What Global Businesses Can Learn from Vietnam’s Growth
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As the Deputy CEO of one of Vietnam’s largest privately owned company, I would consider my story far from typical. In fact, the story of my family’s business has led us to be a role model for a new business generation seeking out the qualities of a good leader.
It is a privilege to be in this position and I plan to use it well by sharing my insights to benefit global businesses.
Overseas educated and armed with the tenacity and unflagging optimism typical of the post-war generation, my family works hard every day to help our business thrive. However, I consider myself to belongs to the millennial generation that accounts for 50 per cent of Vietnam’s population, who are busy transforming the country’s fortunes.
What it Takes to Be a Global Business
My family’s business is the Tan Hiep Phat Beverage Group (THP). With its “Never Give Up” attitude and “Nothing is Impossible” core value, THP is Vietnam’s leading FMCG (fast moving consumer goods) food and beverage company, with its sights set on joining the global stage.
THP’s success is a modern David and Goliath story. Founded in 1994 by my father Dr Tran Qui Thanh, Chairman and CEO of THP, and Madam Nu, our business’s vision has triumphed in the face of adversity — economic sanctions, a country recovering from war, a lack of capital, and hyperinflation — along with numerous other hardships. From these entrepreneurial leaders, I have learned what it takes to be a good leader.
Between 2006 and 2009 alone, the company grew by 400 percent with a raft of best-selling drink products, a fact that didn’t go unnoticed by one of the world’s largest players: Coco-Cola.
In 2012, THP famously walked away from a $2.5 billion offer from The Coca-Cola Company to acquire a controlling interest.
My father taught me a valuable lesson that day. Understand our values and what our company stands for, what direction we are heading in, and above all else, do not be dazzled by the power that multinational companies are able to display.
As Western businesses vie to stay relevant in the fast-growing global business economy, all eyes are turning to Asia. With more and more multinationals setting up operations in the East, THP’s story identifies what companies can learn from East and West.
It offers a personal perspective on everything from how to do business in Asia to leadership strengths that are unashamedly drawn from Asian family cultural values — qualities particular to leaders from Asia that I hope will inspire Western businesses.
Leadership Qualities From My Entrepreneurial Father
To understand THP’s trajectory, it’s essential to take a closer look at the man behind THP: my father, Dr Thanh. By all accounts, it is his brilliance, forward thinking, tenacity, and resilience that have made him one of the region’s most successful leaders.
My father literally never gives up. The core value closest to my father’s heart is the one, which states, “Nothing is impossible. There are no limits to what we can accomplish.”
Spending part of his childhood in the harsh environment of an orphanage from the age of nine, he learned how to carve opportunities out of very little. This ability benefited him as a young adult struggling to survive in a ravaged post-war Vietnam. At the time, private industry was still illegal, and the country was in chaos.
He started a small yeast business to supplement his government day job. For years, my father worked crazy hours to stay ahead of rampant inflation. But to scale the business, he needed centrifuge filters so that he could generate larger amounts of yeast more efficiently.
At the time, U.S. sanctions were still in place making it hard to get the materials he needed. That’s when my father found an ingenious solution in the form of cast-off U.S. army hammocks, sold in Saigon’s markets. The high-grade nylon in the hammocks became the basis of his secret centrifuge-filter process and after much refining, he was able to double his profits. Such innovative thinking is the hallmark of a great leader.
Starting in the mid-80s, my father and my equally industrious mother, Madam Nu launched a number of innovative projects. The yeast business was just one of them. In 1994, they founded THP, which today produces Vietnam’s best-loved drinks.
THP’s Number 1 Energy Drink, its Zero Degree Green Tea and the Dr Thanh Herbal Tea hold leading positions in the market and have helped make THP the global business it is today.
My father is a man of many mottos. His key one is that we exist to serve the customer, at a profit. He insists that every single THP product needs to have a functional benefit. This is what sets our company apart from the competition. Tasting good on its own is not enough. Nor is giving someone a sugar rush.
THP — A Global Business Doing Things Differently
Over its 20-year history, THP has invested in several business leading practices. These include creative product strategies in marketing, many masterminded by my father himself, and the use of breakthrough packaging, technology, and software. Dr Thanh Herbal Tea, for instance, required a record 45 days of research and production using aseptic (sterile, preservative-free packaging) technology to bring the product to market.
THP’s innovations also embrace a commitment to sustainability and leveraging great ideas from around the world, mirroring Vietnam’s outward facing approach. In fact, THP continually strives to improve by adopting international standards and processes.
I am fiercely proud of my father and I am convinced that his ability to take risks and view failure as an opportunity to learn — to start again no matter what — has made THP what it is today. (“Great success comes to those who set sail for the sea,” is his refrain. “No success comes to those who stay moored in the river.”) These are the leadership qualities I hopes to emulate as THP strides towards global business status.
It can be helpful for businesses investing in Asian markets to deeply understand its cultural nuances and values. Many of these are steeped in the Confucian ideals of respect, honor, and accountability. Personal relationships are highly valued.
These values underpin THP’s success and are deeply engrained in the company culture. Collaboration and creating an Asian family culture that gives back to society is deeply entrenched in the company’s ethos. All stakeholders are treated with equal care and respect, from customers to employers.
Our family has its own personal mission for the business: “Share a culture of leadership, integrity, commitment, and talent so we can build a global business that creates wealth, enhances our family’s reputation, and makes a positive impact on society.”
I believe one of THP’s biggest competitive advantages over global business advantages is its long-standing and inclusive relationship with its diverse chain of suppliers, from Vietnamese farmers to international vendors and research firms.
We always try to ensure we are maximizing these relationships. We cannot innovate without them. There are so many benefits to strategic supplier collaboration. With employees, THP empowers them to realize their capabilities by creating opportunities and fostering a community spirit. Employees are viewed as “family members” and encouraged to equate helping others with personal success. It’s a view vastly different from the self-motivated approach in the West.
One individual can change the world, but when a group of individuals work together, the impact is magnified for good or for ill. Employees all over the world are also more motivated if they feel they are working for something bigger than themselves. If someone has a sense of belonging, he or she is not only far more likely to go the extra mile but also work with others to achieve it.
The difference in THP’s approach is illustrated by the way it sets its employee pay. The company’s seven core values are a priority benchmark, which means that an individual’s performance is based not just on hitting financial targets but other attributes. These include having a positive attitude, being honest, helpful, hardworking, and customer focused.
This mindset of seeing values beyond the bottom line is another of the leadership qualities Phuong and THP offer to other businesses as a key to their success.
A Bright Future
As a young business leader, I already learned and achieved a lot from my experience at THP.
But, it’s just the beginning, thanks to my father’s insistence that there is always so much more to discover.
The philosophy of not being afraid to say, ‘I don’t know’ and ‘why’ has inspired me and my family-owned business to keep learning and improving their understanding of the world. They are key qualities of any good leader — those who can enable the greatest of global business visions.
Phương Uyên Trần serves as the Deputy CEO of Tan Hiep Phat (THP) group, Vietnam’s leading beverage company. In addition to running Number 1 Chu Lai Plant, she is responsible for THP’s procurement, domestic and international marketing, public relations, and corporate social responsibility programs. Phuong is an executive of the Beverage Association of Vietnam and also sits on the executive committee of the Young Presidents’ Organization (YPO) Vietnam chapter. After being asked by Harvard Business Review to write a case study on how her family-owned business walked away from $2.5 Billion offer from Coca-Cola, Tran decided to write a book that would teach people exactly how to do it in their own business called Competing With Giants.
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