As a foreign company ourselves, we naturally are working frequently with branches of foreign companies or even foreign direct investments. Over the last decade, we have identified some patterns, which show the challenges of foreigners doing business in Vietnam.
Some issues faced by foreign companies in Vietnam:
- A cultural gap of how business gets done
- Complexities of the dynamic and young job market
- Different understanding of “common sense”
All of the above shows us, that the intercultural collaboration between a foreigner in Vietnam and their Vietnamese workforce is leading to complex environments. As we described in earlier articles, complexity describes the interaction between individual parts with an uncertain outcome. So, if, for example, a foreigner has an apparent understanding of their common sense and a Vietnamese has just a different mindset, those 2 worlds clash. The outcome of that clash is unpredictable – hence complex.
Common mistakes in setting up companies in Vietnam
Regarding organizational setup, “copy & paste” is probably among the most common mistakes foreigners do when setting up in Vietnam. Often, they just do, what seemed to work in other markets, or they just copy an organizational framework (e.g. SAFe). But this ignores the specific attributes of the market in Vietnam. As mentioned above, mindsets might clash, but also, the foundations in terms of staff maturity or even education in certain fields might just not be as expected.
It is no secret, that one of the biggest factors for high team performance is a trustful environment. Leaders need to build such an environment, it is not just there. Imposing a framework without an effort to understand the dynamics and certain attributes of a new environment rarely generates trust. Our article on Scalar Reframing might give an idea, on how to start building such an environment.
It is no secret, that one of the biggest factors for high team performance is a trustful environmentChris Kruppa
Agile Organizations as a response to a complex problem
Most people understand Agile as a different way of delivering and managing products, services, or projects. But that is not entirely true. While we approach project management and delivery in an Agile way, Agile is rather a set of values and principles, which help organizations and individuals to make sense in an increasingly complex world.
The solution to solving the prior mentioned misunderstanding is not about finding the appropriate tool and practice to approach the misunderstanding. It is rather in the way we ask questions and find a common answer to the problem. This is when we start about thinking a solution instead of fixating on what, we think, is the only way.
The right Agile structures
Edward D. Deming says, that around 94% of the organizational performance lies in its structures and the environment. Only 6% is because of the people. Therefore, instead of trying to “motivate, empower”, or sometimes even “fix people or managers”, Leaders should focus on empowering and fixing the system and the structures. It is obvious, that people who like and can focus on their work will do a much better performance, than people, who have to follow a hated policy.
If we are looking at Agile Structures, we are therefore not looking at processes, practices, or tools. We rather look at values and principles because those will help every individual to make sense of their own work environment.
Starting a business in Vietnam might look entirely different from what we are used to in our home countries. Both the customers and the employees are younger and the market is maybe more emerging and complex. The answers to respond to these challenges should be the same as always, when we do not know the right and correct answer: We should try something, learn from it and then improve the approach based on our learning. For that, we should have short feedback cycles and the right principles to follow. Based on the size of the organization, you might want to check on which flight level of the organization, you will be asking what questions.
Start Agile from the beginning
When you are planning to start a business in Vietnam, try to start with an Agile mindset from the beginning. You do not need to follow a certain “Agile framework”, it is important, though, that you have a mechanism, that you inspect and adapt: Similarly to an empirical process from Science. In Scrum, they use Retrospectives and Reviews.
Fill out the form below if you would like to start a business in Vietnam in an agile way, or transform your current business: We are helping with the right organizational setup with agility in mind.