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Harvard Case - Heisonglin: Pioneer of the Management by Heart Model

"Heisonglin: Pioneer of the Management by Heart Model" Harvard business case study is written by Xueli Wang, Chuanjiang Mao. It deals with the challenges in the field of Organizational Behavior. The case study is 12 page(s) long and it was first published on : Nov 10, 2021

At Fern Fort University, we recommend that Heisonglin continue to refine and scale its 'Management by Heart' model, focusing on building a strong organizational culture that fosters employee engagement, trust, and psychological safety. This will involve a multi-pronged approach encompassing leadership development, talent management, communication strategies, and organizational design. By strategically implementing these recommendations, Heisonglin can further solidify its position as a leading innovator in the industry, attracting and retaining top talent, and achieving sustainable growth.

2. Background

Heisonglin, a Chinese manufacturer of high-quality steel products, has achieved remarkable success through its unique 'Management by Heart' model. This model, developed by founder and CEO, Mr. He, emphasizes building strong relationships, fostering open communication, and empowering employees. While this approach has yielded significant benefits in terms of employee satisfaction, productivity, and company loyalty, Heisonglin faces challenges in scaling this model as it expands its operations and navigates a more competitive global market.

The case study focuses on the challenges Heisonglin faces in maintaining its unique culture as it grows. The company's success has attracted attention from investors and competitors, leading to pressure to adopt more conventional management practices. However, Mr. He remains committed to his 'Management by Heart' model, recognizing its importance in maintaining the company's competitive advantage.

3. Analysis of the Case Study

Heisonglin's success can be attributed to its unique organizational culture, which can be analyzed through the lens of organizational behavior and leadership theory. The company's 'Management by Heart' model embodies several key principles:

  • Leadership Styles: Mr. He's transformational leadership style inspires and motivates employees by emphasizing shared values, building trust, and empowering them to take ownership. This approach fosters a sense of employee engagement and organizational commitment.
  • Organizational Culture: Heisonglin's culture is characterized by open communication, mutual respect, and employee empowerment. This fosters a strong sense of psychological safety, allowing employees to feel comfortable expressing their ideas and concerns.
  • Team Dynamics: The company promotes teamwork and collaboration, encouraging employees to work together to achieve common goals. This fosters a sense of shared responsibility and collective ownership.
  • Employee Motivation Strategies: Heisonglin emphasizes intrinsic motivation by providing employees with a sense of purpose, meaning, and belonging. This approach, combined with performance-based rewards, contributes to high levels of employee satisfaction and job performance.

However, Heisonglin faces challenges in scaling its 'Management by Heart' model:

  • Organizational Structure: As the company grows, maintaining a decentralized structure that fosters open communication and employee empowerment becomes increasingly complex.
  • Leadership Development: Identifying and developing future leaders who embody Mr. He's values and leadership style is crucial for sustaining the company's culture.
  • Change Management: Successfully implementing organizational changes while preserving the core values of the 'Management by Heart' model requires careful planning and communication.
  • Global Expansion: Adapting the 'Management by Heart' model to different cultural contexts and regulatory environments presents a significant challenge.

4. Recommendations

To address these challenges and ensure the continued success of Heisonglin, we recommend the following:

  • Formalize and Document the 'Management by Heart' Model: Develop a clear and concise framework outlining the core values, principles, and practices of the 'Management by Heart' model. This will provide a guide for future leaders and employees, ensuring consistency and continuity as the company grows.
  • Implement a Robust Leadership Development Program: Develop a comprehensive program to identify, train, and mentor future leaders who embody the values and principles of the 'Management by Heart' model. This program should focus on developing leadership skills, emotional intelligence, and cultural awareness.
  • Enhance Communication and Transparency: Invest in communication tools and strategies to ensure effective information flow across all levels of the organization. This includes implementing regular employee feedback mechanisms, town hall meetings, and internal communication platforms.
  • Embrace Technology and Analytics: Leverage technology to support the 'Management by Heart' model, such as employee engagement platforms, performance management systems, and communication tools. This will help to streamline processes, improve efficiency, and gather valuable data to inform decision-making.
  • Develop a Strategic Growth Plan: Create a comprehensive plan for scaling the 'Management by Heart' model as Heisonglin expands its operations. This plan should address issues related to organizational structure, leadership development, communication, and cultural adaptation.
  • Foster Diversity and Inclusion: Promote a diverse and inclusive workplace culture that values different perspectives and experiences. This will enhance creativity, innovation, and adaptability as Heisonglin operates in a global market.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The recommendations focus on strengthening Heisonglin's core competencies, which are rooted in its unique 'Management by Heart' model. This aligns with the company's mission to create a positive and fulfilling work environment for its employees.
  • External Customers and Internal Clients: The recommendations aim to enhance customer satisfaction by ensuring that employees are motivated and engaged, leading to improved product quality and service.
  • Competitors: By maintaining its unique organizational culture and fostering employee engagement, Heisonglin can differentiate itself from competitors and attract and retain top talent.
  • Attractiveness - Quantitative Measures: The recommendations are expected to result in increased employee retention, productivity, and profitability, ultimately contributing to the long-term success of Heisonglin.

6. Conclusion

By implementing these recommendations, Heisonglin can successfully scale its 'Management by Heart' model, ensuring its continued success in a competitive global market. The company's commitment to its unique culture, combined with a strategic approach to growth and development, will enable it to attract and retain top talent, foster innovation, and achieve sustainable growth while maintaining its core values.

7. Discussion

Other alternatives to the recommended approach include:

  • Adopting a more conventional management model: This could lead to increased efficiency and scalability but may compromise the company's unique culture and employee engagement.
  • Maintaining the status quo: This could lead to stagnation and difficulty in attracting and retaining talent in a competitive market.

The recommendations presented in this case study solution are based on the assumption that Heisonglin is committed to preserving its unique culture and values. If the company decides to prioritize efficiency and scalability over its 'Management by Heart' model, the recommendations may need to be adjusted accordingly.

8. Next Steps

To implement these recommendations, Heisonglin should:

  • Form a task force: Establish a cross-functional team to develop and implement the recommendations.
  • Develop a timeline: Create a timeline for each recommendation, outlining key milestones and deadlines.
  • Secure resources: Allocate the necessary resources, including budget, personnel, and technology, to support the implementation of the recommendations.
  • Monitor progress: Regularly monitor progress and make adjustments as needed to ensure that the recommendations are effectively implemented.

By taking these steps, Heisonglin can ensure that its 'Management by Heart' model continues to be a source of competitive advantage and a key driver of its future success.

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Case Description

In the past 20 years, Liu Pengkai greatly stimulated employees' initiative and creativity through practical application of a set of unique and flexible management by heart (hereinafter referred to as "MBH") models by different means in specific tasks, which facilitated the enterprise's sound development. MBH model enabled employees to turn ideas into concrete actions and make achievements. It also guided employees to always remind themselves to do things with the right mindset in their work and life, and jointly build a harmonious development environment. When Heisonglin was first taken over by Liu, "11 workers, with an output value of over a hundred thousand yuan, two reaction kettles and more than a million yuan in debt" Heisonglin developed from the beginning of Liu's term from small to a large professional domestic manufacturer of adhesives, with total annual assets value growth rate of 20%, cooperation with many Fortune Global 500 enterprises and renowned enterprises at home and abroad as well as "Jiangsu Famous Brand" products. Liu's MBH model enabled Heisonglin to develop gradually, but such management model mainly relied on the wisdom and emotional intelligence of Liu from the perspective of the current management status of Heisonglin. Accompanied with the continuous development of the company, the number of the company's employees gradually increased, and an increasing number of new employees of the post-90s generation joined the company, which made it impossible for him to engage in all those specific tasks in the future. Meanwhile, Heisonglin's business scale constantly expanded to gradually cover customers throughout the country, which made it hard for him to serve each customer in person.

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