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Dinh Vu


Last updated: Wednesday, May 23, 2018


KHATOCO: Personnel is the Core of Success

Posted: Thursday, May 04, 2017

Starting as a small-scale tobacco trader 34 years ago, Khanh Viet Corporation (KHATOCO) is now a leading light in the business community and one of the most effective State-owned enterprises (SOEs) in Khanh Hoa province. Speaking of the company’s success over three decades, Mr Le Tien Anh, President of the Board of Members and General Director of KHATOCO, said that success comes from just personnel.

He said, KHATOCO started up at a low starting point with a total investment capital of VND6 million. But, over the past 34 years of construction and development, the corporation has been already very powerful with 28 member companies with a combined registered capital of VND5,500 billion, including the owner's equity of VND2.5 billion. KHATOCO is engaged in nine industries in 63 provinces and cities and employing over 5,500 workers.

Not only growing in scale, KHATOCO also constantly improves its performance. Over the years, the corporation has always fulfilled and even exceeded the State budget contribution value assigned by the State. The concern annually pays more than VND3,300 billion to the State Budget, being among top contributors to the State Budget of Khanh Hoa province. Not only leading the payment value to the State Budget, KHATOCO also ensures livelihoods for over 5,500 employees and their families. Quoc Hung reports.

KHATOCO is one of the best-performing State-owned enterprises (SOEs). What has made it a successful concern?
There are many factors leading KHATOCO to success but I think human factor is the core. And, among the human factor, the leader is the most important. Without doubt, the behaviour of the leader affects the company he/she is running. If the leader is transparent, enthusiastic and dynamic, the apparatus will also be transparent and developing. In this regard, during 34 years of construction and development, KHATOCO is proud to have generations of enthusiastic leaders who have always strived to build a solid, enthusiastic, transparent and creative working environment from the top down. This factor has enabled KHATOCO to sustain its development in any circumstances.

Personnel is the core. But, how to develop human resources is a big concern? Can you describe KHATOCO's experience in human resources development?
Human development must have a specific action strategy, not just words. For me, I think that human resources development is an ongoing process because a company always has new employees and old employees. KHATOCO recruits new employees every year who have to pass the most rigorous and transparent recruitment procedures. We never accept to use emotions and personal relations to pass the general recruitment mechanism. We also set very clear KHATOCO personnel criteria and orientations. KHATOCO employees must meet all qualities of professional competence and appropriate working skills, and fit its corporate culture and cohesion. While employees meet all conditions, KHATOCO must be able to create an environment for them to promote their personal capacity, virtues and responsibility.

Moreover, I think that a good leader must be someone who can find a good successor after leaving his/her position. When he/she retires and cannot find a good successor, he is not good enough for the position. This is an extremely important criterion in assessing a member of staff. Therefore, in order to have good human resources, training must be carried out at all levels across the company. The KHATOCO regulations stipulate the time an executive, from the General Director to division leaders, spends on in-house employee training a year. Personnel training is not only a chance to convey experience for better personal performance demonstration.

Employees often complain about promotion opportunities in SOEs. As an SOE, how has KHATOCO incentivised its employees to work with devotion?
At KHATOCO, every position is always competitive. In a corporate environment where the leader has no one to compete with and a replacement only takes place at his retirement, he/she will lack motivation and aims for higher development, resulting an overall downgrade in corporate performance. We must create an environment where everyone has the opportunity of promotion, unobstructed by “queuing in line” fashion.

In addition, to promote the capacity and discover new factors, we must be bold enough to assign challenging jobs to the younger. Assignment does not necessarily mean to give a position but a job to be done. In the reporting mechanism, we cannot have only a single way of reporting to a direct superior. All reports must be reserved, even emails must be sent in ‘cc’ mode to let others know the case. If we assess a tree with its shadow, we can hardly make it right. In a company, fruits grown by employees will be harvested by only their superior.

For me, I never thought that if you want to be promoted to the head of a division, you must be already the assistant to the head or if you want to be promoted to an assistant to the head of a division, you must start from an employee position. Seniority is not counted. Assessments must be based on performance.

Is it true that recruitment publicity and transparency at SOEs lacks trust of the young?
KHATOCO launches general recruitment nationwide every August. We recruit for all divisions. In our opinion, we do not only find new employees when we are already need them, but we employ new ones to create a competitive working environment. We accept redundant manpower and pay wages for this redundancy to force every other employee to make an effort. When we recruit, all related processes and procedures must be made open and transparent. Every candidate must register and submit application forms through the company's website. Then, our human resources staff will publicly score and classify them. We will have rationale for any candidacy removed or chosen for the next round. Then, candidates must pass many other interview, IQ test and teamwork skills before reaching decisive executive interviews. Once employed, they must submit action plans and objectives to be achieved in six months and one year. Then, we will have a round of performance assessment. Anyone who cannot pass this ground will be fired.

KHATOCO is very much interested in building corporate culture, especially in the company’s relations with the community and society. Could you tell more about this?
Over the past 30 years of construction and development, KHATOCO has always excellently accomplished its “double task” of doing business and fulfilling social and political tasks. KHATOCO never feels hesitant to invest in remote areas where ethnic minorities are living to create new jobs and incomes for locals to help reduce sustainable poverty. It is no coincidence that, in the past two decades, KHATOCO has been pioneering to the northern mountainous region, near China, to invest in 3,000 ha of tobacco plants, to Tay Ninh province to grow 2,000 ha and to Cambodian border-sharing regions, Gia Lai and Dak Lak to plant 4,000 ha.
The company is committed to bring revenue of VND40 million per hectare in a harvest season. And, it is no coincidence that KHATOCO recently relocated its garment factories from Nha Trang City to Ninh Ich district to create jobs for more than 1,500 workers in the two poorest communes in the province. KHATOCO’s business presence is extended to border-sharing regions, or Khanh Vinh and Khanh Son regions because it targets more sustainable social development. This is something many other businesses cannot do.

In addition, KHATOCO's philanthropic perspective is also different from many businesses. Our policy on this activity is very clear. We never integrate advertising and branding into community activities. Therefore, KHATOCO has financed hundreds of billions of Vietnamese dong for education and health projects without having its name mentioned publicly. This is also the way KHATOCO educates its employees of their sense of community.

Would you mind telling us about KHATOCO’s development plans?
The economy keeps changing constantly and creates attractive investment opportunities from time to time. But, KHATOCO never runs after market development, but it bases on its own strengths and local strengths to develop. Furthermore, we constantly invest in improving the quality of our products and services, approach advanced management solutions, achieve new goals and never feel satisfactory with our success.

Having worked for KHATOCO for quite a long time and experienced various positions, how do you assess its current success, from the highest position of the company?
I think that success does not mean making as much profit and tax payment as possible and creating more jobs with less happiness of people around. Stronger profitability and income growth in a weakened apparatus is not a success, I think.

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