Haidilao: Creating and Sustaining an Emotional Culture for High Performance

The case charts the success of Chinese hot pot restaurant chain, Haidilao, from humble beginnings to international expansion, with a focus on how an emotion-based culture is created and sustained to deliver high performance. Chinese hot pot – a blend of meat and vegetables - is boiled by customers in a broth and eaten with a variety of sauces. There was nothing special about the food, but what differentiated Haidilao was the service, which catapulted the company to the number 1 spot in its segment and had diners queueing for up to two hours. The secret sauce was the company’s attention to the welfare of its employees, who were encouraged to work hard to progress fast. The culture – that competitors its could not emulate – is explored in the case, including the five-part HR system, welfare system, extended family aspects, and ability to adapt (while retaining key cultural markers). The case also looks at attention to product quality and Haidilao’s national and international expansion, asking how far its approach is sustainable in the future.

- Identify the levers of emotional capital that shape an enabling emotional culutre. By charting the growth of Haidilao, its unique culture, and its commitment to staff, students can see the five emotional levers in practice. Analyse how the culture propelled high performance. While the offering was a relatively simple concept, the service was so superior that it engendered loyalty and repeat business. By analysing the service levels and organisational model, students can see the link between service and company performance. - Apply the five levers to their own organizations. By exploring these via examples from the case, students can see how to apply the levers to their own organisation. Appropriate Uses: This case is suitable for an MBA leadership course and executive modules on leadership and strategic execution to illustrate the five levers of emotional capital that yield higher performance and competitive advantage through strategic innovation.