From a Century of Heritage to Beyond 1,000 Years: Lee Kum Kee Group Focuses on Four Key Areas
Building a lasting enterprise is the dream of many entrepreneurs, but achieving it is never easy. Data shows that the average lifespan of small and medium-sized enterprises worldwide is about seven years, while the lifespan of the top 1,000 companies is around 30 years, and that of the Fortune 500 is approximately 40 years. Remarkably, only 2% of companies manage to survive for more than 50 years.
Few businesses stand the test of time, yet Lee Kum Kee Group, which was founded over a century ago, has set itself an even higher goal — to endure beyond 1,000 years. “1,000 years is not about a specific moment in time; each year marks the beginning of another thousand years,” said Mr. Sammy Lee, Executive Chairman and Chief Happiness Officer of Lee Kum Kee Group. The Group hopes not just to become a millennial brand but to have a more long-term and ambitious business goal. “This grand strategic vision pushes us to elevate from ‘I’ to ‘we,’ to view the big picture from ‘our’ perspective, as well as consider and address potential future issues in advance, thereby creating more and better opportunities to ensure the company’s longevity.” In his view, to achieve the 1,000 years vision, a company needs to focus on four key areas:
Strategic Guidance: Four Principles to Support Going Beyond 1,000 Years
“In a constantly changing world, the only constant is change itself. However, under the strategic goal of enduring beyond 1,000 years, we must also adhere to some fundamental principles that cannot waver.”
The first principle is “diversification.” This is evident in Lee Kum Kee Group’s current business portfolio. Starting with its sauce business and later expanding into the traditional Chinese medicine industry, the company further solidified its leading position in the Chinese herbal health industry. The company has also developed in areas such as property investment and venture capital, exploring diverse businesses with a global footprint. “Diversification is crucial; we cannot put all our assets in one basket. Afterall, the more concentrated the assets, the greater the risk. Moreover, not many industries can sustain development for a thousand years, and many family businesses that have lasted for over a century did not start with their current operations.”
Of course, diversification itself often comes with risks. For instance, companies may face challenges related to management complexity and increased operating costs when entering unfamiliar fields. However, Sammy Lee is not worried about this. “We propose the ’70-20-10′ concept: allocate 70% of investments to core businesses, which carry lower risk; 20% to related businesses, which are somewhat riskier; and the remaining 10% to entirely new business areas, which carry even higher risks but allow the company to better grasp future trends, as the most innovative ideas often come from start-ups.” Sammy Lee said, “Diversification also means how we reasonably allocate operational businesses and investment businesses, currencies, regions, and banks.”
In addition to diversification, “growth” and “low gearing” principles are equally important. “When growth stagnates, it becomes difficult for a business to sustain itself for a thousand years. Low gearing ensures that the company’s cash flow is not disrupted; a business might endure losses for a few years, but if its cash flow is interrupted, it may run into bankruptcy.”
The stability of “cultural values” is the most fundamental principle. The importance of cultural values to an organization is self-evident. Management guru Peter Drucker famously said, “Culture eats strategy for breakfast,” a statement resonates deeply with the business world. People generally agree that culture is the core driving force behind a company’s progress. Regardless of the strategy’s uniqueness, if a company neglects its cultural foundation, the only outcome will be failure.
Since its establishment in 1888, the Lee Kum Kee Family has passed on to its sixth generation, still exhibiting vibrant vitality; Lee Kum Kee Group has also become one of the few family businesses to surpass three centuries, boasting a history of 136 years. “It is the immense power of cultural values that drives the company forward, allowing Lee Kum Kee Group to thrive through a century of challenges,” said Sammy Lee.
Cultural Foundations Create a Strong Magnetic Field for Attracting Talents
“A company also needs to cultivate a core culture that can withstand challenges and build a model that ensures long-term operational effectiveness. Regardless of market changes, these elements enable the company to respond with ease and grow steadily.”
At Lee Kum Kee Group, cultural values are crucial, with “Si Li Ji Ren” being a prominent expression. “Si Li Ji Ren” is a very straightforward concept: one should adopt a helicopter view, be able to think from others’ perspectives, and pursue an overall win-win situation, reflecting a mindset of “We > I.”
This way of thinking helped Lee Kum Kee Group effectively resolve issues related to family equity distribution, reinforcing harmony and unity within the family. The fourth generation of Lee Kum Kee family consists of five siblings, but since the second eldest sister did not participate in the family business after her marriage, the company shares were initially divided equally among the four brothers. When the sister later returned to the company, the family faced the question of whether or not to allocate shares to her. After extensive discussions, the family ultimately decided to distribute the shares among all siblings equally. “Because everyone thinks not just of themselves, but of the entire family’s future, it’s about ‘We’ being greater than ‘I,'” said Sammy Lee. In his view, only by letting go of personal interests and embracing “we” can one see a clearer vision for the family’s future development; if individual interests are prioritized over the collective good, the family and the business may struggle to survive.
If cultural values are the foundation for a company’s survival and development, then talent is the source of its life and vitality. The formulation of a company’s strategy and the achievement of its goals rely on people; individuals accomplish everything. Without the right people, even the grandest goals remain mere fantasies. Excellent companies always prioritize people over tasks.
At Lee Kum Kee Group, the practical way of implementing this philosophy is embodied in the “Autopilot Leadership Model”. The term “Autopilot Leadership” refers to a business’s operational state, functioning like an automatic vehicle that can shift gears without manual control. This unique leadership model emphasizes breaking the traditional “right-side-up triangle” organizational structure and transforming it into an “inverted triangle” where the board of directors is put at the bottom, and above them is the management team, which serves and supports the frontline employees; the frontline employees serve the users, who are at the top. In other words, the entire company’s positioning revolves around serving users, truly achieving a user-centric approach.
This model originates from the concept of the “invisible leader” in Lao Zi’s Dao De Jing, inheriting Eastern philosophical thinking and wisdom. At the same time, it integrates Western modern management practices that emphasize systems and processes, such as organizational frameworks including boards of directors and management teams, as well as a complete set of systems including financial and personnel regulations. “In the autopilot leadership model, we address the team’s need for talent acquisition through ‘choosing the right talent,’ ‘effective empowerment,’ and ‘coaching and developing talent.’ We unite talents by fostering a ‘high trust environment,’ a ‘highly effective team,’ and ‘common goals,’ ultimately achieving the goal of building an outstanding team,” said Sammy Lee.
The greatest return and achievement brought by the autopilot leadership model is intrinsic happiness. Happiness, in turn, stimulates the potential for innovation and breakthroughs among talents, enabling them to better serve the top-tier users, thus truly achieving user satisfaction. “The word ‘Happiness’ is often on our lips in our company. The question ‘Are you happy today?’ is frequently asked. Because when employees are happy, they will work happily and proactively contribute their ideas and value to the company’s development,” Sammy Lee explained.
To this end, Lee Kum Kee Group even introduced the “happiness index” to measure employees’ “tri-balance” (that is, health, family and work) at any given time. “If an employee has a high happiness index, they are unlikely to leave; if the score is low, they are more likely to depart. Therefore, supervisors need to pay special attention to employees with a happiness index below 5, identify the reasons for their unhappiness, help them solve problems, and improve their happiness index.”
In the book Autopilot Leadership Model, Sammy mentioned that after implementing autopilot, some employees felt “more accomplished.” One employee remarked that in his previous company, every task came with detailed steps, and they could only follow the guidelines step by step, with supervisors closely monitoring their work. Employees were only responsible for execution. Now, the situation is just the opposite; employees have more room for expression and therefore experience rapid growth.
There are many such examples. The pervasive atmosphere of happiness created by the “autopilot leadership” is undoubtedly very attractive for talents. When employees feel happy and achieve tri-balance among “health, family and work,” they develop a strong sense of belonging and are more willing to commit long-term to the company, which gradually helps the company attract talent. Not long ago, Lee Kum Kee Group was also recognized as the “2024 Best Employer in Asia.” Since 2016, the Group has won this award for several years in a row.
To Be a Mission-Driven, and Constant Entrepreneurial Enterprise that Goes Beyond 1,000 Years
“At the Lee Kum Kee family, you will never find the term ‘maintaining a business’; what we advocate is ‘constant entrepreneurship.’”
Starting from a small oyster sauce shop, Lee Kum Kee Group has gradually expanded to become a diversified and global enterprise. Behind its century-long journey lies not only strategic guidance but also strong support from cultural values and talent. More importantly, the spirit of “constant entrepreneurship” provides continuous motivation for its operations and serves as the key to sustaining itself beyond 1,000 years. According to Sammy Lee, it is only by adhering to an entrepreneurial spirit and continuously seeking change that a company can endure and thrive for generations.
So, how can one maintain a constant entrepreneurship spirit? Sammy Lee has his unique interpretation: it means “6677,” innovation and breakthrough, never set limits, and effectiveness-oriented. “Innovation and breakthrough,” “never set limits,” and “effectiveness-oriented” are easily understood, as these principles drive continuous product innovation, market expansion, and business growth while avoiding reckless large-scale investments and maximizing the use of limited resources.
The phrase “6677” is less common. Unlike the saying “nine out of ten,” Sammy Lee believes that “6677” emphasizes timing, daring, and the courage to think big and act decisively, even if there is a risk of failure. “When you see an opportunity, you can’t act rashly just because you have 30-40% confidence; that would be too risky. Nor should you wait until you have ‘nine out of ten’ certainty, as such opportunities are rare. If you are 60-70% assured based on market trends, then it’s time to act.”
This spirit and passion for constant entrepreneurship empower Lee Kum Kee Group to boldly reform its core business. By adopting a user-centric mindset, the company strengthens communication with users, gains insights into their needs, and develops products that meet those needs while ensuring product quality, hence leading to significant transformation. For example, after recognizing the market demand in the Chinese herbal health industry, Sammy Lee decisively pushed Lee Kum Kee Group to expand the business from the sauce industry to health products, and launched the Group’s second mission: “advocating the premium Chinese health regimen.”
“Nowadays, the market changes rapidly. Almost all industries face disruptive competition, and the lifecycle of products and business models has shortened. Previously, a successful brand could operate for twenty to thirty years, but that’s no longer true. Now, every five to ten years, companies face challenges that require transformation; if the transformation fails, the brand may disappear,” Sammy Lee said.
Sustaining a business beyond 1,000 years is even more challenging. It requires companies to adjust traditional business logic, focus on system building, and create an organization that can operate highly efficiently and independently, thus minimizing the uncertainties brought by human factors and continuously breaking through bottlenecks. For a century-old company like Lee Kum Kee Group, this system includes not only the core cultural values of Si Li Ji Ren, the autopilot leadership model, but also the spirit of constant entrepreneurship and a strategic vision for sustaining beyond 1,000 years, all working together to propel the Company forward on the path to enduring success.
This is a translation text only. The original article is published in Chinese. To read the original article, click here.
Disclaimer
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