100% Corporate transformation, 100% People transformation
Located in the Georgian Bay in Collingwood, Ontario, Canada, Cranberry Village is an architectural project that combines residence, resort, relaxation and leisure facilities. Cranberry Village offers accommodation to various visitors and families. The comfortable and modern design of the resort is like a second home for many families and the elderly. The Living Stone Golf Resort and Living Water Resort & Spa provides a huge range of recreational and leisure facilities including hotel suites, spas, swimming pools, restaurants, banquet halls, tennis courts, golf courses, as well as a cruise terminal. (http://www.livingwaterresort.com/)
Living Water Resort & Spa employs over 500 employees ((download corporate organizational chart) and boasts more than 100,000 visitors each year. Its founder, Mr Larry Law immigrated to Toronto, Canada from Hong Kong in 1984 and worked in real estate development. Mr Law studied architectural engineering in the United States and is familiar with design and architecture, building thousands of homes in Toronto. In 1992, when Mr Law visited Collingwood with his family, he was attracted to the beautiful environment and decided to purchase Cranberry Village in order to develop it into a resort for both living and relaxation.
“The company purchased Cranberry Village with CAD $17 million in 1992. At that time, it was just a side project, one among many to me, and yet this project inspired me to establish communities. This kind of group service targeting families across three generations, with grandparents bringing along their children and grandchildren, is very interesting.”
Adopting a Stable Development Model
Phase 1 of Living Water Resort & Spa:
With the above vision in mind, Mr Law gradually developed Cranberry Village into a huge resort. Cranberry Village only had 80 hotel rooms in 1992. In 1994, 44 terraced houses were added. In 2002, another 42 units were built, including: open-plan units, one-bedroom suites and two-bedroom suites, thereby forming the Club Cranberry Complex. In 2007, the first lakeside resort was built with 40 new units including open-plan units, one-bedroom suites, and two-bedroom suites. Today the resort boasts over 2,000 rooms and homes.
Living Water Resort & Spa is the key development project of Cranberry Village. Mr Law adopted a stable development model and developed one phase out of six every three to four years. By 2014, three phases have been completed. In 2007, Mr Law invested CAD$20 million for Phase I, and CAD$25 million for Phase II in 2011. The current total invested amount has increased to CAD$40 million for Phase III in 2014.
A Business Plan that Promotes Care
Mr and Mrs Law wish to create a joyful and caring community for all guests, resort club members and staff. “I want to create a platform that promotes care and sympathy, encouraging others to contribute to the society and live more meaningfully. Through this real estate project that combines architecture and community development, I hope to establish a harmonious and helpful leadership team that can inspire our staff to pursue excellence with love, sincerity and justice. I also wish for the best for our guests and local communities.”
In the past, Mr Law focused on the value of money and fame, but one incident changed his values. “In 2001, when I was at the peak of my career, my ex-wife passed away due to cancer. I began to understand that money cannot buy everything.” Since his conversion to Christianity in 2002, Mr Law’s life has changed tremendously. His management philosophy shifted from profit-based to people-oriented management model.
People-oriented Management with Heart
In his past experience, when Mr Law saw misconduct committed by staff, he would criticise them immediately. Now he will show kindness and concern towards his employees and ask them if they are troubled by something and whether he can do anything for that employee. Mr Law said, “We are not managing work but people. We need to take into account their emotions and family background.”
“Before, my best-known slogan was ‘Put aside personal feelings because you are paid to work’. I now understand that this is not feasible. If the employee argued with his wife or children the night before, he would be upset and I should care for him.” Mr Law is caring towards all his staff. He emphasised, “We do not manage with job title but our heart.”
Mr Law believes in the possibility of implementing people-oriented values in business. When employees understand that their boss treats them whole-heartedly, they will be more committed to work and keep the same values in mind as they serve the guests, so that guests can feel the sincerity and care of the company and it’s employees.
Fractional Ownership Turns Crisis into Opportunity
Mr Law’s development project has not always been smooth. He encountered financial crisis in 2008 during the development of Phase I of Living Water Resort. While he was facing great financial difficulty, banks tightened the loan policy. Although Mr Law had established amicable relationships with two banks over the past two decades, with the financial crisis, the banks changed their policy and rejected his loan application. Mr Law had to pay in advance over CAD$1 million for salary every month. This was a heavy blow to Mr Law. He and his wife could only hope and pray that the situation would get better.
When development of Living Water Resort project was on the brink of collapse, a colleague suggested that Mr Law should change the management model and introduce the “fractional ownership scheme.” This was proved to be a great success, rescuing the entire Living Water Resort development project.
What is “Fractional Ownership?”
In the traditional context of hotel construction, the developer retains part of the title, while offering some of the hotel rooms for sale. In those days, this was a ground-breaking idea. In a typical hotel business model, one constructs the hotel and owns all of it, or the developer, which wholly owns the hotel and invites a hotel management company to run the hotel. This model leads to heavy investment and high risks.
With the introduction of “fractional ownership,” the developer can share the risks with buyers, thereby benefiting the financial position of the hotel.
Initially, Mr Law had full ownership of Phase I of Living Water Resort. He later sold 50% of his ownership. For Phase II, he sold 70% of it. The Living Water Resort team conducts management and collects management fees from investors. A similar management model has been applied to Phase III.
“Timeshare” to Emphasise both Vacation and Investment
In addition, Mr Law shared the right to residence and use of hotel facilities with guests through “Timeshare”. “Timeshare” is a business model commonly used by the tourism industry. Mr Law explained, “If a guest spends CAD$2,000 on travel every year, the sales strategy is to sell ‘partial ownership’ of Living Water Resort with CAD$2,000 annually over a period of 50 years”. ‘Partial ownership’ means being nominally entitled to one week of right to residence. The owner not only has the right to residence, but can also enjoy all facilities of Living Water Resort, or chooses to enjoy the facilities in more than 5,000 resorts all over the world.”
“Fractional ownership” is a marketing scheme that combines vacation and investment. Travellers will not only stay at Living Water Resort during a specified period of time, but may also sublease the residence and the use of hotel facilities to other travellers through Living Water Resort, which will collect management fees.
Phase I of Living Water Resort started with a loss of around CAD$1 million. With the implementation of “fractional ownership”, profits were recorded for Phase II. Profits increased gradually during Phase III.
The Importance of Business Integrity
The sales success of Living Water Resort is not only a result of “fractional ownership”, but more importantly the good relationships established with customers. The initial sales targets of “fractional ownership” are customers using “timeshare”.
Mr Law expressed, “At present, there are close to 10,000 “timeshare” members. This figure is achieved by mutual trust built over the past two decades and our integrity is hard-earned. With trust, we can perform better. This is very different from usual marketing strategies. Our success rate can reach 14%, i.e. for every 100 potential customers we get in touch with, 14 of them purchase our membership.”
Due to such a high purchase rate, not much is spent to promote Living Water Resort, raising the marginal profit. Therefore, it is beneficial for the business to focus on the integrity and reputation of company. Therefore, customers are willing to remain loyal to the company because of trust.
All-round Business Development that is Comparable with Competitors
Mr Law thinks that successful development of hotel business depends on three major factors – ability to conduct sales, quality of products, and efficiency of hotel operation. Living Water Resort has all three qualities. Coupled with its excellent location, competitors in the industry cannot easily stand out when compared to Cranberry Village.
It is not the case that Living Water Resort does not have any strong competitor. According to Mr Law, while many large-scale hotels have strong hotel operation ability, some of their teams may not be good at using “timeshare”. On the other hand, teams that use “timeshare” may not know how to manage hotels or architectural projects, as they belong to a different practice area. However, Living Water Resorts have good capabilities in all areas and a cohesive team.
In addition, Living Water Resort is a medium-sized company with “local management and local recruitment”. Living Water Resort enjoys smooth and effective communication across the entire office. While large-scale hotels have better resources and support, their local offices are too far away from their headquarters. Business plans can only be managed across many levels. Whether it is budget approval or any other matter, approvals from six to seven executives are needed. It is therefore difficult to take local circumstances into account.
A Company Culture that Focuses on Justice and Mercy
Mr Law is a devout Christian and applies Christian values to Living Water Resort. His business motto comes from Micah in the Bible, which is “act justly, love mercy, walk humbly with your God.”
To Mr Law, running a business is not solely to make profits. It is also important to take care of the needs of employees and customers. He is concerned about the daily needs of employees and treat them like they’re part of his family. A part-time cook of Living Water Resort once took a month of leave for personal reasons. He was worried that he would lose his job for taking leave during peak season. However, with understanding and sympathy from his boss, the cook was deeply touched and became even more committed to work after returning to his position. He has now become an important asset to Living Water Resort’s culinary team. Therefore, a company “showing mercy” can improve the sense of belonging among employees and make them more devoted to their jobs.
Justice and Company Reputation are Important
Regarding “acting justly”, Mr Law shared with us a true story. Living Water Resort recruited a Vice President, and this Vice President later recommended his ex-colleague for another Vice President position.
Unfortunately, this Vice President acted improperly and had an affair with a female manager. Some people have criticised Living Water Resort for only verbally advocating good morals and virtues, while allowing the senior management level to become entangled in inappropriate relationships. In order to “act justly”, Mr Law planned to fire the Vice President.
Mr Law was not without worries when planning to fire the Vice President. First, previous experience taught him that dismissing any senior management level officer would inevitably lead to negative financial performance of the company. Second, as the other Vice President had not yet taken office, he might choose not to join the company upon hearing the news. The company would then lose two senior officers at the same time.
However, Mr Law felt that the unresolved matter could damage the reputation of the company. “One cannot just focus on short-term financial results when managing a company, but also take into account of long-term corporate development.” Mr Law decided to strictly abide by the management culture of the company. Although the Vice President that had not yet taken office heard a lot of rumours discrediting Mr Law, he was still willing to go to Living Water Resort in person to understand better the matter.
After a three-hour meeting with Mr Law, he made independent analysis and his own decision. Eventually, he chose to join Living Water Resort and has now become the most capable senior executive officer. In fact, he was the one who successfully implemented the “fractional ownership scheme”.
Abide by Biblical Principles and Focus on Both Kindness and Logic
As a result, Mr Law learnt that decision-making involves more than the tactics of employing people or deciding on the priority. He learnt that: 1) one needs to consider whether it is in accordance with biblical principles, 2) whether it is done with kindness and mercy, and 3) whether it is logical.
As Mr Law upholds integrity, reason and compassion, many employees enjoy working at Living Water Resort and find it an honour to work with Mr Law.
Mr Don Buckle, the Vice President of Operations at Living Water Resort, has spent nearly 30 years in operations management. He has seen many companies focusing only on controlling costs and increasing profits. Living Water Resort, on the other hand, finds the value of people equally important. He said, “The company has a ‘300% goal’: 100% of growth, 100% of construction of life and 100% of creation of a harmonious and healthy community.”
“Giving Generously Culture” is Spread Abroad
Mr Law also strongly advocated for the “giving generously culture” in the company. He encouraged employees to serve society and participate in various community services outside work. He even set up the Caring Committee, authorising the Vice President of Operations, the Executive Vice President, and the Human Resources Department to manage this committee, as well as promote and implement the “giving generously culture”. Through serving others can one fulfil his or her own mission in life.
Living Water Resort is the major sponsor of Elvis Festival, a local large-scale outdoor carnival. Every year, over 100 artists gather in Collingwood to participate in concerts and competitions that last for days, providing entertainment to over 30,000 people. Through the event, employees of the Living Water Resort can serve citizens of Collingwood in person and let the residents and community groups experience the care provided by the employees of Living Water Resort.
In addition, Living Water Resort offers an annual Christmas dinner for more than 300 less privileged members of the local community. Living Water Resort works with 12 local churches and encourages its employees to participate as volunteers. Many employees find this very touching and are more willing to participate in other community events to care for others.
Living Water Resorts works with local colleges. Every summer, students from India, China and other countries work in Living Water Resort as interns. Through training and internship, they can fully experience the caring culture of Living Water Resort and understand that it is feasible to have compassion when running a business. When they return to their own countries, they will spread the Living Water Resort values.
Apart from local philanthropic work, Living Water Resort cooperates with churches in Paraguay to expand social enterprises. Paraguay has a considerable amount of orphans who are taken care of by their grandmothers. As a result of the high unemployment rate, many need to leave their hometowns and look for work in Argentina. Realising that raising pigs could be profitable in Paraguay, Mr Law established people’s commune and provided villagers with money to purchase and raise pigs, as well as grow vegetables in order to develop the economy.
In 2016, Mr Law built homes for orphans in Paraguay that do not have a shelter. As each child would need US$40 per month to sustain a living, Mr Law initiated fundraising in the company and encouraged employees to support these orphans through making anonymous donations. As all employees participate in the fundraising, it can be demonstrated that it is more blessed to give than to receive.
Also, students in Paraguay take one to two hours to take the bus to go to school and the bus fare is expensive at US$65 every month. Having calculations, Mr Law decided to construct accommodation for university students, with the rent being a only USD $65 per month. The project is expected to receive profits. Being one of the overseas social enterprise investments, the project not only can help provide good education, but can also create a good social environment. All profits will be used to the benefit of local communities.
Employ Those with Integrity and Good Virtues
When managing and hiring employees, Mr Law adheres to the 4C principle. What is the 4C principle? 4C refers to character, chemistry, competence (the first three are adopted from the philosophy of Pastor Bill Hybels) and caring. Mr Law explained, “Whether one is a good employee depends on whether he or she has integrity, good character and is a good team player. That person also needs to have the skills required by the position, be at the same pace as the company, compassionate, agrees with the corporate values, and can help build a joyful and caring community.”
Mr Law shared with us that there are four different levels of purpose of work. The most basic level is to work for rewards. The second level is to work for interests and passion. The third is to work for others’ respect and recognition, as well as being able to exert influence. The fourth level, and the highest level, is to work according to God’s plans and to serve Him. Mr Law hopes to create a caring and supportive working environment for his employees at Living Water Resort, so that they can understand the meaning of work at different levels.
Emphasising Staff Training and Setting Up Growth Group
Mr Law also prioritises the importance of staff training and invites different speakers to give training. For example, John Hull (CEO of John Maxwell’s organisation), came to the company to give training. There were two versions of the training – one contained biblical references and quoted words from chapters of the Bible; the other version had the same contents but did not quote the Bible. The latter version was meant for general public and hopefully they would find it useful.
Mr Law has even formed a growth group comprising of businessmen and senior staff from various enterprises. He fully understands that there are many difficult business decisions to make and it is lonely to be a boss or CEO of a company with difficulties that cannot be easily understood by others. The growth group, however, can provide mutual support. Apart from Mr Law, all members are white. Since they have the same background and belief, they all fully support each other and are willing to help without hesitation.
Inspire a Meaningful Life
As numerous companies come to Living Water Resort to make annual plans and attend training, their staff can often feel the difference created by the facilities and environment, as well as being inspired by nature. Most importantly, our employees are sincere and friendly, which make them reflect and become more caring in their own working environment. There was an American guest who received several millions of dollars after selling his company. Having recovered from cancer four years ago, he had yet to find the direction of the rest of his life. He came to Living Water Resort for inspiration and happened to meet Mr Law at the resort entrance. After chatting for 45 minutes, he was invited to join the growth group session held the next day and felt empowered after the session. When he left, he told Mr Law that he had found the direction for the rest of his life.
Host Leadership Conferences to Build Up Leadership Development Culture
Living Water Resort hosts annual leadership development training through Leadercast. Each year, ten highly-recognised speakers are invited to give talks, which are broadcasted to various places via satellites, so that over 100,000 people from more than 50 countries can participate. To Mr Law, the training is not only a business, but the spread of good culture to local communities. More importantly, company leaders can also join to promote leadership development culture in their companies. Mr Law also invited the mayor, local members of Parliament of Collingwood, other company leaders, and local officials to assist and participate, thereby hopefully exert certain influence on them and to develop community culture together.
Mr Law hopes to spread the caring culture of Living Water Resort to every corner of the world. Through extensive efforts with the staff, Mr Law strives to develop Living Water Resort into a model company and Collingwood into a model town. More importantly, Mr Law wants everyone to live their life meaningfully, “God does not need us to make great achievements or do anything significant. He wants us to build close and harmonious relationships between God and men through our business.”
Be Flexible to Reach New Heights in Business
The Living Water Resort development project can be regarded as God’s timing and providence. Mr Law told us that he originally intended to sell the big piece of land of Living Water Resort for cash, but because the buyer revoked the offer, he could only take it back for his own use. Now, Living Water Resort has been developed into a resort of considerable scale. “The land premium has increased, but this is not a result of any of my strategic planning.” Mr Law believes that there is a plan for everything, which cannot be attributed to his vision or prediction.
Mr Law is a very humble person. While the success of Living Water Resort is a result of God’s arrangement, what should not be neglected are Mr Law’s perseverance and determination, his implementation of stable development model, use of talents according to their virtues and the thorough implementation of a caring culture in the company, which are critical factors of Living Water Resort’s success. This is also a good testimony of walking and working with God.
After the construction of Phase I of Living Water Resort in 2009, the balance of payments was not reached as expected. While many business leaders would have reached an early conclusion that the development plan was a failure, Mr Law did not give up. He accepted his subordinate’s opinions with open-mindedness and changed the business model flexibly. Through using “fractional ownership scheme” to sell the title to the hotel, success was achieved.
Phases IV to VI of Living Water Resort will be constructed in the future with the addition of more hotel rooms and expansion of the banquet hall to increasing the grandness of the hotel. Living Water Resort is designed to become an encouraging leadership training platform, an inspiration to people to reflect and act kindly, to positively contribute to the world and those around us, and demonstrate God’s truth, kindness and beauty through men.