Latro: A Pioneer in Collective Management and Radical Transparency

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

Introducing Latro

Latro, a pioneering company based in Istanbul, Turkey, has transformed from a traditional business into a highly progressive and innovative organization. Founded in 2010 as a supplier of textile auxiliary chemicals, Latro has grown to encompass a wide range of chemical solutions across various sectors, including textiles, cosmetics, electronics, aerospace, automotive, and agriculture​​. Bringing 52 people together, Latro defines itself as an ecosystem, a living organism facilitating collaboration between all stakeholders through maximum autonomy. The organization calls its people as “explorers” showing a deep connection to their values; passionate about discovery, believing in wholeness, and functioning as a people-centric network. The essence of its raison d'etre is "creating new possibilities with extraordinary chemical solutions".

Latro defines itself as a living organism of stakeholders, each acting with maximum autonomy. From its structure of a hub nurturing multiple teams which act as startups, via its dedication to exploration and innovation, to its profit sharing mechanisms, the company is a prime example of RenDanHeYi in the chemical solutions industry.

Organizational Structure

Latro operates without traditional hierarchies, managers, or titles. Instead, the company is structured into autonomous teams called "hubs" that function like startups. These hubs are aligned with specific market needs and work closely with partners, including customers and suppliers. The hubs enjoy extensive autonomy, operating under principles of radical transparency and collective management.

The organizational culture at Latro emphasizes collaboration and shared responsibility. Each hub is responsible for its profit and loss, and financial information, including salaries, is transparently available to all employees. This transparency fosters a culture of trust and accountability, where each team member is invested in the company's success​.

The transformation at Latro was significantly influenced by its founder, Haluk Can Hür. After stepping down from his role as CEO to eliminate hierarchical barriers, Hür continues to contribute as a mentor, leveraging his experience to guide and support the teams without imposing authority​

Client Engagement and Innovation

Latro's approach to clients is rooted in its core value of creating extraordinary solutions. The company is committed to continuous experimentation and innovation, often challenging market norms to deliver exceptional value. Latro's hubs are tailored to meet the specific needs of different sectors, ensuring that the solutions provided are highly relevant and effective. This client-centric approach has helped Latro build strong, lasting relationships with its partners and expand its reach to over 30 countries​.

Latro has a living ecosystem that is growing and re-shaping itself with customer needs. With a collective management understanding, Latro encourages internal entrepreneurs in developing any potential startups out of the opportunities they see in the market. Ino Cosmetics is a prime example, producing unique cosmetic products for the B2C market, a sector Latro had never entered before. The idea born out of a real consumer need and demand, and now functioning successfully as part of the ecosystem.

Internal Culture and Autonomy

One of the standout features of Latro is its internal culture, which prioritizes autonomy, ownership, and continuous personal growth. The company eschews traditional performance metrics like KPIs, opting instead to track the number of experiments conducted and the learnings derived from them. This shift has led to a more dynamic and innovative work environment where failure is seen as an integral part of the learning process​.

Latro's business rhythm can be summarized as follows:

• Discovery: Each hub runs its own quarterly sessions to explore new hypotheses and define new business experiments to run accordingly.
• Improve: Review and refine anything (eg. teamwork, way of working, etc.) as needed, as a hub internally or call for the ecosystem when needed.
• Progress: Each hub runs a weekly short session to track their own experiments and fine tune if needed.
• Share & Inspire: This is where all the ecosystem meets quarterly, share their failures and learnings, and inspire others. This is where collective learning is happening and new big ideas are born.
• Update & Learn: This is an asynchronous way hubs provide important updates with the ecosystem, whenever they think that there is something important to be shared.

Latro's commitment to autonomy and ownership extends to its unique compensation structure. Employees receive salaries based on their experience and tenure, supplemented by a profit-sharing scheme that distributes a portion of the company's profits quarterly. Latro shares a minimum 10% (and max 20% with a significant growth) of its quarterly net profit with all explorers in the ecosystem. It is anticipated that this percentage will increase as the net income grows. Additionally, explorers decide on their own salaries collectively based on transparent financial data.

This model ensures that all team members are financially invested in the company's success, promoting a collective effort towards achieving organizational goals​​.

Latro's innovative and inclusive culture has not gone unnoticed. The company has been recognized as one of Europe's best workplaces by the Great Place to Work organization and Modern Work Award, reflecting its commitment to creating a positive and empowering work environment​.

Conclusion

Latro stands as a testament to the power of distributed management and radical transparency. By fostering a culture of trust, autonomy, and continuous improvement, Latro has positioned itself as a leader in the chemical industry, demonstrating that progressive organizational models can drive both innovation and growth​. At the core of the organisations are principles that closely align with the RenDanHeYi management philosophy and make it an excellent candidate for the inaugural Zero Distance Excellence Awards.