Good-Ark: Happy Company Formula

By Prof. Fu Pingping and Cong Longfeng

Good-Ark Electronics, the largest semiconductor manufacturer in China, is determined to break away from the “profits-first” mode of running business that prevails the world today. Its management uses traditional Chinese philosophies to redefine its employer-employee relationship and is regarded as a “happy company” by its stakeholders.

Founded in 1992 and listed in 2006, Good-Ark started its “employee happiness” practicesa few years later. Employee happiness is its most important mission. In fact, this has been recognized asa “sustainable model” by the UNESCO for the 21st century.

The following are the key features of the happy company practices at Good-Ark:

One Big Family

China is a collectivist society, in which the idea of the family is the most essential component of traditional Chinese culture. In light of this, many Chinese companies are run like a big family and their employees see their relationships with the company as a life-long one built on mutual trust. This is what differentiates Chinese companies from Western ones, in which employer-employee relationships are mostly contractual and clearly defined in black and white.

This is certainly the case at Good-Ark, which is regarded as a big family by its 2,300 employees. In their eyes, Wu Nianbo, the founder and chairman, is a benevolent father figure, not the boss or chairman. They call him “Big Family Head.”

Wu tells everyone who visits the company or listens to his public speeches that good entrepreneurs should treat their companies as their families, and their employees as their family members: “Employees would only regard themselves as part of the ‘big family’ and be motivated to take responsibilities and fulfil their obligations when you genuinely treat them as family members.” Wu practices what he preaches, and genuinely treats all the employees as part of his big family, serving as the “Big Family Head.”

Wu leads by being a role model. He does everything that he expects others to do, including cleaning the bathrooms. He would also go the extra mile and take money out of his own pocket to help employees in need. For example, when an employee fell and knocked off a tooth, he offered him RMB 10,000 to have it fixed. He also helped an employee pay for his family member’s urgent need to pay hefty hospital fees.

The impact of his management philosophy is significant. The employee turnover rate at Good-Ark has declined dramatically from 20 percent in 2006 to less than 7 percent in 2013. By contrast, the average turnover rate in the entire manufacturing industry in China is nearly 30 percent. And there are often big crowds outside the factory inquiring about job vacancies. Moreover, over 10 percent of the employees have spent more than 10 years at the company.

Putting Employees’ Happiness First

Wu has always been a kind person, according to some of the senior workers who joined the company when it was first established. Except for a few who have retired or left for personal reasons, almost all of the 80-some people who joined initially have stayed with the company. This serves as good evidence of Wu’s ability to inspire loyalty.

A few years ago, Wu explicitly made “employee happiness” the mission of the company. Starting in 2011, the company systematically introduced a series of best practices in the form of eight modules to achieve the goal. Although none of the eight modules has anything to do with business, the company performance has increasingly improved. In 2012, Good-Ark began to see positive financial outcomes as a result of these practices. As a publicly listed company, its market value went up by 42 percent in 2013 compared with that of 2012. Today, the company’s production makes up nearly 9 percent of the world’s diode market.

Prior to the positive results were shown, some people in the company were worried about the profits and resisted following the practices. However, Wu, who firmly believes in the sages’ wisdom, has persisted in doing what he believes to be the right thing. “Only when a company puts its employees’ happiness above the profits can it be truly successful,” he said.

This contrasts with many companies out there, whose leaders claim that they care about their employees and that employee happiness should come first, but when it comes to putting their ideas into practice, such as providing employee benefits that truly improve their lives, most of them fail to “walk the talk,” particularly when the immediate benefits are not visible.

Placing Traditional Values At Work

Another practice that differentiates Good-Ark from many other companies is its emphasis on learning the “sage culture.” Starting with humanistic care, the company has invested a lot in educating its employees about the Chinese classics, such as Confucius’ Analects, ‘Di Zi Gui’《弟子規》, ‘Qun Shui Zhi Yao’《群書治要》and ‘Liao Fan Si Xun’《了凡四訓》. The sayings of the sages have become the guiding principles in every aspect of management in the company.

Good-Ark pays its employees salaries for six-day weeks, but one of those days is devoted to studying the classics. Recently, the company even offered 5.5 paid days for employees to attend intensive studies. Starting with ‘Di Zi Gui’, they learned about socially desirable behavior, such as how to show respect for parents and the people they interact with; and how to behave properly in public. According to Confucius, filial piety is the most important among all the benevolent endeavors, which is why Wu started with educating his employees to be good to their parents, their spouses or their children, because “when they do well in that aspect, they will learn how to be a good worker or leader in the company; a good citizen in the community… they will know how to be ‘Dun Lun Jin Fen’ 《敦倫盡分》，fulfill their different roles.”

To help employees understand the classics, Wu carefully picks the materials and uses a lot of prerecorded videos or movies that illustrate various sage sayings. He also encourages managers at different levels to join the workers in sharing sessions during regular lunch get-together and staff meetings. At the same time, managers are required to report to work an hour earlier than the staff to greet them at the gate every morning.

Workers who feel respected and appreciated in the company in turn become motivated to share their love and care with people in their communities. For example, every weekend, over 600 Good-Ark certified volunteers would visit retirement homes, rehabilitation centers, schools for special kids, public parks, neighborhoods and more to perform voluntary services. Those who had difficulties getting along with their mother-in-laws have formed a “team of good daughter-in-laws” after having made reconciliations in their families, and are now helping other women to turn their families into a harmonious place. “People are happy about helping others because it reinforces their own happiness,” Wu proudly said when asked about the results of his effort in educating, rather than training, his employees.

Wu believes that what works for Good-Ark can also work for other companies, regardless of industries or countries. His mission is for his company to be the champion in “spreading the sage culture with a selfless heart and creating happiness for the whole humanity.”

This article is based on Chinese article “The Family Model of Chinese Enterprises”《中國企業的家庭模式》appearing in “China Management Magazine”《管理學家》) written by Fu Pingping, associate professor at the Department of Management of the Chinese University of Hong Kong (CUHK) Business School and Cong Longfeng, Editor of “Human Resources Development of China”《中國人力資源開發》.