ORGANIZATIONAL CULTURE
Following addressed theories in previous sections, I bring two case studies to see how theories are applied in practice. The first case study will be to decipher the three layers of Viettel’s culture using our previous model and the use of culture as the source of ultimate strength to compete in international market. Viettel has been the biggest Telecommunication and IT corporation in Vietnam and operating in more than 9 foreign countries. In second case, I would analyze the presence of three building blocks of the thriving culture in the success of Starbucks.
Deciphering the Organizational Culture of Viettel
I have some close friends working at various positions in Viettel, also I had some chances to visit its sites from 2008 to 2010. I try to decipher its culture using information gained from interviewing my friends (many informal talks about Viettel from 2008 to 2010 and continuous updates from him from 2010 up to now), recalling what I saw and felt when visiting Viettel’s sites several times and researching published articles as well as some internal documents (cultural handbook from Viettel and public talks from its CEO). Viettel’s culture deciphering is to use in the scope of this thesis only. Then I will use one of the true story about how Viettel used its culture as the weapon to compete successfully in very challenging market.
Introduction about Viettel
In 2004, Viettel (Vietnamese stated-own company) was established with a vision to provide mobile network from their existing small business in VoIP (Voice over Internet). With capital asset was around 2 million USD and annual revenue at 3 million USD, Viettel decided to build and provide mobile network. Since the first launching of mobile network service on 15 October 2004. In 2014, Viettel has become the largest mobile network operator in Vietnam in terms of infrastructure, signal coverage and number of subscribers with more than 50% share of telecom market.
Reported revenue in 2016 was around 10 billion USD with around 2 billion USD net profit. Viettel is now hiring more than 50,000 employees (Viettel’s official website, 2016).
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On 26 February 2008, Viettel launched the new mobile network operator in Laos, marked the initiative of global expansion. Figure 5.1 is the global report for Viettel presence and operation across the globe.
By 27 March 2016, Viettel officially was granted to operate in Myanmar with the promise of investing 1.5 billion USD to build and launch the telecom service.
Before 2004, telecom market was dominated almost 100% by 2 giant mobile operator, Vinaphone and Mobilefone which are subsidiary of state-owned VNPT corporation. Year 2012 is the remarkable milestone of Viettel for the first time its revenue was more than double of total those two operators’ total revenue.
Figure 5.1.Viettel’s business quick facts and presences. Adapted from
“http://viettel.com.vn/en/about#about-viettel”.
Deciphering Viettel’s Culture
Viettel’s culture artifact layer
In 2008 to 2010, I had many times to visit Viettel’s site in Hoang Hoa Tham street in Ho Chi Minh City and one time visit to head quarter in Ha Noi City. Here is
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my procedure to entering the site and what I usually saw in the office. When you arrive at the gate of Viettel, you will see there are two or more lieutenants standing as the security guard. The check-in process takes you sometime since you need to sign on a paper, call to the person you want to meet to escort you entering the site. When you enter the office, the atmosphere is little tense. Employees are focusing on their task with little discussion and teasing as we usually see in most of offices. The time principle is strict here, that employees could not enter the site after 8AM and will be asked for the reason if they leave before 5PM. It is explained by that Viettel is operated as the business entity under military. So time constraint is understandable.
Another feeling is that Viettel’s employees work very hard, and seem stretching with many assignments and reports. The detailed understanding of the task and in control of issue from requirement of managers there reinforce employees to master their responsible zone, so to compensate the hard working, they are good at handling technical issues. These had been observed when I joint the weekly meeting between vendors and Viettel’s team, the purpose of this meeting is that Viettel will check every raising issues with vendor to know the progress and find out next step or solution.
Viettel’s engineer needs to know the detail of the issue and report to their manager in the meeting how they had contacted to vendor to solve the issue. Then the vendor’s engineer needs to confirm and address the next steps or the current progress of the solving issue. At one of the meeting in 2009, the foreign expert of a vendor was surprised and accredited to the report that Viettel’s engineer had solved the problem by themselves by modifying the software’s codes. In some social coffees with the vendors, they often appreciated Viettel’s capability in technical detail and handling.
The organizational structure is setup in the way to accommodate the basic assumption about 95% and 5% of workforce (next section will explain this belief). The highest layer with senior staffs to form many communities and write the standard procedure which will be followed by lower seniority. At the junior level, employees need to learn and know what procedure to take (there had been many procedures issued by the senior team or management team to indicate the flow and steps taken for a specific task). Every year, there is an examination that assess all the employees as the standard for appraisal and seniority promotion (the exam is hold by the HR team in each region, and the criteria to select and assess is publicly distributed to every employee). Viettel also pays higher than market for most of positions (the salary report from HR agencies in continuous year from 2007 up to now).
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Employees are very resilient and willing on organizational and mode of operation change, they have almost no worry or concern in any significant change.
Since every six months or one year, the change is always happened. The consistent and living culture had made big impact on Viettel employees’ willingness to change that we don’t easily find outside (we can say Viettel’s employees have been familiar with frequent changes, so their willingness and readiness are higher than others).
Viettel’s culture espoused belief and value layer
Discipline is a norm (military’s norms and spirit): Developing strict discipline, solidarity and acceptance of hardships while being devoted to the job. Performing in a decisive, quick and thorough manner. Actually, the English translation of this value perhaps do not reflect accurately the whole meaning of this same value in Vietnamese.
Here I would like to elaborate and detail this value further. This value somewhat comes from macro culture that Viettel is nested in. It is a company under military unit, the government allows some military units involving in business to reduce the burden of governmental budget for defense. As such, we can see that senior managers in Viettel holding rank in military. For example, the CEO is ranked as the Major General, all Vice Presidents holding the army ranks, ranging from Colonel to Major General as well. Also that if an employee has potential to climb up the corporate ladder, he/she will be designated to join series of training as the prerequisite for becoming army rank. Then he/she will get promoted to be a relevant rank in military before officially promoted to next organizational title. Over a thousand years struggling with China, more than hundred years fighting with Western nations’ invasions and finally made the completely independent revolution in 1975, Vietnamese military had imprinted and cultivated the long-historical culture that earning lot of respect from Vietnamese people.
To run company, we need 95% of ordinary people and 5% talent: Talent is scarce, so if we fill up the company with thousands of talents, how long it takes and how much cost and effort are spent. Business and opportunity are not waiting for finishing filling all positions with talent. So Viettel see that there are some jobs that are not necessary to have a talent to do that. For example, monitoring engineers who sit in the Network Operation Center, they just need to follow a pre-defined procedure to inform any arisen issue to relevant team to solve it, so Viettel hires ordinary people to perform this job. In the other hand, Viettel seriously seeks and nourishes potential talents to fill the pool of at least 5% out of total workforce. Viettel started a program called “talent pool” from
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year 2010 to promote very senior and potential employees in each line of job. These people have higher salary and work together to create the procedures which then are followed by junior engineers, embrace ideas and consult to company in their area of expertise. Viettel also created a leveled seniority of the job where specific requirement and qualification of each level are indicated. Every employee need to pass these level-relevant requirement and qualification to be promoted up.
Only thing never change is changing and evolution rather than revolution:
Viettel is aware that changing is the must in today’s rapid changing technology-driven-business environment. It reinforces this idea strongly in its strategic organizational structure change every six months or one year and also the continuous evolution in top leader’s perspective of doing business. From some first times, it was difficult for employees to accept and adapt to the change, but gradually, their willingness to the change is much higher which create the flexibility and agility of making any change to adapt with outside world. For example, if you are in any company, when you hear about structural change or new way of doing thing, you will have a resistance by nature, but in Viettel nowadays, when employees are communicated about the change, less resistance is observed, instead lot of constructive opinions given to facilitate the change.
One of the first all-hand meeting (business term refers to the meeting that all employees are invited to join, either by going to the hall or by virtual room using internet. In many corporate, this meeting happens once per quarter) in 2015, Viettel’s CEO had given employees another definition “evolution rather than revolution”, he explained that in others companies, they don’t want to change until business condition force them to change and that change is really painful since they need to layoff and re-structure the whole organization. In Viettel, they don’t want to end at that kind of revolution, rather than a so deep and hurting change, they will change themselves gradually before that, called evolution. In this way, it can still retain and reuse its workforce and react more timely under any business condition.
There are no extraordinary people, only people do the extraordinary things: As usual, company will seek a candidate with rich experience to take over the demanding position, but Viettel insists in using their internal people who are under long-term commitment and engagement with company. If top leaders see a potential from any one, they will put an over-challenge to him/her. As we can see almost senior directors in Viettel that 5 to 8 years ago, they were engineer or sales. There are many meetings in Viettel where Mangers can examine and hear the report carefully about the situation
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every day, especially top leader daily meeting. In this way, senior managers can detect and supervise any newly arising issue to respond swiftly. Also another benefit of daily meeting is to supervise and guide the newly promoted managers if anything begins out of control or new managers don’t have experience to deal with. Another words of this basic assumption is that “full people’s potential is unleased under survival threat”, meaning that giving ordinary people a circumstance of extreme difficulty or survival challenge, they will be creative and brave enough to deal with it that in normal circumstance, they never thought they can do that. It is reflected in the way Viettel assign job and goal for employees as they are always heavier and beyond their imagination. As the result, Viettel have been moving so fast that it surpasses its competitors in very short time in all markets.
Every morning, we need to run, no matter you are lion or you are deer: Since offering mobile network service in 2004, Viettel always recognize that telecom market was mature, that there is little room for new players, especially in developed countries.
That’s the story of developed countries, there are significant potential markets in developing countries. But these markets are very difficult to deal with due to many political and social issues. Viettel dedicated themselves to do the hard job, to conquer difficult market. As you can see, all of 11 countries Viettel is operating are developing countries and very difficult markets that no giant telecom operators want to go there.
This text has been hung on some office walls for many years and still remain there. The narrative is that in Africa, every morning, if you are a lion, you need to run faster than the slowest deer to catch it, otherwise you are in hunger to death. If you are a deer, you need to run faster than the fastest lion, otherwise you will be caught and eaten. So you need to run to not being death. At Viettel, every morning coming to office, you need to run.
There are more beliefs and values which Viettel has been articulating and applying in daily practice, but these are some of most mentioned and pursued beliefs and values in Viettel.
Viettel’s culture basic assumption layer
Usually, the successful company is the one has very few hidden basic assumption, since their leaders have spent significant time to identify, artifuclate and drive their organizational culture to the desired path. The same with Viettel, as senior leader really care about cultivating the culture, they have spent lot of time to reflect,
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articulate and reinforce their beliefs and values, so the number of hidden basic assumption is smaller over time. Besides that, this is the deepest and most difficult layer to decipher in any organization as we need to stay and live with them long enough to recognize them. From to my understanding, one of basic assumption that Viettel’s people, specifically senior leaders are holding is that human by nature is not good that they need to be in controlled. So employees very often are reinforced to the new policy which was very strict and made no sense. For example, in 2010, there was a policy that company will hold all the employee’s passport, if any one needs to go abroad, he/she must apply to the headquarter and get approval to borrow back his/her passport in allowed duration. Some other examples are that each of new onboard employee must spend two weeks to learn company’s culture handbook, then the closed book examination will be conducted to be one of criteria to determine the score to pass the assimilation period. Only if passing this period, new hires can be offered to sign the official employment contract; or in some occasions, Viettel’s managers suddenly stop at any employee to ask them how many procedures they need to know and follow in their area of job or the detail of procedure how to conduct the official tasks.
Viettel’s Using its Unique Military Culture as The Weapon to Compete in Difficult Market.
Following real story will illuminate how important unique military culture create unique competency of Viettel in doing and expanding its business. This story is translated and added some more info to make the content more comprehensive by me from the Vietnamese version of story told by Viettel’s CEO Nguyen Manh Hung in his talk about entrepreneurship in October, 2016 and retrieved from (http://dantri.com.vn/kinh-doanh/7-kinh-nghiem-cua-ceo-viettel-danh-cho-ban-tre-khoi-nghiep-20161108110512223.htm):
In 2015, almost instantly after building telecom infrastructure and opening the new telecom business in Burundi, there was a military coup in May. Most foreigners working at Burundi fled to adjacent countries in facing the threat of arm war. Telecom was operated mostly by foreign operators, Viettel is one of them. The CEO, Mr.Son, of Viettel subsidiary, Lumitel, which is operating the new brand there, had called back to the Board of Managers in Vietnam, reported the situation. The BOM had asked him about his decision to do next as he was the one that knows best the circumstance. “We will stay there, no fleeing out, this situation is not as much dangerous as the time we
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faced with bombing from American to our capital, Ha Noi, in 1972” (there was 49 days of continuous bombing from American with its heavy carrier B-52 to Vietnam’s capital, Ha Noi, in 1945 which almost destroy large part of the city, as that over 49 days, people had been living in the deep tunnel), he replied. BOM said it is dangerous, how can you deal with that situation. Mr. Son said “we had plan already, as we have the cellar at the base station (base station is the telecom equipment deployed in each zone to provide enough signal for phone to receive and transmit the call and internet), we can take the shelter there from any arm threat”. Mr. Son had been a solder before and Viettel’s employees have several weeks each year to attend the military training, it is the reason they were not afraid of this hardship and be able to assess the risk and find the shelter at emergent time from their instinct, told by Viettel’s CEO Mr. Hung. With this brave decision, no one was injured, they managed the telecom system of Lumitel stable and under service during the coup while other operator’s services were interrupted and roamed all calls to Lumitel. Coup was over and people there saw and appreciated the bravery and commitment that Viettel people had made, they changed their subscriber to Lumitel in mass subsequently. Just over 6 months from the commence of its network, Lumitel had become the largest operator in Burundi. Mr. Son had been promoted immediately and this story have been recorded and disseminating over the corporation as the evidence of how Viettel people apply and live their core values.
The Presence of Three Building Blocks of a Thriving Culture from Starbucks’s Success
In this case, I will base on the story told by Starbucks’s founder, Howard Schultz (Schultz and Yang, 1999), to analyze the presence of three building blocks of a thriving culture mentioned in previous sections in the success of Starbuck since its inception.
Introduction about Starbucks
Starbucks is a roaster and retailer of whole bean and ground coffee, tea and
Starbucks is a roaster and retailer of whole bean and ground coffee, tea and