Zhang Ruimin was invited in 2018 Forbes China Innovation Summit

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Zhang Ruimin was invited in 2018 Forbes China Innovation Summit

From August 14th to August 17th, 2018 Forbes China Innovation Summit was held in Chengdu. At the forum on the theme of “New Drivers in Global Innovation” on the 15th of the summit, as the first speaker, Zhang Ruimin, Chairman of the Board of Directors and CEO, Haier Group delivered a speech entitled Haier: Building an IoT Ecosystem Brand in the Rendanheyi model.

He described the whole process that Haier builds an IoT Ecosystem Brand by using Simon Sinek’s Golden Circle.

In August, Chengdu was full of passion and fervor. The 2018 Forbes China Innovation Summit was chosen in this famous “innovation” capital in the west. Undoubtedly, it is a powerful booster for the summit to promote the convergence of global innovation resources, the flow of innovation elements and trading achievements.

If we say that Chengdu is the booster of the summit, then “innovation DNA of Haier” is a punchline on the booster. At the beginning of his speech, Zhang Ruimin, Chairman of the Board of Directors and CEO, Haier Group used Simon Sinek’s Golden Circle from “Why: Why classic models need to be reinvented in this networked age”, “How: Haier’s original Rendanheyi model for the Internet era” and “What:Rendanheyi as a leading-edge IoT paradigm” these three levels to construct the whole logic of the speech. Zhang Ruimin mentioned that successful companies move with the times. Enterprises should understand the times, achieve self-subversion, and enhance dynamic capabilities instead of blindly emphasizing the core competitiveness.

The way Haier achieves self-subversion is to reinvent classic models and build IoT Rendanheyi model. Zhang Ruimin explained theRendanheyi model from the two levels of organization and salary to the audience. That is, the traditional mode of organizational management is linear management, and we are nonlinear management, which is done according to user needs. The traditional model is the shareholder first. Our model is the human value first, which exerts it to the greatest extent. Everyone is their own CEO, and everyone can be their own entrepreneur. In terms of salary, the change in the payment of the enterprise deposit to the user is achieved. That is, we are not determined to pay how much for you. How much value you create for the users, how much you will be paid. Or leave without any value.

Ecosystem Brand emerges with the times in the Rendanheyi model. Zhang Ruimin pointed out that average brand follow the diminishing marginal returns, but Ecosystem Brand aims to achieve converse increase in revenue. He classified brands into three categories: traditional brand, Internet platform brand, and IoT Ecosystem Brand. The traditional brand is divided into the brand enterprise and the enterprise which produces for the brand. Internet platform brand is divided into the enterprise that owns the platform and the enterprise that is owned by the platform. However, Ecosystem Brand is constantly evolving, with the words of Kevin Kelly, the most famous prophet in the United States: All companies die. All cities are nearly immortal.

As he said, companies that do Ecosystem Brand need to constantly evolve and optimize like rainforests. Everything in the ecosystem is increasing or decreasing, the environment inside the ecosystem is changing with each passing day, and the whole ecosystem is constantly expanding and evolving. This is the endless life of the IoT Brand.

Zhang Ruimin finally mentioned a quote in the epitaph of Karl Marx: The philosophers have only interpreted the world in various ways. The point, however, is to change it. To change the world, you must first know the world.