han Tan Dat took on his new role as chairman of the executive board cum general director of Binh Duong Mineral and Construction JSC (BIMICO – code: KSB) after the State sold all its stake in the Binh Duong province-based company.
Before that, Dat held key positions at Eximbank and is currently also chairman and CEO of DRH Holdings.
BIMICO's activities focus on exploiting and processing construction materials while Dat is a specialist in banking and finance. His lack of knowledge in geology first cost him a long time to learn about each segment of the company. For example, he had to learn how and when a stone is quarried, why using one ratio and not another, and how a worker can cheat and make the company lose money.
“The details are not necessary, but I need to thoroughly understand each segment so I can make quick decisions. All of that knowledge had to be gradually acquired,” Dat said.
Corporate governance after divestment is always a problem for any leader and Dat was no exception as there are stark differences between the leadership and thinking patterns of state-owned enterprises (SOEs) and private ones.
For SOEs, efficiency is important but they operate by stricter internal regulations, so it is difficult for both employees and leaders to improve their capacity. For example, a high portion of the previous salary of BIMICO officials and employees was fixed, so it was impossible to motivate them.
In SOEs, the responsibility to preserve state capital is very important while the creativity and commitment to generate high productivity are not key factors. Meanwhile, private enterprises always aim to maximise benefits for shareholders.
“This attitude is different at private enterprises. Two different goals make two different management styles,” Dat said.
According to Dat, the former leaders of BIMICO were enthusiastic, experienced, and highly specialised people who worked effectively but lacked the environment to push their boundaries. From the early days of leading the company, Dat was determined that the human factor would become crucial besides productivity. His team would focus on changing the working environment and the way employees interacted.
As a young leader, having to change the positions of all senior staff, from general director, deputy general director to heads of departments who have worked with all their heart and soul for BIMICO since the first days for 25 years straight, was not easy for Dat.
These leaders themselves had a strong love for BIMICO, so the strategy at the time was to encourage everyone to work together to develop the company, not for individual gain. In particular, Dat’s leadership style highlights that all members, from higher management to the newest employee, are an integral part of the organisation and encourages them to take the initiative and contribute instead of waiting for orders from higher up.
Dat focused on training, such as sending middle-level and senior managers to modern management classes. BIMICO also applied a new management strategy, avoiding bureaucracy by promoting the application of technology. In the past, every decision had to be printed out, handwritten, and submitted through multiple levels of leadership, which took a lot of time. Now, everything is put on the system through specialised software and sent via email.
While a proposal used to take up to two weeks to reach the general director, not it takes a maximum of two days – a timeline enshrined in the internal rules.
"Everything must be put into regulations and processes as well as be supervised to be effective, avoiding making biased decisions," Dat said.
In the company, each person will have different views and opinions on an issue, and company leaders must work towards directions agreed by consensus and take responsibility for each shot called during implementation. The right decision bringing benefits to the company will prove the leadership's ability. At this time, age or seniority are no longer material.
At BIMICO authority is heavily decentralised. Each person will have enough authority to work to the best of their abilities while enjoying a strong sense of responsibility. A supervisory department will ensure that the regulations are carried out.
“Responsibilities are assigned based on the capacity each manager. A person who is spread too thin will never work effectively. In particular, a good supervision model will assign work more effectively,” said the 30-ish leader.
Dat also renewed the salary and bonus system to be fair, both with the carrot and the stick to encourage employees. This scheme helps people understand that their every effort will be duly rewarded. Salaries also increased significantly, with more perks and welfare benefits, such as opportunities for trips abroad.
To build a culture of exchange and good interaction that enhances the teamwork spirit among employees, Dat has encouraged everyone to participate in team-building activities which have been maintained since 2017.
“At BIMICO, we do not use big words like KPI or OBM. Instead, we just set goals based on an accord between company leaders and employees befitting the tasks of their department,” Dat shared.
Dat stated that people were an invaluable asset and an important factor in the company's sustainable value chain. Like other assets, human resources need to be continually invested to ensure that employees work to their full potential and take the initiative to innovate. Employees are allowed to participate in external as well as internal training courses.
As the mining and mineral processing industry carries many health and operational risks, Dat especially enhanced workplace safety through training and upgrading facilities. He said that the safety of employees needs to be a constant, long-term priority that does not stop at protective equipment but needs to be a consideration when purchasing new new facilities and training human resources.
In addition, employees are also encouraged to hold discussions and raise their voice on matters involving their interests.
“In my opinion, profit must be harmonised between shareholders and employees as employees contribute a major part of profit. The success of the company is the result of the efforts of each employee and everyone achieves success based on the success of the whole company,” the chairman said.
Focusing on human development is an important part of BIMICO's social responsibility goals – one of the three main pillars of sustainable development, along with economic benefits and environmental friendliness.
"Sustainable development should be long-term, contribute to the society, and be positively recognised," Dat shared.
In 2018, BIMICO supported the provinces and people affected by the company's production activities through various forms such as financial support, scholarships, infrastructure construction, and construction material support with a total amount of more than VND7.6 billion ($330,430).
Talking about management style, Dat stated that each leader has their own personal style and approach which they need to reconcile with the company's culture. A new management style is formed over time as both leadership and employees grew more familiar with each other. Initially, he expected that changing mindsets and the old ways of doing things at BIMICO would take about two years but after only one year, the results far exceeded expectations. After three years, the initial targets and plans have been achieved and were heavily reflected in the business results.
BIMICO is currently an exemplary enterprise in the field of mining construction materials, with three years of continuous presence in the group of 200 enterprises whose turnover is less than $1 billion that run the most efficient business in Asia, and ranked among the 500 largest enterprises in Vietnam, as voted by Forbes. Last year, the company's consolidated revenue reached VND1.2 trillion ($52.17 million), up VND47.5 billion ($2 million), reaching 104 per cent of the plan.
In 2019, BIMICO set the target of VND1.4 trillion ($61 million) in revenue and VND400 billion ($17.4 million) in pre-tax profit. In the first half of the year, the company expected about VND602 billion ($26.17 million) in revenue and VND190 billion ($8.26 million) in pre-tax profit. With the current plan, Dat was sure that BIMICO would achieve the annual targets.
Regarding his vision, the BIMICO leader said that they planned to become a leading supplier of building materials products, especially top-quality construction stone in Southeast Vietnam thanks to their creativity and the standardisation of products and services, and especially through expanding resources and operating scale via mergers and acquisitions (M&A) deals.
Currently, BIMICO is eager to conduct M&A in the same industry to put hand on large and good quarries to replace Tan Dong Hiep mine, which will be closed by the end of this year, and then to double the number of stone mines within the next three years.
Dat said that achieving high business goals while ensuring sustainable development goals was never easy. It requires great effort and determination as well as promoting technology as an over-strong focus on meeting business goals would easily push to company to deviate from its sustainable development path.
BIMICO always attaches great importance to the use of sustainable energy, sewage, and waste treatment, and other environment-related activities to reduce the impacts of production and business activities on the environment.
Internal communication activities aimed at raising the environmental awareness of the staff through saving electricity and water at the company and production factories are also promoted. In particular, the finite resources are exploited and used effectively in an environmentally friendly manner.
Regarding sustainable development, the BIMICO chairman emphasised the contributions of the entire company from the board of directors, the supervisory board, the executive board to the functional departments, factories, and subsidiaries. Also, corporate governance is considered the core to ensuring sustainable development.
In particular, the board of directors sets strategic goals and orientations, then evaluates the capacity and implementation related to sustainable development. The board of directors is responsible for sustainability issues as well as for ensuring the effective implementation of development strategy and goals. Notably, the sustainable development board is responsible to the board of directors for the implementation of strategies and goals of sustainable development to other functional departments and all employees of the company.
To Dat, sustainable development is an important goal to show business ethics. Achieving business goals without proper respect for the law, environment, and society is the quickest way to failure.
“Entrepreneurship is not something big. For an entrepreneur, the important goal is to bring value to employees and the society, which is also the responsibility of the leader. As the VCCI chairman Vu Tien Loc once said, no one becomes an entrepreneur just for the financial benefits,” Dat added.
Text by Dang Hoa - Design by Viet Anh
December 24, 2019