What If Your Company Was Divided Up Into Countless Startups?
From a juggernaut with 80,000 employees to thousands of small companies with ten to fifteen employees. Haier, the renown Chinese manufacturer of white and brown goods, radically changed course by doing this. What would you do if that happened at your company?
Imagine this: you work for a large company. Your job (and its responsibilities) depend considerably on decisions made by people you rarely or never speak with.
The top of the company determines who your colleagues are, what you earn, which customers you work for, and the strategy for the future. Most of the things you do are imposed from above.
"That's just how we do things here."
Chances are, many of you are in that type of situation right now. But what if the top of the company decides to outsource everything? What if they suddenly decide to split the company into countless mini-companies? You and your immediate colleagues are suddenly responsible for everything.
Suddenly, you no longer do things “because that's how we do it here.” So, if you and your immediate colleagues think things should be done differently, then, by all means, go right ahead.
In one fell swoop, you are no longer an employee but an entrepreneur with a startup within the parent company. If that business turns out well, you will also reap the benefits. If it goes wrong, well, that's your problem too.
Haier as an example
When you think of such a profoundly progressive experiment, your first thought might be a hip Silicon Valley company that does something clever with data rather than an Asian white and brown goods juggernaut. But this is what Haier, a gigantic Chinese manufacturing company, actually decided to do.
Former CEO Zhang Ruimin divided the company into thousands of small pieces around 2005. Today, Haier has about 80,000 employees and now consists of approximately 4,000 small businesses, each with about 10 to 15 employees on average.
Sound fascinating? We think the same. We've been following the company for years. Pim and I first visited in 2017 and returned many times. And then we wrote our book Start-Up Factory about it.
What you can learn from Haier
Even if you are not interested in Haier, asking yourself how you would deal with such a situation is an interesting question.
What if the company you work for decides to divide things up, immediately turning your department with about fifteen people into its own company?
What would you do if you could suddenly hire new employees yourself, determine the strategy yourself and distribute the salaries yourself?
How would you relate to the parent company?
Would you still have all business functions internally? What about HR? Or finance? Or legal? Would you decrease them significantly, or is it better to outsource them?
Let's go a little further.
Do you think the other mini-businesses would still knock on your door for your services when they have to pay for them?
And if so: how much is your internal service actually worth? What if one of the other mini-businesses threatens to compete with your own services? And are you actually adding enough value to the company yourself?
Are there things you don't do now but would definitely do if your department suddenly became a startup? Or are there things you are doing now that you would immediately stop doing? And if so, why not do it now?
And perhaps the most important question: wouldn't it be much more fun and fulfilling to work in such a self-determined, entrepreneurial way?
Corporate Rebels Academy
Do you fancy creating high levels of entrepreneurship within your own organization as well? Then check out our on-demand course about Haier and other progressive organizations and practices at our Corporate Rebels Academy.