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THE COMPANY HAS BECOME SUCCESSFUL THROUGH EXCELLENT CUSTOMER SERVICE, PRODUCT QUALITY, OPERATING EFFICIENCY, INNOVATION, AND SPEED TO MARKET.
In 1984, Zhang Ruimin took over a nearly bankrupt refrigerator factory in Qingdao, China. In 2003, the company's global sales hit $9.7 billion with a growth rate of 70% during the previous 19 years. Today, Haier Group is recognized as a worldwide brand. On January 31, 2004, the firm ranked 95th after such household names as Coca-Cola, McDonald's, and Nokia, which were the top three on the World Brand Laboratory's list of the 100 most recognizable brands. Haier was the only Chinese brand on the list.
So how did they achieve their success? As one of China's fastest-growing companies, Haier Group fits a 1999 Gallup survey profile for a successful company. Customer service, product quality, operating efficiency, innovation, and speed to market are among the top seven factors for success. Haier excels in all these areas.
To achieve success the company developed its corporate culture, business strategy, and OEC management-control system, which enforces firm work rules and discipline. Haier's Human Resource Management Director Wang Yingmin explains the OEC acronym: "O stands for Overall; E stands for Everyone, Everything, and Everyday; C stands for Control and Clear. OEC means that every employee has to accomplish the target work every day. The OEC management-control system aims at overall control of everything that every employee finishes on his or her job every day, with a 1% increase over what was done the previous day."
Why did Haier choose to implement the OEC system? According to CEO Zhang, "If you observe Chinese people's behaviors at the traffic lights, when the red light is on, people simply ignore it and cross the street anyway. At the workplace, Chinese people also tend to ignore rules and do not pay enough attention to details. We need a tough management system with fair rewards and penalty features to help our workers get things done properly."
OEC works. When I visited Haier's air conditioner manufacturing facility in the Haier High Tech Industrial Park at Yellow Island in July 2004, the factory floors were clean, and workers, wearing uniforms with photo ID badges, operated in an orderly manner at the assembly lines. Banners featuring quotes such...