Case StudyProduct Team: Aligning With Stream Teams,Aligning With The Ecosystem - Micro-enterprises

Haier was a successful white goods manufacturer. But with increasing demand for smart appliances they feared that they would get left behind. And given their scale, they weren't able to react quickly enough.


The Solution

They replaced their centralised team with 2,000 cross-functional teams. The idea was that the autonomous teams would be closer to the customer and be able to react quicker. However, they didn't achieve the immediate results that they were hoping for because the teams weren't truly autonomous: targets were still being set centrally.

In a traditional organisation, if a team is underperforming then you might enforce more strict controls, more management oversight and tighter deadlines to encourage people to work faster.

Haier decided to remove controls rather than add more. They gave the teams more autonomy by splitting them into 4,000 fully autonomous micro-enterprises.

Each micro-enterprise was responsible for product development, as well as their own P&L. This meant that they could make their own decisions and were accountable for their own success.

Outcomes achieved

Haier has continued its stellar growth over the past few years and it has become known as a startup factory. They have created 5 unicorns and 120 gazelles (a company growing 20% YoY from a base of $100k).

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