Leaders for Humanity

Good Organisations

building better businesses - PIONEERING NEW WAYS TO ORGANISE

Emanuele Quintarelli is one of the most progressive and visionary thought leaders and a seasoned business consultant in the fields of organizational development and transformation. With a wealth of experience and expertise, he helps leaders reshape traditional work models into dynamic, value-driven ecosystems. In our interview, we embark on an engaging journey through contemporary alternative organizational models, exploring concepts like Agile, Holacracy, Sociocracy, Teal, and Haier's Rendanhahyi. We question the relevance and possibility of universal values in a complex and pluralistic world while seeking to uncover how organizational design can promote autonomy, participation, creativity, innovation, and social purpose. Throughout the conversation, we gain a deeper understanding of the practical challenges inherent in organizational transformation, emphasizing value co-creation, self-management, and interconnectedness at scale. Join us on a quest to liberate employees and help them rediscover meaning in their work!

Emanuele Quintarelli

Core Concepts: Social Enterprise, Sociocracy, Holacracy, DAO, Warm Data, Rendanheyi
Unique Propositions: Entrepreneurial Ecosystem, Enabling Organizing Micro-Enterprise (3EO)

BEHIND the interview

Why is the interview important? Who are we talking to?

DISCOVERING THE DIALOGUE WITH
emanuele Quintarelli

We were eager to engage in an interview with Emanuele due to his extensive expertise in organizational design, encompassing both theory and practice. Moreover, his unique insights into Rendanheyi as an education partner of Haier, along with his unwavering dedication to social enterprises, made him a compelling guest for our discussion, which revolved around three primary focus areas.

Firstly, in line with our interest to develop an organisational archetypeanchored inexplicit ethical foundations,we sought to explore the design principles at the coreof Emanuele's work.Central to our inquiry was a pivotal question: Couldresponsible organisational institutions and structures be designed and scaled in the absence of a robust moral and political framework? Could an approach centered solely on negative freedom and personal autonomy avoid compromising the essential interconnectedness of tasks and contributors, failing to cultivate community andshared purpose?Emanuele had often questioned the grounds for normative or universal ethics and the discussion therefore promised to be thought-provoking.

Secondly, we aimed to leverage Emanuele's wide expertise for a deep dive into a comparative analysis of various popular organizational models. With the proliferation of alternative approaches, we were keen to gain a comprehensive understanding of these diverse proposals, considering both their theoretical underpinnings and practical implications.

Lastly, we wanted to delve into Emanuele's personal vision for a cohesive integration of various approaches and his evolving toolkit for entrepreneurial ecosystem enabling organizations (3EO). Our critical inquiry here was whether this model could genuinely bridge autonomy and collaboration or indeed might inadvertently foster more extractive and exploitative labour practices. Furthermore, we sought to examine the extent to which his model, rooted in Haier's Rendanheyi, was reliant on unique Chinese culture and philosophy. Finally, we wanted to understand if it could become a model for all, or would remain more suited to individuals inclined toward risk-taking, competitiveness and entrepreneurship?

KEY LEARNING GOALS (click LIGHTBULB to see the INQUIRY MAP)

What are the challenges for normative ethics in a pluralistic society? Conversely, what are the pitfalls of subjectivist, individualistic or relativistic narratives?
What are the main alternative approaches to organisational design in contemporary management literature and consultancy practice? What are the characteristics of Agile, Sociocracy, Holacracy, Humanocracy, Teal, Rendanheyi? What are their similarities and differences, both in their normative premises and practical implications?
What is 3EO and how does it build on other organisational approaches? What might be its benefits and potential challenges in practices, and in seeking to transform from traditional workplaces towards entrepreneurial ecosystems?

✿ ABOUT EMANUELE QUINTARELLI

Emanuele Quintarelli is a visionary thought leader and seasoned business consultant specializing in strategy, technology, and organizational development. Since 2020, he serves as Equity Partner and Entrepreneurial Ecosystem Enabling Organization (3EO) Micro-Enterprise Lead at Boundaryless, a prestigious design and organizational development agency. Prior to his role at Boundaryless, Emanuele has worked as a Senior Advisor in Digital Workplace Transformation and Organizational Evolution at eFM, Entrepreneur at Cocoon Projects, and Socialenterprise.it. He also was a Co-Founder and Project Leader at People R-Evolution, a movement and community focused on nurturing awareness, passion, and responsibility for interdependent evolution. Before his work in consultancy and entrepreneurship, Emanuele held senior positions at EY, where he focused on Social Business, the Future of Work, and Digital Transformation.
Quintarelli's career is marked by his unceasing commitment to fostering a more interconnected and humane approach to organizational development, seeking to “make the world a better place, one organisation at a time”. For the last 20 years, he has led global teams across sectors, cultures, and continents to promote value co-creation, self-management, and innovation on a global scale. His contributions to the development of a freely available and widely shared Design Toolkit have significantly influenced designers and strategic thinkers across the globe, reimagining traditional workplaces.

Exploring the Critical concepts for this session

Social enterprise [Wikipedia]

Social enterprises are businesses created to further a social purpose in a financially sustainable way. A social enterprise's main purpose is to promote, encourage, and make social change. A social enterprise is an organization that applies commercial strategies to maximize improvements in financial, social and environmental well-being. As a result, their social goals are embedded in their objective, which differentiates them from other organisations and companies. Social enterprises can provide income generation opportunities that meet the basic needs of people who live in poverty. They are sustainable, and earned income from sales is reinvested in their mission. They do not depend on philanthropy and can sustain themselves over the long term.

Sociocracy [Wikipedia]

Sociocracy is a theory of governance that seeks to create psychologically safe environments and productive organizations. It draws on the use of consent, rather than majority voting, in discussion and decision-making by people who have a shared goal or work process. The Sociocratic Circle-Organization Method was developed by the Dutch electrical engineer and entrepreneur Gerard Endenburg and is inspired by the work of activists and educators Betty Cadbury and Kees Boeke, to which Endenburg was exposed at a young age while studying at a school led by Boeke. Sociocracy has informed and inspired similar organizational forms and methods, including Holacracy and the self-organizing team approach developed by Buurtzorg.

Holacracy [Wikipedia]

Holacracy is a method of decentralized management and organizational governance, which claims to distribute authority and decision-making through a holarchy of self-organizing teams rather than being vested in a management hierarchy.

DAO [Wikipedia]

A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC), is an organization managed in whole or in part by decentralized computer program, with voting and finances handled through a blockchain. In general terms, DAOs are member-owned communities without centralized leadership. The precise legal status of this type of business organization is unclear.

Warm Data

Warm Data is information about the interrelationships that connect elements of a complex system. Put another way, Warm Data is transcontextual information. Warm Data captures the qualitative dynamics and offers another dimension of understanding to what is learned through quantitative data, (cold data).

Rendanheyi

RenDanHeYi is a highly progressive management model applied by various organisations. The model - pioneered by Haier - is about unleashing entrepreneurship at all levels. The RenDanHeYi model allows organisations to remove traditional, top down management structures while unleashing a hugely entrepreneurial network of microenterprises…

3EO [Boundaryless]

Created in strict collaboration with Haier Model Research Institute, the 3EO Toolkit is an open source framework to transform organizations into a swarm of networked micro-enterprises connected through dynamic collaboration and shared services. Entrepreneurial Ecosystem Enabling Organizations absorbs the highly volatile, hyper-connected, unpredictable shocks of current markets while, at the same time, unlocking human passion, potential and entrepreneurship.

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GETTING STARTED

A Resource Kit to launch your explorations

Emanuele's Profile (Linkedin)

Further information and links in Emanuele's profile page on Linkedin

Social Enterprise

The Human Organization explained and further resources about organisational change

Boundaryless - The future of organising

One of the most forward-thinking organisational design and transformation consultancies in Europe - with many free resources

The Platform Design Toolkit

The Platform Design Toolkit – Platform Opportunity Exploration Guide. The Platform Opportunity Exploration Guide and the related canvases provide a structured approach to scanning an ecosystem and assessing the platform opportunity in there.

The Trilemma of Organizational Unbundling

This article explains the concept of organizational unbundling, the idea of making organizations more resilient by separating them into smaller, loosely coupled pieces. Reading this piece will help organization designers understand the tradeoffs between autonomy, coherence, and adaptability.

A Product-Centric operating model at Scale

In this post we explore how adopting a Product-Centric operating model proceeds as you scale and what processes of continuous innovation such a model can generate, making organizations that can more safely adapt to continuously changing markets.

Ripensare le organizzazioni

Ispirato a quasi 40 anni di incessante trasformazione aziendale e organizzativa del Gruppo Haier, il modello RenDanHeYi si fonda sulla teoria dei sistemi adattivi complessi per offrire un approccio radicalmente nuovo nell'assorbire l'estrema volatilità, iperconnessione e imprevedibilità dei mercati attuali e, allo stesso tempo, liberare la passione, il potenziale e l'imprenditorialità degli esseri umani che vivono all’interno ed intorno all’azienda.

The RenDanHeYi Italian style

Emanuele Quintarelli describes the deliberate transformation of the Italian creative agency Gummy Industries after learning about RenDanHeYi.

Sociocracy Meets Rendanheyi

Through their unique ability to empower multiple streams of value creation among million of actors, platform organizations such as Amazon, Airbnb, Haier are quickly emerging as leaders of the business world. Boundaryless will share early insights from mixing their market-based design with sociocracy as an attempt to foster unprecedented levels of entrepreneurship, motivation, inclusiveness and power distribution.

Agile on steroids through the RenDanHeYi

Virtually any organization has been exposed to, if not already influenced by agile thinking, rituals, and tools. Stand-ups, weeklys, retrospectives, iterative sprints, scrum, kanban boards, or other parts of the agile lingo, and its practices have made their way into most large firms Boundaryless is honored to support. Some recurring questions thus naturally pop up: Are agile principles and RenDanHeYi’s values in alignment? Should we expect any conflict from adopting RendanHeYi solutions in teams that leverage agile techniques? What are the organizational and operational domains mostly impacted by the RenDanHeYi versus those affected by Agile? What is, instead, the RenDanHeYi adding to agile approaches?

Collapsing Empires and Rainforests

Collapsing Empires and Rainforests at Teal Around The World 2021. An overview of Haier's Rendanheyi model and how to leverage it to design adaptive, ecosystemic organizations able to fully unlock human potential and unprecedented market value in the era of platforms and IoT

Social Tools

Emanuele Quintarelli has years of experience on how to introduce enterprise social tools into large organisations. At Social Now 2016 Emanuele shared a few steps to help organisations become more productive and more human.

Further essays and materials from other authors

Organisation Models

Recent years have seen an increased number of Organisation Models appearing on the scene of management. With this post, I want to try to build an overview of the suggested models, which I will maintain over time as additional readings and sources of inspiration appears. Before digging deep, however, I wanted to stress one important fact. None of these models is, at this stage, attaining the status of a “leading and universally accepted model”, which means that every organisation needs to develop Organisation Design capabilities, being able to freely choose the aspects that are more consistent with the corporate strategy identified.

Strategy and Emergence

The shifting role of “strategy” in a world in deep and continuous evolution - Martin Reeves on dynamic strategies. "We need to think about vitality, which is not performance, it’s the potential for future performance. Key about dynamic strategy is essentially, either real world needs driven adaptation, or ideas driven, imagination driven, creative strategy..."

Thriving on messy coherence

A significant shift is happening regarding how organizations influence individual behaviors, under the evidence that telling employees to work differently while maintaining old paradigms of structuring and measuring isn’t going to fly. The most promising firms in the world are instead undergoing a complete rethinking of operating models, expectations towards people, roles, responsibilities, which are becoming fuzzier and more fluid. What Sonja calls “messy coherence” is a desperate demand to become antifragile and to experiment, to dynamically steer direction and leverage massive heterogeneity to generate resilience without losing consistency.

The End of Bureaucracy

Bureaucracy has few fans. Walmart CEO Doug McMillon calls it “a villain.” Berkshire Hathaway vice chair Charlie Munger says its tentacles should be treated like “the cancers they so much resemble.” Jamie Dimon, the CEO of JPMorgan Chase, agrees that bureaucracy is “a disease.” These leaders understand that bureaucracy saps initiative, inhibits risk taking, and crushes creativity. It’s a tax on human achievement.

Busting bureaucracy

Straight from Humanocracy, the recently published bestseller book authored with Gary Hamel, the EEEO Conversation series is kicked off with Michele Zanini and a not-to-be-missed conversation about the necessity of busting bureaucracy together with its implications for strategy and organization design.

Beyond the holocracy hype

Most observers who have written about holacracy and other forms of self-management take extreme positions, either celebrating these “bossless,” “flat” work environments for fostering flexibility and engagement or denouncing them as naive experiments that ignore how things really get done. To gain a more accurate, balanced perspective, the authors—drawing on examples from Zappos, Morning Star, and other companies—examine why these structures have evolved and how they operate, both in the trenches and at the level of enterprise strategy and policy. Adopting self-management wholesale—using it to determine what should be done, who should do it, and how people will be rewarded across an entire enterprise—is hard, uncertain work, and the authors argue that in many environments it won’t pay off. But their research and experience also suggest that elements of self-organization can be valuable tools for companies of all kinds, and they look at circumstances where it makes more sense to blend the new approaches with traditional models.

New Organizing

The purpose of this article is to describe how organizations have evolved across three periods of modern economic history. These periods can be called the age of competition, age of cooperation, and age of collaboration. The major organizational forms that appeared in each of the three eras, including their capabilities and limitations, are discussed.

Building Better Bureaucracies

Colloquially speaking, bureaucracy means red tape, over-controlling bosses, and apathetic employees. But large-scale organizations need appropriately designed formalized procedures and hierarchical structure to avoid chaos and assure efficiency, quality, and timeliness. We currently lack theoretical or practical guidelines for building better bureaucracies that can support high levels of both performance and employee involvement. This article combines insights from organization theory and cognitive psychology research on technology to propose a set of organization design guidelines.

TOP 100 BEST LEADERSHIP BOOKS

Interested in Leadership? Here is our Top 100 selection of the most important books for professional leaders of all times.

the socratic dialogue

Live video recording and podcasts

Explanations, artefacts and references from the interview

Control and Coherence (Rita McGrath)

Whether it’s from external events such as Covid-19 or a market crash, Rita Gunther McGrath points out that inflection points are inevitable for any organization. The key is to not remain complacent, but to keep moving, innovate and learn what the new strategy playbook looks like in a non-linear world. She also suggests that we may have been “sleepwalking” our way into complexity and that we’re now starting to see the consequences.

Sociocracy for all

Sociocracy For All (SoFA) is a nonprofit that helps organizations, communities, workplaces and collectives to learn how to organize in a decentralized way and make their decisions with equity, efficiency, empowerment, trust and transparency using sociocracy.

Sociocracy S3 (James Priest)

James Priest's website on sociocracy S3 with many resources and design patterns

Reinventing Organisations (Teal)

Frederic Laloux's website with many practical tips, links, information and over 200 hours of videos

What have we learned? Our "Best Bit" takeaways from the Interview

KEY INSIGHTS FROM THE INTERVIEW FOR OUR INQUIRY

Here you can find the most memorable insights from our interview, related to our three inquiry questions. Simply select from the drop down menu on the right -->

1. WHAT IS GOOD?

Good Life and Good Work

I am troubled by the term “good”. It seems like a Manichean dualism. Something is good, something else is bad. And I struggle with that, since I do not believe in a clear, unique, universal definition of good. Something that could be good in one paradigm may look terrible in another one. I’m always afraid of imposing judgment on people or organisations based on what could be good for me or somebody. I care about looking at organisations in which the human component, and the humane outcomes are important.
I see millions of people struggling every day, spending most of their lives for companies they don’t respect, where they don’t like the colleagues with whom they don’t go along with. I think this is a massive social problem because of the output we are missing as a society and the fulfilment we need as human beings. I always felt the call of doing something about it. (…) Most organisations don’t feel it is their call. They don’t feel responsible for it. And even when they do understand it, they don’t know how to walk this journey. So, I think what we need to do is twofold: fostering the sense of urgency, but even more so paving the way so that more organisations can really act on it.
Individuals within and beyond the organisation started to care about the reality of human-centricity. So I’m picking an organisation as a customer, or I’m picking an organisation as an employee, not because of what is written in the brochure, or on the website, but because of the stories of the people that live in and interact with that organisation. Now, this is becoming important. And it’s becoming important, because, on top of having a good salary, many of us have the ambition to find true meaning in an organisation.

Universal values

I don’t think aspiring to a universal common view is the answer to solving the problems of the world. (…) Why do I think that a universal normative perspective is not the solution? I think that through some organisations that have reached exponential scale and growth we may nudge the system in some direction. What I’m saying is that it’s a cultural process, more than a normative process. So it’s really about negotiating paradigms, decisions, and actions, between people that want to do something different. It’s complex, not complicated. Even a single event may have massive repercussions. So, we have to be careful. Also, we should have hope, because even a single individual may have a huge impact.

2. HOW TO CRAFT GOOD ORGANISATIONS?

Co-creation an recipients of value

The criterion for me is the value, and especially the recipients of value, that your organisation co-creates. Traditionally, the recipients who are benefiting from the action of the organisation are a small group with strong interests in the organisation. The owners, the shareholders - ignoring all the others. (…) What I appreciate today is that we are going beyond that. We need to enlarge the number of stakeholders. Putting all the stakeholders, even our competitors, even distributions, even customers, even partners, even nature at the same level and making decisions based on keeping those non-traditional stakeholders in mind. (…) If you apply this holistically, that’s what I would define as an organisation that is trying to do something good for the world.
We may define value as financial streams. These are important in the end, but just one measure. We can think about many different capitals, intellectual capital, natural capital, and even psychological capital. So, yes, the meaning of value is changing, and the recipients of that value are changing. But the means of generating value are also changing. As an example. For a long time, we have seen customers as passive recipients. I create the product, I define the strategy, and you buy it. Your only option is to put your money in it, or not. And even after having done that, I will ignore you, if you have a problem or feedback. That’s the traditional approach. I think we already went beyond that. We learned to listen more. But that’s not enough. I’m talking about engaging the different stakeholders, even those who cannot speak, such as nature or animals. If you do that, the output changes.

What are the core principles of a system for good business?

Power is an intrinsic property of a system. You cannot get rid of power. You can only be intentional in how you distribute and use power. Distributing power intentionally is already a way to nurture the engagement of multiple stakeholders. So this is the first principle. It’s not me, the boss, the CEO, the board, the manager, it’s everybody. This is very democratic, a bit scary for those that have power and those that today don’t have power. But to me, it’s a key measure for good business, not just for the good impact, because it means having individuals or teams as sensors of reality. (…) And that’s what we need today because the world is changing so fast.
The other point is transparency. We, as people in power have been benefiting from a lack of transparency. Asymmetry of information is power. What “I know that you don’t know” is a way for me to get more
Another point is equivalence. So believing that regardless of the hierarchical position, the status, or how much money you make a year, people are equivalent, and all of them deserve a space, all of them deserve support from the organisation to participate.
A final point is seeing the organisation as a vehicle for growth — individual growth, societal growth, and the growth of teams. I believe the organisation is really an accelerator for some outcomes, not an end in itself, not an end for some people, but a vehicle for making the world a better place. I used to say that what I do is trying to help organisations become better, to build a better world. That means having the organisation interact with the world not just in terms of extraction of value, but in terms of co-creation of value.
In any system, there are many levels. (…) Looking at the interdependence among these levels is complex. For at least 100 years, we have been addressing this challenge through structure. We defined the rules, distributed work and tasks, and monitored — giving incentives to people to behave in a way that we envisioned. But this brings problems, in terms of autonomy, ambition, creativity, motivation, impact, and actualisation of individuals. I think that the autonomy of individuals doesn’t go against having a system because otherwise, we wouldn’t be talking about an organisation. I think that as we tend to say in Boundaryless that the future is not about organisations. It’s about organising. It’s about finding those founding principles, the enabling constraints, and the minimum viable structure that maintains a messy coherence.
The constraints of the system could be their purpose or rights. The levels of the system will have different constraints and will generate, of course, different outcomes. (…) I don’t want to use the word “rule” or “constraint” in terms of what “you must be, this is what you must do”. I see them more as attractors. (…) It’s not about telling people what to do, it’s about giving them a nudge. Giving them an incentive in the broadest term, for the right individuals to be attracted, and to do their own thing in this organisational space.

How to build better businesses?
Transformation

When you go for a transformation, you have to be mindful because there is no target operating model, there is no big design upfront. The only way of evolving — more than transforming - is iterative, is co-created, is based on pilots with a model that will be messy, that will keep evolving and that, in the end, should implement the hope and purpose we have been describing in a few steps of this conversation.
I don’t believe in God, but I believe you need faith to go through this journey as it means you have to trust the system (…). There is no guarantee in terms of the quality or the timing of outcomes. And this is scary, (…) but it’s becoming more and more of a need.
The first question that has to be addressed is the “why”. Why do you want to do this? (…) There are many reasons for not doing it. I believe the only viable answer is to do it because of my people and because of my business. So if you find this journey valuable for you, specifically in your complex trajectory, business space, well, that’s good. Let’s get started.
The second point is where we should start. I wouldn’t ever go with a “big bang” transformation. To simply disrupt everything, my business, my organization, and to build a Rendanheyi-like model. What we do, is to go through a process in which the organisation itself co-creates a portfolio of pilots, and decides where they want to start experimenting. (…) So it’s not the entire organization altogether. It comes in small but meaningful bites, because those pilots are meant to generate the transition from pilot to scale.

Dimensions and models of transformation

The first topic that I would raise is that in the last few years, we have been seeing a Cambrian explosion of new models. (…) All of them seem to bring something new, while all of them insist on a few dimensions. Instead of focusing on the model, we should think about the need. What we want to achieve as a company, the outcome, who we are, our culture, or trajectory.
In my “human map” there are different levels of dimensions. For example, there is the organisation itself, there is the team, there is the individual and there is also there is the physical space.
Personally, what I’m trying to do is to mix ideas from different models, because I don’t believe there is one solution. (…) I think being intentional about what you want to achieve, finding the right pieces, building the right recipe from the ingredients, is the responsibility of the individual organization.

Holacracy and Sociocracy

What holacracy believes is that the problem is the system, and it’s meant as an operating system for organisations. It provides a set of algorithms for people to be more efficient, more intentional at distributing value, and working together. This is very good. It’s what most organisations need. (…) But the thing is that we are not computers. We are human beings. And this also has value. So holacracy is powerful but a bit cold.
Sociocracy from which holacracy has been largely taken, (…) comes with a totally different mindset, with the belief that organisations are living beings. So, yes, imperfect, but we want to see this imperfection, we want to see human beings. Just to give you an example, the “circle” is the basic unit in both holacracy and sociocracy. In one case, holacracy, it is a cell of the system. In the other case, sociocracy, it is a group of people. So the human trait is important. And that’s what attracted me to sociocracy — this feeling of a community of a group, caring about each other, even with the same organisational tools. This is fascinating to me. It’s the same tool but totally different flavours.

Teal and Agile

I will try to be as gentle as possible. I think they have merit in the sense that if we want to have an impact on the world, the more we have conversations about ways of organising in which human beings and all those stakeholders are more central, they are good.
Through Teal, managers learn about stories and about other ways of designing your organisation. Is this structured enough? Is this concrete enough? Is this researched enough? I don’t believe so. But it’s a way to open the door for an exploration which organisations should take responsibility.
Agile is taking care of one piece of this big picture (dimensions of the human organization map). And that’s why I’m using this human organisation map because you can see what is in and what is out. If you have a team, and you want to use rituals to facilitate how the team works, Agile is fine. But is Agile revamping the way of organizing? I don’t believe so.
The problem is not with Agile or with Teal, it’s with a lack of awareness about what they can do and what they cannot do. Unfortunately, this is the state of the market. Most organisations, don’t bother going this deep, and just use what some consulting company told them.

Rendanheyi model: concepts and properties

The Rendanheyi model is a way to reduce the distance between every employee and every customer. So the first principle is customer-centricity, but the other principle is really unlocking the human potential. We want to set human beings free into an organisation.
Every employee could be an entrepreneur. Not only an intrapreneur, but an entrepreneur. Meaning the owner, part-owner of an entity. And it does that by taking inspiration from the market. So it’s bringing ideas that we often see in the market (ecosystems and platforms) into the organisation. Because the only way to act as an ecosystem, or as a platform in your market is to be an ecosystem and a platform within the organisation. So in the end, this is not a choice. If you want to play that game, you have to do that both externally and internally.
The first concept is the so-called “micro-enterprise” (ME). Instead of having 80,000 or 90,000 people in a monolith, you have 4000 small teams called micro-enterprises. A micro-enterprise is like a small company with plenty of freedom. A company that can decide the strategy, the people that should work there, and how to distribute profits.
The second concept is the so-called “enterprise micro-community” (EMC). It’s about how to reconnect those many small teams to produce value for the user. The belief is that the goal is not selling a product, but to become an “ecosystem brand” trying to serve the user throughout his life. And that’s necessarily about orchestrating multiple players, even outside of Haier. It could be your competitors, it could be your startup.
The third concept is about “unbundling the core of bureaucracy”. HR, IT, Finance, Legal and other support functions. Those functions become teams themselves. Small teams that are measured against the needs of their colleagues. These are called “shared service platforms”.
There is also another type of platform, the so-called “industry platform”. These industry platforms are another way to unbundle strategy. Instead of telling people that “this is the strategy”, “this is what you have to do”, they want to nudge the system into some specific directions by offering incentives through these platforms — and people can jump on board with their micro-enterprises, take the investments, and then create something new.
In summary, the Rendanheyi model has three properties: a) it is entrepreneurial. We want every individual to potentially become an owner, or at least to sense opportunities in the market and act on opportunities in the market. b) It is ecosystemic. It intentionally wants to distribute value and collaboration among different entities. And c) it is enabling. Meaning that it tries to crystallise common services and offer these more efficiently to the entire firm, without maintaining the bureaucracy that we see today in many organisations. There, individuals are not human beings, they’re just cogs in the machine. What the Rendanheyi is offering is by some orders of magnitude (…) more levels of freedom. You can decide what to do, how to do it, with whom you want to do it, and even how much you want to be paid. You can be not an employee, but an owner. So the idea is a society with fewer employees and more people free to do the meaningful work they want to have, still having some security because you will have more traction in terms of work.

Competition or collaboration across micro-enterprises?

In the end, they offer some tools to the people in the organisation to work together. It’s not more prescriptive than this. Even the enterprise micro-community (EMC), as a collaboration contract, is not an organisational structure. It’s a contract. A contract encoded in a blockchain, so it’s really dynamic.
The (collaboration) contract is not about how to do things. It’s about what you want to achieve. The how is left to the people involved in the contract. And even the people involved in the contract are not decided top-down. So what you say is: “I want to provide this new service”, you put it on a platform and people will flock to it. And then we talk and see who is best qualified, who has time, who provides the best conditions to work together. So it’s really a free decision (…) and not so dry as it could look. And it’s very dynamic.
It came out as an idea from the organisation itself. Some teams said, we want to collaborate. How can we make this easier? Let’s find a construct that will make it easier. There is no competition within the team or micro-enterprise. The micro-enterprise is really a team with specific goals, evaluation, and adjustment mechanisms. Failure is part of the picture. And the key point is that what you do when things fail, it is not a problem or a reason for punishment. It is learning.
So the organisation is no longer somebody telling you what to do, it’s people figuring out themselves what to do alone or together.If you want to measure the total value created, you can measure the total value created for each stakeholder. But there’s going to be some interaction effects that might be missing.

3. HOW TO DEVELOP GOOD LEADERSHIP AND TRANSFORMATION?

We need a different kind of leadership, more leadership and not less. More responsibility, not less and more distributed, not more centralized.
It’s leadership that I call an “architecting leadership”. Leadership is acting more on the enabling constraints than on the people, more on the structure than on the outcomes. And eventually, even the architecting could be crowd-sourced. In sociocracy, people are doing the work, but also designing how the work happens. And that’s one of the reasons for which we use sociocracy on top of Rendanheyi, just to add this possibility of the system designing the system.
As a leader, you are empowering others through the right mechanisms, more than energising them, more than coordinating them, more than rewarding them. I believe that leadership is connected to ownership and purpose, because it’s about trying to transcend yourself and transcend leadership itself, and hand leadership over to the system. Letting the system own the system itself at the service of purpose. That’s the highest level.So there’s an idea of leadership about getting stuff done, which I think dominates. And there’s an idea about personality, which is the charismatic stuff, which dominates. We need a certain kind of leadership. It’s not this charismatic stuff. It’s people who have a high degree of humility and are fiercely determined around purpose and things.

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