Small firm has pure intentions
Tucked away in a nondescript industrial building in Kwun Tong, Richform Holdings is seriously walking its corporate social responsibility (CSR) talk. In so doing, this small-sized enterprise of 30 people – the sole agent of Everpure Drinking Water Systems of the US in Hong Kong and Macau – is sending out the message that CSR is not just about niceties – it can also be very good for a small business.
Last year, business grew by 30 per cent over 2010, surpassing the projected rise of 20 per cent for the year. It has sustained an average growth rate of 20 per cent over the past five years. For most small and medium-sized enterprises (SMEs), the figures may defy logic given Richform’s generosity towards staff, customers, society and the environment.
Consider the benefits offered to Richform’s associates (its preferred term for staff): an extra 30 minutes on top of their one-hour lunch break for a siesta or shopping, as well as flexitime, plus paternity, emergency and birthday leave, and gratitude allowances for parents.
But that’s not all. They are also entitled to a free fruit a day and free herbal soup and traditional Chinese medicine consultations, paid compensation leave for voluntary community service work organised by the company, head and shoulder massages once a quarter, and plenty of training and growth opportunities.
Such generosity makes sound business sense to Richform CEO Dr Jimmy Lau Fu-shing. “We are not a charity – we are a small company and we have to make profits. But we have found that CSR can be competitive and advantageous if you tie it to key business strategies,” he says.
Lau was one of the founders of Richform, which opened in 1998. Wanting to build a sustainable business, he picked Everpure Water Systems after extensive research. The reputable US brand with an 80-year track record looked like a sound investment.
Richform’s early CSR initiatives were ad hoc responses to a desire to give back to society. It offered assistance to non-governmental organisations (NGOs). “We wanted to contribute to society. So we did volunteer work and made donations,” says Lau.
Only years later did they hear about CSR and they made it a core element of their corporate culture.
Lau took over the helm as CEO in 2006. Since then, the company’s CSR activities have soared. As a Rotarian, he is inspired by the group’s creed of the four-way test of thoughts, words and actions. Is it the truth? Is it fair to all concerned? Will it build goodwill and better friendships? And will it be beneficial to all concerned? This is his personal yardstick for Richform’s initiatives, he adds.
Firstly, Lau says, the product has to be good. He made sure Everpure was true to its marketing promises. Next in line were happy people, with the happiness trail starting at home. “Happy and satisfied associates” translates into “happy and satisfied customers”, Lau says. “We operate in a competitive environment, so happy associates are crucial.” Hence, the perks.
As for customer service, the company offers a free lifetime guarantee on maintenance so long as they use Everpure filters. With Richform holding about 60 per cent of the market share for drinking water systems in Hong Kong and Macau, including 500 educational institutions and 20,000 households, leading hotels, and even Hong Kong’s Chek Lap Kok Airport.
It all boils down to quality and good work, says Lau. The product is good, and the technical team very professional, and so repairs are minimal. Richform also teaches customers how to deal with minor problems, such as a leaking tap.
Communication channels ensure clients are happy. Frequent focus groups show Richform how to improve customer service while the company’s website and newsletter inform customers of new developments. Customer service associates follow up installations and maintenance works with calls within two working days. The result: a water filter cartridge replacement rate of 90 per cent, compared with the market average of 60 per cent, reflecting high customer retention.
Then, there is giving back. The company’s community service initiatives were formalised with the formation of a volunteer task force chaired by Lau. Five per cent of Richform’s gross profits were set aside as donations and the task force chooses the projects.
“Donations can be in money or kind. We are a drinking water system company, so we donate drinking water systems to needy institutions, such as some schools and NGOs,” says Lau.
In the office, Lau takes the lead in environmental protection, setting an example with good housekeeping, such as switching on lights and air-conditioning only if necessary. “Richform’s operations manual adheres strictly to the five R’s – reduce, recycle, reuse, renewable and replace,” he says.
Green practices are encouraged in fun ways, such as an African violet growing competition, and rewarded with cash prizes. Last year, compared with 2010 levels, power consumption fell by 7 per cent, and paper consumption by 10 per cent. That translates to savings, Lau adds.
Lau says CSR for SMEs is easy. “We are a small and medium company. We have the flexibility and ease to implement initiatives. It’s just a matter of a simple calculation for us, compared with large corporations where even if the CEO has an idea, it will take a long time to initiate,” he says.
“Management commitment is very important. In my case, I am committed to the idea. So I do it. If you do not, associates will not commit. You have to set the example, get them involved, and make sure they understand why we do it,” he says.
On the cards are client gatherings where people can talk freely about any subject, ranging from water, to volunteering and health. “We want our clients to know we are thinking of them as friends and not just buyers or sellers,” says Lau.