At times neglected, a strong corporate culture is a key factor in success.
Photo: Viet Tuan
When Vietnam-based pawn service provider F88’s management team attended the Vanto Group’s Three Laws of Performance program two years ago, after just a few coaching sessions they had defined its core values and vision for growth in the years to come. Afterwards, they had the chance to join a discussion with the CEO of the Mobile World Group, and outlined a clear roadmap on how to implement, reinforce, and amplify those core values associated with the company’s business culture.
Vietnam’s business community, especially small and medium-sized enterprises (SMEs), have in recent years realized the significance of building a strong business culture, which can be a key factor in differentiating their branding, enhancing their competitive capacity, and committing to sustainable development as Vietnam’s economy changes rapidly, according to Ms. Nguyen Minh Giang, Director of Talent and Culture at Mekong Capital, whose Mekong Enterprise Fund (MEF) III has invested in F88.
Building core values
She believes a strong corporate culture has been an essential driver of success both for Mekong Capital and the companies in which its funds invest.
Over the past two years, since receiving investment from MEF III, F88 has begun seeding core values into its recruitment, retention, training, and promotion, by conducting a series of training sessions to publicize these values among all employees in stores around the country. Its recruitment process has been organized around values since 2018, to have new hires who share those same values. Corporate culture and core values were the very first training session the HR team conducted for staff.
Mr. Nguyen Duc Dai, F88’s HR Director, said the company has conducted different activities such as games and conferences to make sure its core values are always followed. “The managerial level will never compromise on behavior contrary to our core values,” he said. “Core values act as a ruler, with managers at all levels having to justify their behavior and those of their staff.”
For example, a store manager must be the first to detect any fraud and propose penalties to the HR team. To be promoted, senior staff will need to submit a core values statement so that managers can judge how they would practice these core values and how they would empower their subordinates to practice them.
F88 has also applied various digital tools and platforms to ensure core values are practiced within the organization. “We have a team called the ‘Culture Committee’, founded to adopt initiatives that would help promote corporate culture and reinforce core values,” Mr. Dai added. “We have also utilized a wide range of internal communication means, including social media. We designed a lot of activities, from games, video clips and promotional ads, to show what a ‘culture’ looks like and what behavior would constitute core values.”
Meanwhile, creativity and polite rebellion are core values at Quan Ut Ut, an innovative craft beer restaurant chain. “In order to retain the company’s core values and let employees be themselves, the management team had to determine what was needed to encourage and inspire them every day, because standing still means going backwards,” said Ms. Linh Dai, Senior HR Manager. “With the technological revolution along with the rapid expansion of our restaurant network, only digital technology can help us keep up with trends and help management teams control targets quickly and effectively.”
Industry 4.0 has been creating so many new business models that are pushing market competition to new heights. In the context of increasing economic integration in both breadth and depth, the competitive edge of businesses lies more so in corporate culture than in products, revenue, or brand. “Nearly everything about your organization, including your strategy, products, and systems, can be replicated, except for one thing: the effectiveness of your people. Culture is the ultimate competitive advantage,” said Mr. Bob Whitman, CEO of FranklinCovey, a leading US organization in management training and assessment services.
SMEs in Vietnam can move quickly and seize the opportunities from Industry 4.0 if they are truly aware that corporate culture is the core value determining their competitiveness, according to Ms. Giang, and this is an important factor for sustainable development in the digital era.
Speed in processing business issues is critical in these new times. A sound business culture reflects the trust and agreement within the team in decision making. “The digital economy provides us with a plethora of tools, software, and platforms, so we can collect different data, customer insights, and market trends in a timely manner,” said Mr. Dai from F88. “But it is the business culture that allows us to act and respond quickly to information to accelerate business performance. We are confident that we have a team where everyone shares a belief in our vision, trust each other, and are devoted to our success.”
Moreover, the company’s strong corporate culture can help with employee branding. “Potential candidates would be aware of what we stand for and would refer others once vacancies open,” he explained. “We recruit those who are aligned with the company’s core values and build up their skills. These core values are fundamental and relatable across industries.”
F88’s employee satisfaction rate, as measured based on Net Promoter Scores (NPS), was 79 per cent last year and up to 85 per cent in the first quarter of this year. With these core values, its front-line staff can be open to proposing ideas or proposals to deal with regular customer needs. For example, being dedicated to customers and being willing to speak up are two of its core values. Its staff can directly identify what works in their daily operations and what does not, and pass this on to the management team of C-suite directors. Each customer feedback is recorded and available to be accessed to improve product offerings. This gives the company plenty of opportunities to identify improvements for greater customer satisfaction.
Building a strong corporate culture has not been a simple process at all businesses, according Mr. Gian Tu Trung, President of IRED of Education in Vietnam and Chairman of the PACE Institute of Management. Analysts also note that many Vietnamese enterprises are still under significant pressure from competition and revenue and profit goals and are neglecting building a culture.
He posed the question of why so many businesses want to create a culture but so few are successful, and in answer emphasized four main causes. The first is a lack of deep awareness about culture and the role of building a corporate culture as part of sustainable development. Secondly, businesses lack a clear vision regarding corporate culture. Thirdly, they are short of methods, tools, and solutions to build a culture in the new era. Finally, they fail to be persistent in the process of culture building.
Not every business can grasp the power corporate culture holds. Changing a business’s culture will always lag behind technological change. This requires business leaders have a firm view of what the culture should be. As FranklinCovey noted in its report, “If strategy was seed, then culture would be soil. If the ‘soil’ is not good, then regardless of how much effort is put in, the ‘seed’ will not geminate and grow.”
SMEs in Vietnam can move quickly and seize the opportunities from Industry 4.0 if they are truly aware that corporate culture is the core value determining their competitiveness, and this is an important factor for sustainable development in the digital era.
Ms. Nguyen Minh Giang, Director of Talent and Culture at Mekong Capital
From: VietNam Economic Times