HR Conference 2016: The culture of co-ownership



By Jennifer Khoo

Each company has its own unique culture, driven by a corresponding belief of what drives performance.

NiQ Lai, Head of Talent Engagement and Chief Financial Officer at Hong Kong Broadband Network Limited (HKBN), the city’s largest provider of residential fiber broadband services, passionately believes that “if you get the people right, the company will do great.”

During his luncheon keynote address, Lai elaborates on how the concept of co-ownership transformed HKBN from a struggling startup into the most profitable carrier in the city today.

Humble beginnings

The founders of HKBN started out selling plastic calling cards in 1992, in Canada’s Chinatown, before coming to try their luck in Hong Kong. Once here, the newly formed company held its own against some of the city’s largest conglomerates, backed by just HK$1 million from family and friends.

Over the next 20 years, HKBN grew from a humble startup to a market leader. “If you had invested HK$1 with us when we started, today it would be worth about HK$9,000,” says Lai.

How did they do that? “For every idea or business plan we have, we need to ask what is our ‘LUCA’ (Legal, Unfair, Competitive, Advantage)? Everything we do needs to be done better than our competition, and faster,” he explains.

Culture of co-ownership

One key “LUCA” at HKBN is co-ownership, says Lai, a concept that applies both in practice and mindset.

Formerly an investment banker, Lai took an 80 percent pay-cut to join HKBN, then some years later sold his home to buy into the company as a co-owner, following a management buyout in 2012. The reason underpinning his decision was simple. “You will never get rich working for an entrepreneur, but you might get rich working with one,” he explains.

During the buyout, the management team expanded the co-ownership pool from 10 to 100, to allow 90 more of the company’s top performing managers to buy in. This decision resulted in an “alignment of interests, an instant change in attitude and improvement in performance,” the effects of which he describes as “like turning on the lights in a dark room.”

This new “alignment of interests” became the impetus behind HKBN’s journey from private listing to IPO in just two and a half years. Well acquainted by now with the benefits of co-ownership, the company expanded the scheme to allow even more employees to co-invest.

Today, 500 top performers from the company’s 3000 staff are invited to co-invest, and around 65 percent say yes. Lai places emphasis on the word “invited,” as co-ownership is a state of mind as well as a financial commitment, neither of which can be enforced.

Collectively, the co-ownership mindset at HKBN has given birth to a vibrant work culture, showcased briefly in short video clips during Lai’s address.

From a sales meeting that could have easily been mistaken for a pop concert, to a military-style team building excursion in South Korea, it is obvious that the company genuinely invests in and rewards its people, in exchange for loyalty and good performance.

Lai believes the co-ownership structure ensures both these things: people stay because they made a family-based decision to co-invest, and a personal stake in the company motivates them to perform.

Doing the right thing

HKBN goes to great lengths to implement its vision of “Making our Hong Kong a better place to live,” starting with addressing some of the city’s biggest issues.

In efforts to combat education inequality for example, the company hires many non-university degree holders, and has a partially-subsidized program in place to support employees who want to pursue a degree whilst working full time.

Meanwhile, the company’s co-ownership structure has made some of its younger employees enough money for a down payment on a home, says Lai.

These initiatives, along with other benefits such as a “no work emails on weekends” policy; extended paternity and maternity leave; a HR culture based on trust and “the assumption you are a good person;” are not motivated by profit but simply “a desire to do the right thing.”

“Though we may be too small to change Hong Kong by ourselves, we hope that by sharing and learning and working together, we can influence change,” he concludes.