Redefine Business Purpose

Tecsun is a small size company, specializing in constructing high quality wooden villas in China.  With only one sales person and 1000 workers, the company enjoys a steady 800 million yuan or 110 million dollar annual revenue and 80% market share in its sector.  Its financial achievement is outstanding, but what makes Tecsun truly stands out is its unusual management philosophy and system.  For example, all employees with 5+ years of tenor in the company are eligible to an all-expense paid trip to Europe or North America; employees are entitled to an up to 3-year sabbatical to try employment in other companies with guaranteed job opportunities when they return; business expense reimbursement requires no manager’s approval except the submitter’s signature; the company’s Employee Guideline has been published and reprinted 30 times as a book, and is considered by many as a management bible.     

Some people might expect Tecsun employees to be social elites.  In reality, most of its construction workers were previously farmers with limited education and underprivileged background.  Furthermore, the founder of the company Mr. Nee is not a fulltime business manager.  In addition to building the company, he pursues many other interests: song writing, poetry, script writing, directing movies, teaching in universities, charity work and sharing his business insights with other business owners.  Besides the construction company, he has built hotel management and carpentry schools to supply talents for the villa business.  Their carpentry school graduates even won gold medals in national and international competitions, which speaks volume of their product quality.  These business ventures are his social experiments to re-define the purpose of enterprises and to create moral value based financial success.  Unlike typical businesses that focus on maximizing profit, Tecsun’s focus is serving people – not only meeting their needs but also guiding their growth.  Mr. Nee’s unusual business approach can be summarized in the following 3 ways.  

First, pursue excellence.   

To many people, it is incomprehensible that a company with over a hundred-million-dollar revenue has only one sales person.  In fact, the so-called sales person is mostly responsibility for selecting projects and rejecting the rest in order to ensure quality delivery.  Then how do they get clients? The answer is word-of-mouth.  Thanks to their outstanding products and services, their past clients make up their best sales team.   

Tecsun has some of the highest safety and quality standard in the industry.  Excellence comes from managing details.  For example, they have rigorous work procedures that details how every screw is screwed in and maximum allowance for deviations.  The company not only comply but set industrial standard with zero tolerance for “taking short-cuts”.  New worker must undergo apprenticeship under the guidance of experienced workers.  At the end of each project or sub-projects, participating workers leave their signatures on their creations.  Workers have learned to work with love and to take great pride of their work result.  

All managers must spend 3 months doing physical work during their orientation period before taking their roles.  One must be a good worker himself before he can lead other workers.  One day per month, all managers must trade in their management roles and work at the ground level, including working as a genitor.  The purpose is to prevent bureaucracy, bring managers down to earth and create a culture that respects work and workers.  This way, managers can also easily identify problems and opportunities for improvement.  

While most company founders are eager to grow their companies bigger, Mr. Nee had a different philosophy.  They manage their business with grace and ease.  For examples, with their villas highly in demand, they could have easily expanded their operation or charge higher prices.  But Mr. Nee refused to expand for the sake of expanding.  He believed that 1000-workers is a good size for him to take good care of with personal attention.  He also capped the company’s profitability at 20%, which is sufficient to support the company’s expenses.  In his mind, a profitability over 25% is excessive profit and is disrespectful to their customers.  In over 15 years, their material cost has increased 300%.  Instead of passing the cost to customers, they tried to reduce the cost through internal product development.  As a result, their final price only increased once in the same period.  To Mr. Nee, the company’s ultimate purpose is serving people – customers, employees and underprivileged people in society.  

Second, cultivate integrity. 

Most companies in the world create rules to ensure business results.  In Tecsun, rules are created to guide worker’s spiritual growth.  They understand that people without integrity will always look for loopholes and take advantage of even the most comprehensive set of rules.  They want every employee to cultivate innate desire to act according to morality, which means becoming men and women of integrity.  They establish processes and create a culture that cultivates honesty, self-responsibility and kindness.  For example, they don’t have punch card system to verify worker’s work hours.  When needed, workers can freely organize their work schedule with their teams.  Nobody’s compensation is tied to financial performance or equity, because they discourage behaviors that have the potential of seek profitability at the expense of integrity.

Tecsun has an extremely lean management team, whose main job is to organize business, not to manage people.  People are expected to self-manage and take full responsibilities for their own actions.  For example, every employee, when making promises to clients, managers or colleagues, must instantly write down the promise.  This is to train them to make every promise consciously and to be accountable for the consequences.  Before submitting business expenses, each employee must recite a statement of integrity and sign his name.  He is fully responsible for the accuracy of his submission, and cannot transfer this responsibility to his manager as in most other companies.  Employees are expected to always make the “right decision” instead of the “easy decision”.  For example, once a truck load of supplier products had defects in it.  While the project manager wanted to use the first package and reject the rest, because they had a short deadline, but the quality manager refused.  When Mr. Nee found out, the quality manger received a big bonus and public recognition. 

Third, respect people.

At Tecsun, employees without their own apartments have access to free and quality dormitories provided by the company.  Construction workers who move with their projects are guaranteed temporary housing that include 24-hour hot water and air conditioning.  Their workers’ schedule must include sufficient resting time regardless of project deadline.  Nobody is allowed to work while being sick.  Employees are discouraged to risk their lives to rescue properties of the company or society in general.  Respect life is their number one priority.  Everything else comes second.  

Their cafeteria food is of the highest standard in any industry.  3 meals a day, heavily subsidized food is offered at a low price fraction of its cost.  The company strictly prohibits Genetically Modified food, semi-processed food or any food with chemicals.  All food that the kitchen teams purchase must come from identified sources and of the highest quality, approved by internal experts.  In over 20 years of operation, the company doesn’t have a single long-time employee who has had cancer.  The high living standard and respect for human life has becomes a culture that spills over to employees’ family lives.  

Employees are encouraged to borrow company cars for personal use.  The price is 20 yuan per day, the equivalent of 3 dollars, far below market price.  Many other perks offered to employees demonstrate that the company treat its employees like family members.  As a result, 60% of its employees have been with the company for over 10 years.  Mr. Nee has allocated 200 million yuan as pension fund for their employees.  Most people who have interacted with Tecsun have noticed a sense of calmness and joy in Tecsun employees.  While their salaries are not necessarily the highest in the industry, their overall wellbeing definitely is.  

Through Tecsun, Mr. Nee demonstrated the timeless wisdom that happiness doesn’t come from ever increasing wealth.  It comes from a sense of safety, respect and meaning in life.  We are happy when we know that our company always has our best interest in mind; we know that we are respected and in turn respect ourselves; we know that our work and creation enhance the life of our customers, our families and ourselves.  A life well lived is not necessarily a life with a grand vision to change the world.  It is often a simple life that lived mindfully, taking small and kind actions consistently.  Over time and collectively, the world becomes a better place because we have been here once.     

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