# The Workbench This all changed with the introduction of the Workbench at the end of 2019. The tool digitalised and automated many of these offline processes that were still being performed manually, thereby radically **reducing the transaction costs** inside the firm. As such, the Workbench allowed Haier’s EMCs to **self-organise in a wholly digital manner**.
However, the tool not only radically decreased transaction costs but also brought three other advantages: market **efficiency**, ecosystem **transparency**, and **common prosperity**.
# Market Efficiency **Before any micro-enterprise can become part of an EMC**, it must successfully engage in a **Digital Bidding** process facilitated by the Workbench. EMCs are supposed to tender out all their goals (or ‘dan’ meaning ‘business opportunities’) they hope to achieve via the internal marketplace. The **goals** must outline what the EMC hopes to **outsource**, along with **contextual** information, in-depth analysis, and a clear description of the goal.
These goals come in all shapes and sizes. Some are minor projects, others are grandiose and ambitious: building a state-of-the-art factory, for example, or achieving a 10 percent market share in a specific region. There is an **art to formulating these goals**. They must be sufficiently clear, and the potential rewards attractive enough, for the micro-enterprises to bid on them.
Bidding on the internal marketplace gives micro-enterprises the freedom to choose their work. However, Haier’s bidding process is not only open for internal micro-enterprises but also for **external partners—the best bids are awarded a place in the EMC**.
All parties must be mindful about their biddings: They must bid high enough to get a place in the EMC, but the risk of overbidding is also present. If one can’t deliver on their promise, they are essentially ‘punished’ by compromising their credibility within Haier’s star-based **performance rating system**. The rating is significant, as parties will eventually be disadvantaged in future bids if their rating is too low.
The Workbench has completely digitalised and automated these goal-setting and bidding processes while greatly increasing the efficiency of Haier’s internal market mechanisms. (To give you a sense of scope: each month, more than 4,000 bids are made through the Workbench, of which 100 are successfully turned into new contracts.)
> 40:1 bid to contract completion ratio.
# Ecosystem Transparency When the members of the EMC are identified based on their winning bids, it becomes time for the next step: the contract. The Workbench automatically generates the EMC contract once all parties in the EMC agree with the terms of collaboration, as this is the place where **template-based EMC contracts** are digitally initiated, created, signed, and periodically updated.
EMC contracts are ‘Smart Contracts’ stored in blockchains (Ethereum) to create increased transparency around the contracts. Smart contracts are **self-executing agreements** in which a chain of action is triggered when certain conditions are met. These contracts are automatically **enforced** through the Workbench and cannot be altered.
**During the duration of the contract, the Workbench breaks down the goals and sub-goals via detailed daily activities and deliverables for all members of the EMC.** The tool also tracks the daily performance of the members compared to their respective deliverables. This allows all members to easily and rapidly spot any differences between planned and actual performance. The Workbench makes this process of **real-time performance tracking transparent to all members in their respective ecosystems**.
# Common Prosperity The Workbench also automatically generates rewards proposals between the different members of one EMC, which are guided by Haier’s remuneration system based on **profit-sharing mechanisms**. Every micro-enterprise shares in the profit of the EMC they are part of when the goals outlined in the EMC contract are reached. Haier’s profit-sharing mechanisms include specific objectives and events that will trigger certain bonuses. In a nutshell: **Do better than the market average, and you’ll get a share in the profits**.
Haier’s profit-sharing remuneration system is built around the Chinese concept of ‘common prosperity.’ It enables the EMCs to make the cake bigger and divide it fairly among all members of the ecosystem. The Workbench automatically executes the profit-sharing agreements as guided by common prosperity, with members of an EMC only sharing in the profits when the entire ecosystem succeeds at making a profit.
Profit-sharing is based on agreements on the value and size of the contribution by each member of the EMC, which are **re-evaluated each month**. Any changes in profit-sharing agreements are made through the Workbench, as all EMC members can alter conditions in their smart contract as long as they find **consensus** with each other.