It is hard to overstate just what an amazing case study that Vinh Duc Real is, so I want to preface the story told by Hang with my (Rob) own reflections on the journey over more than a year.
Not only did Hang completely reinvent the operating model for a real estate agency of 40 people, so that they were self organising teams, completely fluid as to size, structure, and duration; but then when most of the staff realised what a dynamite model it was and decided to go off on their own to start a new agency, this didn’t create any hostility or friction. Hang supported them in doing so and maintained a business relationship, so that they continue to share clients and properties, to their mutual benefit. As a result, Hang now operates with 5 staff, has reduced her office space and all her operating costs, and still gets the same revenue as she did with 40 and makes much more money than she used to. Everyone has three times higher income.
Consider just how advanced this example of management is – straight out of the best of contemporary management textbooks. Completely self organising teams is the Agile that most organisations dream of. Growing staff until they fly free with their own business and remaining collaborating with them is pure Green from the Laloux model – one step away from Teal. Hang has made it work with courage and conviction, through the support and advice of Dr Cherry Vu.
I’m Huỳnh Thúy Hằng (Sarah Huynh), CEO of Vinh Đức Real Estate Agency. I founded this company four years ago.
We have 40 staff involved in arranging the sale of properties, as well as investing in land and houses, in Ho Chi Minh City, Vietnam.
(You can read more of Teal Unicorn’s client stories here)
Hằng came to our agile Manager (small “a”) training in Saigon several years ago, and keeps coming back for more. She brought along her managers, and she joined Cherry’s weekly online coaching group. She and Cherry talk several times a week to coach and support her, but we have only done a little consulting onsite: Hằng devises and implements her own solutions.
Previously the sales teams were divided into teams: a fixed number of 5-8 people in a team with a team leader. When a team was organised that way, everyone functions and interacts within a small scope under the supervision and support of the team leader. We found that organising teams this way caused bad workflow that hindered the development of individuals. People had to spend a lot of time reporting. Also, to do a sale, a team leader needs to support their team members in every transaction as well as to pay attention to very small details such as punctuation, as well as the working attitude of everyone.
As well, experienced members who can independently sell had to still report and receive support from the team leader (for example, making contracts, etc.), that led to a lot of work for the leader, wasting the time and skills of every party involved, and left no time for improvement. When one member did not fit in the group, they were afraid to switch to another group although they thought it would be more suitable. The leader of the group was still active in sales themselves, which led to a conflict of interests among the members and the leader. Everyone was unhappy, tired. We rarely saw interaction, coordination, and information sharing with other team members. This lack led to ineffective results.
We decided to set the teams free. We took team leaders out so it is up to everyone to organise and manage themselves. People choose anyone that they can coordinate with to form a team naturally. It can be a group of 2 people, 3, 6-7 people, and also people who work independently but have a support team whenever they need it.
This was not as rash as it may sound. They had made smaller experiments first with one team to verify it was workable.
In the beginning, we still maintained the support of team leaders to support the members when needed. Later on, we formed an official support group, where everyone can come to them whenever they need. The support team does not specify exactly who they will support: any worker can share with one or all three members of the official support group, as long as they feel safe and can best support his or her problem.
It is important to understand that this support group is made up of three experienced managers – they are servant managers.
During the month after changing the way of working, the performance of the whole company dropped significantly because people were not familiar with the new way, the level of interaction decreased, the collegial spirit went down, people felt bewildered, and most of them wanted to go back to the old way, even though there was the agreement and consensus of 100% staff before. They had all agreed on the obstacles.
During that month, some people formed a group and worked well, some people had difficulty forming a team, most felt helpless and wanted to return to the old way and didn’t accept change.
Beware the “J-curve”. It always happens on any change.
We then had a half-day company meeting, under the guidance of Rob and Cherry from Teal Unicorn, to help :
· identify the values for the whole team to follow
· draw the value stream to find the reason why transactions fail, where are the bottlenecks, why performance drops
· decided some areas for improvements, an action plan for things that can change immediately and what needs to be done in the future
· decide what needs to be done to support and coach those people who are struggling with the new way
· establish trust between individuals.
We conducted a visioning exercise to create focus on company values. Some staff looked a bit mystified or cynical during the exercise, but later in the afternoon they came to realise its value. Cherry gave a motivational speech about why it was happening, how a J-curve was normal, and how collaboration was essential for them to now rise up.
Then we split the staff into three groups for 90 minutes to look at value stream and what the blockers were; who was struggling and what support they needed; and what were the opportunities for immediate incremental improvement. Staff self-selected their group, so most were engaged.
We found the big problem was that people lacked trust to collaborate, share information, and help each other among staff. As well, people did not have adequate support from the company to timely guide and remove obstacles in the process of working, leading to the performance of the whole company and the morale of people going down.
After discovering the problems and finding solutions, we have had many successful transactions. Specifically, in the first 10 days of October, Vinh Đức has successfully sold 9 properties. In 20 days we have sold more than the number of sales in September. All are the results of good collaboration between members. Even new staff who in 5 months hadn’t sold any property have been successful in selling houses.
Some people left initially, but we think that is because poor performance is made visible. Culturally, people are not accustomed to being exposed: in other organisations, many coast within the group. Now it is stable and morale is up.
Their success continues. Sales are not as high as they would like but the market is flatter than last year. This is one of the challenges with organisational change: it is never a controlled eperiment, there are always multiple concurrent changes, some out of our control. Cause and effect is never provable – it is only ever a hunch. We must beware of confirmation bias.
An experienced manager shared:
One of the great things about the new way of working is that even though you’re still in the support group and have the role of a leader, you no longer have to do micro-management so we have time to sell and still care about others.
Staff no longer have to spend time reporting, but spend most of their time selling, cross-interacting, and diversifying with many staff that they used to hardly talk with before.
When I talk to people about what they think, I notice the changes are huge. Some staff were very harsh at the beginning and did not support the new way of working but now they think differently and are more active. People in the company are more creative, always looking for ways to improve their work, to help each other, the more experienced ones help the newcomers, the better sales people cooperate with the less successful members. They often tell their friends about the company and how we operate, and everyone likes it.
Of course it is not all rosy. They had challenges getting the demand balanced across the three people in the support team: everybody prefers to go to one. We coached them to hold a group workshop to design how support should work; and the three support staff worked out how to load balance amongst themselves.
Other challenges continue. Commission schemes are an endless source of debate, and are probably never optimal.
When approaching the perspectives, ideas, and methods from Teal Unicorn, I know what is right and what is good and how to get there. If I had not learned things from Rob and Cherry, if I hadn’t been greatly encouraged and accompanied by Cherry, it would have taken so long or I would never have stopped to improve. I would never have thought about ways to set people free and to be better together.
Thanks to her guidance and daily feedback to our work, we learned the stages of change and how to face it. I know and believe that I can do many things with the team to make them happy. I was fortunate to have the chance to attend Cherry’s training courses to know about the right and beautiful things, so my mission is to help my people to be better, with sincere sharing about where we are going, why we are going that way. They will not be afraid to go along with me.
Our next step will be to encourage the group to study each others’ ways of working, to understand the different models emerging, and their pros and cons. Then a support function can hold this knowledge and coach the teams. Vinh Đức will open a second office in the new year. This knowledge will be essential to allow them to scale quickly.
At Teal Unicorn, we never give answers or “design solutions” (although sometimes we offer suggestions). Nobody knows how this agency should work. Those best equipped to find out are those doing the work, through experiment and exploration and sharing. They will continue to collaborate, and to adapt to changing people, demands, and conditions.
I realized that I was able to apply it partly because I brought all my managers and some key people to Cherry’s training courses, so when I proposed an improvement, no leader left me. Initially, some group leaders were somewhat disappointed when their roles were removed, but thanks to the knowledge they obtained, they are aware of many things and still accompany me.
By now, the sales results of all team leaders are superior to the previous month. One of them got 5 successful transactions/month which was previously only seen in the sale teams, even though they are still in the support team.
Team leaders used to get commission on their team performance. Now they sell directly themselves to earn commission. We suspect this will create conflicting incentives. If so, we will suggest to Hằng to pay them commission on the performance of the whole branch, and to stop selling directly. This will allow them to focus on supporting and coaching, and to work on management functions: sales, marketing, customers, finance, information, personnel, operations, risk, and assurance.
I am not alone, and happy to see that people are truly creating more value, no one has to drag anyone, seeing my people grow up day by day, just like I plant seeds and they become big trees. Now it is time to fertilise to get more sweet fruits.
Hằng has been with us from the beginning, has given us so much support, and is now a personal friend. We are so happy and relieved to see her company humming with strong managers emerging, as she is pregnant and we did not want to see her stressed. We hope she can step back with confidence and enjoy the new stage in her life.
We awarded Hang “Best contribution to our community” in 2019.
2021 update
Hằng and her baby are going great. So is her business. In 2021, Cherry gave us an update on Hằng, transcript translated here by Rob:
WHEN YOU HAVE DREAMS, YOU WILL SEE THE WAY …
One day this energetic young CEO emailed me:
I read your articles, hear you talk about agile management and agile enterprise, I see that’s what I’ve been searching for so long. I wasn’t happy where I worked in the past, nor am I satisfied with what I am doing now. It is not the working environment that I want, where everyone works effectively and happily. Can you help me?
Since then, whatever training course Teal Unicorn has run, she joined and brought her team to learn too; she read the books I recommended to read; and did (most of) what I suggested she should do. She told us:
In me, I see the determination, persistence, curiosity, wanting to explore, wanting to assert myself. I desire to improve every day and most of all, I believe one day I will get what I want. After a year of training and coaching, I was able to master a lot of knowledge and skills and led my team to become a fully agile team, which means that I can respond quickly to change.
During the 6 month period applying an agile management method, the cost of the whole company decreased by more than 60%, everyone got better, they had more skills, and could take on many different jobs.
After 3 months of applying an agile sales method, previous problems such as conflicts of interest, bad cooperation in teams were completely eliminated. Everyone backs each other, working best to win together in every deal. Everyone in the company is happier, and everyone’s income is better.
I realize that when you have a dream or a goal, the most important thing is to believe in yourself. People will tell you it’s not possible, but when you connect with your dreams, nothing can stop you. Of course, you still need the right support, but if you don’t believe in yourself, all support is meaningless.
And of course, old man Rob [it’s a Vietnamese honorific, no comments please :)] and I are extremely happy, the gardener’s happiness when we see the trees we work hard for. The people around me get better, their lives are better.
Cherry’s telling of the journey
In February 2021, we made a video in English of our success stories in Vietnam, and Hang’s was of course the first. Here’s what Cherry says in the video
The first case I want to talk about is the CEO of Vinh Đức, a real estate company. When we first met, they had more than 40 employees. They had a problem with the middle management and with the culture. There was too much competition – they paid employees individually. Before we met, every team had one team-lead, and they only worked within the team to exchange information. Also because they paid individuals and they didn’t have a fixed salary or some monthly salary or anything like that, if you sold a house you could get a big commission, otherwise you got nothing. They had a management team and the leader of that team (Hang) never worked with people. She actually only worked with team-leads. They also had a functional team for finance, legal etc who worked closely with leaders and that’s it. So you can imagine how the culture would be in real estate. What people sell is actually the information but people didn’t share information with each other because it’s risky for them. When we started working with her we saw the problem that the middle management – the team-leads – actually created a lot of constraints in the system. So we took out the team leads. We also created the supporting team: the supporting team is made up of some specialists who have more experience than the others.
That created work structures to go much faster and they got higher revenues and higher income. The staff worked like this: if you like someone for a particular deal you can work with them, they work loosely, every single house has one different team, it depends on who will be best for the deal.
After that we said why do we need a functional [support] team, why don’t they just join the team and create the end to end process, and that makes everything much faster.
Later on Hang also joined the team: the CEO is also one of the members of the team. She’s no more controlling anything.
But the biggest change and the biggest outcomes came later on, from the change of payment: when they changed the policy from paying individuals to the team, it was much different. The teams had been self-organised, but conflict of interest was still there because of the individual commission policies.
No manager at all, the structure of the company is no longer having hierarchies or anything like that, it’s just flat. I am a fan of “Inviting leadership” and “open management” so I asked [Hang] that every single thing, every policy, every decision, you should put it on the table – don’t do it yourself, stop making a decision. She stopped making decisions, put everything on the table, democracy.
People gradually learned more and more skills. Before that they had very limited skills, but now everyone can do each other’s work. They have cross-functional teams, pay people based on skills, and all the teams are organized by skill, using shu-ha-ri. All the skills are in the group that are needed to finish the work, from the learner to people who are good at work to a master. So they divide people into shu-ha-ri level and they join teams so as to make sure that for every single skill they have one – at least one – who is good. That’s based on self assessment and group evaluation.
We created a learning organisation to make sure that every week they have at least two hours for learning, exchanging ideas, concepts, understanding. Even though they don’t have any roles or don’t have any team-lead or promotion, they are happy because all of them are better, they have better skills, they have more experience, they have more income. Here’s a result you can see:
Before we changed the policy, they started from June last year, and up to now you can see the difference. You can see that the number of the employees dropped a lot [down to five!] just because some key sales didn’t like the new arrangement: they wanted to have a great sum of money rather than to share with others, so they left. [An even bigger bunch of employees left to form several of their own companies to exploit this better way of working. Hang was initially concerned but Cherry coached her. She keeps working with them, so they share properties and clients, and hence commissions]. Operational costs also dropped a lot. Revenue is still the same [a much smaller number of people made just as much money!! So that…]. Average payment for employees increased hugely [about triple].
I’m very very proud of this case because of the outcome, and people are much happier, and they feel like every single day they are going to have fun.
More about Hằng
If you speak Vietnamese, and you are curious about the CEO Huynh Thuy Hang and what she does, we invite you to watch this Facebook video
This is video No. 3 in the series “Agile Thought Connected Community” by Tien Thuy Tran.
(You can read more of Teal Unicorn’s client stories here)