TiER1 Performance: Transforming Organizations through People-Centric Solutions

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. TiER1 Performance is one of the 50 organisations we listed this year.

Introducing TiER1 Performance

Founded in 2002, TiER1 Performance is a leading consulting firm headquartered in Covington, Kentucky. The company specializes in enhancing organizational performance through innovative solutions that integrate strategy, culture, and technology. With a team of over 300 professionals, TiER1 serves a diverse clientele, including Fortune 500 companies, educational institutions, and healthcare organizations. Their purpose is to help people do their best work and at the core of their philosophy is the belief that they can help organizations perform at their best when their people are at their best.

Tier1 Performance is a prime example of RenDanHeYi in the consultancy services industry. Their approach to organizational design known as Dynamically Distributed Authority (DDA) is closely aligned with the RDHY philosophy in terms of autonomy, agility and zero distance to the customer. In addition, it has curated a comprehensive compensation policy which ensures shared rewards and aligned interest long-term.

Organizational Structure

TiER1 operates with a flexible, role-based organizational structure that emphasizes collaboration and agility. The company has moved away from traditional hierarchical models to a more decentralized system where roles and responsibilities are fluid and adaptable. This approach, known as Dynamically Distributed Authority (DDA), allows responsibilities to form naturally around specific purposes, ensuring flexibility and effectiveness in decision-making. DDA operates on five fundamental pillars: principle-driven decision-making, role-based organization, metric-informed performance, unified ways of working, and personal expectations of empowerment and accountability. This system supports TiER1’s focus on innovation and responsiveness, fostering a culture of empowerment and ownership as employees are encouraged to take initiative and drive change from within their roles​.

Zero Distance to Customers

At TiER1, customer centricity is more than a philosophy; it is a foundational aspect of their operational model. The company’s primary focus is on delivering exceptional value to clients, a goal supported by their unique DDA framework. Employees interacting with clients are empowered to make decisions that enhance service delivery and client satisfaction. This high level of autonomy ensures that client feedback is swiftly integrated into project workflows, resulting in customized and effective solutions. The principle-driven approach of TiER1 ensures that decisions are made by the individual closest to the client, fostering direct and transparent communication. This minimizes hierarchical barriers, builds trust, and enables the development of strong, long-term partnerships. This approach allows TiER1 to consistently deliver high-value outcomes that are closely aligned with client needs and expectations​.

Internal Culture and Employee Engagement

TiER1’s internal culture is built on principles of inclusivity, transparency, and continuous professional development. The company places a strong emphasis on employee well-being and engagement, offering various programs and initiatives that support personal and professional growth. TiER1 encourages a collaborative environment where knowledge sharing and mutual support are integral to daily operations. Employees are involved in decision-making processes, and the company practices open-book management to ensure that financial information is accessible to all team members. This transparency fosters a sense of ownership and accountability, driving high levels of engagement and satisfaction.

The DDA framework further supports this culture by empowering individuals through a role-based organization, where work is broken into ‘packages’ defined by specific roles and responsibilities. Metrics play a crucial role in guiding and aligning the organization’s efforts, transforming abstract goals into actionable targets. Additionally, TiER1 promotes an emphasis on both empowerment and accountability, encouraging employees to leverage their talents while being responsible for their work and well-being. The company’s unified ways of working ensure consistency in collaboration tools and processes, enhancing efficiency and innovation​.

TiER1 employs an innovative approach to employee compensation that includes both long-term and short-term incentives. The company is 100% owned by employees through an Employee Stock Ownership Plan (ESOP), which allocates shares to employees each year. In addition to the ESOP, TiER1 has a bonus structure that pays out twice a year. These bonuses are tied directly to company profitability, ensuring that all employees share in the financial success of the business. This system is straightforward and keeps the entire team aligned on the financial health of the company. To facilitate transparency and understanding across the organization, TiER1 uses a financial color-coding model, where the business is rated from red to blue based on various financial and operational metrics. This color-coding helps employees understand the company’s performance and guides decision-making processes​.

Conclusion

TiER1 Performance exemplifies a forward-thinking consultancy that combines innovative strategies with a strong commitment to its clients and employees. Through its agile organizational structure, customer-centric approach, and supportive internal culture, TiER1 is an excellent example of RenDanHeYi principles in practice. Indicators of TiER1’s success have included 15 consecutive years on the Inc. 5000 list of fastest growing private companies in the U.S., recognition by B-Labs as a “Best for the World” company in the category of Workers practices, recognition by many local and national and national publications as a “Best Place to Work”, and recognition by the Center for Disease Control as a model for their commitment to employee mental health.