The value of constant entrepreneurship: Eddy Lee, Lee Kum Kee

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Ten years ago, the family owners of Lee Kum Kee, famous for its oyster sauce, unveiled a sculpture in its main production base in China’s Guangdong province. The Willow sculpture celebrated Lee Kum Kee’s 120 years of existence, but it was also designed to represent the company’s core value of ‘Si Li Ji Ren’, which translates to ‘considering others’ interests.’

It’s a value that has guided the company through sometimes tumultuous times and continues to do so as the company strives to be a successful family business many years into the future.

“This is our core value,” says Eddy Lee, a fourth-generation member of the Lee family owners and the person in charge of the family’s affairs and investments. “When we do things, we have to think about how other people might be affected by our actions and take these into account.”

Lee came up with the idea for a sculpture to symbolise Lee Kum Kee’s values. He says the artwork also integrates three crucial elements of being a family business: the interrelationship between the family, the company and the community. “These are very important to us as a business and a family,” he says.

Those values have helped build a business that is the world’s largest manufacturer of oyster sauce and one of the largest producers of soy sauce. Under the fourth generation of the family, Lee Kum Kee has diversified into being a maker and supplier of Chinese herbal medicines through its LKK Health Products Group. The business has diversified further in recent years, including into real estate. In 2017, the Lee family acquired the ‘20 Fenchurch’ skyscraper – better known as the ‘Walkie-Talkie’ – in London’s financial district for a record-breaking £1.3bn.

But it is perhaps its oyster sauce that best encapsulates the values of Lee Kum Kee to the broader public. The branding on the sauce bottles usually portrays a stylised, traditional scene of a woman dressed in a cheongsam and a boy paddling a sampan full of oysters. The labelling is in Chinese and English script with, among other information, a simple “Since 1888”. To the consumer, this portrays a product that has survived the test of time – exemplifying quality and longevity, two of the most outstanding values of a family business anywhere.

The efforts to diversify and bring in different streams of revenue is a testament to the Lee family’s entrepreneurship, which Lee says is itself a significant value. “We call it constant entrepreneurship,” he says. “We have to continuously look for change and also be able to take a certain degree of risk.”

Lee says the family nurtures this constant entrepreneurship through what its members call the ‘6-6-7-7’ concept. “This idea means you don’t have to have a 100% [certainty] of making a success of a new initiative. You need maybe about 66% to 77%. It means to take the risk and go ahead and do it.”

But it is perhaps through an initiative of Lee’s brother Sammy in setting up a venture capital company called Happiness Capital, where Lee Kum Kee’s values as a family business are evolving most clearly.

Despite Lee Kum Kee’s success today, not so long ago, family disharmony threatened to bring the business down. To ensure the business survived, the family had to evaluate their values and implement various structures.

Lee Man Tat, Lee’s father, was taken to court by his brother for control of the business more than 30 years ago. Man Tat resolved the conflict by buying out his brother’s shares of the company. But this conflict between siblings and another one that occurred within the second generation led members of the fourth generation – Lee and his three brothers, David, Sammy and Charlie, and their sister, Elizabeth Mok – to formalise a family governance structure.

They established a family council in 2002 and drafted a family constitution. “Together, we built a mission and vision statement for the generations three and four,” Lee says. “And we developed the values and principles that hold all of our businesses together.”

Lee says the council has been a useful forum for resolving difficult issues and refining the family’s connection with the business. It has brought in rules such as a mandatory retirement age for family members working in the company and allowing more engagement by non-family members on the various boards that run the company and its subsidiaries.

The family also makes it a priority to meet together to resolve any issues that might affect family harmony. And their successful efforts have also brought in the engagement of the next generation into the family business through the use of external advisors.

Lee and his siblings, together with their father and members of the fifth generation, believe they have a framework for taking the business forward for many years into the future. Along with its clear set of values and its legacy, family members now even talk about creating a company that will last many hundreds of years into the future.