Centigo: Pioneering Decentralized Business Wellness

The RenDanHeYi model, developed by Haier Group CEO Zhang Ruimin in 2005, is revolutionary management philosophy aimed at transforming traditional hierarchical corporate structures into highly adaptive, customer-centric ecosystems. Rooted in the belief that employees (Ren) and their entrepreneurial capabilities should align with customer needs (Dan) to create value, the model emphasizes individual accountability and dynamic organizational roles (HeYi). By dismantling conventional silos, the RenDanHeYi model fosters a network of autonomous micro-enterprises within the larger corporate entity, transforming the organization into a nimble startup factory.

To develop and share the idea of Zero Distance and its broader management philosophy of RenDanHeYi, Haier hosts an annual forum to celebrate the world's most progressive organizations. This September marks the 8th edition of the forum, taking place in Haier’s hometown, Qingdao, on September 20. Working with the Business Ecosystem Alliance and the Management Lab, the Haier Model Institute will release the inaugural listing of the progressive companies which are putting Zero Distance and related ideas into practice.

These organizations are characterized by:

• Zero Distance to customer | Decision what to build is based on insights from the marketplace

• Autonomy | Small teams with full decision-making autonomy enable speed in execution

• Shared Rewards | Everyone in the micro-enterprise participates in its financial success

For the 2024 inaugural ZeroDX awards, Haier approached us to list 50 self-managed organizations that showcase the principles of RenDanHeYi in how they organise their work. Centigo is one of the 50 organisations we listed this year.

Introducing Centigo

Centigo, established in 2002, operates within the management consulting industry, with headquarters in Stockholm, Sweden, and additional offices in countries such as the UK and Germany. With a team of around 250 people, the company specializes in business transformation, strategy, and digitalization, offering services across various sectors, including finance, retail, and energy.

Centigo's mission is to drive Business Wellness, Centigo’s own concept for successful organizations, ensuring that organizations not only survive but thrive amid market changes and challenges. The foundation of the company is rooted in distributed leadership, independence and collective ambition. At its core, are the values of the company, centered on professionalism, entrepreneurship and balance.

Centigo is a prime example of RenDanHeYi in the management consultancy industry. Its structure is made up of semi-autonomous "nodes", a sophisticated internal market place that enables people to match with roles and projects and proactiveness and entrepreneurship get superior financial rewards.

Organizational Structure

Centigo employs a distinctive organizational model, which embodies a decentralized and horizontal structure. This model features multiple semi-autonomous teams, “Nodes”, each responsible for specific business areas or markets. These teams operate independently, but as part of a company-wide integrated network, fostering an entrepreneurial spirit and allowing for rapid decision-making and adaptation to client needs. The structure eliminates traditional hierarchical barriers, promoting a flat organization where leadership is distributed across various roles rather than concentrated at the top. This approach not only enhances efficiency but also encourages collaboration and innovation within the teams, as well as cooperation between the teams.

Customer Centricity and Autonomy

At the core of Centigo's business model is a strong focus on entrepreneurship. To underline and facilitate it, the company has built a sophisticated internal marketplace that allows people and groups of people to match with the right roles, projects and opportunities.

Each person is part of a Node and at least one Customer Team. Nodes are self-managing entities organized around an area of expertise (like, say, Retail, or Digital Transformation). They can also be organized geographically. Nodes consist of one or more self-selected teams. Employees choose the team they want to work in, based on their interests. Customer Teams bring together employees from various Nodes (and thus areas of expertise) to deliver on a specific client project. Partners at Centigo are responsible for sales and clients. Once they’ve secured a new project, they bring together a Customer Team with the required skills. This is where the marketplace element comes in. Negotiations take place to link supply to demand. Nodes and individual consultants offer their services and Partners offer their projects. Leaders in the nodes (coordinators) facilitate the process. They negotiate the scope of work and the accompanying compensation. It's important to note that consultants are never forced to accept a project.

Internal Culture

This pioneering element of Centigo’s way of working replaces the traditional leadership role. Instead they apply what is referred to as network-based leadership. Each employee has several colleagues to assist their development, both in formal employee responsibility roles, in leadership roles at Customer Teams, and more informal coach or mentor roles within or across nodes. This network-based model means all employees are connected via several connection points, covering all directions.

Another thing that differentiates Centigo is the way they pay. All employees have the same base salary—whether a consultant, a partner, or even a co-founder. This base (~3,000 EUR/ month) is not normal in the consulting industry.

Besides, employees can add to their monthly base by extra effort. This is possible via the internal market place. Extra work/effort earns extra pay. From executing client work to bringing in new projects, extra effort leads to additional pay. Some employees earn several times their base pay, based on effort and value added to the organization. The incentive system is designed to align the financial interests of all employees, regardless of role and seniority, but with the responsibilities of each role taken into account.

While financial rewards play an important role in the organization, the culture does not focus only on money making, alone. For example, each year some employees take part in organizing the company retreat. This is a full-blown, conference-holiday mix that takes a huge amount of effort to organize. Those who organize it do so simply because they love the company or the opportunity. Others might contribute by opening up new opportunities in the market.

Entrepreneurship at Centigo is rewarded, in social and financial value.

Conclusion

Centigo exemplifies a progressive organization with its innovative structure, strong entrepreneurial focus, and a carefully curated internal culture.Their decentralized model and empowerment of employees at all levels create a dynamic and responsive environment that resembles the principles behind RenDanHeYi at Haier.