Discover the value of one-on-one conversations
Author: Chad Ovel – Partner, Mekong Capital
22 August 2022
At the end of 2021, after being restrained by two Covid years, Nguyen Van Tu—CEO of Nhat Tin Logistics—was determined for 2022 to be a big growth year. He was determined that the company would not only get back to normal, but also would achieve its 2023 Vision of revenue and coverage target one year earlier – which meant a year-on-year growth of 40%. Tu was extremely optimistic that this was possible, given the strong bounce back of Vietnamese economy post-Covid, given how strong Nhat Tin’s relationships with their clients were, and given that many of their core clients were sharing their own growth plans and would be in need of additional services from them.
This year, he followed his normal annual cycle of asking his CFO to communicate the guidelines for the budgeting process to each of Nhat Tin’s 36 branch managers country-wide, asking each of those branch managers to develop their own plan for their branch, including estimated revenue, costs, and any other investments they need to make. After patiently waiting a couple of weeks in late November, Tu was shocked to see that—once all the plans from each branch manager were aggregated — they totaled only a 23% YoY growth in revenue.
Determined to cause breakthroughs to happen, Tu called for a management team meeting where he shared with his branch managers his view….
One time, two times, then three times, he patiently asked opening questions to the group:
- What are your views on the potential in your market?
- Are there other services you can offer to existing clients?
- Can you optimize costs or time anywhere?
- How is your employee performance?
After this big meeting with all his branch managers, he sent them back to their home provinces for another round of pencil-sharpening and the challenge to dig deep and redo their budget again. This happened in several rounds.
Each time, the budget would come back, a little higher than the previous ones. It rose from 23% to 25% and finally to almost 35%, but still not reaching the 40% growth he expected. To you it might sound like 35% is close enough, right? But for Tu, it meant the difference between the Vision achieved or not achieved.
To Tu, it just didn’t add up. He was so proud of what Nhat Tin had pulled off despite the extreme rollercoaster ride of Covid. During the two Covid years, Nhat Tin’s strong corporate culture became their secret weapon. While competitors saw mass resignations and delivery drivers walking off the job and returning from the big cities to their country-side homes, Nhat Tin had very few resignations. The employees remained very faithfully committed to ensuring that the business continued to operate—despite multiple lockdowns which meant camping out for weeks on end on the concrete floors of the sorting hubs.
Tu had learned from the past that these enrollment meetings worked. But somehow the management board was still not on the same level of determination for breakthrough as he was. He was not mad at them at all. Rather he wanted to know if there was any possibility breakthrough could be generated if he tried another way.
In the back of his mind, he knew the only way he hadn’t tried was one-on-one conversations. However, at the time his amount of work was massive, given Nhat Tin just launched the Fulfillment services. This was comprehensive expansion in their service offerings including warehousing, pick and packing, last mile delivery. He pushed the idea to the back of his mind, thinking: So would the amount of time spending on each one-on-one compensate in terms of time versus value?
In a regular conversation with the Mekong Capital’s deal team, while listening to Tu’s sharing about his frustration and the struggle of having 36 branch managers who didn’t see the future in the same optimistic, bright way as he did, it was very unusual for me to see Tu in this kind of conundrum. He was stuck. His big charisma, warm smile, and his sales skill normally worked magic to move others to action. But this time around, it wasn’t producing the result he sought.
I asked him: “Have you spoken to each of them, one on one, to really share what you know, what you see and to listen to them and find out what is holding them back?”
He immediately laughed to himself and quickly answered: “That would take a crazy amount of time to have 36 one-on-one meetings”.
But he went quiet, contemplated, and then replied: “Okay, Chad. I think I have what I need.”
I left the conversation, not totally clear what he would do next. But, in a meeting a few weeks later, he shared that he had taken the time to meet every single branch manager – one on one.
Wow! Tu actually blocked a whole week basically just doing this one task: one on one conversations with each branch manager. Instead of painting his view, he asked each manager about their view on their market’s potentials. He wanted to get deep into their thought process, their struggles and concerns. He wanted them to articulate any additional services they can offer, if they could enhance the capacity and number of members on the operation side, or even asking them to think outside of the box into areas of unknowns as such to railway, or boat shipping, or tap into competitors’ territories. Then, he asked them to sit down and redevelop their budget for the year.
And I was eager to hear the punchline: “So what happened next?”
With bubbly enthusiasm like a kid in a candy store, he excitedly told me: “Well, they resubmitted. And believe it or not, now they’re targeting 60% growth, far higher than our guidance of 40%.”
I was very excited for Tu. He kept saying over and over: “The one-on-one conversations provided a private and safe setting that helped both me and my branch manager to listen fully to each other and pour our thoughts out, which a group discussion can never achieve. It was like we never truly listened to each other before. Before this, their mind was closed with default thoughts on their market, but in the conversation, we slowly open our mind up to venture into all the possibilities. It was a real partnership where we together painted the future together.”
Before Tu started the process, he thought it was crazy to put that much time into one-on-one meetings. But he can see now, in retrospect, there’s nothing more important than being in communication with each of his business heads about the future.
Tu discovered the single most important value of the CEO is to inspire the team, to give them a sense of confidence in the market opportunity in front of them, and to align their enthusiasm and their commitment across the entire company. Wherever he feels stuck or when something’s not connecting, his response now is to get into direct communication. It ensures they all have the same belief and commitment and are willing to stand for the vision achieved. I affirm you, once you achieve that, your whole team becomes an unstoppable force.
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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.