RenDanHeYi: A Management Paradigm in the Quantum Era
— A Review of Business Ecosystem Alliance’s latest webinar
For more than a century, management has been in thrall to Frederick Taylor and scientific management. At this stage, a new era of management is approaching to us: the era of quantum management. The concept was pioneered by Danah Zohar, who was invited to take part in the latest monthly webinar of Business Ecosystem Alliance — Discovering Quantum Management. Danah is the Founder of the theory of “Quantum Management”. Her latest book Zero Distance: Management in the Quantum Age, takes Haier Group, Roche India and GE Appliances as three successful practical cases, extending the language and principles of quantum physics to a new understanding of self-consciousness, enterprise organization and management model. In the session, Danah was joined in conversation by Steve Denning, the author of The Leader’s Guide to Radical Management and The Age of Agile and Daniel Pluess of Roche Global. “The RenDanHeYi model is a great gift from China to the global management community,” said Danah at the end.
First of all, why from Taylorism to RenDanHeYi?
In the 1950s, The American style of management, characterized by busyness and individualism, became the object of emulation for the rest of the world. Since Frederick Taylor’s time, hierarchies have kept employees at arm’s length. Stratification, specialization and standardization have become the orthodoxy of management. Taylorism is a contemporary product of the mechanical universe dominated by Newton’s three laws. Danah argues, Taylorism-based organisations are fully operated and controlled by the senior management, functions and departments are relatively independent, bureaucratic regulations and chain of command are very rigid. Employees are regarded as passive means of production, who have always been told to work in a passive state. Without accountability to their community or the world, everyone in the organisation competes blindly in the pursuit of maximum profit and shareholder value, regardless of ethics or values. This was surely validated in the 20th century. In the aftermath of the Second World War, Taylorism set clear standards, strict rules and precise measures, and helped put the recovery on track quickly.
However, the 21st century is the Quantum Age, where all the digital tools and services we use today, from computers to smart home appliances to the Internet itself, rely on silicon chips which are made based on quantum technology. Just like the famous thought experiment Of Schrodinger’s cat, the Quantum Age is full of uncertainties. With the irreversibility of globalization and the outbreak of global epidemics, various contradictions are interwoven and mixed. Newtonian linear and qualitative thinking model can no longer be applied in this era, where a management mode based on quantum physics science should come into being at the right time. When Danah was invited to Haier Group in Qingdao in 2014, she had a deep conversation with Mr. Zhang Ruimin. After the conversation, she found that RenDanHeYi model happened to coincide with her Quantum Management theory, and it was successfully practiced in a large-scale enterprise like Haier, and then effectively verified in Roche Global in India and GE Appliances of the United States.
RenDanHeYi: From island to zero distance interaction
“Zero distance is another name for Haier’s business model and a defining principle in Quantum Physics,” Danah shared. She went on to explain that her idea of RenDanHeYi is to reduce the distance between a company and its employees, and between employees and users, to zero. Before we can understand the quantum management of RenDanHeYi, we must first understand two unique concepts in Quantum Mechanics: quantum entanglement and wave-particle duality.
In quantum mechanics, when several particles interact with each other, the properties of each particle cannot be described separately because the properties of each particle have been integrated into the overall properties. This phenomenon is called quantum entanglement. By transferring the decision-making rights, hiring rights and distribution rights which were originally belonging to the senior management to Micro-Enterprises(ME) owners, the RenDanHeYi model enables every employee become a real independent person and an entrepreneur in the pursuit of creating values for their users. After creating value for users, they can share the value through the user payment mechanism, forming a positive feedback value cycle. Haier finally takes lifetime users as the core index to assess the value of each ME. This will thus realize the phase of zero-distance interaction between employees and users, just like quantum entanglement.
Wave-particle duality means that all particles or quanta can be partially described not only in particle terms but also in wave terms. “In quantum management, there are no causes, only relationships,” Danah explains. Haier’s MEs are both “particles” and “waves”. As a particle, every ME is performing its own function and creating value around a user’s demand and experience. As a wave, every ME is a node in one or multiple Ecosystem Micro-Communities (EMC), which is co-created with other nodes in the same EMC to provide users with a whole process scenario-based experience. Same applies to EMC, which, as particles, it provides users with scenario-based solutions; as waves, it also constantly shares resources with other EMCs. As a whole, Haier becomes a zero-distance quantum system itself.
If everyone is his/her own CEO, what is the role of the original CEO in RenDanHeYi?
This is the most frequently asked question in the comments section. People know that the transformation of any enterprise is inseparable from a change in the mindset of the leader. Traditional CEOs generally believe that they must tell employees what to do and make them afraid of themselves, or they won’t achieve anything. This is the biggest obstacle to organisation transformation, Danah shared. She believes that the starting point of the quantum management approach for CEOs is that you must trust your employees and trust them to make the right decisions based on user needs. This means that CEOs should have the courage to delegate power and let employees innovate.
Steve Denning shared, “The innovations I’ve learned about have always been initiated by people from the bottom, and many CEOs are now making the transition, even if it’s a slow process.” It is rare for a senior leader to actively embrace change. Stuart Crainer added to the point, “I watch Mr. Zhang Ruimin’s speech every year, but every year he talks about something completely different. His trait of continuously embracing change and self-questioning is really rare to see among traditional CEOs.” Daniel Pluess, former Finance minister of Roche and now Head of its Swiss division, also expressed his opinion, “I changed my way of thinking after deeply understanding the quantum management approach and the practice of Haier. Now I think if I make the wrong decision, a lot of the projects or innovations that follow will collapse. It’s suffocating. I believe if the goal of the company and employees is to create value for our users, and my employees will make the right decisions.”
Indeed, as Danah argues in her book, the way we view problems affects how we solve them. The way we think builds our world. If CEOs continue to follow the Taylorism management model, their organisations will eventually reach a bottleneck. The world’s attention to the quantum age, the VUCA age, and the ravages of COVID-19 all confirm the uncertainty of the world that we live in. It is in urgent need of organizational leaders to change their management mindset, actively embrace change, cherish the value of people and create a win-win situation with users through zero distance interactions. RenDanHeYi, a disruptive management paradigm with all these focuses is gradually coming into view.
Please watch the original weibinar replay via: https://business-ecosystem-alliance.org/2022/03/16/discovering-quantum-management/