Lãnh đạo kiến tạo #2|Tư duy cấp tiến - đòn bẩy thúc đẩy đổi mới doanh nghiệp|Lucas Loh,GCEO Nam Long

Key Concepts

Urbanization Stages: The progression of city development from economic growth and middle-income rise to outward expansion and demand for higher quality living.
Middle-Income Growth: A key driver for increased demand in the residential housing market.
Infrastructure Development: Essential for city expansion and enabling people to live further from congested city centers.
Quality of Living: A shift in consumer demand from basic shelter to a more holistic and comfortable living environment.
Integrated Real Estate Group: A company that diversifies beyond housing development to encompass master planning, investment, asset management, and property management.
Project-Centric Organization: A shift from siloed, function-based structures to teams focused on individual projects for better efficiency and decision-making.
Digital Transformation: The adoption of systems and technology to replace paper-based operations and improve efficiency.
Brand Reputation and Trust: Crucial in real estate, especially when sales occur before physical completion, emphasizing "what you see is what you get."
Holistic Living Environment: Providing not just a house but a community with amenities, activities, and a focus on wellness and lifestyle.
Humility and Open-mindedness: Essential leadership traits for driving transformation, allowing for learning, adaptation, and acceptance of new ideas.
Outlier Mindset: An outsider's fresh perspective, free from existing organizational baggage, to challenge assumptions and drive radical change.
Derived Demand: The concept that real estate demand is dependent on underlying economic activity and population growth.
Capital Management: Critical for real estate developers, especially in mature markets, to avoid over-borrowing and financial distress.
ESG (Environmental, Social, and Governance): Incorporating sustainability and responsible practices into development.

Summary

This transcript features a conversation with Lucas Low, CEO of Nam Long Group, discussing the transformation journey of the Vietnamese real estate market and his company.

Vietnam's Real Estate Market: Current Stage and Future Potential

Lucas Low describes Vietnam, particularly Ho Chi Minh City, as being in a "very exciting era" of development. He outlines the typical stages of urbanization seen in developed cities:

Economic Development: Driving employment and the growth of a middle-income demographic.
Middle-Income Growth: Fueling demand for residential housing.
City Expansion: Accommodating population growth through infrastructure development, leading to outward expansion. People move to outlying areas for better living conditions, while city centers become more commercial.
Mature Stage: Characterized by higher-grade development and demand.

Vietnam is currently experiencing a growing middle-income population and significant infrastructure development, indicating it's moving towards the outward expansion phase. This means people are increasingly willing to move from congested city centers to more outlying areas, provided amenities like medical facilities, schools, and shopping are available. Consumers are now demanding a "higher quality of living," not just a basic shelter.

Low sees China as a relevant market for Vietnam to learn from, acknowledging both positive aspects to emulate and potential pitfalls to avoid, such as over-optimistic planning and the creation of "ghost towns."

The macro factors supporting Vietnam's real estate potential include:

Rapid Urbanization: Currently at 40%, with significant room for growth compared to key Chinese cities (around 70%) and Singapore (100%).
Young Population: A demographic advantage for future demand.
Growing Middle Income Class: Directly translates to increased purchasing power for housing.
Economic Development: Vietnam is catching up with other developed Asian economies.

Nam Long Group's Transformation and Strategy

Lucas Low was convinced to join Nam Long Group due to its progressive nature and readiness for change. He highlights Nam Long's evolution from a construction company to social housing, affordable condominiums, and now township development. Key indicators of its progressive stance include:

Listing on the stock market in 2013.
Previous foreign CEOs.
Multinational representation on the board.
Partnerships with international companies, notably two Japanese partners.

Low emphasizes that his strategy is "market-driven," aiming to be an integral part of the market's evolution. He believes that being among the top developers ensures business, regardless of market conditions.

Anticipating Challenges and Differentiation

As the market matures, competition will intensify. Low argues that developers must move beyond selling just a "product" (a house) to selling a "lifestyle." Differentiation will come from building a strong brand and track record, offering superior "software" (lifestyle, community, services) rather than just "hardware" (physical structures that are easily duplicated).

Key strategies for Nam Long include:

Building Brand and Track Record: To instill confidence and trust, especially since purchases often happen before the house is built. The slogan "what you see is what you get" is crucial.
Developing an Ecosystem: Beyond delivering houses, Nam Long aims to build communities through organizing activities and providing amenities within townships. This includes incorporating elements like running tracks and parks to promote wellness and ESG principles.
Avoiding Over-Leveraging: A hard lesson learned from markets like China, where over-borrowing led to financial problems during market slowdowns. Proper capital management is essential.
Realistic Planning: Avoiding overly optimistic development plans that don't align with a city's economic base, which can lead to underutilized infrastructure and a disconnect between affordability and livability.

Becoming an Integrated Real Estate Group

Nam Long's vision is to become an integrated real estate company by 2030. This involves moving beyond being just a housing developer to encompassing:

Master Planning: Designing the overall vision for a township.
Investment: Co-investing with partners or tapping into capital markets.
Asset Management: Managing the developed assets.
Property Management: Overseeing the day-to-day operations of townships and properties.

This integration is compared to the film industry, where the company needs to be the scriptwriter, producer, director, and even actor/distributor. This requires building expertise across various sectors and roles within the organization.

Systems, Skills, and Mindset for Transformation

The transformation requires a determined and compelling commitment from leadership (board, chairman, key personnel). For employees, key characteristics include:

Open-mindedness: Breaking away from tradition and being receptive to new ideas.
Awareness of Ignorance: Recognizing what one doesn't know is crucial for learning and innovation.
Conviction and Patience: Leaders must be persistent and able to convince people of the necessity of change, even during peaceful times.
Humility: A core DNA trait of Nam Long, fostered by the founder/chairman, enabling listening, learning, and adaptation. This is vital for a foreigner like Low to integrate and drive change.
Outlier Mindset: Bringing a fresh perspective, free from existing organizational baggage, to challenge assumptions and drive radical change.

Specific Changes Implemented

Over the last 18 months, Low has implemented several changes:

Project-Centric Organization: Shifting from a siloed, function-based structure to teams focused on individual projects for faster decision-making and problem-solving.
System Implementation: Forcing the use of more systems and rolling out new ones to integrate information and data, moving away from paper-based operations.
Redefining Job Scope and Roles: Adapting roles to fit the integrated real estate model and the new organizational structure.
Measuring and Rewarding Behavior: Aligning incentives with the desired outcomes of the transformation.

Brand Image and Positioning

Nam Long aims to be perceived as a reputable and reliable developer ("what you see is what you get"). Low also wants to shed the market perception that Nam Long exclusively builds affordable and social housing. The goal is to be recognized as an integrated developer capable of developing all segments of residential property, from social housing to luxury. To achieve this, a subsidiary, Nam Long ADC, has been established to focus on affordable and social housing, allowing the main Nam Long Group to focus on its integrated development and investment strategy.

Key Lessons for Future Leaders

Lucas Low shares key lessons for young leaders in Vietnam's real estate industry:

Transformation is a Journey: It's an ongoing process with no definitive end, especially with continuous technological advancements.
Patience and Conviction: Leaders need to be persistent and believe in the necessity of change, even when facing resistance.
Embrace Naysayers: Disagreement is healthy and indicates innovation. If everyone agrees, it might mean the company is too late or doesn't need to change.
Humility is Key: Be open to listening, learning, and adapting. Avoid rigid adherence to past formulas; adapt strategies to the local context.
Outlier Perspective: Challenge assumptions and drive radical change by looking at things from a fresh perspective, but balance this with listening to existing team members.
Focus on the "Why": Understand the desired outcome and work backward to achieve it, leveraging systems and data.

Success Factors for Nam Long

In the next 5-10 years, Nam Long's success will depend on two dimensions:

Macro Level: Continued economic development and infrastructure improvement in Vietnam, as real estate is a derived demand. Vietnam's position as a developing economy with a need to catch up provides a strong foundation.
Company Level: Nam Long's ability to capture the market by being among the top few developers. This requires strong brand reputation and market positioning, enabling survival even in challenging markets and capitalizing on growth during good times. The company's current ranking as the fourth-best real estate brand in Vietnam is a good starting point.

The synergy between international expertise and local DNA is seen as a powerful combination for creating a progressive mindset and achieving long-term success. The future of Nam Long involves building holistic living environments to meet the evolving demands of Vietnam's growing middle class.