Current difficulties can provide opportunities for enterprises to restructure both management and operations so they can weather the “storm” and pave the way for stronger growth, said Pham Minh Tuan, vice chairman of Bamboo Capital Group (BCG).
Ahead of BCG’s annual general meeting of shareholders 2023, Bamboo Capital will adjust its business strategy and operating model to adapt to the current challenging situation, he said.
The stock market and real estate markets are facing difficulties while the renewable energy sector is struggling with policy issues. What is Bamboo Capital doing to deal with these challenges?
Businesses are having an extremely hard time. Many have had to cut employees, restructure, and downsize as they run out of cash. Some small enterprises have gone into bankruptcy.
To deal with these challenges, BCG decided to adjust its strategy from strong growth to a more defensive approach. The group is aiming for sustainable development and maintaining stable operations, with better cost and risk management.
We are focusing on resources to complete real estate projects and putting a pause on plans that will not pay dividends immediately. The group is continuing to support sustainable production that still has room for growth.
Bamboo Capital’s subsidiary AAA Insurance Company has also improved its services, expanded branch facilities and diversified products to lure more customers and increase sales. Our infrastructure sector will take advantage of public policies to expand its portfolio.
We believe that diversifying our portfolio of core industries is the right thing to do. It helps us diversify our income, be more flexible about cash flow, avoid further reliance on one industry, and be more confident in selecting core sectors to ensure effective and sustainable investment.
The management model should be changed to ensure better performance. We will fix organizational flaws and decentralize to operate more effectively, reduce the workload of senior leaders, and help departments work closely to improve their proactiveness and enhance their responsibility.
How will Bamboo Capital adjust its management model? The group has announced new senior personnel recently. Is this related to the management model you mentioned?
Since its establishment in 2011, Bamboo Capital has been restructured many times. During the latest restructuring in 2019, we transformed into a corporate structure that clearly defined the industries we selected and assigned activities to members of the strategy board. At the same time, we set up a key team who have been trained to become next-generation leaders.
In fact, restructuring plays its role very well, making BCG reach fast growth. As the market has changed a lot this year, we need to adjust our management structure to deal with the situation.
This year, we will add new board members and appoint new senior leaders and executives at our subsidiaries, but they will still be supported by the founding board members.
The organization is simpler, avoiding overlapping. Procedures are further improved for better performance. Some senior managers have withdrawn from their positions at the parent company to manage core segments full-time.
We are also restructuring the parent company to perfect the business model and strengthen M&A activities - the core of BCG.
Thus, subsidiaries will run corporate governance by themselves, independent from the parent company. This is common in global giant groups. The model helps subsidiaries take an active part in decision-making.
Many large corporations have cut employees to save costs. Does Bamboo Capital plan reduce its workforce?
In my opinion, no business leaders want to lay staff off. Despite the difficulties we are going through, Bamboo Capital considers human resources to be vital to us.
To protect a tree from storm damage, we need to cut its branches as we adjust business strategy and minimize risks; reinforce the truck, as we enhance the power and effectiveness of the management model; and keep roots strong as human resources. The core workers can be game changers. Our employees are now working effectively and productively although we still need to adjust task assignments for optimization.
Current difficulties are the driving force for enterprises to find the right organization and operating strategies.