Vietnam - Hiring CEOs not always best solution

VietNamNet Bridge – Hiring CEOs is now in fashion. However, a lot breakup cases reported recently have made businessmen rethink.

In mind of many people, hiring a CEO is the best solution for a rapidly developing business, because the CEOs are professional who have better experience and corporate governance skills. However, in most of cases, the “marriage” between business owners and hired CEOs do not last for long time.

Businesses need consultancy

Robert Tran, General Director of Robenny Asia Pacific, a consultancy firm specializing in leasing CEOs to businesses, related that one day, he was invited by the director of a veterinary medicine company to the company’s head office to consult with him about high ranking personnel.

The director said to Robert Tran that he wanted to hire a CEO, because he feared that the too rapidly developing company would go beyond his control, while he is just a veterinary doctor and he had never experienced the training courses on corporate administration.

Finally, Robert Tran advised the director to continue managing the company with the assistance of an advisor, because the director himself has a good management method already.

According to Robert Tran, the fee to hire a CEO at Robenny would be no less than 10,000 dollars a month, while the fee for a consultant would be just 1/5 of 10,000 dollars.

In fact, there are many problems existing that may hinder the cooperation between CEOs and businesses. Tran Sy Chuong, a Viet Kieu consultant, who spent 20 years working in Asia and 20 years in the US, said that most Vietnamese businesses want to hire CEOs, but they do not have the high enough confidence in the CEOs to assign all the works to them. This is one of the most important reasons that make the cooperation finish soon.

Chuong said that an advisor could be seen as an employee, but CEO needs to be considered as a fellow passenger of business owner. The owner of an information technology business said at a seminar on business strategies that in the current economic difficulties, businesses need to consult with advisors who can help improve the situation. Meanwhile, Chuong believes that businesses need advices even at the moments when they perform well.

Human resource experts believe that one should think of hiring CEOs only when he has three conditions. First, his enterprise is not strong enough and still does not have good management capability. Second, he is ready to share information with the CEOs to be hired. And third, enterprises need to have long term vision.

Tran emphasized that when company witnesses big personnel changes and follow a strategy to expand business, the owner should think of hiring a good CEO to manage the business for at least two years.

Tran said that business owners need to be very cautious with their decisions to hire CEOs. Many Vietnamese companies follow the “nepotism style,” while business owners do not trust “outsiders.”

In Vietnam, Tran Bao Minh, who is now the Managing Director of Asia Food Joint Stock Company, is considered a “star” at many big Vietnamese enterprises (Vinamilk, TH Milk). Minh leaves the businesses just after one or two years of holding high ranking positions and achieved some successes.

Robert Tran has warned that Vietnamese enterprises should not expect too much on hiring CEOs for a long time, because this is unrealistic. Robenny Vietnam only signs the contracts on leasing CEOs for one or two years, while it refuses longer term contracts.

Source: Dien dan DN

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