How Employee Metrics Create a Competitive Advantage at Khind

Companies change over time. Khind Holdings Berhad has changed many times. The Malaysian company was founded in 1961 by Cheng King Fa, who repaired and built small electrical appliances and parts at a table in half a shop lot. By the 1980s, his sales had reached $1 million. The founder's son, Cheng Ping Keat, took over in 1987 and quadrupled sales within five years. Today, Khind leads its market with $132 million in sales in 58 countries, and Group Executive Chairman Cheng Ping Keat oversees 900 employees.

It sounds like a good story of change -- and it is -- but not every change was a good one. A collapse in leadership performance brought Mr. Cheng Ping Keat back to active management in 2014. Two disastrous years cost Khind 80% of its profit and 40% of its top management. And in 2019, leaders realized Khind was losing its way.

"We were always a company for common people because we were founded by a common person," says Khind's Group CEO, Adil Jimmy Mistry. "But we started to lose alignment as we went along. Our purpose of delivering happiness and making customers' lives easier started to lose energy. And when leaders lose alignment, everything underneath goes haywire."

Losing alignment precipitated many changes that are still cascading through Khind. And that's a good story, too.

Real Challenges

The story begins just before the pandemic. A board member recommended Gallup's Q¹² employee engagement and CliftonStrengths tools to then-CEO Cheng as a science-backed method of development that could track -- and if needed, change -- employee sentiments and performance. Cheng introduced the science to top leaders but kept his opinion to himself. "I told them, 'You'll be leading the team in the next five to 10 years, not me,'" he says. "'Don't do it for me. Decide if you want this change for yourselves.'"

Leaders soon realized those tools could initiate a very big change. Gallup's Q¹² employee engagement instrument is predicated on the 12 employee needs that managers can meet with ongoing conversation and coaching -- and meeting those needs is scientifically proven to improve productivity as well.

CliftonStrengths identifies people's innate talents, which people can hone through guided, intentional use -- "naming, claiming and aiming," as CliftonStrengths experts say -- with attention to managing potential weaknesses. They're a blueprint for transformational change in performance. "These things aren't often taught in business school, at least not here," says Duo-Ren Cheng, Khind's group activator and digital strategy manager. "Most managers are promoted because of their individual excellence, but when you're responsible for a group of people who are responsible for direct results, how do you manage that? You just learn along the way."

Leaders were faced with a decision. On one hand, Gallup's Q¹² and CliftonStrengths simplify complex human asset issues, offer a scientifically valid approach to performance management, and support Khind's leadership priorities, including people development, a kaizen-based continuous improvement system and machine learning initiatives.

On the other hand, if Khind adopted advanced leadership, management and development practices, they'd be among the first in Malaysia. They wouldn't be able to learn from local competitors' successes and stumbles. Legacy employees would require persuasion. And the training and data analysis demand ongoing attention.

Those are real challenges, but they appealed to Khind's leaders. Cheng believes that the journey is as -- or more -- important as the results. "Don't aim at being No. 1," he says. "Focus on being sustainable." Duo-Ren Cheng saw the connection between engagement, strengths and Khind's mission. And Mistry likes crunching numbers. "I'm a data person," he says. "A lot of the answers, if not all, are in data. And the Q¹² and CliftonStrengths give us data to really understand how we work."

But in the end, the decision came down to this: Khind was changing, and the Q¹² and CliftonStrengths would help them change the right way. "Those tools help us be conscious that no one is the same, stay mindful of how we communicate effectively and rebuild meaningful relationships with one another," Duo-Ren Cheng says. "It's not about manipulating who you are. It's about understanding who we are and how we can engage with one another effectively."

Good Changes

In 2019, Khind conducted its first Q¹² employee engagement survey and began administering the CliftonStrengths assessment to the executive board, directors and top managers. Predictably, engagement scores weren't consistent. Those with low-scoring teams "felt rejected," Duo-Ren Cheng says. "But we were really well prepared to manage that kind of reaction. We didn't try to pacify them. We said, 'This is your team members' state of mind right now. They're being sincere, and now it's our job to build the team up.'"

To do that, Khind rolled out webinars, training sessions and individual consulting. And leaders selected two Q¹² items to focus on for a year. The first Q¹² item ("I know what is expected of me at work") stood out to Mistry as a key to alignment, and he uses it to guide his leadership approach. "I spend 70% of my time working on Q01 because when people know what is expected of them, we start getting alignment," he says. "And if my leadership team fails, everybody fails."

Meanwhile, leaders were exploring CliftonStrengths -- taking the assessment, receiving feedback and executive coaching, and learning what makes them tick and teams click through greater self-awareness. "It was very important to align people over the whole leadership team," Mistry says. "There was no two ways about it. If you have questions and issues, let's thrash it out, whatever it is. But once we have agreement, that's what we are going to work on. It quickly changed their outlook."

Duo-Ren Cheng, for example, found himself becoming more mindful in his communication. Mistry started thinking about how complementary partnerships could elevate his performance. Cheng saw the whole company shift its mindset from fixing weaknesses to developing strengths. "Now we say, 'How can I use my strength to perform better? How can I make use of others' strengths?'" Cheng says. "That definitely is effective in bringing about good changes."

Mistry compared engagement results with financial impact and found that the highest-performing teams tended to work for the most engaging managers. That echoes Gallup's 2020 Q¹² meta-analysis, which shows business units in the top quartile of engagement are 23% more profitable and have 18% higher sales than bottom-quartile units.

With a year of practice under their belts, leadership was ready to introduce and coach strengths and engagement to their direct reports, and they scheduled the second employee engagement survey. Then, the pandemic hit. And Khind was forced to change again.

Clarity of Purpose

Khind started strategizing for COVID-19 as soon as they learned of it. Cheng calculated that a Malaysian lockdown would affect 88% of their customers and dealers. So Khind rechanneled the business from physical to digital -- which was in excellent shape -- and sought ways to soften the blow to suppliers and dealers. Cheng's fears were realized on March 18, 2020, when government officials issued stay-at-home orders. "I must say that we are lucky because most of our competitors were caught off guard while we were prepared," Cheng says. "Digitally, we were more aggressive and much more effective. And we had very close relationships with our suppliers and dealers."

Duo-Ren calls those relationships partnerships, and they're all built on Khind's purpose -- to deliver happiness and make things easier for customers. "A business entity shouldn't be judged just on its market cap or financial performance. You should also be judged on your core beliefs," Duo-Ren says. "Because we believe in our mission, we make life easier for every consumer around us, and our consumers, business partners, employees and communities derive the value."

Those partnerships and that mission resulted in record-high profits for Khind, out-performing its competitors despite having, as Mistry says, precisely the same opportunities. "It was our clarity of purpose and our engagement and strengths plan that helped us take advantage of the external environment to the utmost," he says. "Our people were ready and had momentum."

Khind accelerated its momentum in 2020 and 2021 with executive leadership results sessions and one-on-one CliftonStrengths executive coaching. Khind enlarged the pool of managers in the Q¹² and CliftonStrengths programs as well and began including improvements on two low-scoring Q¹² items in managers' performance plans.

The second administration brought much higher engagement scores across 11 elements. "By then, we had a common language around engagement and strengths to really bind us together," Duo-Ren Cheng says. "So, our conversations were different. People started seeing each other's context differently, and we were taking a longer-term view of people."

He says he noticed that people were focusing more on working together better and that managers were more empathetic -- but they were also aware of each other's progress. "Proactive managers just tend to be more effective in their business performance," Duo-Ren Cheng says. "People do care what others think about them. Some don't show it as much, but managers who had been quieter became more inquisitive about applying the Q¹², asking how they should talk about question items with their team members and use their strengths."

To bring engagement up across the board, Khind rolled out new sessions for managers to learn how to maximize their team's strengths and have engaging, performance-oriented conversations. And several leaders became Gallup-Certified Strengths Coaches, including Mistry. He even invited several people on the verge of retirement to join him so they could "stay in the family," as he puts it, and continue contributing their strengths.

Little by little, engagement and CliftonStrengths were becoming part of the Khind culture. The second Q¹² results proved it. But they proved something to Mistry too. "Engagement and strengths development had stopped being initiatives," he says. "They had become a cause."

How to Cross a River

That cause changed Khind's story again. This year, all managers and individual contributions will be introduced to Q¹² and CliftonStrengths. Cheng says it will enable them to move ahead in their market. "Our competitors are not sleeping, and they will catch up," he says. "It's important to act faster and continue to invest in ourselves." Duo-Ren Cheng says it will help them all build trust and communicate more effectively, while being mindful of what helps them as teams.

Mistry, naturally, says the rollout will help them all align. "I believe that there's a lot more work required on the Q01," he says. "We want alignment to filter down to every individual in the organization, who should all be very clear what is really expected of them, what success looks like for them and what they are supposed to work on."

That's not the only big change. In 2022, Khind changed its mission.

For years, Khind promised to deliver happiness and make customers' lives easier. "Then we added two more words: every day," says Cheng. Those small words signal a big change. "When you want to take care of all stakeholders, you're not focused. But when you focus on the end user, your dealers, suppliers and employees become partners to serve the consumer."

Mistry, Duo-Ren Cheng and Khind's other leaders will tell you that focusing on the customer's happiness every day is easier when people are aligned, have meaningful conversations and use their strengths. They'll tell you they're ready for it, too.

Executive Chairman Cheng Ping Keat will say that Khind's future is up to Khind to decide. But there is one last story he thinks all leaders should know: a story about learning and a story about change.

"Change can only happen through learning. That's important," he says. "If you want to cross a shallow river, you can step across stones one by one to get to the other side. But when the water gets very deep, when the river is difficult, you've got no choice. You must learn to swim."