Although speed is a strong, definable attribute at Kingston, it is not to be confused with the company's core values. A suggestion of those can be found on a small plaque inside the front door in the lobby, which reads, "Courtesy . . . Compassion . . . Modesty . . . Honesty."
The embodiment of those values is John Tu, Sun's partner. The two have worked together since 1983, when they started a company, later sold to AST, to provide memory upgrades for Digital products. Tu, amiable and soft-spoken, focuses on sales and marketing, while Sun worries about engineering. But ask Tu what preys on his mind most, and he'll tell you it's a sense of obligation to his employees. "Suppose the company stops growing tomorrow," he muses. "We want to make sure our employees will not be hurt." Sun adds that Kingston is managed so conservatively that should it go out of business tomorrow, it wants to have enough money to distribute a year's salary to every employee to give each time to find another job.
The atmosphere at Kingston implies fluidity. No doors, no ties, no titles, no secretaries. No memos, no supervisors. No quality standards, points out David Sun, because quality comes built in. The company tests 100% of its parts before they ship, whereas the industry standard is 5%. "There are times when I've been over there, and I've seen David sweeping the floor," notes Al Soni, who represents Samsung, a major Kingston vendor. "He relates to his employees at their level -- always."
Janet Ruprecht, who works in marketing, describes Kingston employees as "people you would not expect taking responsibility for things you'd think they wouldn't notice." They range from engineers breaking from their mind work and wandering down to shipping to pack boxes for a while to shippers walking into the sales department, after talking to people in accounting, to report that certain distributors have fallen behind in their payments.
Ruprecht's sister Carol, who works in sales, recently got a call from a customer in Belgium who wanted to know if Kingston could produce a special modification of one of its products. Ruprecht hung up and called engineering. Engineering said OK, provided production could handle the alteration. Production assented, and 10 minutes later Ruprecht called back the customer to say Kingston could produce the part. She also recalls a rare slow day when production employees with nothing better to do decided to dismantle one of Kingston's fax machines to see if maybe they should be thinking about building add-on memory for it.
Kingston pays its employees salaries that are 20% to 30% above industry norms. It pays no commissions to its salespeople, believing that their success would not be possible without the group's efforts. Its bonuses are paid out in equal shares, not pegged to salary level, because Sun reasons that the bonus is a reflection of "how the company is doing," whereas salary "is what you know."
Kingston invests in engineering talent. Orange County brims with a surplus of free-lance engineers, yet the company assiduously has built an engineering staff, largely through Sun's and Tu's contacts in the industry. Both have a decided bias against credentials, and as a result, Kingston's two best "engineers" lack degrees but have a wealth of experience as technicians.
Paul Popadak is one of them. Recently, he spent six months designing a complex upgrade that allowed Kingston to become the only aftermarket company to reverse-engineer a board with an application-specific integrated circuit (an ASIC is a custom chip designed to take the place of many smaller and less complex chips).
Kingston's inventory takes up four rows of shelves, each running about 20 feet deep, creating the impression that David Sun and John Tu run a midsize auto-parts store, not a $141-million company that ships computer add-on components around the world. That inventory amounts to four days' worth of parts.
Such a lean inventory in the volatile computer aftermarket leaves little room for error. Memory chips, the heart and soul of Kingston products, are notoriously commodity-like in nature. Prices soar and collapse with little notice. If there is a hallmark to the industry, it is that the prime loyalty is to price and today's deal. Manufacturers persistently shop around among vendors. They cancel purchase orders when the market suddenly shifts. They drag their heels on paying bills.
Kingston's lean inventory thus appears against the backdrop of a chaotic market as a high-tech, high-wire act. But Sun and Tu have a safety net beneath them, woven taut and true by their vendors. In their hierarchy of important people, Sun and Tu place employees first, followed closely by vendors. They believe that if you treat those two groups well, then they in turn will see to the care and feeding of the third vital group -- customers.
"Integrity. That's how I'd sum up Kingston in a word," says Ken Hurley of Hitachi America, one of Kingston's key vendors. "We have a strong partnership with Kingston. We don't share that with a lot of its competitors."
"If David gives me his word, I can take it to the bank," echoes Mike Burns at Motorola, who labels Kingston "my top account" -- in terms not only of volume but also of psychic ease. Burns makes no commission on the commodity chips he sells to Kingston but says, "I spend 40% of my time supporting this account, because it's so pleasurable to do business with them. I've been doing this for 15 years, and I have yet to meet a company that's more fun to work with."
