Rendanheyi & MAQE

This is an excerpt from our book titled 'Start-up Factory'

MAQE

Thai software company MAQE is an Asian example that transformed towards Haier's Rendanheyi model with close contact from Haier´s Model Institute. Based in Bangkok, with about 80 employees, the transformation started with a focus on Rendanheyi-inspired contract mechanisms tailored to specific cultural and business needs. Three kinds of contracts related to employment, internal entrepreneurship, and external partnerships.

Employment contracts moved towards a Haier-inspired reward policy consisting of two components: a base salary and bonuses for entrepreneurship and risk-taking. As at Haier, if an employee at MAQE fails at his or her entrepreneurial initiative, they can fall back on the base salary and try again.

To boost entrepreneurship, MAQE introduced a contractual mechanism to let employees introduce ideas for new products or services, and start their own microenterprises. This involves a special contract that outlines all things related to the incubation stage and ownership of the microenterprise. Each receives support and guidance from founding members to bring concepts to market.

When microenterprises graduate from MAQE’s incubation programme, they are spun-off as separate entities. The contracts outline how the ownership of this new entity will be divided between employees and MAQE. Generally, the employees receive a major stake in the new entity, and MAQE receives a minor stake based on investment during the incubation phase. Expectations for all of this — who gets what, and when — is detailed in the contract that is signed before incubation.

Also implemented were EMC-inspired contracts that allow microenterprises to partner with one another (or with any external partner). These partnerships are designed to allow groups of entities to work together and address unmet customer needs. The contracts are results-orientated, to solve a particular un-met need and achieve a specific quantitative result based on forecasts. The partnership contracts give details of who the contributors to a specific project are, why they work together, what they are aiming to achieve, and, crucially, how they will split the proceeds.

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