Leading Through SARS

First came the rumor: A killer virus was sweeping through Hong Kong. Panic soon followed. Marjorie Yang, CEO of textiles conglomerate the Esquel Group, faced her toughest test: to manage a global organization from ground zero of SARS.

It started in February, when the Hong Kong newspapers reported that people in Guangzhou, in southern China, were buying up large quantities of vinegar. That’s when we knew that something was wrong. In China, vinegar is used as an all-purpose disinfectant. People were burning vinegar the way they would burn incense, hoping that the fumes would ward off a mysterious, flu-like illness. Then we got phone calls about my 80-year-old father. He loves to visit our factory in Guangdong province. But our management at the factory called and said, “Don’t let him come, there’s a virus.” My father was angry — he thought they were overreacting. We didn’t know that this “virus” was severe acute respiratory syndrome — SARS — and that it was already peaking in Guangdong.


By late February, there was still no word from the Chinese government about SARS. But when you do business in China, you don’t wait for official pronouncements. Almost always, the government’s first instinct is to control the flow of information. If you hear rumors about diseases, you take precautions. With 47,000 employees in nine countries, we had a lot to protect.

In mid-March, the news finally broke: 300 residents of a single urban-housing estate in Hong Kong had contracted SARS. Newspapers in Hong Kong began running stories about doctors dying at the Prince of Wales Hospital. And then the panic hit. People started wearing surgical masks in public; a doctor friend of mine told me to forget the usual masks and get 3M’s N95 mask, which is designed to ward off anthrax and tuberculosis. I put a smiley face on my mask (which was not an N95). I was not about to sacrifice my individuality.

On the morning of March 19, I gathered our senior management team in one of our conference rooms. The goal of the meeting was to try to predict the worst-case scenarios, and to make plans to deal with each. As I sat there listening to my managers try to grapple with this thing, I began to comprehend the magnitude of the SARS threat. The challenges seemed endless: If some of our workers got infected and a factory shut down, how would we move shipments to other locations and protect customer orders? What would we do if Hong Kong were to be quarantined — where would we send our management team? What if this virus could live outside the human body, and other countries began banning Hong Kong exports out of an irrational belief that our products were contaminated? As it turned out, that last scenario was not so far-fetched. My good friend Vivienne Tam, the high-fashion designer, told me that people would walk into her boutique in downtown New York and say, “I like your clothes, but I’m not going to buy them — they’re made in China.” It’s a racist thing. They think, “Vivienne Tam, Chinese, SARS.”

In fact, fear of SARS was far more contagious than the disease itself. The reality is that SARS is hard to catch. As of early June, the global death toll for SARS was 775 people — and 90% of those deaths occurred in China, Hong Kong, and Taiwan. But just 0.026% of Hong Kong’s population contracted SARS. Unless you were a medical worker, the probability of coming down with it was ridiculously low. But that fact didn’t prevent people from overreacting to the hype — even within our own company. At first, people in our Japan office refused to open packages from Hong Kong. Some of our buyers in the United States canceled meetings and told us to communicate by phone and email only. I realized then that we had to stop this fear from paralyzing the entire company — that the only way to survive the epidemic was to pull together as a team and refocus on our work.

It turned out that the little things, such as our health-care benefits, mattered the most. We requested that people with even a hint of fever stay at home. In a place like China, where losing even one day’s wage is a major setback, it’s hard to get people to comply with that rule. But our employees get 80% of their pay when they call in sick, which gives them the security to do so. That simple policy has always helped to keep sick people home. But I think it was our clean-bathroom rule that did the most to shield our company from SARS. People call me the “toilet lady,” because I’m obsessed with sanitation at our factories. I’ll never forget something an executive from McDonald’s said at a seminar in Hong Kong: “If we don’t keep our men’s and women’s rooms clean, we’ll never make it.” And paying attention to the details paid off. On May 23, with the SARS threat abating, the WHO lifted its travel alert on Hong Kong. We employ 20,000 people in Hong Kong and China, and not a single one of them contracted SARS.

Kite flying is a favorite Chinese pastime. In late spring, Edward Tian of China Netcom gathered a group of Chinese entrepreneurs for some kite flying at the Great Wall in Beijing, as a way of celebrating life after SARS. I thought that was a great idea, and to support it, I led a group to do the same in Hong Kong. As I sent my kite soaring, I realized it symbolized all we had been through. A kite will fly only when you work with the wind. So it goes with leading a company. In the whirlwind of an epidemic, you can’t force things. You plan, you react as events unfold, and then you try to summon the courage to let go.


Marjorie M.T. Yang is a graduate of MIT and Harvard Business School. With annual revenues of more than $500 million, the Esquel Group manufactures and distributes cotton apparel to premium clothing retailers.