Kitamoku: Growing Business Within the Constraints of Nature

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

Introducing Kitamoc

Kitamoku Ltd, established in 1994, operates in the scenic region of Kita-Karuizawa, located at the northern foot of Mount Asama, an active volcano in Japan's Gunma Prefecture. This unique setting profoundly influences the company's mission and activities. Kitamoku started as a campground business, Sweetgrass, and has since evolved into a multifaceted organization that integrates forestry, beekeeping, and firewood production. With its 240-hectare forest and a variety of nature-centric operations, Kitamoku is more than a business—it is a steward of its region, embracing a philosophy called LUOMU, which means "living according to nature." This principle guides the company's pursuit of harmony with the environment, ensuring that all activities respect the natural cycles and rhythms of the land. Their commitment to a long-term vision, looking as far ahead as 60 to 100 years, earned them the Good Design Gold Award for their innovative and sustainable business model.

The philosophy of LUOMU is also deeply reflected in the constraints that Kitamoku places on its business. One notable limitation is their decision to limit business operations within a 35-kilometer radius. This radius was determined to be the optimal distance for both the environment and their business needs, ensuring that their impact on the local ecosystem remains minimal while also allowing them to maintain close relationships with their customers. By embedding such constraints into their operations, Kitamoku ensures that both the land and the community can flourish together in a sustainable cycle.

Kitamoc exemplifies an ecosystemic way of business development and is a prime example of RenDanHeYi via the entrepreneurial spirit and emergence of new ventures in line with the needs of the larger ecosystem. Learn more about the organizational setup below.

Organizational Structure

Kitamoku’s organizational structure is deliberately dynamic, mirroring the ever-changing nature it seeks to protect. Initially a family business, the company now operates on a divisional system to manage its diverse activities more effectively. This structure promotes autonomy within each business unit, with teams encouraged to take the initiative and pursue projects driven by passion rather than profitability alone. This decentralization is not just a management strategy; it’s a reflection of Kitamoku’s belief in the importance of individual responsibility and pride. For example, the beekeeping business started from a single staff member’s passion. Over time, this idea developed into a thriving operation, with over 200 hives producing nearly four tonnes of honey annually. This level of autonomy allows employees to take ownership of their projects, making the business more resilient and adaptable. Even in the face of challenges such as the limited business opportunities in a region constrained by nature, Kitamoku’s organizational flexibility allows it to innovate and thrive​.

Zero Distance to Customers

Customer centricity at Kitamoku is closely linked to its decentralized approach. By empowering teams to make decisions at a local level, the company can offer highly personalized services that align with the needs and expectations of its customers. For instance, Sweetgrass, their flagship campground, isn’t just a place for outdoor recreation—it’s designed as a space for family regeneration. Kitamoku’s deep connection to the land and community translates into a unique customer experience where every detail, from the warmth of a wood-burning stove to the purity of local honey, is crafted with care and intention.

One notable example of this customer-centric approach is TAKIVIVA, a unique initiative born during the COVID-19 pandemic. TAKIVIVA is a space created by Kitamoku to foster deep, honest conversations and collaboration among guests through shared experiences around fire and food. The concept is simple yet profound: people gather around a fire, which serves as a focal point for communication and connection. The warmth of the fire, combined with the natural surroundings, creates a sense of security and openness, allowing participants to speak freely and collaborate more effectively. TAKIVIVA embodies Kitamoku's philosophy of balancing individual and collective experiences, creating an environment where customers can reflect on their needs and collaborate on creative solutions.

Internal Culture

Kitamoku’s culture is deeply intertwined with its environment, shaping both how it works and how it rewards its employees. The company fosters a sense of belonging among its staff by encouraging them to take root in the region, which is why 70% of Kitamoku’s employees have migrated from other parts of Japan, drawn by the company's values and way of life. This is more than just a job for many—it’s a lifestyle that blends work with the rhythms of nature. Kitamoku supports this integration with initiatives like home ownership subsidies, ensuring that employees are not just temporary workers but long-term members of the community. The recruitment process at Kitamoku is also unique, focusing more on shared values and alignment with the company’s mission rather than just skills or experience. For instance, recruitment discussions often take place around a bonfire, where both parties can openly discuss their values and aspirations. This process helps Kitamoku attract individuals who are not only skilled but also passionate about living and working in harmony with nature.

Moreover, Kitamoku's organizational design promotes a flexible, cooperative work environment where the work is shaped around the people, rather than the people being shaped by the work. This means that job roles are fluid, and staff are encouraged to take on tasks that align with their strengths and interests, which fosters a strong sense of ownership and engagement. Profit-sharing mechanisms and flexible working conditions further reinforce the company’s commitment to shared success, making Kitamoku a model of sustainable, people-centered business.

Conclusion

Kitamoku stands as a testament to the power of aligning business practices with the natural world, proving that growth and sustainability are not mutually exclusive. Through its innovative approach to regional revitalization and sustainable development, Kitamoku is not just preserving nature; it is actively regenerating the community and fostering a culture of responsibility, pride, and long-term thinking. As the company looks to the future, its continued success will depend on maintaining this delicate balance between business needs and environmental stewardship, showing the world that there is a way to grow that respects both people and the planet.