In delegation, trust is a must

Author: Pham Thai Thanh Ngoc, Digital Transformation & Marketing Manager, Mekong Capital
June 25th, 2023

Pham Thai Thanh Ngoc, Digital Transformation & Marketing Manager, Mekong Capital

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In August 2022, I took on the role of a coach for the new Head of Technology for the Digital Transformation of a company in our MEF IV.

The new Head of Tech quickly adapted to the company’s culture. His exceptional skills and experience in technology made him the ideal candidate for the role. Just two months after joining, he completed a technical audit of the company’s systems and infrastructure and proposed a 2023 technology growth map for the company, which highlighted areas that needed investment and budget. He quickly called for solutions and price biddings from some vendors.

However, the CEO of the company was hesitant to decide on choosing a vendor based on the Head of Tech’s proposal. He then decided to hire an independent consultant to verify each of the vendors’ proposals and each of the technology solutions.

The involvement of the consultant extended the planning period, but the Head of Tech still relentlessly worked back and forth among parties to move the project forward.

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In early December, the Head of Tech walked into a meeting with me with a sad face, and shared, “I want to RESIGN. I’m so frustrated. I felt helpless.”

That sounded like a lightning strike across my ears. I could not imagine how he felt untrusted or how he felt that he was wasting time for 3-4 weeks that led nowhere.

As his coach, I listened and acknowledged him for what he had done so far. I suggested that we should discuss it more when he was calmer and spend more time thinking about his decision before announcing it.

That night, I could not help thinking about his resignation. We have spent 9 months hunting a suitable Head of Tech and if he would leave now, the company would have to start all over again on its journey for digital transformation. Without Digital Transformation, the company could only rely on some traditional channels, instead of omni-channels sales from offline to online. Now with the current growth stage, this digital breakthrough was important for the company to improve its performance.

I spoke to my mentor about the issue and he asked me a question that made me realize something important: “Ngoc, are you clear about his delegation and authority?” BAM! It was a wake-up call as I had never asked him about his authority in the company. I immediately met with him and asked “What decisions can you make in the company?” Through our conversation, he realized the biggest issue was that he had no authority.

He said, “I can’t decide on any technology solutions or choose a vendor with a budget. Everything has to be reviewed by a consultant and approved by the CEO. I can’t even decide on a 10 million VND contract. I wanted the company to succeed, but this way of collaboration doesn’t feel right“.

After pouring out, his face lit up. He eagerly said, “I need to talk to the CEO about my authority as Head of Tech for the company!”. I agreed. “Alright, let’s do it!”.

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A week later, the Head of Tech and I met again since he wanted to share his agenda for the conversation with the CEO. He had prepared a list of what he did well, and what he did not do well, and proposed what he could do better based on his commitments. I was impressed by his level of ownership and leadership. He no longer showed frustration towards the CEO or the consultant. Instead, he took responsibility for what had happened. As a result, he stepped up from being a Department Head to a true leader by proposing a new plan and contributing to the company’s targets with autonomy. If I were the CEO, I would definitely trust him as a partner to drive the company’s future.

As I had hoped, and even dared to expect, after the conversation, the authority delegated to him as the Head of Technology was clearly defined. He was given the authority to use and control a budget of billions of VND for the company’s whole digital plan. He could decide which technology solutions and vendors to implement without the involvement of consultants. The CEO took ownership of the digital transformation and committed to being a partner of the Head of Tech.

The Head of Tech proactively led the implementation of new technologies and kept the CEO informed every step of the way. The effect was transmitted to other leaders, where the CEO has found trust to authorize other committed & capable heads of departments.

He wasn’t just the technical leader; he was also a partner of the CEO, as he declared: “I’m a high-performance player who laser focuses on creating results for the company.”

What should you take away from this seemingly simple success story?

It’s very simple:

Authority with high trust is a must.

And when I say must, I mean it. It’s not optional, and it’s not just recommended. Trust is required! For high-performing, result-driven senior leaders, it’s crucial to (1) clearly define authority based on trust and (2) then trust those leaders to perform to achieve shared business results.

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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)