Restructuring key to businesses’ development: executives

Leaders of large enterprises such as Phu Nhuan Jewelry JSC (PNJ) and Decathlon Vietnam have emphasized the crucial role of corporate restructuring to businesses’ sustainable development.

At a Tuesday seminar entitled "Quick adaptation - Big change" organized in Ho Chi Minh City by NEWING, a provider of business consulting and services, PNJ chairwoman Cao Ngoc Dung, said if her company had not focused on restructuring and seriously implementing the Enterprise Human Resource Planning (ERP) project, it would have struggled to maintain operations and been unable to achieve strong growth in recent times, especially during the Covid-19 pandemic.

Over the past over 35 years, shifting from a state-owned enterprise to a joint stock company and then a listed firm, PNJ has undergone many corporate restructurings.

“The positive point is that throughout that process, PNJ always achieved its annual growth plans and business targets. Despite being a strong brand, in an open economy, if it did not change or restructure itself, it could not compete with foreign companies,” she said.

In 2012, PNJ decided to invite a foreign company to aid its governance and restructuring to adapt to new changes.

In the 2018-2019 period, PNJ implemented the digital transformation strategy with a focus on System Applications and Products in Data Processing (SAP), including ERP. However, this led to an incident during the transfer process between the old and new systems, which securities companies at that time called "PNJ's ERP incident". This incident caused PNJ to face a backlog of orders, customer complaints, stock price drops, sales declines, and a sudden increase in the number of employees resigning, affecting its business results, Dung recalled.

She emphasized that the biggest difficulty in transformation was that some personnel could not overcome the challenges of innovation. At that time, the company had to strengthen trust among employees regarding corporate culture.

“If we were not determined to apply SAP, we, with 600 stores, would not have achieved the growth we've posted in recent years,” she noted, adding even during the Covid-19 and post-pandemic period like 2022, PNJ’s after-tax profit still increased by 75% compared to the previous year.

According to Dung, the role of business leaders in the restructuring process is of utmost importance. “All changes must come from the leader's thinking and he/she must lead those changes, with clear objectives and commitments while staying consistent with the set goals,” she stressed.

Sharing the same view, Pham Thanh Ngan, Uknit production zone director at Decathlon Vietnam, a French group specializing in producing and distributing sporting items, argued that restructuring is the foundation for sustainable business development.

Ngan said previously Decathlon only distributed products through a system of stores, but during the pandemic, to ensure its growth plan, the company increased the proportion of online sales. At the same time, it worked hard to avoid supply chain disruptions during this period, supplying goods to 60 different countries. The quick response helped the group maintain a stable growth rate.

“After the epidemic, we learned a lesson that if businesses want to be successful, they must have a corporate cultural foundation with their own core values. They must have a clear priority strategy for each stage and focus on actions and solutions to be able to adapt to strong fluctuations," Ngan said.

Boasting experience in working with a number of big customers in the world such as Boeing and Microsoft, Bruno Anjos, business development director at the NeuroLeadership Institute, said that most big firms have their own data measurements and statistics that show that 75% of behavioral changes come from corporate governance awareness.

Highlighting Vietnam’s great potential, he said the country is at the right stage to bring brain science into governance to change leadership and human resource management behavior.

Ngan added his institute has worked with businesses in Vietnam such as Mobile World Investment Corp. (MWG), PNJ, Nhat Tin Logistics, G-Group, Vietnam Education Cooperation (Edufit), Hoa Sen Viet Group, Rever, Golden Gate, Mutosi, Pharmacity, Thien Viet Securities (TVS), VNG Corp., Talentnet Corp., Vccorp, and Open Asia.

The Vietnamese market has a lot of potential but many businesses are still not ready to participate in restructuring, he noted, saying lessons from businesses that have been successful in restructuring will be "examples" for other businesses to follow.

Experts held that in the context of integration, businesses need to access and apply modern business governance principles and skills in line with international practices. This will not only help businesses meet market rules, but also provide them with better competitive advantages and momentum for stable development.