The Hidden 'Organizational Code': Zhuiyun Health's Core Competitiveness Beyond Products

Currently, “organization” has become a hot topic in the industry, increasingly mentioned by key opinion leaders.

Baidu CEORobin LiByteDance CEO recently emphasized the importance of “intelligent organizations” in both internal and external speeches, listing it as one of the eight key technologies that will drive the future development of the digital economy.Liang RuboIn his first forum speech after assuming the new position, the focus was on “How an organization of 100,000 people can maintain vitality”; Xiaomi CEOLei JunAt the company’s largest campus recruitment speech, held to mark its 11th anniversary, it was explicitly stated that Xiaomi aims to “cultivate ‘pure-blooded’ Xiaomi employees on a large scale and in a systematic manner” in the future.

As can be seen, internet giants, serving as bellwethers, are currently showing keen interest in “organizational structure.” In reality, however, this is a natural response to their continuous expansion and the attainment of a new critical threshold at the next stage of their lifecycle. To put it simply,For enterprises to successfully advance to the next stage of development, they must overcome the constraints of the business life cycle, making organizational capability upgrading an inevitable choice.

“Organization” is clearly important, yet we habitually overlook its presence. When assessing a company’s value, we can always think of many dimensions; more directly,Stock Price, Market Capitalization, Revenuesuch as specific quantitative data indicators, and at a deeper level,Core Technologies, R&D Capabilities, and Market Potential...and other key elements, while “organization,” as a low-frequency term, is always relegated to the margins.

But it is now beginning to attract attention, especially as industry competition enters its second half. For many internet healthcare companies, as business scale expands and organizational complexity increases, breaking free from the cyclical constraints on corporate development requires building organizational capabilities aligned with strategic growth—namely, regularly upgrading organizational capabilities to swiftly identify the second curve that supports enterprise development.

From this perspective, as China's largest provider of digital solutions for chronic disease management,Zhiyun HealthTech Group (hereinafter referred to as “Zhiyun Health”) naturally holds greater sway. At the recently concluded inaugural “China’s General Health Trends Development Summit,” Zhiyun Health, leveraging“Iterative Integration, Inclusive Acceptance”and other keywords, withSanofi, Philips, GE HealthCare, Gilead, Takeda, DanaherZhiyun Health was jointly certified as a T+Employer™ Excellent Employer alongside 15 other companies, reflecting the industry’s high recognition of its organizational capability development.

Hu Yue, CHO of Zhiyun Health

Based on this, to uncover the “organizational code” hidden within the Zhiyun Healthy Growth System, VCBeat hasHu Yue, CHO of Zhiyun HealthAn exclusive interview was conducted to present, from a professional perspective, the systematic strategies and underlying logic of Zhiyun Health in “organizational capability building.”

As a “Chinese model” for chronic disease management and a unicorn in its niche sector, Zhiyun Health, founded in 2014, must have done some things right during its growth journey.

For example, in terms of focus areas, Zhiyun Health has deeply concentrated on chronic disease management, positioning itself from the outset in a vast blue-ocean market. According to industry research reports by Frost & Sullivan,In 2020, Chinese patients’ expenditure on chronic disease management amounted to approximately RMB 4.1 trillion, with the internet-based chronic disease management market size reaching RMB 176.1 billion, accounting for 4.3% of the overall market.

For instance, in terms of service model, Zhiyun Health takes industry needs as its starting point, leveraging its independently developedHospital SaaS System, Pharmacy SaaS System, Internet Hospital Platform, and Zhiyun Health App, fully connecting diverse scenarios across healthcare providers, pharmaceutical companies, payers, and communities; digitally empowering all collaborators along the industry chain; and leveraging innovative, scalable solutions to create a robust network ecosystem effect, ultimately enhancing the overall efficiency and service capacity of chronic disease management.

This is also reflected in business expansion. To date, Zhiyun Health has covered ChinaThousands of hospitals and hundreds of thousands of pharmaciesProvide services,Covering tens of millions of patients with chronic diseases.Notably, in terms of the number of pharmacies served, as of June 2021, more than 150,000 pharmacies in China had installed the Zhiyun Health Pharmacy SaaS system, achieving a penetration rate of 29%. In terms of both the number of pharmacy installations and the number of patients served,Zhiyun Health has become China's largest provider of SaaS products for pharmacies.

These three seemingly independent dimensions are, in fact, inherently interconnected. “Focus Area” corresponds to industry trends, “Service Model” represents the solutions positioned at the forefront of these trends, and “Expansion Capability” constitutes the ultimate tangible output. In essence, these three elements form a progressive sequence, driven by the enterprise’s own “organizational development capability.”

Hu Yue, CHO of Zhiyun Health, stated,“Zhiyun’s ability to stand out in fierce market competition is largely due to its proficiency in leveraging organizational capabilities to effectively align with and execute strategic goals.”

Specifically, for internet healthcare companies at the current stage, strategic goals are largely similar. However, Zhiyun Health has grown into a benchmark enterprise in the field of chronic disease management because it possesses strong organizational capabilities—namely, robust execution that is highly results-oriented—and has established a standardized incubation system.

Hu Yue told VCBeat, “In the past two years,Why Organizational Capability Building Has Become Zhiyun’s Core Competitiveness: The Significant Role of Organizational Capability in Zhiyun’s Development“Specifically, once a company establishes its strategic business objectives, Zhiyun’s organizational capabilities can effectively align with and support these goals, ensuring their achievement with high quality and quantity, and often exceeding expectations. This has undoubtedly provided a significant impetus for Zhiyun’s acceleration in the internet sector.”

In terms of organizational capability building, Zhiyun Health once did something crazy.

Over the two-year period from 2019 to 2020, Zhiyun Health’sRapid Expansion of Workforce from 200 to 1,500 Employees, which can be described as the completion of a major project based on staff expansion.

According to Hu Yue, the recent “incremental” personnel are mainly concentrated inR&D TeamandFront-End Sales Team, these two factors are precisely the “vitality” of internet healthcare enterprises. First, at the product development and R&D level, continuously recruiting top-tier talent in internet-based product development and R&D enables effective refinement of multi-matrix products, thereby ensuring high efficiency and quality of service. This is well reflected in Zhiyun Health’s strong user stickiness across multiple scenarios.

Taking “Pharmacy Solutions” as an example, a growing number of healthcare institutions are paying for this SaaS system for chronic disease management. The increased willingness of pharmacies to pay indicates their recognition of its service model and has fostered long-term dependence on the platform. Data shows that in 2020, “Zhiyun Health Pharmacy SaaS” was integrated with approximately 110,000 pharmacies across China, representing an increase of nearly 100,000 compared to 2019. This suggests that Zhiyun Health still has significant room for market growth in its pharmacy solutions in the future.

In addition, the front-end sales team is equally important and serves as a key driver of business growth. According to the prospectus, Zhiyun Health’s revenues in 2019 and 2020 were RMB 524 million and RMB 839 million, respectively, representing significant increases compared with prior years.

User growth was also substantial. In 2020, “In-Hospital Solutions” became Zhiyun Health’s primary revenue source, largely driven by a significant increase in the number of hospital users. Reportedly, the number of hospitals connected to Zhiyun Health’s in-hospital SaaS platform reached 1,705 in 2020, an increase of 1,328 compared with 2019, demonstrating the clear benefits of expanding its hospital sales team.

Overall, the rapid expansion of teams across multiple business lines has enabled Zhiyun Health to achieve improvements at various levels, propelling it into a new stage of development. However, completing such a massive “organizational construction project” is no easy feat, particularly given the fiercely competitive talent market and the short timeframe of just two years.

Therefore, Zhiyun Health must have its own unique strengths. Hu Yue told VCBeat, “Zhiyun is capable of completing organizational development on such a large scale,”First, it is essential to have a clear organizational and talent strategic plan., that is, to understand one’s own business needs and precisely identify key areas of focus;Secondly, establish strong strategic partnerships with external suppliers., form a synergy to rapidly drive personnel business growth;Finally, it is essential to fully mobilize internal recruitment potential.On one hand, we have vigorously promoted internal employee referrals, with the proportion increasing from an initial 3% to 35%. On the other hand, we have enhanced the professional capabilities of our recruitment team, enabling them to precisely identify talent through efficient methods and successfully execute challenging hiring assignments, such as recruiting highly specialized R&D personnel.

On August 27, 2021, Zhiyun Health formally filed its prospectus with the Hong Kong Stock Exchange, signaling that the company had entered a new corporate phase and that the profile of the “Chinese model” in chronic disease management was becoming increasingly clear.

Yet this is not the endpoint for Zhiyun Health. As a representative enterprise in China’s internet healthcare sector, Zhiyun Health will continue to advance toward becoming a great company, with “organizational development capability” poised to serve as a key driving force behind its sustained progress.

Currently, Zhiyun Health has a workforce of 1,500 employees, firmly establishing it as a leading large-scale enterprise in the industry. Even so,The turnover rate of core talent at Zhiyun remains very low., significantly lower than the industry average, which to some extent reflects the uniqueness and maturity of Zhiyun’s “organizational development,” and also demonstrates that outstanding internet healthcare talents can fully grow and exert their expertise on the Zhiyun platform.

AdditionallyZhiyun also has a substantial number of young employees, with a notably high proportion of staff born in the 1990s.This has also aggregated significant innovative momentum for Zhiyun’s development. However, in Hu Yue’s view, a good company should not be judged by its youthfulness. Therefore, within Zhiyun’s organizational system, being young is not used as a label of “good” or “bad”; instead, performance and actual professional capabilities serve as the criteria for evaluation. Under such a framework, youthful vitality and fresh talent can integrate more rapidly and grow quickly during the company’s development process.

Although Zhiyun has taken the lead in building organizational capabilities, this is an endless path of exploration. Looking to the future, Zhiyun still has ample room for further reflection and development in “organizational capability building.”

1. Continuously expand core positions and systematically build a "talent pool."To break through the growth bottleneck of internet healthcare enterprises, Zhiyun Health will focus on scaling up its recruitment of three key talent categories—pharmaceutical sales, business management, and product R&D and operations—in the future. The company aims to facilitate their rapid integration into Zhiyun’s organizational system, maximize their potential, and lay a solid foundation for future business expansion.

Second, focus on internal organizational development and rapidly build a talent pipeline.Organizational development is not achieved overnight, nor through transient efforts; rather, it requires continuous investment in both time and capital, coupled with a strong sense of responsibility at the leadership level. For Zhiyun, while leveraging external resources, the company will remain steadfastly committed to advancing internal organizational development and talent cultivation. This strategy aims to further unlock the potential of its internal organization and workforce, thereby building a robust talent pipeline.

Third, emphasize “compliance,” “internal control,” and “innovation” to maintain innovative vitality within a robust organizational framework.Hu Yue stated that for an enterprise to evolve from a large corporation into a great one, it must adhere to two critical factors in organizational development: “compliance” and “internal control.” This is an inevitable choice on the path of corporate advancement and represents Zhiyun’s strategic focus for future organizational development. Meanwhile, the company actively promotes internal innovation mechanisms by establishing competitive incentives for individual and team-based innovations. It is essential to pursue high quality and high standards, thereby fostering an internal personnel management system with robust risk controllability.

In the current era, competition compels enterprises to iterate rapidly, and core advantages are constantly evolving. However, the one constant remains “organizational capability building.” Without robust organizational capabilities as support, even the most perfect corporate strategy or unique business model will become a castle in the air.

From this perspective, as the first-generation leader in the internet healthcare sector, Zhiyun Health has had no prior experience to draw upon in building its organizational capabilities. It has consistently engaged in unstructured exploration and innovative breakthroughs, steadfastly committing to rapid self-reinvention—a priority more critical now than ever before.