Codewave: A Pioneer in Design Thinking, AI & Culture
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. Codewave is one of the 50 organisations we listed this year.
Introducing Codewave
Codewave is a design-led technology development services company that redefines traditional organizational structures through radical transparency and self-management. Founded on principles of authenticity, transparency, empathy, teamplay, and self-management, Codewave has successfully created a thriving ecosystem where innovation and human transformation are paramount. Their unique organizational design, “Org as a social network,” devoid of traditional managerial hierarchies, places immense trust and autonomy in the hands of its people. This bold approach has led to negligible attrition rates, high customer satisfaction, and a culture deeply loved by its employees.
Founded in 2013, Codewave has successfully completed over 400 digital transformation projects globally across more than 15 industries, serving VCs, startups, SMEs, and governments. The employees have launched new branches in Udaipur and Kolkata, showcasing their autonomy and leadership. These expansions, driven entirely by team members, highlight the company's culture of self-management and trust. Codewave currently has a team of over 150 people, with multiple delivery centers across India and several satellite offices around the globe.
Codewave is a prime example of RenDanHeYi in the software development industry. The organization is structured as a social network and works under a self-management framework known as "BeYourOwnBoss" Teams have full autonomy within predefined boundaries for action and hold full responsibility for their p&L. There are profit-sharing mechanisms on project and company - level and to top it all off, the company has become a test bed for initiatives driven by the people. Two of the latest product MVPs - Glue and Storymetrics are a vivid example of the entrepreneurial culture at Codewave.
Culture of Self-Management at Scale
Codewave believes that everyone is a creator and a leader. Its self-management framework, known as "Be Your Own Boss" (BYOB), allows every individual to take charge of their roles, responsibilities, and career growth. New project opportunities are openly broadcasted, enabling team members to select projects that resonate with their passions. This autonomy extends to team formation, where individuals choose their collaborators and define their collective goals.
Codewave has a variety of organization-wide initiatives based on six critical success criteria: revenue, profitability, self-management, customer Net Promoter Score (cNPS), employee Net Promoter Score (eNPS), and thought leadership. These initiatives are further divided into sub-initiatives, which are entirely run by employee volunteers. These volunteers recruit people for their initiative teams, and team members are free to move from one initiative to another. The guiding question for this flexibility is: "What's the most valuable work I could be doing that I'm passionate about?" These initiative groups monitor the organization’s key performance indicators (KPIs) regularly to ensure the organization is on the right track.
Employees are empowered to develop their own product ideas, transforming into intrapreneurs and driving innovation. This entrepreneurial spirit has led to the creation of pioneering products like Glue and Storymetrics. By fostering intrapreneurship, Codewave evolves into a company of companies, where individual initiatives fuel collective success.
Teams operate with flexible roles and responsibilities, starting every project with a "Vision" workshop to align on the client's objectives. The "Social Contract" established by team members ensures accountability through agreed-upon social behaviors and consequences, fostering a culture of mutual respect and responsibility. This self-regulating environment eliminates the need for traditional management, enabling teams to make agile, local decisions guided by the Boundaries of Action (BOA) tool.
The Boundaries of Action (BOA) at Codewave empower teams to make informed, autonomous decisions within defined guidelines. Teams can:
Nominate peers for promotions and double hikes.
Set a hike budget for every season, evaluating revenues and profits.
Mine customer accounts for additional value creation.
Accept, reject, or negotiate change requests from customers.
Choose technologies from an approved pool or add new frameworks.
Hire directly in collaboration with the recruitment team.
Add or remove team members.
Decide where and how they work from, including timezones.
And more.
Teams are responsible for maintaining their project’s profit margins, ensuring they do not fall below the minimum target set at project sign-off (e.g., signed profits may be 50%, with a minimum target of 25%).
This tool ensures alignment with organizational goals, fosters accountability, and enhances agility. Teams operate with trust and independence, driving better outcomes and overall success.
Culture of Profit-Sharing
Codewave shares profits on the go rather than accumulating them. With a high revenue-to-salary ratio, profits benefit both the people and the company. When a project profits, a portion goes into the “project kitty,” which is equally distributed among team members regardless of experience, and the rest goes into the “company kitty” to be shared across the company and reinvested. The “company kitty” includes a company bonus component, rewarding all employees.
This bonus scheme is switched on or off based on the company’s financial health and market conditions. Employees are encouraged to set their aspirational salaries and take on challenges to prove they can handle greater complexity and responsibilities.
Empowering People to be Design-Thinkers
Design thinking is at the core of Codewave’s ethos. The company empowers its people to think creatively, ask critical questions, and influence project outcomes. Every team member, irrespective of their title, is encouraged to adopt a design-thinking mindset, allowing them to innovate and solve complex problems effectively. The performance parameters—dependability, competence, self-management, teamplay, and impact—highlight a commitment to nurturing holistic leaders who excel in both technical skills and human values.
Codewave's Peerly practice fosters continuous growth through peer-to-peer performance nudging, eliminating the need for annual reviews. Teams provide real-time feedback, promoting a culture of accountability and mutual improvement. This approach ensures that feedback is timely, constructive, and directly actionable. Peerly helps individuals grow holistically, balancing technical skills and interpersonal development.
This culture of continuous feedback and growth ensures that teams remain nimble and proactive. High performers at Codewave are not just exceptional in their roles but also demonstrate strong interpersonal skills and a commitment to collective success. This unique blend of capabilities and character drives innovation and sets the company apart in the industry.
Building Glue: Productizing the Culture
Recognizing the power of its self-management culture, Codewave set out to build Glue—a product designed to help other organizations adopt and thrive with similar practices. Glue encapsulates the principles of autonomy, transparency, and peer-based growth into a scalable framework. It provides tools for decentralized decision-making, continuous feedback, and transparent performance management, enabling teams to operate with the same level of trust and autonomy that has fueled Codewave’s success.
Glue is more than a tool; it is a movement towards a more human-centric approach to work. By productizing its culture, Codewave aims to transform workplaces around the world, promoting environments where individuals can be their authentic selves, collaborate effectively, and drive meaningful innovation.
Glue is MVP-ready and in a pre-revenue stage.
Building Storymetrics: Using AI to Create an Open World
Storymetrics, Codewave’s latest venture, is set to revolutionize the way organizations access and interpret data. Storymetrics leverages the power of AI to democratize data, making it transparent and accessible to everyone within an organization. By transforming raw data into compelling narratives, Storymetrics enables employees at all levels to understand and act on key insights, fostering a culture of informed decision-making and continuous improvement.
Storymetrics is committed to creating an open world where data is not confined to the “upper” management but is a shared resource that empowers all members of the organization. This groundbreaking approach ensures that every individual has the information they need to contribute to the company’s success, driving innovation and fostering a deeper sense of ownership and accountability.
Storymetrics is MVP-ready and in a pre-revenue stage.
Conclusion
Codewave stands as a pioneer of empowerment, innovation, and human-centric work culture. Through its radical transparency, self-management practices, and design-thinking ethos, it has created a thriving ecosystem where individuals are empowered to achieve their greatest potential. The products, Glue and Storymetrics, extend Codewave’s vision to other organizations, helping them embrace the future of work. The principles it is built on as well as its strong entrepreneurial culture strongly align with the RenDanHeYi management philosophy underscoring its pioneering organization setup. As Codewave continues to push the boundaries of what is possible, it remains committed to transforming workplaces and shaping a more open, inclusive world.
