CommonWealth Economic Forum
I Don't Do Big – Just Strong
Broad Group CEO Zhang Yue talks about his unique “green” road to success.
I Don't Do Big – Just StrongBy Elaine Huang
From CommonWealth Magazine (vol. 492 )
As the CEO of the China-based Broad Group, the world's leading manufacturer of air-conditioning systems that do not run on electricity, Zhang Yue represents an unusual mix of business acumen and passion for sustainable technologies. In 2011, he was awarded the Champions of the Earth Award by the United Nations Environment Programme. The same year Forbes magazine listed him as the 210th wealthiest person in China.
Though short in stature, Zhang rarely fails to grab attention wherever he goes.
He invariably carries with him a LifeBroad handset, developed by his company, which in addition to the usual cell phone features, includes instruments to test environmental quality. When he first stepped on stage at the Commonwealth Economic Forum, he used it to measure the air for hazardous particulates. That drew the attention of Acer founder Stan Shih, who later approached Zhang during the lunch break to get a closer look at the device and watched as the Chinese entrepreneur used it to measure Shih's own handset for electromagnetic radiation.
Zhang founded his company in 1992 and never took it public. In fact, he has not even taken out a loan from a bank to finance his company's expansion.
"I don't do big," he said. "Many people borrow money to get bigger and are forced to do things that violate their principles. I just do strong." Of the world's ten biggest airports, four use Broad Group central air-conditioning systems.
During a panel discussion at the CommonWealth Economic Forum, Zhang was asked how he is able to operate in China, where it is hard to do business without bribing officials. The straight-shooting entrepreneur answered without hesitation, "You have to be willing to throw away money and insist on your principles."
Zhang revealed that he has lost about two-thirds of the orders he was likely to get – including a prestigious Beijing Capital International Airport job – because of his refusal to pay kickbacks, a quality that only accentuates his status as a maverick in China's business world.
In a country that is the world's biggest emitter of greenhouse gases, Zhang has come to be known as the "low-carbon godfather." Because of his belief that the electricity generating process wastes energy, he developed air-conditioning systems, known as absorption chillers, that run on non-electric sources, such as diesel or natural gas. Clients who use his systems can even monitor their energy consumption through a specially designed control panel. Those innovations helped the Broad Group emerge as the world's leader in the field within its first 10 years.
The magnitude 8.0 earthquake that devastated Sichuan province in May 2008 prompted Zhang to move beyond the air-conditioning industry. He decided to get involved in construction, an industry he himself described as "dirty, chaotic, and awful," by developing a steel-framed structure that was earthquake-resistant and energy efficient.
His novel "Broad Sustainable Building," which ignored construction industry conventions, was presented in a video that captivated the forum's audience.
Applying the manufacturing techniques mastered in producing air-conditioning systems, Zhang created a structure unit that can be 90 percent completed on the factory floor. Roughly 120 square meters of finished modules are transported to the construction site at a time and bolted together relatively quickly.
"This structure consumes only about a fifth of the energy of conventional buildings and uses about one-sixth of the materials," he said, and it has also gone beyond some of the China's building regulations.
To prove the soundness of his concept, Zhang brought a scaled model to the Earthquake Resistance Testing Platform of the China Academy of Building Research to be tested. While other companies present structures scaled at 1:40, Zhang submitted a model on a far more demanding 1:10 scale and had it subjected to a magnitude 9 earthquake test, 12 times higher than the earthquake standard that exists throughout most of China. The model passed the test without any signs of damage.
In another impressive display, the Broad Group erected a six-story "Broad Pavilion" in 24 hours at the 2010 World Expo in Shanghai, earning the admiration of architects from around the world.
Throughout his life, Zhang has been full of surprises. Even though he started out as an artist – he graduated from Hunan Normal University with a degree in fine arts – he went on to invent several unique technologies.
"Without innovation, there is no art," he says. "Running a business for me is the same. I've been in business for 30 years, and I've never done anything that is the same as everybody else."
Translated from the Chinese by Luke Sabatier