Indaero's Transformation to Self-Management

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. Indaero is one of the 50 organisations we listed this year.

Introducing Indaero

Indaero, founded in 1969 and based in Seville, Spain, specializes in engineering and manufacturing within the aerospace sector. Known for its high-quality production of aircraft labels/decals/placards, aircraft covers, and aeronautical parts and structures for the interiors of the aircraft, Indaero is a significant supplier to major companies like Airbus. Today the company employs over 40 people dedicated to building trust in their work with customers through quality and excellence in research and development.

Indaero is an excellent example of a company embedding RenDanHeYi principles in its work. They have undergone a major transformation towards self-management and distributed authority in the past and are already witnessing results better than any improvements expected around both customer satisfaction, financial results as well as team engagement and shared rewards.

Organizational Structure

Historically, Indaero operated under a traditional hierarchical structure. In the summer of 2023 the company was acquired by Krisos, a private equity fund which does management buy-outs and transforms organizations towards self-management. The transformation, guided by the NER (new style of relationships) framework, eliminates traditional hierarchies in favor of self-managing teams and elected representatives. This shift aims to empower employees, fostering a culture of shared leadership and collective decision-making.

Customer Focus

Indaero's transformation has reinforced its customer-centric approach. By enhancing employee engagement and transparency, the company aims to improve its responsiveness and innovation, ensuring higher quality and more reliable service for its clients, particularly in the highly demanding aerospace sector. Moreover, most of the former senior managers have transitioned to client-facing roles which has further enhanced customer relationship management and overall experience.

Among other efforts, the transformation has also unleashed team proactiveness and one year later there are micro teams set-up to drive bold efforts in sustainability and ethics.

Internal Culture

The transformation to self-management has significantly impacted Indaero's internal culture. Key changes include:

• Transparency: Full financial transparency has been implemented, helping employees understand the company's financial health and contributing to a shared sense of ownership and responsibility.

• Profit Sharing: A profit-sharing scheme allocates 25% of profits to employees, aligning individual and company success.

• Training and Development: Extensive training programs in decision-making, conflict resolution, and meeting effectiveness have been introduced to support the new organizational model.

• Salaries and Incentives: A new salary system, co-created by employees, has been established, resulting in significant salary increases and fairer compensation structures.

• Collaborative Governance and Integrative Decision Making: A series of decision making bodies with significant representation from all teams, that utilize advanced social technologies such as consent decision making, to ensure a good balance of robust and agile decisions.

Transformation Process

The transition to self-management at Indaero is an ongoing process. Initial steps included gaining employee buy-in, with 87% voting in favor of the acquisition and transformation plan. The implementation has involved creating co-creation teams, simplifying financial reporting, and establishing clear operational rhythms.

Challenges and Progress

The shift to self-management has not been without challenges. Adjustments to new roles, resolving past power dynamics, and mastering the new evaluation criteria for salaries have required time and effort. However, the transformation has already shown positive results in terms of employee engagement, team spirit, and financial performance, with revenues significantly exceeding expectations and EBITDAexpected to double in 2024.

Conclusion

Indaero's journey towards self-management exemplifies a radical shift in organizational structure, customer focus, and internal culture. By embracing self-management, Indaero has become more agile, innovative, and responsive to customer needs, while also fostering a more engaging and satisfying work environment for its employees. This case study highlights the potential of self-management to drive organizational success and employee well-being, offering a model for other companies considering similar transformations. The outstanding results Indaero has achieved in less than a year is another testament to the inherent value of the RenDanHeYi philosophy - zero distance to customers, autonomy and shared rewards.