Samuel Hui believes that the best way to construct a bridge and make sure it is safe is for the architect and the builders and their families to live under that bridge.
"It is not going to collapse if that happens, because the people involved in building have so much more skin in the game," said Hui, the head of Digital at Hong Kong Broadband Network.
Hui uses the bridge analogy to explain HKBN’s unique “pain-gain” initiative, where staff put up a portion of their salary and commit to agreed key performance indicators.
“Hitting or missing transformation targets at HKBN could actually mean that you lose money,” Hui told the second Chief Digital Officer Summit in Hong Kong recently.
“We set our transformation KPIs around business objectives and then put in up to 20% of our salary into a pot, and it is tied to whether we hit or miss or exceed our KPIs.”
If the KPI is met, staff are rewarded. If they are exceeded, the reward is higher. Still, if the result falls short, the entire pot of salaries is then donated to charity.
“You kind of like to make your money back, so it is a big motivator,” said Hui.
Challenging the Norms
HKBN is Hong Kong's second-largest telco. One in three Hong Kong families uses its services, along with one in two Hong Kong businesses.
As a challenger brand, the "pain gain" strategy is geared to KPIs such as better cross-sell and up-sell, and also customer retention.
With one-tenth of the potential industry revenue, there is a significant upside for HKBN if it can achieve these goals and get its offer right in the market.
The “pain gain” is also used as part of the company’s digital transformation plan, as employees – or ‘talents’ as the company calls them – are grouped into cross-functional “squads’ based on specific projects.
In these squads, people from a different area of the business come together for a finite period to deliver particular projects, with the leader operating as the "CEO" of the product. Once the project is complete, they return to their regular areas within the organization.
“In the past, a person might be doing ten different projects at once, but we found it was better to have 10 people doing one project,” said Hui.
“And having a single KPI creates the focus and brings together the expertise and domain knowledge required to make that project a success.”
The approach also breaks down barriers between people from business and IT units and gets them aligned around a set of goals.
"This is how we created not just a vision for the entire organization, but it showed how we could create our 'digital tribe'," said Hui.
This had created a culture where people from different functional areas of the company – and HKBN has around 6000 employees – were “starting to speak the same language.”
“In the past, business and IT were very separate,” said Hui. “IT would be only talking about what percentage of things are pushing into the cloud, and about security issues.”
"The business couldn't understand any of that. When the business talks about moving into the cloud, it is about how much agility that is bringing into the group so we can iterate our products faster,” he added.
Sharing the Pain (and Gain)
“Pain Gain,” said Hui, made business sense because it distributed a share of new business revenue to the employees who had helped create it.
“That skin in the game creates accountability,” he said.
In addition to his title as head of Digital, Hui’s business card also describes him as a “co-owner” of HKBN.
Alongside the "pain gain" incentive plan, the company also operates a "co-ownership plan," where 300 of its “talents” in supervisory or higher positions invest their savings back into equity in the company.
Under the plan, co-owners invest savings – ranging between two and 12 months’ salary – to purchase HKBN shares at market price. A second version of the plan grants three shares for every seven bought, vested annually over the following three years.
Along with the “pain gain” plan, the co-ownership model is how HKBN is looking to use its human talent to build what it calls a “legal unfair competitive advantage” over its rivals in a highly competitive market.