CEO of Vua Nem – My transformation in Leadership

Author: Nguyen Thi Thanh Huyen – CEO of Vua Nem

May 10, 2024

In the initial phase as the newly appointed CEO

When I took over as the CEO of Vua Nem in September 2023, the company was undergoing a restructuring phase, resulting in a state of chaos that left the entire team uncertain about the future. After exploring various management styles, the Board of Directors officially entrusted me with the task of leading the ship of Vua Nem towards its vision for 2027. Simultaneously, this period posed significant challenges as the company has experienced continuous negative growth over the years and was preparing to pay off two bond debts in November 2023 and May 2024.

My journey should be traced back to the end of April 2023 when I officially took on the position of Director of Sales at Vua Nem, and I began planning to improve the team’s working methods. I focused on changing people’s mindset through differences in ‘behavior’, ‘ownership’, and ‘discipline’. I worked with the Sales Managers and realized that they were all dedicated to the company, but they lacked a ‘big picture’ for the team below them. So we visited every Vua Nem store, worked with every online sales group, and identified the ‘missing elements’ and ‘inefficiences’ in every sales point, quickly improving everything. We knew that only ‘actions’ could help us improve the fastest. I was fortunate to have these four months to stablize the sales team before officially embarking on the journey to become CEO.

However, even when I became CEO, I still experienced countless emotions and feelings of ‘worry’, ‘fear’, and ‘lack of confidence’ because I lacked experience in this completely new role. I asked myself many questions about my role, my responsibilities, and the burden on my shoulders.

I embarked on my challenging and incredibly exciting journey like that.

Transformation in Leadership

Ms. Huyen – CEO of Vua Nem

My journey officially began with the act of playing with Lego blocks. I dedicated an entire day to organizing and aligning the mismatched pieces, creating a cohesive and colorful structure with a promising future. It became evident that in order for my team and Vua Nem to undergo transformation, I, too, had to undergo a personal transformation.

To facilitate this change, I enrolled in Landmark Forum and Landmark Advaced courses, which empowered me with the strength and guidance to embark on a new role. I realized that living solely in a world of reason was limiting, and instead, I needed to remain focused on my goals in order to grow. While there are numerous reasons one can procrastinate actions, I understood that these were mere minor obstacles that needed to be decisively overcome. I also recognized that I stand for the success of Vua Nem and each member of my team, rather than succumbing to fear and avoidance.

In October 2023, I noticed that I no longer owned the present vision. Curious to assess the state of my fellow leaders, I discovered that three out of gour lacked the same vision as me. This prompted me to propose a new vision to the Board of Directors and my team. This vision encompassed the future of Vua Nem, one that was measurable, feasible, and actionable. I am grateful to Mr. Chris, Ms. Le, Ms. Khanh Van from Mekong Capital, and Mr. Tuan Anh for their invaluable support in helping me shape this new vision that would guide Vua Nem into 2027.

Armed with a clear and shared vision, we began constructing a new framework. This involved developing new metrics, top Key Performance Indicators (KPIs), and simplified core values that were easily memorable. We strategically divided these metrics into priority projects and enforced disciplined control over them. I observed a newfound willingness among my team members to actively listen, eagerly confront challenges head-on, embrace demanding KPIs, and fearlessly experiment, fail and then try again without losing face… This transformation was a daily process that occurred within each leadership position, including my own.

Remarkable Changes

I have outlined three essential priorities for Vua Nem that require immediate attention: Product Enhancement, Multi-channel Business Efficiency, and Cost Control for a Robust Cash Flow.

To tackle these priorities effectively, I have simultaneously commenced work on each of them with different functional teams. The aim is to minimize the accumulated losses in 2023 and establish a strong foundation for the year 2024.

The first priority, product improvement, is considered Vua Nem’s backbone. To secure a leading position in the market, our focus is on refining the product in terms of both quality and price to cater to various customer segments. Given the economic challenges in 2023 and the subsequent decrease in purchasing power, particularly in slow-moving consumer goods like mattresses, our priority is to review and eliminate underperforming product lines. Instead, we are concentrating on the main product lines that exhibit strong sales performance. Additionally, we fill the gaps in market segments where Vua Nem has lost market share, such as the mid-low and low segments. By swiftly introducing high-quality mattresses at affordable prices in these segments, we were able to expand the segments of customers. The results have been promising, as within the last three months of the year, these mid-low and low segment mattresses have successfully attracted new customers without compromising the mid and premium segments of Vua Nem.

Priority number two in our plan focuses on optimizing business operations across our physical stores, online platforms and e-commerce channels. To achieve this, we implemented a strategic resource management structure for middle management and store managers, emphasizing operational efficiency rather than widespread expansion. Moreover, we introduced a performance-based incentive system tied to store-level EBITDA, ensuring that each store and channel feels a sense of ownership and responsibility. Our efforts paid off, as by the end of 2023, our store-level EBITDA increased by an impressive 41.5% compared to the previous year, setting a new record for Vua Nem. Despite a 17% decline in revenue, our online and e-commerce channels experienced a twofold growth in EBITDA compared to 2022. The positive momentum continued into the first two months of 2024, with company-level EBITDA doubling and profit after tax rising by 176% compared to the same period in 2023.

With priority number three highlights cost control and a strong cash flow. We closely monitored major cost components, ensuring that expenses were managed efficiently. Negotiating payment terms and promoting sensible spending further contributed to our goal. This approach allowed us to maintain strict cost control on a monthly basis and accumulate a healthy cash flow, enabling us to meet our bond repayment obligations. As of the end of Febuary 2024, we had already secured 70% of the bonds maturing in May 2024.

In addition to these achievements, our Marketing, IT, and Customer Experience teams continue to explore innovative strategies to enhance our brand image. We strive to create compelling narratives and breathe life into each product, constantly improving our technology to streamline operations and consistently providing a remarkable experience for our valued customers.

We firmly believe that when our dedicated Vua Nem team works passionately, customers will naturally be drawn to support us for the long term.

The Message

The message of ‘Commitment greater than oneself’ is deeply ingrained in me. When my team and I wholeheartedly dedicate ourselves to our common goal, success is bound to come to Vua Nem in the near future. I am committed to nurturing and upholding our team’s values of integrity, passion, and creativity, as I believe that Vua Nem will successfully bring its 2027 vision to life.

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Mekong Capital makes investments in consumer-driven businesses and adds substantial value to those companies based on its proven framework called Vision Driven Investing. Our investee companies are typically among the fastest-growing companies in Vietnam’s consumer sectors.

In January 2022, Mekong Capital founder Chris Freund published Crab Hotpot, a story about a bunch of crabs who found themselves stuck in a boiling pot. The colorful cover of “Crab Hot Pot,” complete with expressive cartoon crustaceans, looks like a children’s tale at first glance. But as one continues reading, it becomes clear that the work has an important message about organizational transformation, leadership and focusing on a clear vision for the future.

The book is available on Tiki (Hard copy): bit.ly/38baF8a (Vietnamese) and Amazon: amzn.to/3yWunzG (English)