Zhang Ruimin

Zhang Ruimin is a household name in China.

Thirty years ago, officials sent him to run a failing maker of poor-quality refrigerators in the coastal city of Qingdao. Today, that company—which he still heads—is better known as Haier, the world’s biggest seller of washing machines, air conditioners, and other major appliances. The company’s revenues—$29.5 billion—and profits—$1.8 billion—easily exceed those of its two largest global rivals, America’s Whirlpool and Europe’s Electrolux.
Zhang’s achievement in taking an ailing collectively owned factory and building it into a world-beating firm is one of the stunning business success stories of China’s reform era. Zhang was born in early 1949, just months before the founding of the People’s Republic of China, to parents who worked in a garment factory in north China’s Shandong Province. After the disastrous Great Leap Forward economic campaign of 1958 to 1961 and the subsequent famine of the early 1960s, Mao Zedong sought to reclaim his power and prestige by instigating the Cultural Revolution, a nationwide political campaign aimed at purging the Communist Party of his rivals and reestablishing the revolutionary spirit that had brought him to power. Across China, countless young people joined this political movement, launching a long period of chaos and upheaval that left a deep scar on the country.
After the initial fervor of the Cultural Revolution died down, Zhang took his first job, in a construction-materials factory. Through the 1970s and early 1980s, he rose through the ranks to become to a member of the factory’s management committee. Along the way, he established a reputation as an autodidact who, despite having ended his formal education at the age of 17,read every business and management book he could lay his hands on. In 1984, Zhang experienced the most pivotal moment of opportunity in his career, though it probably didn’t look like one at the time. He was dispatched to run the Qingdao Refrigerator Factory, the fourth director to walk through its doors within the space of a year. When he arrived, he found he was to lead an insolvent, debt-laden plant. “The workshop didn’t even have any windows then,” he later recalled. “The winter was very cold and the workers had no coal to keep themselves warm, so they removed the window frames and burned them as fuel.”
The one thing in the factory’s favor was that people wanted what it made. Its refrigerators may have been poorly designed and frequently defective, but China’s shortage of consumer goods was so acute that the few people who could afford home appliances would take anything they could get their hands on, regardless of their shortcomings. Of course, this didn’t mean customers were happy if their new refrigerators didn’t work properly. But for many companies, such matters were of secondary importance. With demand rising fast, especially in the countryside where farmers were taking advantage of reforms that allowed them to sell surplus produce at whatever price they could find, manufacturers of home appliances and other household goods rushed to add capacity, certain they could sell everything they produced.
Zhang, however, was convinced that such circumstances would not continue for long, and that inevitably, as supply rose to meet demand, consumers would become more picky. For a business to thrive in the longer term, he believed, it would need a reputation for reliability and quality.
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From book China's Disruptors.