Because the wide, total framework for a new management paradigm that is offered by Quantum Management, embraces many, more narrowly focused new management ideas being offered by others, there are forward-looking companies that have, one at least knowingly, many unknowingly, implemented several features of Quantum Management itself and/or RenDanHeyi. These include new ideas like “the flat company,” “the agile company,” “the networked company,” “the purpose-driven organization,” “holocracy,” and “humanocracy,” as well as others that call for ridding companies of bureaucracy or empowering more self-organization. I think it may be useful to readers to look at a few of these. Perhaps implementing every feature of RenDanHeyi is not suitable for some companies, but these examples show there is much to be gained from adopting some of the key ones.

Volvo: Circles Within Circles

Volvo, when it was still a Swedish-owned company headquartered in Gothenburg, is the first instance I know of a large company that consciously set out to implement the principles of Quantum Management as I had so-far outlined them at the time. It did so in its engineering division with the goal of redesigning the company’s car development process.

At the very end of the 1990s, Volvo management realized that the company’s whole design model had a major problem. For years, Volvo had been turning out cars whose various models all looked very similar on the outside, but internally they were all different. Few components were universal, which kept production costs high, while the various models’ similar outward appearance limited, customer appeal. Management finally realized that the ideal would be a range of distinctive looking models that nonetheless shared most of the same internal components. Achieving this would fall to design and engineering teams.

The original intention was to organize this reengineering process the way management has always organized things—with clearly directed, top-down control. Management would decide what teams were needed, would assign pre-chosen designers and engineers to those teams, and give them clear, already worked out instructions on what to do and how to do it. At the time, Volvo’s learning model was, “Always go with what you know.” Management knew how to do the thinking; the engineers knew how to follow their instructions; everybody could rely on predictable results.

But just before this reengineering project was to be initiated, the senior management team that would supervise it traveled to England to attend a training course at Ashridge Business School. Having recently published my first stab at Quantum Management Theory in Rewiring the Corporate Brain, I had been invited as one of the speakers on the course, and I outlined my early ideas about the logic and benefits of self-organizing teams and decentralized, bottom-up decision-making. The Volvo managers were intrigued, and when they returned to Gothenburg, they read my book, and others they could understand that outlined the main ideas of quantum physics. And they looked at other organizations that had abandoned a hierarchical, top-down model of control. Finally, acting more on intuition than certainty, they adopted a “quantum strategy” for setting up the necessary redesign process and, expressing their own trepidation about this, changed the project learning model to: “Leaving behind what we know; Jumping into the unknown; Surpise!” They handed over the whole project to the discretion of the engineers and designers.

Telling these employees only that the reengineering goal was to arrive at a range of distinctive models constructed of mainly universal components, management then left it to them to decide what teams would be needed, how the teams would operate, and who should be assigned to each team. In all, twelve multifunctional teams were organized, one for each of twelve crucial design features—chassis, seats, steering, etc., and engineers once siloed to work on just one of these now worked together as team colleagues. More specialized subteams were formed in each team, and some outside experts were invited to join. All twelve teams worked in the same very large design room each day so they could stay informed about what each other were doing, members of each team were encouraged spontaneously to join a different team or subteam when their skills might make this relevant, and all desks and computer terminals were put on wheels to facilitate this easy movement between teams. Once each week, representatives from each of the twelve teams met as a group to catch up and coordinate. Management who reviewed the work pattern designed by these teams, called their model, “Circles within circles” (Fig. 19.1). The whole thing was dynamic and self-organizing.

Fig. 19.1
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Volvo circle of circles within circles

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I spent some time with the engineers in their “work” room when I was invited to visit Gothenburg during the project. It looked and felt more like a Montessori classroom, with “toys” (bits and pieces of gadgets, Lego bricks, materials, and tools) spread around the periphery, and there was an atmosphere of children at play. Various individuals with whom I spoke told me they had never enjoyed their jobs so much. And the whole experiment was a great success for Volvo. Before long, the new look Volvos offering customers a variety of models, all built using the same reliable components, were rolling off the assembly lines. Anna Nilsson-Ehle, vice president in charge of Change Management at the time, commented afterward, “We didn’t know what we were going to get out of each team until we had the team. Their way of working surprised us and them. But it worked!”.

Not complete RenDanHeyi, but the Volvo case foreshadowed many of its key features: the self-organization, the greatly enhanced self-motivation, the small, independent, multifunctional teams that also collaborated as a network, and Volvo’s own decision to be led by customer needs.

Visa: The Chaordic Organization

Dee Hock used to be a vice president at a Seattle bank that licensed BankAmericard, one of the world’s first credit cards. BankAmericard was successful at first, but an ensuing orgy of other credit cards issued by competing banks led to chaos. In response, Bank of America held a crisis meeting that resulted in a committee mandated to find a better model. Dee Hock was chosen to chair the committee, and both the method he conceived for arriving at a new model and many features of the model itself, were early implementations of Quantum Management principles—purposely so. Hock, personally, was fascinated by the “new science,” quantum physics, chaos, and complexity theory, and particularly inspired by descriptions of the complex adaptive systems that explain why biological systems thrive. He wrote openly about how these ideas, and similar ones at play in the design of America’s federal system of government, inspired his thinking as he developed his model for the new Visa credit card.

Hock rightly felt that the first step toward designing a new credit card system had to be having a clear vision of its purpose. “Unless we can define a purpose for this organization that we can believe in, we might as well go home….Far better than a precise plan is a clear sense of direction and compelling beliefs. And that lies within you,” he told his committee colleagues. “The question is, how do you evoke it?”Footnote 1 The committee spent just over a year on this one issue, and any company that Hock touched throughout the duration of his executive career had to go through a similar, initial, and prolonged dialogue about its founding vision and purpose. As MIT’s Peter Senge described it, Hock used that period of dialogue to “blow up the whole organization, dissolving power relationships, everything.”

In conceiving Visa, Hock felt there had to be a healthy balance between competition and cooperation. This balance is stressed in both Quantum Management and RenDanHeyi. The Visa credit card would be issued globally by myriad local banks, each of which would want to serve its own customers with competitive terms and conditions. At the same time, the card had to be a global currency, with certain universal features available only through cooperation. Quantum Management would describe this as giving the card particle-like (local) and wave-like (universal) features. Dee Hock described it as “chaordic,” poised between chaos (competition) and order (cooperation).

He conceived the organization behind it as a non-hierarchical, bottom-up power structure, an organization so “invisible” and flexible that no one could “tell who owns it, where it is headquartered, how it is governed, or where to buy shares.” As M. Michael Waldrop further described it in Fast Company magazine,

The organization must be adaptable and responsive to changing conditions, while preserving overall cohesion and unity of purpose… The governing structure must not be a chain of command, but rather a framework for dialogue, deliberation, and coordination among equals. Authority, in other words, comes from the bottom up, not the top down.Footnote 2

In short, the “networked organization” Zhang Ruimin envisioned with RenDanHeyi.

Zappos: Moving Beyond Holocracy

Holocracy is a management model in which members of a team, or teams within a company, form distinct, independent, self-managing teams to accomplish company tasks and goals. The model was first introduced in 2007 by Brian Robertson, founder of Ternary Software, and has since been tried by several companies. It is pretty much a somewhat less hierarchical, hybrid of top-down design by management and self-organization by employees, that both fans and critics alike feel has some of the strengths and weaknesses of each. It has some elements of both Quantum Management and RenDanHeyi, but also differs in important ways. Holocracy was implemented by the American e-commerce company Zappos in 2015.

The essence of a holocracy is that employees are organized in “circles” which are multifunctional teams, and within the guidelines determined for each circle, their work is self-organizing. But the organization as a whole consists of network of circles-within-circles, and each circle that contains smaller circles has a greater power of decision-making than those smaller circles it contains. Ultimately there can be three or four circle sizes, and there is always a hierarchy of power that assigns more power to the larger of any enclosed collection of circles, and thus descending degrees of freedom to self-organize are allowed in each smaller circle. So while employees working in the smallest circles have some freedom to self-organize their assigned tasks, much of what they are asked to accomplish has already been decided by decisions taken by a larger circle that encompasses their own. There were some vestiges of this within the Volvo initiative described above.

But Zappos slowly became dissatisfied with the elements of hierarchy in the holographic model, realizing that it was limiting employee potential, and thus both product innovation and customer service by putting too much distance between those making decisions and the customers the company was serving. Zappos has always stressed that it is critical to know their customers, and that everything they do must “wow!” them. Toward those ends, the company has now moved much closer to using an adaptation of the RenDanHeyi management model.

Currently, Zappos’ 1500 employees are still organized in circles that self-organize their work, but now the circles have equal authority and each functions as a small, independent company, “like a start-up,” that deals directly with customers and conceives new products or product adaptations in response to customer feedback. There are 400 circles overall, and each is multifunctional and made up of seven employees. These employees still each belong to three different circles for the purpose of coordinating work activities, and in all each employee might play a total of seven different roles in the various circles to which they belong. The whole company is a network of these coordinating circles (Fig. 19.2). At Haier’s 2020 annual RenDanHeyi Management Forum, a senior Zappos executive was one of the speakers expressing how his company now looks to that model as its example.

Fig. 19.2
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Zappos holocracy

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As of 2020, a total of 62,975 enterprises, representing 29 countries, had registered as members of the global RenDanHeyi Alliance. 800, including 25 Fortune 500 companies, had registered for the RenDanHeyi training offered by Haier.