Beike launches major organizational restructuring; managers need to be more frontline-oriented.

Ke Holdings home services platform Shell (NYSE:BEKE;HKEX:2423) launches major organizational restructuring.

On March 29, Shell Group issued eight key notices in succession, making important adjustments to the group and its business-unit organizational structure. At the group level, it established a Group Transformation Committee and five special-purpose management committees, and also made major changes to the group’s affairs lines.

On the same day, Shell Group’s co-founder and Chairman and CEO of Shell, Peng Yongdong, issued an all-staff letter titled “Shell’s Next Stage: Putting Consumers at the Center and Rebuilding the Organization,” explaining in detail the original intent behind this structural adjustment, as well as the major adjustment to Shell’s strategic goals. It will transition from a transaction platform to a community-based residential services platform in depth.

Managers “go deeper into the front line”

It is understood that the Group Transformation Management Committee is Shell’s highest deliberative decision-making body. It is responsible for reviewing and reaching consensus on major transformation matters, resource allocation, risk matters, and key strategic directions, with final decision-making authority exercised by the CEO; the special-purpose management committees include the human capital, strategy and operations, production, research and development, safety, and culture and discipline committees.

In terms of the group affairs line, the original product organization structure and related functions of the production, research and development (R&D) affairs line were adjusted to the product affairs line; the original R&D organization structure and related functions of the production, research and development (R&D) affairs line were adjusted to the R&D affairs line. The original human resources affairs line’s Group Organization Department organization structure and related functions were adjusted to the General Cadre Department; the original Shell Research Institute organization structure and related functions were adjusted to the public affairs line.

At the city level, it has subunits including Chengdu Region, Chongqing Region, Guangzhou Region, Hangzhou Region, Nanjing Region, Shenzhen Region, Suzhou Region, Tianjin Region, Wuhan Region, and Xi’an Region. Li Fengyan was appointed as the Group Senior Vice President and Shell Cities Chief Operating Officer, responsible for Shell Cities’ overall business operations management, reporting to Peng Yongdong.

In key cities, organizational structure adjustments were made for the former Beijing Lianjia, Whole-House Renovation Beijing, and Huiju Beijing. A Beijing Lianjia Strategic Committee was established, with the Beijing Lianjia Capability Professional Middle Platform, the Beijing Lianjia Eastern Region, and the Beijing Lianjia Western Region under it. In Shanghai, Huang Yueping was appointed as Group Vice President and General Manager of Shanghai Lianjia, responsible for the overall business operations management of Shanghai Lianjia.

For diversified businesses, the organizational structure of the Whole-House Renovation business line was adjusted, with the Western Region and Eastern Region under it. The organizational structure of the Huijia business line was adjusted, with the Beijing Region, Wuhan Region, Xi’an Region, Hangzhou Region, Guangzhou Region, Chengdu Region, Nanjing Region (in preparation), and Shanghai Region under it. The Huiju business line has the Northeast Region and Southwest Region.

Regarding the matter of the organizational reform, the all-staff letter shows that this move is to create an “organizational form that creates value by returning to it,” with the goal of streamlining various metrics so that people who truly create value can be closer to consumers; to make the organization revolve around consumers so it becomes more agile and flatter. All managers must go deeper into the front line, into real estate agents and consumers, and directly participate in business.

“After 24 years, we are also inevitably tainted by ‘big-organization disease’: the walls between departments get thicker and thicker, processes outweigh common sense, and complex metrics pile up to obscure real value creation. It looks like management, but in reality it is internal friction; it seems to pursue efficiency, but actually it is for running itself, moving farther and farther away from consumers.” The all-staff letter said.

Under the new organizational structure, officer positions and responsibilities, as well as assessment and incentives, will all be rewritten. Peng Yongdong said that the goal is to gradually write “serving consumers” into the primary responsibilities of each position. What management cadres should most do is help the team serve consumers well, rather than merely create pressure and do data; to ensure that front-line service providers are no longer bound by ineffective assessment metrics, so they can focus entirely on doing service work.

Upgrading community residential services is the big direction

Shell once again carries out self-reform, and the deeper reason is that it has recognized that the industry is undergoing major changes.

In the past, in the real estate transaction field, consumers’ demand was “buy a house” and “sell a house.” But today, what consumers face is not a lack of information, but too much information. Especially when the market enters a stage of differentiation and volatility, buyers fear “buying the wrong thing,” while sellers care most about “whether someone truly understands the house and helps me sell it well.” Only if someone can help consumers make decisions can real value be created.

As a residential services platform, Shell’s model also needs to change. The all-staff letter shows that in the past Shell looked at short-term transactions: how many customers, what market share, how much average transaction value per customer, and then analyzed business outcomes through these metrics. But this logic no longer fits the future. It needs to look further at long-term services related to the community, the household, and “home.”

For example, when it comes to a community, you cannot just see deals; you need to see how many households live here. How much demand exists for home renovation, leasing, asset management, and even future community services? How much deep service can be formed? In the future, what Shell will focus on will not only be the average transaction value of a single deal, but how deep the connections can be formed, how much value can be created, and how strong trust can be built.

The value of real estate brokers also needs to evolve. In the past, the value of brokers was reflected in connecting information and driving transactions. In the future, brokers will move from “information intermediaries” to “trust-based service providers,” gaining long-term trust by being able to understand customers, explain complex issues, organize multi-party collaboration, and provide professional advice. Branch offices will be the most important business unit, positioned as “community stability and living-amenity service points.” They will not only handle transactions, but also provide a range of long-term services around household living scenarios.

“Upgrading the community residential services model is the big direction of transformation. Beijing will take the lead in implementation, establishing the Beijing Lianjia Strategic Committee to coordinate and推进 deeper integration of brokerage, Huiju, and Whole-House Renovation.” Peng Yongdong said in the all-staff letter. The responsibilities of various management positions will also be rewritten. It is hoped that management cadres will be reminded at all times: what you manage is not numbers—customer service is the core.

Overall, facing the new stage of industry development, Shell needs to hone two main capabilities. One is “front-line service” capability, to better serve consumers. The other is professional capability—middle and back-office functions need to develop and support the professional capabilities required for serving consumers on the front line.

“Consumers are changing, the industry is changing, technology is changing. If we still stay in the past, we will only move farther and farther away from consumers—and farther and farther away from the初心 with which the company exists.” Peng Yongdong said. He also said that in the past Shell changed the industry’s way of connecting. In the future, there will be opportunities to change the industry’s way of serving, becoming a true “one-stop residential services platform.”

（Source: Yicai）