Pioneering Autonomy and Ownership: The Vertica Way

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

Introducing Vertica

At the heart of Denmark’s burgeoning tech scene, Vertica stands as a shining example of innovation and forward-thinking organizational design. This 150-strong company specializes in creating complex e-commerce solutions for a range of clients, including well-known names like Bolia and Søstrene Grene. However, what truly sets Vertica apart is not just their technological prowess, but their revolutionary approach to organizational structure, client engagement, and internal culture, all deeply rooted in principles of autonomy and ownership.

The journey of Vertica from its inception in 2001 by five developers to its current state is marked by continuous evolution and adaptation. Initially, the founders aimed to create a company free from the inefficiencies and rigidities of traditional corporate structures. Over time, as the company grew, it became necessary to formalize some processes while maintaining the core principles of autonomy and peer-based management.

Vertica emerged from the passion of five developers to create a company free from inefficiencies and rigidities and today boasts more than 150 people. From direct interaction with clients, through autonomy in decision-making and profit-sharing mechanisms, the company is a prime examples of the principles behind the RenDanHeYi philosophy.

Organizational Structure

Vertica’s organizational structure is a testament to the power of decentralization and employee empowerment. The company is divided into approximately 16 customer-centric teams, each ranging from four to twelve members. These multidisciplinary teams are the core operational units, responsible for delivering value directly to clients. The autonomy of these teams is paramount; they have the freedom to make decisions on everything from project execution to client interaction.

Supporting these primary teams is a web of additional groups focused on specific functions such as internal IT, administration, and organizational development. These supporting groups operate not in a traditional hierarchical manner but as collaborative networks that provide necessary resources and expertise without imposing rigid control.

Client Engagement

Vertica’s approach to client engagement is both personalized and persistent. Each client is typically served by a dedicated team, ensuring continuity and deep understanding of the client’s needs. This model fosters long-term relationships, as evidenced by Vertica’s enduring partnerships, such as their 20-year collaboration with Bolia.

The account managers and project managers, though not always part of the daily grind within the teams, play crucial roles. They are the bridge between the client’s strategic needs and the team’s operational capabilities. This setup ensures that even as teams focus on delivering specific solutions, there is always alignment with broader business goals.

Internal Culture

Vertica’s internal culture is a vibrant mix of autonomy, ownership, and community. The absence of traditional managers is a deliberate choice to promote a culture where the best ideas win, and everyone has a voice. This culture is underpinned by several unique practices:

Decision-Making Processes

Decision-making at Vertica is highly decentralized. Teams and individuals make decisions based on the principle of “meaningfully affected.” This means that those most impacted by a decision have the primary say in how it is made. For larger, more complex decisions, temporary groups are formed to ensure thorough exploration and consideration of all perspectives.

Career Coaches

Instead of traditional hierarchical management, Vertica employs a system of career coaches. These are peers who volunteer to guide and support their colleagues in professional development. Each employee selects their coach annually, ensuring a good fit and mutual trust. This peer-to-peer support system encourages continuous learning and growth, tailored to individual needs and aspirations.

Profit Sharing

Vertica believes in the distribution of success. A portion of the company’s profits is shared among all employees, with a slight increase for those with longer tenures. This practice aligns individual and company success, and is a factor in motivating everyone to contribute their best.

Professional Development

Vertica does not maintain a traditional education budget. Instead, people decide together with their career coach and other colleagues if the education or conference they have looked at is relevant to them and for Vertica.

One of the current focuses at Vertica is clarifying roles and responsibilities. This effort is crucial as the company scales, ensuring that all employees understand their contributions and can collaborate effectively without overlap or confusion. This process involves clear documentation and regular reviews to keep the dynamic organizational structure agile and responsive.

Conclusion

In conclusion, Vertica’s story is one of pioneering new ways of working in the tech industry. Their focus on autonomy, ownership, and fair profit distribution are closely aligned with the RenDanHeYi management philosophy and contribute to a thriving environment where innovation and personal growth are at the forefront.