, but the market and users have the final say. The market information flows from the market side to each related business entity through "reverse force", driving the linkage of the entire organization.

When each business entity has relations with the outside world or with other business entities within the enterprise, the principle of market transactions shall be adopted uniformly. Whenever a terminal market demand information is confirmed to be satisfied, the information is decomposed into a series of indicators, and these indicators become the transaction between related business entities. Once the transaction occurs, the related business entities are glued together to form a certain A portfolio of business entities dominated by market demand. Each combination is not isolated, and they will also trade with other business entities in need. Through multiple transactions, logistics can obtain a large-scale order resource.

Zhang Ruimin said in his latest speech: "Haier is no longer an inverted triangle, but is changing from an inverted triangle to a mesh organization, from an inverted triangle to a closed-loop mesh organization. 80,000 employees will be turned into 2,000 self-operated entities, which means that everyone should not listen to what their superiors tell you to do, but the market will be given to you. You can develop and create by yourself. Our 2,000 operators The entity is like a big network directly facing the market, each business entity is a node on this network, and this node can become a basic innovation unit. Since this basic innovation unit is like a real company, give them three The first is on-site decision-making power, the second is distribution power, and the third is human rights."

Dr. Xie Zuchi believes that in the process of changing from small to large, Haier Group has continuously innovated its organizational structure and has also The management and control model has undergone several adjustments and changes. After experiencing growth and expansion, Haier has once again innovated the management and control model and introduced the "inverted triangle" structure, which has achieved the effect of simplifying the process, improving the speed of response to the market, and making the "elephant" dance. .