(Classified Post Page 42)

As vice-chairman of Shun Hing Electronic Holdings, David Mong Tak-yeung expects to attend any number of lengthy meetings during the year with the management and corporate advisers to scrutinise budgets and sales projections, or formulate strategic plans.

However, one chance encounter a few months ago gave him a new insight into the overall state of the business.

It took place during lunch with his father William, who founded the company in 1953 and made it the sole distributor in Hong Kong of National Panasonic products. A fellow diner, middle-aged and prosperous, approached to ask if he had correctly recognised Mr Mong senior.

Getting confirmation, he explained that, as one of the first students to graduate from the CCC Mong Man Wai College in Kwun Tong, he simply wanted to shake hands and say: “Thank you for building my school.”

“My father was so happy, he talked to that man for 15 to 20 minutes,” Mr Mong said. “He told me afterwards this little episode made his day. He really felt that he had helped someone, and it is that feeling that makes you want to continue to contribute.” Far more than most local enterprises, the group has made contributing central to its whole business philosophy. The corporate structure requires subsidiary operating companies to give 25 per cent of taxable profits – the maximum allowed under current Hong Kong accounting rules – to the Shun Hing Education and Charity Fund.

To date, donations totalling roughly HK$500 million have been given to a wide range of research, learning, conservation and medical causes.

“If the government allowed a higher percentage for tax deductible donations, we would be able to contribute a bit more,” Mr Mong said.

He explained that running the business came down to two core objectives. The first was to provide products which could give customers generally happier and healthier lives. The second was to train employees to be well-balanced individuals with strong values and an interest in helping others.

“The management philosophy is that everyone should be socially responsible,” Mr Mong said. “Companies must contribute to society through their activities; for us, it is charity from a businessman’s perspective.” In terms of administration, the fund’s executive committee meets every six months to evaluate and approve projects. Generally, donations are made with no strings attached and, where possible, to schemes that emphasise education and involvement.

For example, scholarships have been set up at every university in Hong Kong and a considerable sum is given to backing research in science, advanced engineering and nano-technology.

“With research projects that ‘make it’, there is real satisfaction,” Mr Mong said. “It is like seeing children grow.”

He maintains a strong interest in technology, having graduated with a BSc in electrical engineering from UCLA in 1984. Soon afterwards, he found himself in Osaka learning the ins and outs of the family business.

“My father sort of planned it that way,” he said. “I was prepared to look for a job outside, but he asked me to attend a Panasonic policy meeting in Japan. I found it interesting and ended up staying for four years.” First, he had to master the language before going on to absorb vital lessons about marketing, product development and Japanese business ethics.

 “The first year was pretty tough,” he said. “But the good thing was that the company put me into their male dormitory, so I was able to make friends and learn the language in a more informal way.”

He also sees the importance of teamwork and how much more could be achieved when people worked well together. “[Nothing] is a one company or one-man job,” he said. “That’s why we are trying to move all our staff in the same direction to make them good workers and good citizens.”

Revealing the spirit of give and take

Q. What does it take to maintain consistent corporate growth?
A. There is a statement in our staff handbook reminding people that Rome wasn’t built in a day. Over the past 50-plus years, we have not only grown the original agency, but also branched out into areas such as advertising and logistics in a vertically integrated group. To do that, you must have the trust of your customers, your staff and society at large. Profit will come as a reward for that, but let me stress that profit is not the only thing in business.

Q. What has shaped your approach as a leader?
A. My leadership style is to encourage teamwork and is the result of a combination of influences. There is my Chinese background, education in the United States, working for my father, and my exposure to the Japanese way of doing business. Business leaders of my father’s generation mainly focused on how to make money, but we have to pass on a different message to staff about things such as total quality management and corporate social responsibility.

Q. What “return on investment” do you expect from the fund’s donations?
A. We don’t want to just give money away – that is the easy part. It is also important for us to educate people about the spirit of give and take. The overall aim is to change attitudes and get staff and the general public involved in events such as tree planting, the Community Chest 10K run, or visiting the elderly. At the beginning, we had to push them to do it. I remember about 12 or 13 years ago, one of our staff asked me why the company gave so much money to charity instead of increasing bonus payouts. That rang a bell and made me realise we should not only give in monetary terms, but should involve staff personally. After participating in a few activities, they see what they can contribute and even start to initiate things themselves.

Q. Can you give an example of when your instincts proved correct?
A. When I rejoined the group in 1991, after getting my MBA, one of the toughest challenges was changing the mindset of some senior staff. Back then, we distributed to dealers who sold the products, and had no retail outlets of our own. I wanted to get closer to the end user and provide more options for customers. People queried the move, saying we would be competing directly with the dealers, but I knew that, sometimes, dealers only display what they think is sellable. Now we have nine stores in Hong Kong under two brands – Ninki Denki and Health One - and progress has been “so far, so good”.

Q. What are your major plans for taking the business forward?
A. Allowing for trends, we target a minimum overall increase of 10 per cent per annum. We are quite optimistic about the coming two years because of digital broadcasting and the Olympics, which we hope will bring a boom, especially in the sales of flat-panel TVs. Our best selling items continue to be digital still cameras, air conditioners and rice cookers, but we will do more to promote health-related products like massage chairs and horse-riding simulators. There are likely to be more retail outlets, but rents are now so expensive that we are doing our numbers very carefully before opening up.

Personal file
I admire Zhou Enlai. He was a hard worker behind the scenes and I see myself as something like that.

I like to watch action movies to take my mind off things. I’m a fan of Bruce Willis and Sandra Bullock, but my favourite film is Being There with Peter Sellers. It shows that good ideas can be very simple; it’s all a matter of how you interpret them.

Sometimes when visiting primary schools in rural China, I take my kids with me, so they know how fortunate they are in life.

I recommend reading Blue Ocean Strategy by Kim Chan and Renee Mauborgne, which emphasises the importance in a competitive market of selling in a way that doesn’t depend on cutting prices.