"We also want to keep [them] buying our monitors versus the [ones] bundled with Apple computers, Apple monitors or some kind of monitor they don't want to use. At Circuit City you want a brand A speakers, brand B receiver and brand C another component. You can combine [components for] the best value. You'd be ashamed in front of your friends if you buy a full set of the same brand because they're thinking you're not getting the best.
"We know what the customer needs," says Chu, "and we set the most stringent quality standards for the manufacturer. We make lots of improvements [in specs] to make today's technology meet customer needs. This kind of [market] research and R&D does a lot to make sure the product meets the highest standards.
"It doesn't matter if IBM accepts a monitor or not. We have more [stringent] specs." Chu shows off the quality control lines in the plant behind the sea of offices and cubicles. Before ViewSonic starts shipping a new model, QC inspectors check out hundreds of units to determine its quality level.
"Apple doesn't do as much [inspecting]," Chu declares. When a technical glitch is isolated, ViewSonic engineers devise what Chu calls an "action plan" to "imput quality to the problem."
"Actually, [the action plan] does not cost [us] money," Chu adds, "because the costs are paid by the customer. Customers are willing to pay if the quality is better."
Much of the quality issue is tied to Chu's concern with eye strain and radiation levels. "We give you PCU monitors," Chu says. "That's the toughest industry standard so far." The standard has caught on in Sweden and other Scandinavian countries that demand stringent safety standards. The less stringent NTR2 standard currently prevailing in the U.S. measures radiation levels at a distance of 40 centimeters, about 16 inches from the screen. PCU measures at 30 centimeters or less than 12 inches. ViewSonic's monitors are checked to ensure safe radiation levels even if you like to work with your face pressed close to the screen. Monitors sold by competing companies offer PCU only if you're willing to pay $100 for the option.
"We researched why it costs $100," Chu says. He discovered that the higher standards could be met at a cost of only $10. "Consumers definitely want to pay for it! But very few models [offered by competitors] are PCU standard, only as an option on some 20-21-inch. We developed the technology so we can implement it for all our products. It doesn't matter whether you want to buy high-cost monitor or low-cost monitor, it's the same. It is more healthy. So that's one value we give people. You pay a little more, but get much more."
Chu's bold action in implementing the PCU standard across the board is one example of ViewSonic's policy of quickly implementing the highest standards as they become available--at a profit. For this efficiency in staying ahead of the industry curve Chu credits his company's efficient flat structure which dramatically shortens the decision cycle. Instead of six months to make a decision to implement a new development, Chu can respond in days. Chu keeps a staff of 20 whose sole job is to elicit customer reaction to ViewSonic products and the kinds of features they want to see added. This data is reviewed personally by Chu and acted on. This quick response is critical in an industry in which the entire product cycle is one year or less.
"If you react in six months," Chu says, "it's all over already! Lots of new technology is coming out every month, so users continue to require more and more features and more and more benefits. We can implement them in time [to fill] their demand."
Despite his sales background--or perhaps because of it--Chu personally keeps up with technological and market developments by poring over stacks of consumer surveys, trade journals and manufacturing specs and reviewing his findings with purchasing and engineering staffs.
It has only been five years since ViewSonic entered the monitor market but Chu has jumped on the re-engineering bandwagon. In this case re-engineering means going from a one-man show to add a layer of management. As a result Chu has cut his workdays to a reasonable 8:30 to 6:30. "I hope in the future it will be even shorter. If I have more time for thinking on future direction, the company gets more benefit. I need managers who can conduct business by themselves, can start generating ideas so they can start coming from the bottom up, not [always] from me."
At the moment Chu still comes up with about half the ideas for future product development. But he has changed operating procedure to allow more input from below.
"Before I [would] say, 'Here's the idea. How does it sound? Go ahead and do it. The decision [would take] about one minute. [Competitors took] six months, we [took] a few seconds. But now it's little different. The company is bigger. I cannot do everything. So now it's this way: 'If there's anything you feel we need to do, ask the manager. Come up with suggestions, come up with proposals.' They come up with proposals. Many times it's not [acceptable], not even close. But at least when you ask the person to try, the next time it's okay. Now is a very challenging time."
Until early 1995 Chu was personally managing all aspects of the operation with the help of an assistant manager who reported directly to him. By the fall of 1995 Chu was deep into delegating management duties to three new vice-presidents, one for sales and marketing, one for engineering and one for finance and operations. The first to be hired was his chief of operations operations who began in early 1995.
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"So now I probably do half and they do half," Chu says. "Hopefully, my [share of management] will get down to 10% so I can focus on future direction.
"My job [is] to look at the company like an outsider. From the perspective of an outsider is this company competitive? Can this company continue to create new channels and sales successfully? Sell ABC brand? Create another brand, maybe in multi-media? Can we repeat the success of ViewSonic? We will lose its scale if employees cannot learn this. It is my job to teach them how to do that. I'm the person the company [looks to for] entrepenurial spirit. Are we losing this spirit? Are we at the peak of [each] product or can we be even more aggressive? I was doing the new product [launches]. Now other people are doing it. [If] I communicate with 100 James Chus, I can be very, very successful. So I want to make sure that more and more people have that entrepreneurial spirit.
"Also, my job is to look at the Peter Principle." Chu is referring to the phenomenon in fast-growing companies in which employees keep getting promoted until they reach their level of incompetence. "At that limit [no one] can do a good job, so the whole organization becomes incompetent. First I need to look at myself. Am I [at] the Peter limit? I cannot tell you whether [I will be] successful or not, but I will continue to try. I do half and you do half. If anything is wrong, I still can back up and not get in big trouble. If you go this way, how competent [are you]? If we're doing well, we'll continue. I help myself not reach that limit. I want my [competitors] miserable.
"Right now I have enough money, I have good achievement, we will continue growing. If we feel we have much bigger capability, [we can] take a big risk and become IBM, Apple or Compac. Never try, never know. If I find I'm wrong, I always can back off. Make sure [we] stay at our most competitive level--that's my job. No other person can watch [that] for me."
Chu's lofty ambitions might suggest taking ViewSonic public to raise capital. The possibility of being able to "compete up" to the likes of Compac and IBM tempts him, but he prefers to simply continue growing with profits and homegrown competencies.
Chu dismisses out of hand the possibility of selling out. He clearly has no thirst for liquidity.
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