What makes coaching effective?

Author: Nguyen Minh Cuong, Investment Associate, Mekong Capital

April 26, 2023

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It was a beautiful and sunny Thursday morning in Hanoi. The weather was great, but I did not feel so.

My Deal Leader and I were on our way to the office of one investee company in Mekong Enterprise Fund III, and I was feeling very nervous. Why? I was only in my third month at Mekong Capital, and, in 30 minutes, I needed to lead an important conversation for the first time: for the CEO and Chairman to grasp the intention of having upstream, actionable, and causative KPIs that are impactful to business performance. This was a critical conversation because how the company will perform depends on how well it set and managed its KPIs. As a member of the Deal team, I have a strong commitment to the company’s achieving its breakthrough business goals, and they were quite not on track.

Nguyen Minh Cuong, Investment Associate, Mekong Capital

The real challenge for me in this conversation would be to adhere to the Mekong’s value creation approach: “I will not be an advisor, giving advice, solution, or answers to the founders”. Instead, I should basically ask questions, and create a blank space for the founders to generate and discover for themselves.

“How could this be possible? I have never done this before, and I really do not know how to do it. Having worked as an advisor for most of my professional career prior to joining Mekong Capital, my fixed way of value-adding is via giving ideas and solutions. In my previous jobs, CEOs actually paid me to get my advice, and now I cannot do it!”

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Soon, we arrived and walked into the conversation. I started strong by stating the objective of the conversation so that everyone was aligned on it. Then, I began to ask questions from what I know from the intentions of the KPIs, and the founders responded. The beginning was good.

However, after two or three questions, I ran out of ideas on what to ask. There was a long, awkward pause. I started seeing the confused looks that the founders threw at me. “Oh my god, I’m stuck. What should I say next? If I cannot ask some smart questions here, they may not want to talk to me anymore!”

I struggled to calm down and asked another question. The founders looked even more confused. They kept silent. No one was talking. It was super stressful for me.

My inner advisor’s voice said, “Maybe I should give them the answer like I always did before.” As the pause prolonged, the inner voice became louder: “Don’t hold back, give them what they need! KPIs are very important. You know what the company’s KPIs should look like. It would be easy to just give them the answer!”

As the silence spread like a suffocating blanket, the fear kicked in within me, to the point that it was almost unbearable. I almost blurted out the answer. I couldn’t stand the silence anymore. However, a little voice came up like a calming whisper. “No. Trust the system. Find the right questions to ask. Let them discover.”

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While I was struggling so hard to move the conversation forward, my Deal Leader came to the rescue. I was amazed at how easily—effortlessly—she did it. Her way of being was so natural, and her questions were so insightful.

“Wow! Asking questions is really working. I want to do it like that! I thought to myself. At that moment, I realized that my Deal Leader was very curious about what the founders said, and she kept asking great follow-up questions. This reminded me of one core value of Mekong Capital that is very related to asking questions – Inquisity (Inquire with curiosity):

“Being Inquisity, we ask questions to relentlessly pull for the big picture, identify root causes, and discover insights. We are curious and open-minded.”

This was in total contrast to what I had just done: asking leading questions from what I know about KPIs and expecting answers that confirm my understanding.

“Maybe I just try to be Inquisity here to see what happens”, I thought.

However, it was a frightening moment. I was not sure if this worked for me. “What if they don’t? What if they can’t?”, I felt like jumping off a cliff, not knowing if my parachute will open or not. I started listening to founders’ answers to fully get their world and thinking about current KPIs at the company. I stayed open-minded and curious about their answers.

Taking a deep breath, I looked them in the eyes and asked questions so that the founders could dig deeper to identify root causes and insights about what KPIs are working and not working at the company. Surprisingly, they started generating ideas enthusiastically.

“Wow, this is magical”. I was delighted, and the feeling of fear and tension went away. Being Inquisity, the questions started flowing naturally without me trying so hard. I no longer tried to ask smart questions to guide them to understand what I think they need to know about KPIs. I was just being Inquisity with a strong commitment to the company’s success in that conversation. Of course, the seasoned founders could easily realize that some of the existing KPIs were downstream, lagging, and not yet actionable.

A few days later, I got an appointment with the CEO to have dinner with him. He just got back from his business trip to visit his sales staff in the South. He shared that he now fully realized the power of having the right KPIs that shaped the actions and thinking of his employees. By switching to more upstream and actionable KPIs, his sales staff started thinking and acting differently. Two weeks later, in the following-up conversation about KPIs, the CEO generated for himself the top 5 KPIs that are truly upstream, causative, and actionable that could lead the company towards achieving the key milestones and on track with the Vision.

I felt elevated and amazed. For the first time in my life, I experienced being a value-added partner without giving any advice or solution. That’s when I discover that being Inquisity is an essential access to walk our seasoned founders to their own discoveries.

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Mekong Capital makes investments in consumer-driven businesses and adds substantial value to those companies based on its proven framework called Vision Driven Investing. Our investee companies are typically among the fastest-growing companies in Vietnam’s consumer sectors.

In January 2022, Mekong Capital founder Chris Freund published Crab Hotpot, a story about a bunch of crabs who found themselves stuck in a boiling pot. The colorful cover of “Crab Hot Pot,” complete with expressive cartoon crustaceans, looks like a children’s tale at first glance. But as one continues reading, it becomes clear that the work has an important message about organizational transformation, leadership and focusing on a clear vision for the future.

The book is available on Tiki (Hard copy): bit.ly/38baF8a (Vietnamese) and Amazon: amzn.to/3yWunzG (English)

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