The interview with the Chairman of Thien Minh Group (TMG) started at 12:30PM right after he had returned from a meeting with the Vietnam National Administration Of Tourism (VNAT). It was very hot but the founder of TMG was still wearing a pair of high boots.
There were two stacks of Havard Business Review and The Economist magazines appearing on the reception desk. Kien said “I often have a glimpse to get the necessary information, most of these books are for the staffs”
You’ve just signed a shareholder agreement with Air Asia Investment Ltd to establish an LCC in Vietnam while Hai Au Aviation – a subsidiary of Thien Minh Group has not been really sucessful. Could you share the reasons for this joint venture?
There are many definitions of success. It is true that Hai Au Aviation (HAA) has not been really successful in finance. It’s started to make profits since January 2017 after 2,5 years being invested hundreds of billion dongs. It was expected to meet the break even point after a year of operation; however, I think every start-up project gets this issue.
But HAA has helped Vietnam’s tourism products mark on the international map and been the only seaplane product in the Indochina region so far. More optimistically, Hai Au Aviation and Vietjet Air are the two private airlines that have still existed after 2 year of coming into operaton in Vietnam.
On other words, we haven’t been sucessful in finance but in another field; that is an establishment of an airline which has served the unique experiences to more than 30,000 visitors (up to now) and promoted Vietnam tourism to the world.
Hai Au has been operating in a such difficult situation, what is an opportunity for your bigger aviation project?
Vietnamese popullation is nearly 100 million and the aviation market is forecasted to grow 10% in the next 10 years. Recently, growth rates have been rising around 28-39%. As such, more and more airline corporations are needed to establish.
There are only 02 big airline corporations in Vietnam including Vietnam Airlines and Vietjet. Meawhile, there are about 20 airlines operating in the countries that have the same size market as Vietnam such as Thailand, Philipines, Indonesia and none of them accounts for more than 30% of the market share. Therefore, I trust in the opportunities for the new airline in Vietnam.
What will 3 year experience working with HAA help you in the new project?
Firstly, either small or large carrier must apply for a license and the application process is very complicated. It’s even much more difficult for HAA as it get involved in not only the flight management agencies but also the Ministry of Defense and the localities of our flight routes to. It took us more than one year to get the approval for the license.
Secondly, we have experienced in operating an airline such as fleet, aircraft type, repair, ground service, product positioning and distribution and services.
JV with AirAsia will be costlier and we are going to welcome more passangers; however; the infrastructure will also be improved to meet those.
Aviation is different from other businesses that they dont need to set their own standards. The standards of safety, maintenance, ground…have been well regulated, updated and applied through out the world for hundreds of years.
As such, the difference among the airlines is just how they implement those standards. The second is to build a different service culture and last but not least, to ensure the most affordable pricing for consumers.
HAA took two years and a half to get the break event point, how about the new one?
TMG’s margin in travel segment are much higher than those of its peers. Could you please share your secret?
In 2016, our revenue in travel segment was 2,000 billion dongs, earning before tax got 150 billion dongs which was equivalent to about 7.5% of ROS. Meanwhile, the average rate of the big companies was about 3-5%. There are three reasons:
Firstly, our target customer segment is high end. Secondly, Buffalo Tours owns the products that meet the market demands. Thirdly, we are trying to improve everyday. For example, the number of bookings can be managed per day by a TMG’s staff is around 200 – 500 while the number in another companies is only 20 for the same. As the result, our sale staffs can focus on another works to improve the efficiency. Fourthly, Thien Minh Group has invested in a lots of properties (hotels, cars, train, cruises..) and own 90% of tourism products.
Another example, Buffalo Tours Indonesia, which was opened in 2015, has increased their number of vehicles to 50 after one years and a half of operating. In additional, most of our tour guides are working full time. They work directly and help present our brand to the customers. With such an approach, though we have the better rates for the customer, the margin in travel segment (especially Buffalo Tours) is much higher than the others’
On the first days after establishment of Buffalo Tours, you spent time talking and driving the customers to the airport. Why did you think a CEO should do so?
Talking to the customers is very important. At the momment, I dont have much chance to work directly with them as many years ago. If not really involving in operation, I do not know what the customers exactly think of our services. All the feedbacks are transmitted through the reports. This reduces the accuracy and not constantly updated. I have always believed that a management system should be as flat as possible. It means that even a large business should have only 3 levels of middle management between staffs and executives.
Before, it was difficult manage a flat organization because of the need to remotely manage offices across the countries. But thanks to today technology, it’s no more hard to make the system more flatter.
Now I can chat in group with guides, management team, hotel managers on facebook, whatsapp, viber…The message of CEO thus can be delivered immediately to all staffs, even to the lowest level; and the innovative ideas have also been implemented well within the Group.
Before, it took a month for the CEO messages to be transmitted to the guides. Nowadays, a message on whatapp or viber could reach them at once.
Exept for corporations that need high security or strict control, the speed is extremely important for the service companies like TMG. we are trying to create a forum that help deliver the fastest messages. This is easy to say but hard to do.
Technology makes the organization of TMG flatter, so how about it’s culture?
TMG’s culture has five main features: Safety (the most important one), Care (taking care of customers, colleagues and staffs), Honesty (do not say what you’re not going to do), Fastness and Creativeness. In TMG, everything can be changed except for Safety.
You said in an interview that you wanted to get out of poverty and preferred to get rich but you chose to study at Hanoi Medical University. Could you please share why?
I wanted to get rich but actually at that time my goal was not to be hungry (smile), having some savings and then did something useful for society. It was my real desire to make money. About my study in Hanoi Medical University, in my generation, we did not have many options to choose which university we should study at, we should either studied in technical universities such as Medicine, Pharmacy or Social Sicences and Humanities. I was fond of technical so that I took an exam to Hanoi Medical University. If I had been able to choose again, I would have had a different option. Styding medicine took much time. But I found that it was also useful. The university had a long tradition (hundreds of years ago), good style, good discipline which allowed students to learn many things. We were not only taught in knowledge but more importantly taught in thought.
How has the way of thinking learnt from Medical University helped you in works later?
Of course there is no cure (laugh)
I learnt about the exclusion in the university. When the patient is hospital, the doctor must check and immediately eliminate to risks that may occur to that patient. We keep ruling out then testing and diagnosis. Exclusion to diagnosis is an important way of thinking I take an example of solving the problem of poor productivity in the aviation industry by improving aircraft uptime to 13 hours a day instead of 10 hours as before. In order to do that, we will phase out the reasons and find out the root of the issue. Finally we come to solve the core problem. The second good thing of Medical University is that students are taught not to harm anyone. The same as in business, many people think that business is the battlefield; everyone must fight against others to be the winner. This is not good for society and community. There are so many things we can do better without harming the others.
People often trade lots of things to reach success. How about you?
I don’t think I need to trade. When someone does a big thing, people say “ he must be very excellent”. The word “excellent” is not the correct one. Actually, he must have a great passion for what he does and believes that he can do much better than usual. In addition, he must be determined to overcome the short term challenges that can takes place at the time he hasn’t been ready yet.
This morning, I read an article about a fellow that joined IRONMAN in Da Nang (the third IRONMAN 70.3 contest in Vietnam). He said joining IRONMAN was the best way of learning how to start up because this contest trained the racers how to keep up their speed in the longest time. This is extremely important. If you don’t keep up the speed and are willing to give up, you definitely will not able to reach your destination. Many big Companies in Vietnam have such characteristics. They work passionately in order to be the number one in Vietnam, in the region and even in the world.
We only get achievements when we are interested in and ready to put a lot of effort and time on works. That’s the same way of Thien Minh Group works on travel; we have been working step by step and get better and better. One day to look back, we found ourselves to be far away from the competitors. We are also adopting this approach to the hospitality operations and hope to apply it effectively in the aerospace sector also.
Most of Entrepreneurs often wear western office shoes, why are you wearing high boots in a hot weather like today?
These cowboy boots, a brand of R.M.William in Australia, can be worn in any weather. Most of Vietnamese people do not like these shoes because they look hot but I get used to them. I have been wearing these pair of shoes for almost 10 years and they still look new. I have an unforgettable memory with these shoes. Many years ago, our client, an Australian female tourist, had an accident in her trip and we did all we could to help her. After everything had been solved, her husband personally wrote to me a letter saying: “when I saw you wearing high boots of R.M.Williams at the airport with a private plane picking my wife to Bangkok for treatment, I know I could trust you”. He believed that people who wearing boots were real and hardworking farrmer as they have been wearing the same shoes for 50 years. Those were consistant with what they had.