Do you rendanheyi?

I've been reviewing some of the recordings from the Business Ecosystem Alliance's recent conference on Rendanheyi (RDHY), Haier's radical non-organisation model, organised by Stuart Crainer from Thinkers 50 and a host of organisation innovators.

I was surprised though impressed with the number of organisations now following this approach, although I thought the concept was being applied quite broadly, including some organisations (eg Fujitsu) following mushroom spore organisation strategies that became popular 20 years ago. Others seemed to have retained a surprisingly hierarchical approach with weekly all hands meetings for the CEO to cascade to their employees (GE Appliances).

In a sense, that's a good thing, since, as I commented early on in the conference, all organisation models (even ones which seek not to be a traditional organisation) have pros and cons, and it's important to identify your own way of organising, not just copying someone else's (don't get me started on holacracy!)

However, doing this tailoring depends on clarity about what you're trying to achieve, and calling everything RDHY detracts form that. Much better to call the event a conference on network based ways of organising. Including, but not limited to external networks based on digital platforms (and in Haier's newest iteration, blockchain based DAO type contracts), and to internal networks as well as externally spanning ecosystems.

That's also important because if you see to develop a digital platform you probably need to start your exploration in the digital technology space. But if you're looking at being more networked, you're best off to start with this.

So, as I described in 'The Social Organization ', the main opportunity for most organisations now is just to develop internal distributed networks as part of their organisation design, using your norms and behaviours, or culture, as the platform to make this work. Once you've got some internal networks (of teams, and of individuals, communities and smaller networks) it will be much easier to extend this approach outside of the organisation, using digital platforms to replace the norms that different cultures across ecosystem partners can't provide.

That's sort of what Haier did too, moving from its ZZYT autonomous teams to providing these almost complete independence.

Of course, that's only appropriate is it fits the type of organisation you want to create. As Mike Lee and Wesley Koo suggested, the con with proper RDHY is "how to foster the right level of competition. After all, if internal players are bidding for the same project and profit is shared based on project performance, it might create gaps and distrust between employees and between departments."

Haier are trying to get round this by creating a new layer of ecosystem micro communities (EMCs) built on the existing micro enterprises (MEs). That's potentially a very expensive solution (organisationally) to recreate some of the collaborative advantage of a traditional organisation (one of the reasons I didn't get deep into platform based organisations in 'The Social Organization').

Crainer also noted that another challenge he has seen is that the Haier model generates a degree of ambiguity which culturally the Chinese seem much more comfortable with than their Western counterparts. (Danah Zohar ties this back to the?I Ching, Daoism, Confucianism and the Communist Party of China!) I'm not sure about this - the use of blockchain should theoretically remove any lack of clarity, but then the model is very radical, and is bound to take some time to get used to.

Just whilst I'm on the pros and cons, I also think it's a shame that the model's pros were reinforced by over exaggerating the cons of traditional models. Traditional, vertically focused, functional / divisional organisations may have been built on original ideas from Taylor and Weber etc, but that doesn't mean that today's functional organisations operate on scientific management principles. For me, these links back to Taylorism (unfortunately endemic across most other 'modern' management books and articles from Reinventing Organisations to Humanocracy and including Zohar's article too) detract substantially from the arguments these authors put forward and just makes me question the whole premise of their suggestions.

But perhaps that's what GE Appliances was like before Haier took over? - eg not optimising people's contribution or enabling their development. In that situation, there's an awful lot of non-RDHY things they could have done to turn around. However, if Haier's your new parent, of course it doesn't take a genius to work out what the new approach should be.

It's not that RDHY should be avoided. Firstly, if you're in the RPA space or something similar, why wouldn't you want to organise like this? Secondly, even if you're not, and you might therefore not want to use the model itself, there are still plenty of ideas from that this that you can take and apply to your rather more traditional organisation. Which is actually what I think most of the organisations featured were correctly doing.

The challenge then is implementing the approach you've selected will work for you. Edgar Schein asked an interesting question on this, wondering how organisations like GE Appliances could change their mass social relationships around what is a boss, a subordinate, how a hierarchy works"

Haier / proper RDHY makes that easy. You just don't have them. Cross-over approaches will have to deal with Schein's questions. His personalised, level relationships will be a good place to start.

HR, Organisation Design and Organisation Development (not Technology) should be at the front of this change. Once again, that seems not to be the case, being told at the conference that whilst HR may be hitting its targets, we're missing the point 'longitudinally': "HR focuses on talent targets but the environment isn't dynamic enough to retain the talent. They spend money on online learning and development but learning is experienced in context of the job. They focus on engagement when the basics of human motivation are missing. The reward systems are completely unfair and don't relate to those that deliver real value. They still use performance management systems that are subjective and don't focus on the strengths of the employees etc etc."

We can sweep all of these points out of the way by using RDHY, or we can create working organisations using the architectures we're more used to. We shouldn't just stay as we are.

Jon Ingham

@joningham ,?https://linkedin.com/in/joningham

[email protected], +44 7904 185134

Top 100 HR Tech Influencer - Human Resources Executive

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