RenDanHeYi in 4 Steps (2025 How-To Guide)
The RenDanHeYi model is a management system created at Haier, the Chinese appliance company, and it has been spreading worldwide. Often described as a flat organisation, it breaks away from traditional hierarchies by giving employees the power to act as entrepreneurs.
Instead of managers making every decision, small micro-enterprises run with autonomy, their own P&L, and direct accountability to customers. In 2025, leaders everywhere are asking: What is the RenDanHeYi model, how does it work, and how can it be applied outside China?
This guide explains the RenDanHeYi business model, how it compares to other frameworks, and how to start implementing it in your organisation.
What is RenDanHeYi?
The phrase RenDanHeYi roughly means Employees (Ren) connected to Users (Dan) through a common goal (HeYi).
Key features of the model include:
Micro-enterprises: teams of 10–15 people with autonomy and their own profit responsibility.
Flat organisation design: fewer middle managers, direct accountability.
User-first mindset: every employee is linked to customer value.
Ecosystem collaboration: internal units and external partners co-create products and services.
If you’ve searched RenDanHeYi model explained or what is RenDanHeYi model, think of it as a hybrid between agile organisations and entrepreneurial ecosystems.
Why Leaders Should Pay Attention
RenDanHeYi was pioneered in China, but it’s no longer only a Chinese model. Companies in Europe, the US, and the Middle East are now experimenting with it.
Agile vs RenDanHeYi: Agile focuses on delivery methods, ways of working, culture. RenDanHeYi goes deeper by tying entrepreneurial accountability directly to profit and loss.
Holacracy vs RenDanHeYi: Holacracy removes hierarchy but sometimes struggles with accountability. RenDanHeYi balances autonomy with ownership.
Flat organisation vs RenDanHeYi: It is more than just flattening the org chart. RenDanHeYi creates small, market-driven business units that survive by serving users.
This is why you’ll see references in business books and case studies to the RenDanHeYi business model as the “operating system of the future.”
RenDanHeYi in 4 Steps
1. Define the Value Ecosystem
Start by mapping your users and the value they expect. This becomes the basis for creating internal entrepreneurs who compete to serve those needs.
2. Break into Micro-Enterprises
Large departments transform into small, autonomous teams. Each unit is accountable for outcomes, revenue, or measurable OKRs.
3. Use Market Mechanisms
Budgets don’t come from above. Micro-enterprises compete for funding and customers internally and externally, creating real entrepreneurial behaviour.
4. Shift Leadership Roles
Executives stop controlling and start enabling. Their new role is to build trust, set vision, and act as ecosystem architects.
RenDanHeYi in Practice
If you’re exploring how to implement RenDanHeYi, here are some starting points:
Pilot the model in one division or function.
Change incentives so performance is measured by customer outcomes, not compliance.
Adopt digital platforms that connect employees directly to customers.
Educate leaders using case studies and books about the RenDanHeYi model.
Blend frameworks — many companies combine RenDanHeYi with agile at scale, lean portfolio management, or OKRs.
Interestingly, the model is also being tested in new contexts, including RenDanHeYi in education, where schools explore student-centred accountability instead of centralised control.
Final Thoughts
The RenDanHeYi business model is not just another management trend. It’s a proven system that has scaled one of the world’s largest companies and is now spreading globally. For leaders asking if RenDanHeYi is a flat organisation—the answer is yes, but it’s more than flat. It’s entrepreneurial, customer-driven, and outcome-focused.
For executives searching RenDanHeYi model explained, the practical answer is: start small, build trust, and let micro-enterprises create value directly for users.
RenDanHeYi was made popular in the UK by a great mind, coach and trainer: Simon Reindl. And read more here: www.rendanheyi.com