Great minds behind two global brands

PUBLISHED : Wednesday, 20 May, 2009, 12:00am
UPDATED : Wednesday, 20 May, 2009, 12:00am
 

Businessmen Clement Kwok King-man and Keith Griffiths have barely crossed paths on their way to bringing their companies on to the global stage, but they have one thing in common - an ability to build their brands.

Mr Griffiths is the Asia and Middle East chairman of architectural design firm Aedas. He helped found the Aedas brand seven years ago and presided over its rapid emergence as the world's No2 architectural practice.

Mr Kwok is the chief executive of Hongkong and Shanghai Hotels, owned by the Kadoorie family. Although an accountant by training, he, too, is an architect in another sense - helping design the international reach of the 143-year-old Peninsula hotel group.

Hongkong and Shanghai Hotels won the international award at the 2008 DHL/SCMP Hong Kong Business Awards, while Mr Griffiths won the owner-operator award.

Last Friday, they both addressed South China Morning Post readers at Meet the Corporate Architects, a series of monthly events run by this newspaper, DHL and the Hong Kong General Chamber of Commerce, revealing how they grew their businesses beyond their home turf of Hong Kong.

Hongkong and Shanghai Hotels is the owner and operator of eight Peninsula hotels in Asia and the United States, a golf lodge in California and prime investment properties in Hong Kong.

Elegance and exclusivity are trademarks of the Peninsula, which in the popular mind is perhaps best known for having one of the world's largest fleets of Rolls-Royce limousines - a total of 18 in its Hong Kong, Tokyo and Beijing hotels.

'Globalisation happened late in the company's life and at a slow pace,' said Mr Kwok, a prime mover in Peninsula's expansion in Tokyo, Shanghai and Paris since joining the group in 2002.

Other global hotel firms take minimum risk by acting as a hotel operator and then maximising the number of properties, many of which resemble office complexes.

'We look for an exceptional and prime location that can house 200 to 400 rooms, offer grand and gracious services that reflect a strong local culture,' Mr Kwok said. 'We want guests to wake up in the morning and know where they are.'

A case in point is the 100 per cent-owned Peninsula Tokyo, a 13 billion yen (HK$1 billion) project opened in 2007 after more than five years of planning of every detail.

Property developer Mitsubishi Estate was looking for a high-end hotel to be a key component in its rejuvenation of the Marunouchi, the business district neighbouring the Imperial Palace and the popular Ginza shopping district.

The landlord was betting on the 'Peninsula effect', which comes from the hotel being the popular see-and-be-seen place, especially during its British afternoon teas.

This autumn, Hongkong and Shanghai Hotels is due to return to its Shanghai origins when a 235-room Peninsula will serve its first guest at the historic Bund.

'Everyone knows all the existing buildings on the Bund are protected as heritage structures,' Mr Kwok said of the US$361 million project. 'The Peninsula is the only new building along the Bund. It is a very meaningful project to the Kadoorie family, which first settled down and traded there before heading for Hong Kong.'

In 2012, the Peninsula will set foot in Europe for the first time with the opening of a Euro250 million (HK$2.7 billion) hotel in a century-old building adjacent to the Champs-Elysees in Paris.

The Peninsula's conservative expansion strategy does not mean it lagged in technology.

'We were the first hotel to have televisions in bathrooms 15 years ago,' he said. 'We had hands-free phones in the bathrooms as well, which automatically mute the sound of running water and the television. When you pick up the phone, nobody knows you are having a bath and watching the television.'

All the attention to luxury and detail has paid off over time, said Mr Kwok. 'As the owner of the hotels, we create long-term value.'

In 1929, a year after it opened, the Peninsula Hong Kong was valued at HK$4 million. Having grown with the economy and emerged as a landmark in Kowloon, it was worth HK$8.9 billion at the end of last year.

But for Mr Griffiths of Aedas, 81 years is a bit too long.

After a humble debut in 1985, Aedas transformed itself in 2002 through mergers into a global firm with 40 offices in 18 countries, employing 2,500 architects.

It generated US$239 million in revenues last year, up 48.4 per cent from 2007. Aedas is the architect of the Sunny Bay MTR station on Lantau and is redeveloping the White Swan Hotel in Guangzhou - the mainland's first foreign hotel.

'When I started my office in 1985, I wanted the company to be international but never thought it would become the world's second-largest,' said Mr Griffiths, a well-groomed Welsh architect who studied the subject at Cambridge. 'But there were setbacks, many setbacks.'

After losing one of three core clients in 1989, Mr Griffiths said he woke up to the fact that his practice had to diversify - both in geography and in the number of clients.

'By 1989, we had a considerable amount of high-profile commercial projects,' he said. 'But we were heavily reliant upon one client for much of our work and this client fired us from all his projects while I was on holiday.

'It was a severe setback and taught me to diversify and not to rely on one client in future.'

In 2002, Aedas went global, taking the company to the US, Europe, Asia and the Middle East through three main rounds of mergers.

Still, the group operates without any headquarters as part of its 'creative management', designed to maximise flexibility by mobilising the intellectual talent at its offices.

'This works well on an operational level, but drives accountants nuts,' Mr Griffiths said. 'They asked me where the tax should be accounted for. I don't know!'

A rail design project in London, for example, could call in architects from offices in Dubai, Singapore and especially the Hong Kong office, which has accumulated experience in railroads.

The free flow of brains at Aedas will play a crucial part in designing the Tsim Sha Tsui terminus of the Hong Kong-Shenzhen-Guangzhou express rail link, which the company won after beating international rivals such as Britain's Norman Foster.

In another maverick move begun two years ago, Aedas sometimes shuts the top talent from its global offices in a remote place - sometimes bringing a chef along - for an annual meeting to brainstorm designs for key projects.

In March, about a dozen top architects from seven offices including Britain, New York and Hong Kong, underwent an intensive four-day meeting at a holiday resort in San Remo, France. They were divided into teams competing for designs for three key projects, including one for the Hong Kong stadium and sports district in the site of the former Kai Tak airport.

'We got the best designs,' Mr Griffiths said. 'The results yielded were far beyond the money spent.'

In Mr Griffiths' corporate philosophy, the company's most valuable asset is human talent.

'The value of a company is brain power, it has nothing to do with finance,' he said.

That proved a stumbling block when it sought to expand into the mainland market.

'A large Chinese architectural firm was interested in merging with us,' said Mr Griffiths. 'But it was talking about a listing following the merger.

'I don't understand why they wanted a listing so much. A listing will kill the company. And we turned it down.'

The next Meet the Corporate Architects event - Delicacies for All - features Michael Chan, the executive chairman of Cafe de Coral Group, and Michael Wu, the chairman and managing director of Maxim's Caterers. Visit http://conferences.scmp.com for updates

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