I finished Competing With Giants: How One Family-Owned Company Took on the Multinationals and Won by Phương Uyên Trần (Tran Quy Thanh's daughter) and Brian Tracy during my pass time in Taiwan trip. The book shared how Tan Hiep Phat (THP) sustained as the family business against giant competitors in the FMCG - Fast Moving Consumer Goods market. The brand gained its fame through so product like: Energy Drink No. 1, Zero Degree Green Tea (Tra xanh Khong Do), and Dr. Thanh Herbal Tea when Coca Cola, Pepsi Co, and others entered the market. There are some lessons I learnt from the book.
1. Do not stick to the one business which does not promise profit.
Tran Quy Thanh left beer to enter soft drink given its low profit margin partially contributed by the higher tax rate. It also "cost more to produce as it needs to be fermented for twenty or more days and incurs other costs relation to storage". When business promises no future, leave. Don't be sentimental. Move on.
2. Vietnamese people are not capable of teamwork
"The Vietnamese find teamwork particularly difficult, because we are such a self-reliant people. History has made it so. Put too much trust and reliance in other people, and you will end up being subjugated by them."
THP introduced a core value of "Owning your work" which allows its employee to be responsible with his/her own work. Mr. Thanh, the founder of THP, also advocate for John Maxwell’s five levels of leadership: "People not only follow someone because they want to (i.e., the relationship they have with them, which is classified as level-two leadership) but also because of their track record". So, when it comes to human management in Asian context, delegate and let them "own" their parts of the plan.
Each staff member at THP now has a daily work plan with a list of priorities. Each of the company’s processes have a lead time and a paid time—that is, staff get paid for the amount of time it should take to do a process and no more. If a process is not completed on time, the staff member in question is issued with a corrective-action request.
Another reason why teamwork would fail, the Asians are always afraid of loosing faces. In teamwork, it is easier to shift the blame to someone's else. In the context of "own the work", employee will take greater responsibility and retain his/her true sense of self in the working process. Given the special traits of Asian employees, the techniques of raising opposite opinions needs to be trained.
Part of it is about the tone of voice used to frame a different solution. This is also a sign of respect. For example, “I respect your vision, but I feel there is a different way we can execute this project.”
The author also learnt how to argue with her father by simply "touch his arm" to bring him back to present. She also shared that "getting defensive or fighting back does not work and is generally not a good way to deal with anyone in life". Instead of react, Uyen chooses to simply ask what she can do to help.
While allowing employees certain level of independence, THP also instilled the "family" culture within the business which works very effectively in the Vietnamese society of collectivism.
Where the wider company is concerned, we try to ensure everyone feels they belong. My mother has always been an expert at this. For Children’s Day every June 1, she sends each employee’s children a gift and personalized letter. She buys Mooncakes for everyone to celebrate the Mid-Autumn Festival. One time, she personally cooked three thousand pots of stewed pork.
3. Swift decision better than right decision
My father often makes tough decisions like this: “When an issue comes up, I’ll listen to my team and then sleep on the decision,” he says. “I’ll announce my decision the next day or the day after. Sometimes I’ll get it right. Sometimes I’ll get it wrong. Either way we’ll know the answer quickly. In the long run, our ability to make quick decisions, even faulty ones, outweighs the advantages of excessive deliberation.
4. Discipline, yes, again
But transparency, control, and discipline are all very important to my father. He often says individual competency only accounts for 20 percent of the job and discipline the remaining 80 percent.
The family lived in the factory. There is blurred line between family and business issues. The whole family members sleep only for 4 hours per day and still heavily involved in each of the business process.
The story of Tran Quy Thanh single handedly launched Dr. Thanh herbal tea shown his vision and self driven. While everyone was against with his idea, Mr. Thanh took a record forty-five days of research and production. He priced it at 8,400 VND per bottle (higher than the average 7,000 VND per bottle). What set the drink apart from other products was its 12 herbal ingredients claiming to benefit the health. The product was launched at the right time, after Lunar Tet holiday, a period of unhealthy diet and family members seeks for healthier living habits. Dr. Thanh came in handy "to rebalance and detoxify the body after excessive eating". The product became a great success and remained a monopoly position in Vietnam. One trivia note, when the line was launched, I remembered vividly its ads and very sure that Thanh was a doctor (hence the name Dr. Thanh herbal tea). It came to my surprise that he is an engineer instead. I was tricked by the capitalism game.
The other story I found fascinating its THP's inventory management. Tran Quy Thanh has a massive dashboard to monitor what is being delivered and where on the daily basis. Trucks have GPS trackers and even the smallest shop has DMS. It helps to "ensure whether the signage and advertising are correct and also whether the shop even exist." Thanks to the systems, Mr. Thanh recognized fake photos and uncovered three hundred thousand misrepresentation by various member of sale team. The story reminds me of how dishonesty run in veins and the only way to prevent is close monitoring.
5. It still the man's world
He wanted me to succeed, but he kept telling me I would fail—every single day.
Uyen talked about her father as if I talked about mine. The exact way my dad wanted me to be happy and successful but always tell the me the opposite. Til this time, I still failed to understand the underlying logic but all I need to remember is this book. Take a deep breath and walk my way.
“In my experience, it’s always women who are asked to take notes, and until we start refusing, it will stay that way. Do I have your support?”
Gender discrimination in workforces still exists. Yet I believe it has its own reasons. Have us, women, support each other and have the will to thrive? Have we earn the rightful treatment? Or have we are just asking something we have not deserved (yet)?
All in all, how to compete with Giants? Leverage and adapt. THP earned their customers by leverage its local customer insights which allow them to move fast. Dr.Thanh herbal tea proves to a great example. The forty-five day products became national phenomenon. International giants with bureaucratic system do now allow new product to enter international market given such short period of time. Hence, local company can earn its first mover advantage. THP also understand their employees to build the company. THP values "self - responsibility" instead of teamwork. Or the way it fired the whole original sale team to act upon an Asian proverb "Sometimes you have to kill the chicken to scare the monkey". In the book, Uyen also acknowledge the benefits of international giants forcing THP to improve the quality standard by implying ISO or DMS system. The company is believed to be the first Vietnamese company to apply such system despite its cost burden. It is also in line what the author set "value" to come before "growth"
We graph performance with financial targets/core competency on the Y-axis and THP’s values on the X-axis. Both are important.
When Vietnam's familiar local brands like Highland, X-men, Diana, Kinh Do finally gave up and have been sold to foreign companies, THP still made us proud. And the book did wonder to remind local businesses of their strengths. And there are still ways to fight with Giants.