HNA Group, a China-based company that started with a small airline and few favors from the state-run economy, has now become a $100 billion company with stakes in global brands such as Hilton.

Not surprisingly, CEO and founder Chen Feng has made Six Sigma training a strong part of the corporate culture.

HNA Group started in 1993 with one small airline, Hainan Airlines. While the state owns a stake in the company, Hainan Airlines did not receive the best landing slots or other subsidies lavished on bigger China-based airlines, according to the Economist.

Now the airline is the top rated in China.

Using Six Sigma

HNA Group is somewhat unusual in that it is located in communist China, where the government has a lot of say in business dealings.

However, Feng has his staff regularly attend “training projects” in Six Sigma processes as well as “business etiquette,” according to a report from the company, which added that these courses help employees “strengthen professional skills, improve career quality and expand their vision.”

Using Six Sigma methodology is part of what distances HNA Group from other state-owned business that tend to be “run by bureaucratic grey men,” according to the Economist.

The company employs a financial methodology that requires examination of all financial deals for economic value-added. HNA Group typically does not remove top management for companies it acquires and has not ordered mass layoffs.

Chen Feng, a Buddhist scholar, also avoids any deals that impact the public negatively.

“We will not damage public benefits for our own business interests,” he told the University of Pennsylvania’s Wharton School of Business in a rare interview in 2013.

Big Global Player

HNA Group, guided by Six Sigma and its mixture of the above business philosophies, has moved into the global market in a big way. Just a few of the deals involving the company include:

  • A 25% stake in Hilton Worldwide
  • A midtown Manhattan skyscraper for $2.2 billion.
  • The aircraft-leasing division of New York-based CIT Group
  • ACT Cargo Airlines in Turkey
  • GE SeaCo, the container-leasing subsidiary previously owned by General Electric

Part of the company’s philosophy also is part of Six Sigma – constant innovation. Feng told Wharton that among the company’s first initiatives were attracting American investment money for a Chinese airline (George Soros invested in Hainan in 1995), discovering the value of niche markets (serving corporate clients and regional flight routes) and using different financial models within their business.

While it can’t be credited for all the company’s success, the company’s use of Six Sigma methodologies has helped pave the way to success for the China-based company.