Everything Korea, June 29 Episode: the Gap in Norms

 

Outside my day-to-day support of Korean facing business and clients, I am drawn to ponder on issues and drill deep. I other words research, investigation and then providing commentary on the direction of Korean business from trends inside Korea to Korea-facing international operations.

An example of this process, several years ago I coined the term K-lobalization (Globalization with a K for Korea) as I saw the trend when Korean firms boldly promote their own unique management style and corporate culture internationally and across many markets. A recent manifestation is organization-wide, corporate-directed mandates…. from core value, vision, and management training directives to most recently how they should brand or even target specific consumers in local markets. Usually these programs are expected to be unchallenged and accepted without question by overseas teams—at times not in the best interest of the local operation.

This said, a new topic, which has my interest, was touched upon in May 11 edition of Everything Korea… there I argue a key challenge in Korean success with startups and innovation was “culture.  I would like to expand this perspective more broadly to be the “culture” needed to foster the Creative Process in general. In fact, this is the first of three commentaries on the topic.

Let me explain. What has evolved in America regarding startups, tech, and innovation is they tend to hub in cities with diversity and strong counter-cultures like Boulder, Colorado, San Francisco, Austin, TX, and NYC, although more and more scenes are emerging in Nashville, TN or here in Golden, CO…

Screen Shot 2015-06-29 at 10.25.40 AM

Nuff said…Edgy Austin and Jack Kerouac

Within these communities I have witnessed an amazing synergy not only in day-to-day interactions and dialogue, but also in resources. Actually spending an hour and listening to the chats and even pitches for Angel Funding in edgy Caffe Centro on a South Park Street in San Francisco (the couple of blocks once referred as the Tech Ground Zero and where concepts like Twitter were launched and well as scores of tech companies and startups now call home) one quickly sees why locating in one of these scenes is key. In fact, showing how widespread, I frequently hear similar coffee shop launch pitches in Golden, Colorado.

Let me explain more in detail.

As academic Richard Florida points out in The Rise of the Creative Class, creatives as a group reflects a “powerful and significant shift in values, norms, and attitudes.” He clusters this attitude to be:

1) Individualism

2) Meritocracy

3) Diversity and Openness (which can translate to gender, sexual preference, race and my favorite “personal idiosyncrasies”.)

Of course those familiar with the Korean workplace and by this I don’t mean only the larger organizations but even most progressive firms, recognize there is a huge disparity from these “creative” norms.

For example, in contrast to the individualism within the creative class, in Korea we find deeply rooted collectivism where the group is the primary unit of reality and the ultimate staendard of value.

In collectivistic societies, group goals take precedent over an individual’s objectives. This view does not deny the reality of the individual, but, ultimately, collectivism holds that one’s identity is determined by the group(s) with which one is affiliated.

Collectivistic cultures also require that individuals fit into the group—and “conform.”

Noting this, outside values, norms and attitude, perhaps the gap between US and Korea that also occurs is in “risk mindset.” Today the American entrepreneurs, angel investors and VC who launched Facebook, Twitter, Instagram, Linkedin, Square and now Super continue to look for, invest and provide mentorship and guidance to what they hope will be the next success story…. In most cases they are investing resources in multiple ventures….

This said they know and accept that failure is part of the process…. As Biz Stone (co-founder of Twitter, and an early investor in Square, Medium…and a bunch more) said at SXSW on his most recent work… “the failure of one venture, Jelly, led to success at a venture, Super.me ”

So getting back to Korea the real challenge is not in lack of ideas or topnotch talent, but in allowing and fostering a culture of Diversity and Openness, an acceptance of failure, and tolerating and even embracing non-conformity.

The good news…. I would not give up on Korea and a creative culture. More of my thoughts on this in the next episode of Everything Korea. I even will propose a roadmap for grooming creatives in Korea.

So until next time…

Links

The Rise of the Creative Class http://www.amazon.com/Rise-Creative-Class-Revisited-Anniversary-Revised/dp/0465029930/

Screen Shot 2015-06-29 at 10.27.29 AM

The Beat Museum http://www.kerouac.com

Biz Stone’s Super.me https://super.me

Screen Shot 2015-06-29 at 10.30.01 AM

Questions and Comments?   questions@koreabcw.com

Everything Korea, June 22 Episode— a Singular Message

I was recently interviewed by Fortune.com—I often contribute to the media. They were looking into the success of Korean car brands Kia Motors and Hyundai Motor in the wake of the latest J.D. Power’s Initial Quality Survey (IQS). To the surprise of many, Kia ranked #2 just below premium brand Porsche and Hyundai ranked 5th, both well above longtime and formerly top ranking Japanese brands.

With much of my work over the past decade supporting Korean global business, especially Hyundai and Kia, and more so, the Korean carmaker has long been a topic of my research, study, writings and media commentary…. My answer on why the Korean brands have achieved such success is simple. Quality has been an almost singular career message by the carmaker’s chairman, Chung Mong Koo.

To share some insights…. I quote from my book Hyundai Way: Hyundai Speed.

By 1999, Chung Mong Koo had assumed control of HMC in addition to his leadership role at Hyundai Precision [today known as Hyundai MOBIS]. Adding to his responsibilities, HMC had also acquired Kia Motors—an early casualty of the Asian financial crisis that ripped across the Korean economy. Having experience in the Hyundai Motor’s after-sale service early in his career, Chung Mong Koo was not without insights into the car division.

Since its founding in the mid 1970s, HMC had focused solely on growth. Indicative of Korea industry at that time, this focus was to produce as many cars as possible—as fast as possible. In turn, product quality and customer satisfaction suffered. From his experience working with consumers at Hyundai Motor’s After Sales division, Chung Mong Koo knew the damage shoddy products could bring to the Hyundai reputation, not to mention the high cost of warranty repairs.

When Chung Mong Koo began sharing his intention to turn Hyundai Motor Company into a top-five automaker, few outside the company took him seriously.

Hyundai, like many family-controlled Korean companies, was hierarchical and at times slow to change if there was a perceived risk. More significant, managers rarely cooperated with one another and division chiefs ran their operations as personal fiefdoms. It was a company of silos. “When a problem occurred, each division would blame other divisions,” says Lee, Hyun Soon, former Hyundai-Kia Motors Vice Chairman and Chief Technology Officer.

Chung Mong Koo’s first step was to replace the former top management with engineers and those with whom he had worked closely at Hyundai Precision. He formulated a strategy to challenge Toyota for quality. Extensive work with a number of top global consulting firms (e.g. J.D. Powers) and benchmarking of the world’s best automotive companies followed. He also sent teams to America to study weather, road conditions and driver habits. Quality control staff increased tenfold to 1,000 and they reported directly to him.

Employees were encouraged to offer suggestions and were rewarded. For example, one worker reported the Sonata and XG350 Grandeur sedans had differently designed spare tire covers. Sharing a common cover saved Hyundai about $100,000.00 per year.

Chung Mong Koo quickly earned a reputation for an obsession with quality. For example, several years ago a new Sonata launch in Korea was delayed for two months with 50 issues that senior management wanted addressed. Employees in the Asan factory worked feverishly to correct these items.

One was a tiny error in the size of the gap between two pieces of sheet metal near the headlight. The problem was not visible to the human eye and was narrower than 0.1 millimeter. However, numerous managers and employees worked on the problem for 25 days before it was solved.

This obsession with quality continues today with the Chairman relentlessly reinforcing the quality mandate to management and teams globally as they strive for zero defects.

All said, for my work I drill deep. I look for and then share with clients the reasons behind Korea facing business, while over time mentoring, coaching and steering teams and C-level leadership to solutions.

If these unique resources can benefit you and your company, I have blocked out some times I’m available to discuss options. Just go to http://www.meetme.so/southerton

For a Link to Hyundai Way: Hyundai Speed, in either Paperback or eBook.
http://www.amazon.com/Hyundai-Way-Donald-G-Southerton/dp/1495968723/

or a Complimentary PDF Copy
http://unbouncepages.com/hyundai-way/

#singularmessage #fortune #IQS #kia #hyundai #koreanmotors #koreanglobalbusiness#quality #hyundaispeed #customersatisfaction #top5automakers #qualitycontrol#obsessionwithquality #zerodefects #mentoring #coaching

Everything Korea: Episode June 15, On-boarding

I truly enjoy sharing the nuances of Korean business culture—whether through my books, Vodcasts like this one, in media interview and articles, or coaching those new to the Korea facing workplace.

Long part of my core business has been On-boarding. In fact, this week I have a number of engagements scheduled in Southern California with some planned for San Francisco in the next future.

On-boarding or, organizational socialization is where new employees, from C-level staff to entry-level hires, acquire necessary knowledge, skills, and behaviors to be effective in their job. In most cases for my work this means those employed by Korean companies, but it also includes those partners that provide services to Korean global firms

A common false assumption taken by some is those new to the company or project “will get” the cultural nuances without considerable support. Nothing can be more mistaken.

I find the Struggles for non-Koreans can range from team members not dealing with matters feeling it may offend their Korea colleagues to being perplexed and frustrated why approval processes are so complex or why Finance appears to be the making final call in critical operational decisions. The later two situations covered extensively in my books Korea Facing and Korea Perspective. See link below.

All said, my role in On-boarding is to provide context and the reasons behind Korea facing business, while over time mentoring, coaching and steering teams and C-level leadership to solutions.

If coaching and mentoring is like something you and your company can benefit from, I have blocked out some times I’m available to discuss more. Just go to http://www.meetme.so/southerton
Until next time…

Link to Don’s books
http://www.amazon.com/gp/search…

‪#‎onboarding‬ ‪#‎koreanbusinessculture‬ ‪#‎coaching‬ ‪#‎koreanglobalbusiness‬‪#‎culturalnuance‬ ‪#‎mentoring‬ ‪#‎bridgingcultureworldwide‬

Everything Korea: Episode June 8—The Short Answer

I was on a conference call last week when asked how best to describe my work—and do I provide consulting for CEO and C-level management—her organization’s international development committee made up of a number of CEOs.

My short answer was that a client and long friend, then a CMO for a major company best described my practice to others as Everything Korea… I also like having been introduced as “ a high power consultant” or Don is “the guru, the guy CEOs want to have their voice heard with, “ the later shared on Seoul’s eFM tbs Koreascape.

Pondering over the weekend on the question from the conference call much of what I do is provide context and a strategy to decision-makers involved in Korean facing business projects that range into the hundreds of million of Dollars.

In particular, I provide counsel and solutions based on my years working with Korean business—a good part in the international expansion into new markets and the challenges that surface and as a client once asked “ where are the landmines he needs to be aware of and avoid.”

So this gets to why I post weekly Vodcasts, frequent media commentaries, case studies as well as books on Korea facing topics.   They all serve as channels to support and educate.

This said, in my consultancy each engagement needs to be approached on a case-by-case basis—no two situations identical.

If you feel you might benefit from my C-level insights, I’ve blocked out my availability to chat and discuss…. Just go to http://www.meetme.so/southerton

In closing:

A great book on the reshaping of the American economy and the New Order… check out Richard Florida’s The Rise of the Creative Class, Revised Edition.  I prefer the Hardcover.

And the music on Repeat Song listened to while drafting this week’s episode—Pink Floyd, “Wishing You Were Here” Re-mastered Available on iTunes.

Links

Seoul eFM Koreascape http://www.tbs.seoul.kr/efm/koreaScape/

The Rise of the Creative Class

http://www.amazon.com/Rise-Creative-Class-Revisited-Anniversary-Revised/dp/0465029930/

Pink Floyd, “Wishing You Were Here”

https://itunes.apple.com/us/album/wish-you-were-here-remastered/id704223460

Everything Korea: June 1 Episode: Challenges and Solutions in Recruiting Foreign Direct Investment and Supporting their International Workforce

Just back from Greater Nashville area and specifically the Clarksville –Montgomery Economic Growth Summit. I was honored to have been asked to speak on an elite panel about international business market entry. In particular, my contribution focused on 1) how the community and its leadership can best support Korean Hankook Tire, with construction now underway for the Korean company’s it’s 1st manufacturing plant in North America, and 2) how can the community attract other top Korean FDI manufacturers.

I like to share some comments made by my colleagues Kiyo Kojima, a top lawyer specializing in Japanese market entry and Sebastian Eich an expert of German and EU business.

For starters, Japanese, German and Korean firms approach the overseas’ operations differently. Cultural nuances impact how they look at and enter new markets.

For example, although local quality education for the expat Japanese, German or Korean dependents is important. German and Japanese families expect to return to the mother countries and their children to resume schooling. More often Korean families see value in an American education, with English language proficiency—the later a competitive workplace edge. A recent trend among Korean expats then is for father to return to Korea when the assignment ends, but the family to remain in the states until the children graduate from High School and college.

BTW A positive for Clarksville is the area has the best schools in the state, along with home to the Austin Peay State University campus.

Another factor that stood out among the many questions the panel tackled included the need for a qualified and skilled workforce, not an issue in Germany, Japan or Korea, but labor force can vary much with a country the size of American, and a determining factor on picking one region over another in the site selection process.

All said, having supported major Korean manufacturing facilities in the US and globally, i found the Clarksville—Montgomery County region of Tennessee offering much…. Not to mention just miles from Nashville.

I also see as a great site for future Foreign Direct Investment as other Korean firms consider launching US manufacturing operations. If interested, I have blocked out my availability to chat and discuss…. Just go to http://www.meetme.so/southerton

Until next time.

Did you check out the Super.me APP yet? Give it a try.

Everything Korea: May 25 Episode: Diverse Sub-cultures

Coming off the Memorial Day Weekend Holiday here.  I use holidays as a time to write, read, recharge and re-focus. This means opting out perusing Facebook and Twitter, as well as checking emails.  I’m happy this year both the American holiday and Buddha’s Birthday (a legal holiday in Korea) fall together.
I was again asked what’s been on my reading list.  I recommend for starters, Brian Grazer’s (the Hollywood producer and with creative partner Ron Howard founded Imagine Entertainment) new book A Curious Mind
A second Book:  The start-up of YOU, by Reid Hoffman, co-founder and Chairman of Linkedin
And, Hatching Twitter, by Nick Bilton
All three give some great insights into the varying aspect of American business–behind the scenes and sub-cultures.
This brings us to today’s topic—these recognizing diverse sub-cultures.  To often like an iceberg what is seen on the surface only shares a potion of a business and in particular for that business model in a respective market or region.
What is truly deceptive is that on the surface business is business, and all can appear similar.  Where the challenge emerges is that each business sectors can vary considerably in the West, and the three books I mention highlight just how different.
For example Brian Grazer, as a Hollywood insider and successful TV and film producer talks about expectations within filmmaking and specifically Hollywood that require special mindset— which at the core is “creating ideas.”
Building on this, the other two books look at recent trends and sub-cultures that exist within…
As the Linkedin Chairman points out that in contrast to an old model embodied by the once great Detroit, we find the entrepreneurial mojo of Silicon Valley embracing a willingness to take bold risks and accept failure, coupled with a network of alliances to work in collective action.
More revealing to inner workings, we find in Hatching Twitter that can things vary lots even across startups.  Cited in the book one of the Twitter co-founders Biz Stone willingly went to a startup which would become Twitter from  “unlimited free meals, free snacks, free buses to work, and a free inexhaustible everything at Google  and replaced with a office where homeless people slept in stairway, the only free transportation was his two feet, and the only free food and drink was a beer after work if EV [his boss] picked up the tab.”
This said, the author notes, “ The cultural difference was incalculable. The sterile, robotic culture of Google, with its know-it –all engineers and bossy bosses, was now replaced with tattooed hackers with a do-what-you-want mentality.”
So what am I saying…
To my friends and clients in Korea, I’d share these are just several examples of the diversity in Western work culture and norms—a deep understanding required to be effective in the local market.
In contrast, although no two Korean Groups are entirely alike in their mindset and even Divisions and sister companies within a Group can vary some—workplace culture, norms and process are very relatively similar.  For example, hierarchical titles, role of Finance, a team focus, a junior’s deference to seniors, pressure to take action over considerable upfront critical thinking, as well as top down oversight and decision making.
All said, I am often asked about a pet project of mine over the past year Mad For Garlic.  My Korean friends and the expat community in Korea know the brand well. In short…. Mad For Garlic is known for its unique and innovative menu with garlic-specialized Italian cuisine.
I was asked to assist the team in US market entry. A rare and very smart move by the Korean team who recognized the need for local support. Our first round was getting the word out to the FSR industry.  This is summed up nice in a PDF study. Link below.
As if often the best case, our original strategy to find a master developer for the US market has evolved to now finding a VC or Angel to invest in the International development of the brand.  This makes considerable sense with a recent  $48 MM investment by Standard Chartered Private Equity (SCPE) in the now 40 plus domestic Korea Mad For Garlic operations. This new partnership with SCPE will accelerate Mad for Garlic’s Korea expansion.  Working with the Korean team we seek to accelerate the International development though a similar partnership.  Questions, thoughts or an interest, please contact me directly and we’d love to discuss more.
Oh and one more thing…. I am off to Nashville, Tenn. area this week and more specifically as speaker a panel on international development held in Clarksville-Montgomery County, soon be home to a $180MM Hankook Tire plant.
So until next time….
Links

 

Everything Korea, May 18, 2015 Episode: Embrace and Immerse

In this week’s Everything Korea my thoughts again turn to discussing why some Korean businesses do well outside Korea, while others struggle.

A caveat is tied to last week’s episode where although Korea entrepreneurs have and continue to launch some amazing new startup concepts—few ever gain the stellar funding and success achieved by similar startups the US in the past or now with concepts like Periscope, Meerkat or my favorite Super.me.

Frankly what works well in Korea may not work well outside Korea and with regard to the Startup Model even work within Korea. Same thing goes for global brands, what works well in each respective country or region needs some if not substantial localization—localizations a catch phrase that everyone agrees to but few truly embrace.

In particular, I see with Korea brands looking outside Korea to often the same missteps re-occurring. In my recent case study “A Global Approach: For Korea Management Teams” I address many of the challenges. See the link below for a copy of the study.

So what are some steps in my opinion for 1) Korean brands already having a global footprint, or 2) brands that wish to expand outside Korea, or 3) domestic Korea startups, all need to take?

I’ll talk more on this in the next episode, but for a first step–embrace and immerse in the local culture, market norms and success model.

What is a poor idea is for an overseas team modeling practices after the Korea operations. This I know can be difficult–most Korean teams dispatched are most familiar with the Korean model, receive limited support to transition, or are subjected to pressure from their peers and seniors to limit the embracing of local norms over the mother company’s. The later situation a real concern.

Again in the next episode we’ll drill deeper to the core causes of the disconnects.

Oh one more thing…
Those struggling with some of the challenges I’ve mentioned, or have issues within your organization that need to be addressed….I have blocked out my availability to chat and discuss…. Just go tohttp://www.meetme.so/southerton

Until next time, all the best.

Case Study http://unbouncepages.com/case-study-fb/

And a very cool App, please join and follow me https://super.me

‪#‎Koreanculture‬ ‪#‎bridgingculture‬ ‪#‎koreanbusiness‬ ‪#‎globalstartups‬‪#‎Koreanstartups‬ ‪#‎koreanbrands‬ ‪#‎globalbrands‬ ‪#‎localize‬ ‪#‎localization‬‪#‎globalfootprint‬

Everything Korea: May 11 Episode, Startup Culture

 

Summary and Links:
Just back from NYC, so I wanted to share the link to The Korea Society presentation. Nikita Desai and the team did a wonderful job hosting and then professionally producing and uploading the event. You’ll want to set aside some time to watch the recorded session. I have included the YouTube link in week’s copy.

The topic of Korean startups seemed to come up lots last week. We touched upon it in The Korea Society interview, but it was a subject of discussion in several of my high level meetings while in the City.

I feel it is a “talking point” that I will be elaborating more on in the next few weeks, but frankly Entrepreneurship and the roots of Korean style Entrepreneurship has long been a subject of my study, writing and work.

In fact, my first book was titled, The Filleys: 350 Years of American Entrepreneurial Spirit

A second book Intrepid Americans: Bold Koreans—Early Korean Trade, Concessions, and Entrepreneurship

As well as Chemulpo to Songdo IBD: Korea’s International Gateway, and Hyundai Way: Hyundai Speed all approach Entrepreneurship from different perspectives, historically and culturally.

So today, just as an introduction to the topic of Korean startups, I see the major challenge with Korean startup is culture. Let me explain, what has evolved in America regarding startups is they tend to hub in cities like Boulder, Colorado, San Francisco, Austin, TX, and NYC, although more and more scenes are emerging like here in Golden, CO…

Within these communities I have witnessed an amazing synergy not only in day-to-day interactions and dialogue, but also in resources. Actually spending an hour and listening to the chats and even pitches for funding in edgy Caffe Centro on a South Park Street in San Francisco (the couple of blocks once referred as Ground Zero of the dot.com, where concepts like Twitter were launched and scores of tech companies and startups now call home ) one quickly sees why locating in one of these scenes is key ….

Noting this, where the gap between US and Korea occurs is primarily in mindset. Today the entrepreneurs, angel investors and VC who launched Facebook, Twitter, Instagram, Linkedin and Shopify continue to look for, invest and provide mentorship and guidance to what they hope will be the next success story…. In most cases they are investing resources in multiple ventures….

This said they know and accept that failure is part of the process…. As Biz Stone (Twitter, Square, Xanga, Medium…and a bunch more) said at SXSW… “the failure of one venture, Jelly, led to success at a venture, Super.”

So getting back to Korea the real challenge is not in lack of ideas, innovation, and talent, but in allowing and fostering a culture for an acceptance of failure. And this is where I will take up in the next episode of Everything Korea and share some an exciting developments, which may be the very answer…so stay tuned.

Until next time….

Link to The Korea Society
https://youtu.be/oDo6y1RD3s8

Link to Don’s Books
http://www.amazon.com/gp/search?field-author=Donald+Southerton&index=books

For some fun with your iPhone
https://super.me/

Questions? Go to questions@koreabcw.com
Korea Perspective

Listen to Podcast from the Korea Society Corporate Series Featuring Don Southerton

Listen to Podcast Here:

Korea Society Corporate Series Featuring Don Southerton

TKS 2

Don Southerton is highlighted in the month’s Global Success Newsletter from Frankfurt, Germany.

Doing business in Korea- Contractual Agreements

Contracts, legal agreements and negotiations go hand in hand with global business. I was once told that in Korea the purpose of signing a contract or agreement was essentially to formalize the partnership. Over time, terms would be subject to change and re-negotiation.

My Korea facing experience has been that the contract fundamentally solidifies the working relationship.  However, to maintain the partnership contractual obligations, the contract will require on-going changes to reflect business conditions. In contrast, a legal agreement in the West is immutable.

Challenges

Major differences in how Korean and Westerners perceive legal agreements can surface during the negotiation stage and even after the contract is in place. In particular, requests by Korean teams for change after change and alterations to a Western company’s standard agreements and contracts can cause considerable frustration, especially for their legal counsel. In the West some “red lining” of a document may take place, but legal teams may see unprecedented levels of questioning the most basic contractual language. Great patience may be required to walk Korean teams through the Western legal terminology and clarifications of what cannot be changed within the document to maintain compliance with international laws.

Finally, it is not uncommon for terms to be re-visited and questioned by other departments – often with limited or no international legal or business experience –  despite months of work between the Western and Korean lead teams!

As the Ink dries

Perhaps of more concern is that terms mutually agreed upon within the binding agreement can be subject to re-interpretation. Most often, Korean and western senior leadership teams did a great job gaining mutual trust. Both negotiated well. The deal is signed and its time to perform.

Sadly, the honeymoon is over. Challenges arise, what appeared to be clear expectations could now seem murky with poor alignment and weak communications. 

 Why?

There are a number of reasons. Over time, as Korean team members are reassigned to the project, the new staff will be unfamiliar with previous compromises and understandings. This new staff, often in response to changing business conditions, will have different expectations and want to implement fundamental changes that alter the agreement.  This will require amending the original agreement with all of the associated time and costs. In the worst cases, Western companies will not be open to altering what they feel is fair and binding, resulting in seriously jeopardizing the relationship and creating potential legal action.

Conclusions

In dealing with Korea-facing business partnerships ensuring success and sustainability will require well-communicated expectations and cross-cultural understanding. In particular, any business plan and strategy needs to take into account differences the cultural realities between the West and Korea.

Excerpt from: https://www.globalsuccess-club.net/newsletter-april-2015

https://www.globalsuccess-club.net/business-in-korea?utm_source=april+Newsl

 

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