China’s New Playbook - Part 2: Leadership

In part 2 of our blog about China, we will dive into the topic of leadership.

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Over the past decades, Chinese companies have mastered the blend of Western management principles with Confucian values like moral leadership. Therefore, it is extremely valuable for Western companies to take a closer look at how China is changing the game in terms of organizational change, leadership & company culture.

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Here’s what we can learn from them:

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1️⃣ Radical autonomy: Micro-enterprises & the RenDanHeYi-model

@Haier - once a traditional appliances manufacturer - has reinvented itself into a global benchmark of extreme decentralization. The company split into over 4.000 (!) micro-enterprises, each with fewer than 10 employees. These teams operate like mini-startups inside the company, each with full P&L responsibility, control over hiring, innovation, and budgeting.

At the core of this model is the RenDanHeYi (人单合一) philosophy:


• Ren (人) = the employee
• Dan (单) = the user value
• HeYi (合一) = unity or integration

Results:

• 10.000 middle managers removed to flatten the structure
• Higher innovation output as each ME is incentivized to move fast
• Agility at scale, with decisions made on the ground without red tape

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2️⃣ Leadership as Ecosystem Architecture

Rather than acting as classic decision-makers, Chinese leaders position themselves as ecosystem architects:

• First, they define clear boundaries in which the teams can operate (budget, scope, timeline)
• Within those boundaries, teams are fully empowered to self-manage
• Leadership is built on trust in the system, not top-down enforcement

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@BYD, known for EVs and battery innovation, repurposed an entire manufacturing line for face masks within two weeks during COVID. This speed was only possible due to decentralized operational authority.

In short: Chinese leaders lead by designing environments for action, not by controlling every action.

3️⃣ Agility - yes again, but truly at scale

While “agile working” isn’t new in the West, China has taken in to the next level by applying it across entire organizations - not just product teams.

• @Tencent for example, runs on hundreds of product units that control their own product releases, customer feedback cycles, and development roadmaps.

• Decision-making in finance, HR, operations and strategy are fully decentralized, with 80% of operational choices are made without requiring top-level approval.

Agile has become an organizational paradigm for leading Chinese businesses.

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4️⃣ Companies as Open Ecosystems

Where Western firms often operate as silo-ed entities, many Chinese businesses function as open platforms or ecosystems, incorporating external partners (freelancers, users, suppliers) into their internal structure.

• @Meituan engages tens of thousands of independent couriers who fully self-manage their work

• @Pinduoduo builds its entire commerce model around group-buying, turning customers into sales agents and community builders.

This requires a new kind of leadership: one that acts more as a facilitator of infrastructure and trust, rather than commander of employees.

What Western Leaders can take away from this:

• Build entrepreneurial teams internally
• Lead through mandates to fuel truly unbiased innovation within your company
• Treat agility as a company-wide operating system
• Think ecosystem, go beyond your organizational walls

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