October 25, 2011

Chad Ovel – Mountaineer CEO

Today I’m beginning a new feature on my website: Interviews with business leaders to discover and share their leadership secrets.

Chad Ovel

My first guest is Chad Ovel, an accomplished high-altitude mountaineer who has conquered some of the most challenging mountains in Asia, the tallest being Pakistan’s Broad Peak at over 8,000 meters.

Chad is the Chief Executive Officer of AA Corporation, a Vietnamese-owned company with 2,000 employees.  AA Corporation has led the market for interior furnishings and construction in Vietnam since 1993.

Chad moved to Vietnam from the USA in 1996 to join San Diego-based venture capital fund Pacifica Vietnam.  From 1997-2000 he served as the Development Director of World Wide Fund for Nature Indochina.  From 2000-2006, Chad worked at ScanCom Vietnam where he served as the Managing Director of 6,000 employees.  Chad led innovative and aggressive growth of Scancom’s turnover to more than US$ 150 million, making it the largest furniture exporter in Vietnam in 2006.

Chad is passionate about environmental and social responsibility.  Over the past ten years he has been a very active promoter of the Forest Stewardship Council, leading a “green revolution” in the garden furniture industry.  Additionally, Chad has served on the Advisory Board of Social Accountability International in Vietnam.  He serves as the Secretary and on the Board of Governors of the American Chamber of Commerce in Ho Chi Minh City.

Chad holds a BA from Carleton College and an MBA from University of Chicago.

I caught up with Chad recently for a question and answer session.

Chris: What was your first job and the biggest lesson you learned from it?

Chad: My first job was working for my neighbors.  I would shovel the snow off their driveways in the winter and cut the grass in their lawns in the summer.   The biggest lesson I learned was to get up very early in the morning and complete all the work as early as possible in the day in order to save my time for my personal activities.

Chris: Who gave you the best business advice?

Chad: My father once told me that the only job you should ever have to apply for is your first one after graduating from university.  He said, “If you work hard and perform well in your first job after university, it will be widely recognized.  You will never have to go hunting for another job in your life as many opportunities will come to you.”   This has defined my approach to business which is based on a hard work ethic above all else.

Chris: What advice would you give someone starting out in your field?

Chad: Live in the details.  Many new General Directors believe that they can just focus on long term strategy and vision.  But, I strongly believe that in order to steer the ship across the ocean, you must make many small navigational decisions everyday.   These small navigational decision must be informed by knowledge of the details of the business.

Chris: Could you give an example of a “navigational detail?”

Chad: The navigational details vary widely everyday from changing the type of glue we use in our products to spending more money to airfreight an item to Hanoi in order to meet a project handover deadline.  The way I make decisions on these detailed issues gives guidance to all of our team on how they should decide themselves in the future when they must make a quick decision on their own.

Chris: What’s the one thing you wish every new hire knew?

Chad: How to listen.  Each company has its own culture and ingrained methodology.   It is so important for new hires to quickly learn how to function effectively in the new culture they are joining.   The must build rapport with their new peers and learn how to function in the existing system before calling out for big change.

Chris: What is the greatest challenge and opportunity for the furniture industry in Vietnam?

Chad: The greatest challenge is the necessary transition from unskilled low-wage labor to machine technicians and engineers.   If this learning jump doesn’t happen in the coming five years, the industry will not remain globally competitive.

Chris: How will you help your people make a transition to a higher skill level?

Chad: AA Corporation has already made a significant investment in advanced machinery even though we can still do the same tasks with labor at a far lower cost.   Nonetheless, we accept the high depreciation cost as view it as a training cost.   We want our team members to get familiar with the advanced machinery now before the tipping point in wage cost arrives.   We also frequently organize trips for our staff to conduct “benchmarking” study tours by sending them to tour and work in more modern factories in Denmark, Germany, Singapore, and Japan.

Chris: How do you keep ahead of the competition?

Chad: AA stays ahead of our competition through our deep and lasting commitment to quality.   We will never compromise on material inputs or installation methods regardless of our sales price.   Our reputation for authentic product and service is enduring and is the soul of our value proposition to our clients.

Chris: What was the toughest decision you’ve had to make as a manager?

Chad: Time and time again, the toughest decision is to turn down a client when they offer their project to AA.  We have a huge passion for what we do and love to get involved in every project we can.  But our capacity and risk-appetite is not limitless and our commitment to on-time performance is tantamount.   Thus, we must always balance the commitments we have already made with new requests for our service as they come in from clients.

Chris: What was the most satisfying decision you’ve made as a manager?

Chad: The most satisfying decision I have made as a manager was to take a bet on a very young employee by promoting him to a much higher position and then see him succeed beyond his years and beyond the expectations of his peers.  This is always the most rewarding for me.

Chris: You’re an avid mountaineer.  Are there any similarities between mountaineering and running AA Corporation?

Chad: Absolutely!  In climbing large high altitude mountains, nothing is more important than careful and detailed planning.   Time and time again, we find that a very well developed plan is the key to executing a project on-time in the correct quality.  Without a clear plan from the beginning, it is very difficult to pull together all the many pieces and reach 100% completion on the due date.

Chris: You manage Vietnamese in a 100% Vietnamese-speaking environment.  What kind of challenges have you had to overcome to achieve your success in this environment?

Chad: By far the biggest challenge is trying to motivate and persuade the team using my limited vocabulary.   Just making a decision is not enough in my opinion; I want the team to truly understand the rationale behind my decision so that we are all fully aligned when it comes time to implement.  My Vietnamese vocabulary is often lacking the “poetic touch” that is needed to give inspirational speeches!

Chris: Do you have a favorite business book?

Chad: Authentic Leadership by Bill George.  He reminds the reader that a mission-driven business will produce far better results than a profit-driven business.

Chris: How is AA Corporation “mission-driven?”  

Chad: AA Corporation is mission-driven by the consistent and persistent focus of the company’s Founder and Chairman, Mr Nguyen Quoc Khanh on the quality and on-time delivery of projects.  He has created a deeply embedded culture of mission; if we ever fail in achieving this mission, we stop to deeply study and understand why we failed.   We are highly committed to learning from our mistakes.   Our mission is communicated not once a year in a company retreat or on a button given out to employees on their first day at work in the company.   Rather, we communicate the mission with each other in every working meeting of each day of the week.  The focus is always there and serves as our guiding principle in every small decision we make.

Chris: How do you keep your staff motivated, and how important is salary to retaining staff?

Chad: At AA we keep our staff motivated through pride in our work and in our product.    We build beautiful spaces and exquisite product; we take great pride in that and love delivering something new everyday.  Salary is absolutely critical.   If a company wantsto outpace the competition, it must also have the best people in the market.   Attracting and retaining the best requires salary that outpaces the competition.