Everything Korea, January 30 Episode, A Matter of Process

Like a moth to a bright light, I am drawn to Korean facing business issues and trends. I explore and then provide commentary on the direction of Korean business from developments inside South Korea to their impact on international operations. To better define this task, my perspective is “culture.”

I’d like to share some thoughts from my most recent visit to Seoul, South Korea—the third in as many months. (This commentary is also available in Branding in Asia)

First, I see huge leaps in the culture that nurtures an emerging “creative class.” In America, as an example, startups, technology, and innovation have tended to evolve in cities with diversity and strong counter-cultures, all of which foster creativity. Those familiar with the Korean workplace … and by this I mean not only larger organizations but also the most progressive firms… once recognized the stark disparity in “creative” norms between Korea and the US.

That said, one can sense the change just strolling down a trendy urban district undergoing gentrification such as Hongdae or Sinsadong where streets and alleys are dotted with vogue shops and hip cafes. Likewise, as rent has soared in these areas, adjacent neighborhoods, Yeonnam-dong and Sangsu-dong, for example, have become home to Korean hipsters and young artists.

In particular, this emerging Korean creative class has generated a demand for and furthered the appeal for chic design, urban art, indie music, and hip, smart fashion as many look to stand out as individuals within a people once depicted cross-culturally as high in conformity. I see this latter trend as a critical shift in Korean society. As academic Richard Florida points out in The Rise of the Creative Class, creatives as a group reflect a “powerful and significant shift in values, norms, and attitudes.” He identifies these attitudes as:

1) Individualism

2) Meritocracy

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

Gaps

This said, there are still gaps in applying a creative culture to business, especially when a project’s expectations are measured in global terms. Digging deeper perhaps the reason for the disparity is a matter of process and mindset. For example, in the West whether it is a business proposal, a go to market strategy or a roll out, seasoned veterans, in-house or contracted, work from Day 1 to define and flesh out the project. Complementing this approach, their working level teams are experienced. Overall, there is typically considerable investment in time and talent up front.

In contrast, the Korean approach is more to adapt and modify. Since the working teams involved tend to be comparatively less experienced, the project takes them into uncharted waters, so the more practical approach is to tackle each stage as it unfolds.

Additionally, in the West, high-level leadership, such as Vice Presidents, CMOs and COOs, are commonly directly engaged in the project. This enables a more hands-on approach that brings into play their talents and expertise. In Korea, we find it’s a working level team engaged on a day-to-day basis with leadership only periodically briefed on progress.

The challenge arises when western expectations call for detailed upfront plans following a proven model versus ones that are more general roadmaps with fewer specifics.

All and all, I see the engagement of Korean teams in global projects as a positive direction. This promotes the adoption of western approaches to project development enhanced with Korea’s emerging creative culture.

As always, we open to discussing your needs and concerns. Stacey, stacey@koreabcw.com, my assistant can schedule us a time to meet, or chat by phone. For urgent matters, Text me at 310-866-3777

Everything Korea: a Lunar New Year Culture Alert

The Year of the Red Rooster: industrious, outspoken, sharp-witted, and extravagant

Korea (as well as China, Vietnam, Laos, Singapore and other Asian countries) celebrate two New Year’s– one on Jan. 1 and the Lunar New Year celebration, which this year falls on January 28 of the Gregorian calendar, with the legal holiday in Korea from January 27 to January 30.

This year, 2017, is referred to as Jeongyunyeon (‘Jeong-‘ means ‘red’ and ‘-yu’ means a rooster) or “The Year of The Red (fire) Rooster.

Each lunar new year has an associated animal, as well as a related element like fire (red), water (black), earth (yellow), metal (white) and wood (blue), all which rotate over a 60-year cycle. Hence, Red (Fire) Rooster, or Black (Water) Snake, White (Metal) Dragon, etc.

It’s a great time to re-connect with Korean teams and friends. For your Korean colleagues (in Korea), you can wish them “Happy Lunar New Year” by phone, text, or email, by EOD on Wednesday, January 25 (so, Thursday AM in Korea, which is their last day in office prior to Holiday).

BTW Korean companies have Monday off, too.

For expat Koreans (as well as and ethnic Asians from China, Vietnam, and Laos) in your local operations, you can wish then Happy Lunar New Year on Friday, January 27 EOD before the holiday.

For Koreans, here is the formal greeting–Sae hae bok mani ba deu say yo.

You may recall we use the same greeting for the Holidays and New Years… ☺

Give it a try. You will find it will be greatly appreciated.

Questions, comments, thoughts?

Everything Korea, January 16: One More “Must Do”

Following up on my preview commentary, I’d like to add another “Must Do.”
As I have shared, teams and leadership initially will require Korean corporate culture immersion and then continuing support and mentoring.  This ranges from on-boarding folks new to your organization as well as anyone that may have moved into a new role and responsibilities that bring them in contact with Korean teams and exposure.  In the best cases, I am brought in literally day 1 with new leadership, in contrast to waiting for issues to surface that perplex and bring question.

As a caveat to this “on-boarding and support,” immersion should extend to vendors and service providers new to your organization.  Frankly, in my experience, the best partners embrace the opportunity to learn about your company’s Korean ties and influences. More so, it can pro-actively reduce many of the challenges that surface in the relationship and improve overall productivity.

I’d be happy to discuss to ensure we have a solid immersion and mentor program in place, as well as how best to provide support to your partners.

Stacey, stacey@koreabcw.com, my assistant can schedule us a time to meet, or chat by phone.  For urgent matters, Text me at 310-866-3777

Everything Korea, January 9 Episode, The Three Korea Facing Business “Must Do’s”

Must do #1
Stay informed on the economic and political issues in Korea that will impact business in 2017.  For many of you, I do this in daily updates.  If you are not receiving and would like to be better informed, please let us know and we’ll add you these updates.

Must do #2
Mentoring and coaching has never been as vital. Anyone in your organization that has exposure and interactions with Korean teams and leadership need this support.  This can range from training sessions to one-on -one mentoring.  Assuming teams will “get it” is like throwing someone in the deep end of the pool and expecting them to swim and not sink.  Sadly, the later has been the model, with a few exceptions…frankly this attributes to employee and leadership struggles—for example, trying to second guess Korea HQs perspectives,  or investing time and resources in projects only to have them stalled, postponed or dropped.  The investment in mentoring always offsets the huge costs tied to frustrating and misunderstanding that lead to leadership and staff turnover, not to mention poor performance.

Must do #3
Finally stay flexible and be seen as adaptive to change.  Provide options vs. singular solutions to challenges.  Offer, when appropriate, even an “out of the box” additional option.

All said, look for more “Must do’s” in the following weeks, with this as a good start for 2017.

As always, we open to discussing your needs and concerns. Stacey, stacey@koreabcw.com, my assistant can schedule us a time to meet, or chat by phone.  For urgent matters, Text me at 310-866-3777

 

Everything Korea, The New Year Episode: Gazing Back: A Look Forward

2016 in retrospect.  2017 before us.

From a string of weekly trips to OC/ Irvine, California, home to the U.S. HQ offices of Hyundai Motor, Kia Motors, Genesis, MOBIS Parts, Innocean and Hyundai Capital, to somewhat longer trips to a Vegas Dealer Show, NY and LA Auto Shows, HATCI R&D in Ann Arbor, KMMG and the Tier One’s in Georgia and Hyundai in Canada and even longer treks to Seoul, in 2016 I supported leadership across the Korean OEMs and their affiliates.

This said, it was a challenging year for both the western and Korean overseas teams. Bluntly, we all felt the frustration; the common thread—the need to hit steep sales targets. Layered on top was mounting anxiety from South Korea over a declining export economy and a weakening Won. Not to mention, the political scandals touched to the heart of Korean Groups—their Chairman called into the National Assembly and probed if pressured to contribute monies in exchange for special presidential treatment.

Sadly we also saw the abrupt exit of Hyundai Motor America’s CEO Dave Zuchowski, our long time friend who we advised on all things Korea. Still we are honored to support so many in leadership who come to us for advice and perspective—a role we take with utmost seriousness and hold in deep confidentially.

With 2016 also came new clients and a range of projects, among these working on the PyeongChang Winter Olympics.  Equally appreciated were the opportunities to share my thoughts and perspective to a wide audience including groups like KOTRA NYC, and in media– Branding In Asia who both highlighted work in an interview as well as published a number of commentaries.

So what’s before us in 2017…Trump, the Korean Presidential Election and Succession?

“Trump?”—a name and an uncertainty that surfaces often. I constantly field questions from both Korean and American business leadership on the impact of the election and the new administration. Who would know I would be asked to speak in December about Trump to 45 Korea executives.  I also find it interesting that diverse Trump scenarios tied to possible renegotiation of the North American Free Trade Accord by the new administration were mulled at the Hyundai Motor global strategy summit in Seoul.

Looking forward, trade agreements, US military support for South Korea and dealing with North Korea’s nuclear buildup still top the list. On the trade agreement front, my expectation is at some time during the next year it will be looked at deeper by the Trump administration. However, until there is a South Korean president in office, with the impeachment waiting to be upheld by the Courts, we’ll see no Trump-Korean President summit to drill deeper.

Korea’s Presidential Election 2017

What I will be probing for is the “tone” of presidential hopefuls—2017 an election year in South Korea.  One candidate, for example, is already demanding the Chaebol model be dismantled.

In particular, my thoughts were summed up in Forbes, a timely December Frank Ahrens’ article remarking it was likely an incoming Korean president could ride into office on a wave of populist anger directed at the nation’s elites. Still, says veteran South Korea business consultant Don Southerton, “a new administration will need chaebol support to drive the economy and jobs or quickly lose public support.”

I’d add we have experienced decades of “love-hate” between the Korean Groups and the government. One minute mandating new rounds of regulations such as restrictions on mutual investments and loan guarantees to curtail chaebols—the next minute persuading chaebol leadership to spur growth. The reality is Group support by Samsung, Hyundai, LG, Lotte and SK is needed to create jobs, invest in R&D and support an incoming president’s initiatives to grow the economy.

Less likely considering the emergence of a more cynical generation that may threaten to upend an old system, nevertheless seeing disruptive politics emerging globally, we could even a new president promising change but openly allied with the chaebol as engines of growth.  We’ll have to wait and see.  That said, at least in the short run post-scandal I see Groups coming under pressure in laws and regulations designed to increase financial transparency and accountability of family members.

Finally the Succession issue…

What stood out at the recent National Assembly grilling of the top chaebol Chairman, many men in their late 70s, was the targeting of now defacto head of Samsung, who has assumed his father’s role. With the mantle of Samsung now handed to the third generation of the Lee family, we may see similar at Hyundai and the other top Groups.  In fact, South Korea’s textile giant Hyosung just announced with year-end the ushering in the era of the group’s third-generation management.  I expect more announcements in the weeks to come…

What will this new generation bring forth? For one, Samsung’s successor Jay Y Lee has promised to abolish the conglomerate’s “control tower” the Future Strategy Office in response to criticism about the office’s role in the group-wide business command and control operations. No major decisions such as acquisitions or entering new businesses without the FSO’s scrutiny.   On a side note, Hyundai Motor Group is one of the few groups that doesn’t operate a de facto control tower. Unlike more diversified chaebol, Hyundai core business is automotive with its affiliates already aligned in supporting a common interest.

As for succession at Korea’s second largest conglomerate, Hyundai Motor Group’s heir E.S. Chung continues to take a more visible leadership role. For example, E.S. Chung has sought to break away from the old model of a strictly Korean leadership team to more diverse international team as part of his strategy to better position their brand. More recently he re-structured the annual year-end global strategy meeting of 50 Hyundai and Kia Motors Korean executives from their overseas branches. What stood out was the collaborative, open discussion based structure of the summit vs. an older conservative and hierarchical format in which the head of each overseas branch would give a one-way briefing to the Chairman.

We can assume E.S. Chung will continue to follow his design-loving passion, and consensus-building management style in 2017.

Summing up

2017 may be seen as a year of uncertainties—both domestically in Korea and internationally with the potential for a weakening global economy, more disruptive politics and tightening of budgets and spending.  The later is concerning since cutbacks would only hamper sales in what may be a tough market.

Everything Korea, December 26 Episode, New Year Greetings

Like many Asian countries, South Korea has two different New Year days—one that follows the solar calendar and one that uses the lunar calendar.

Traditionally the lunar New Year’s, called So-nal, has had greater cultural and familial significance (In 2017 the 3 day holiday will be celebrated on January 27 – 30).

As for the solar New Year’s celebration, in 1896, as part of reforms instituted to Westernize and modernize Korea, the Gregorian calendar was adopted, along with some of the West’s holidays such as the January 1st New Year’s celebration.

Today I find South Korea’s celebration of the Jan. 1 New Year similar to celebration in America. For example, Koreans make New Year’s resolutions where they promise to exercise regularly, eat fewer sweet things—such as chocolates and candy—or endeavor to study harder.

It’s appropriate to wish your Korean colleagues a seasonal greeting this week prior to the holiday, just as you will wish your non-Korean friends “Happy New Year.”

The good news is …

The Korean New Year greeting is “Sae hae bok mani ba deu say yo.”  It is a great phrase to learn because it will also be used again at the lunar New Years celebration in late January.

Again, pronounced: sae hae bok—mahne—bah deu say yo.

Oh, one more thing. This is the last Vodcast of 2016. Look for my upcoming thoughts for 2017 out early in 2017.

Everything Korea, December 19th Don’s Year-End Thoughts

Returning from Seoul, I find myself pondering on the remaining days of 2016 as well as the upcoming year. Until recently a hot topic for local news in Korea, I saw less significant concern than I expected for Trump—with most recent focus on Prime Minister Hwang now heading up the government in the wake of the impeachment of South Korean President Park.

In reflecting on my meetings, I found some groups wanting to hold back on discussing new initiatives, their organization tied to the recent president scandal–the mood to lay low until the storm passed.

In other instances I saw annual restructuring underway and teams in a “wait and see” mode.  As is common, restructuring bring with it changes in leadership, management and working teams. More so, on-going programs might be revisited and for the new year may be entirely dropped, downsized, or upgraded… again warranting teams waiting to see what unfolds.

For others, it is business full speed ahead, tight timelines requiring action even before the holiday break. In several instances my meetings centered on plans for 2017, colleagues discussing our next steps and now reporting them to the leadership before year-end.

As for my thoughts on what 2017 will bring, look for my upcoming year-end commentary due out over the holiday break.

Questions, Comments?

A Favorite Lesson

 

I share much on business norms and expectations with Korean, American, and global teams and management.

I, too, have learned much in exchange.

In fact, I’ve been fortunate to have a number of senior Korean leadership share their opinions and thoughts.

For example, I was asked by a Korea client to find out if a successful and high profile American brand was interested in the Korean market. If so, the Korean firm would like to be considered as a potential partner.

After talking to the American brand’s Founder and CEO, a legend in the QSR industry, he politely shared that their plans were to focus on the US market. Any Asia expansion would not be for at least years away.

A few months later while they were visiting the US, I hosted the Korean client’s Chairman and his wife at a VVIP lunch meeting with an iconic American restaurant.

Over the meal, the Chairman’s wife quizzed me on my progress with the American brand. I explained that the US brand’s Founder and CEO was polite, but they were not currently looking at Asia and Korea.

Pausing a moment, the Chairman’s wife expressed that their Group was still very interested in the brand for Korea.

She then hoped I’d keep trying and not take “no” for an answer; adding firmly that sometimes we need to “Knock on the door a 100 times!”

My Korean client’s success was evidently rooted in their perseverance and not taking “no” for an answer. A trait we find in many of the leadership the top Korean Groups.

Take away

When challenged with an issue, situation, or problem…we need to “Knock on the door a 100 times, “ not give up at the first impasse.

Questions? Comments?

 

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Everything Korea, December 5 Episode: ‘tis the Season, the EOY Shuffle

Year-end Promotions, Re-structuring, and New Assignments: Korea’s Corporate Culture 2016

 

Year-end organization wide promotions, re-structuring, and new assignments for teams are part of Korean corporate culture. Top to bottom within Korean companies they occurs sometime between early December and early January, with the changes to senior leadership happening first, and team level changes as a norm made known the week just before or between Christmas and New Year’s Day.

After the Holidays, teams then report back to work. Some assume new roles frequently in departments they have little experience–requiring employees to acquire new skills–sink or swim. Meanwhile others are en-route to assignments in overseas operations; a challenge for those working outside Korea for the first time. In the days that follow those shuffled brief their replacements, as staff remaining in their jobs update new management teams on the status of projects and issues.

Some years we do see less re-organization of the teams, departments, and division—some years more. The later can be driven by leadership looking to “shake up” the organization to spur growth.  All said, change is commonplace and an accepted side of Korean business.

This year’s concerns in the Korean economy had prompted the major Korean groups to initiate a November early start to the year-end re-structuring…. But no sooner than announced, the Korean Presidential scandals has required the Groups to re-consider, pushing off the early annual move. This said, LG, CJ and Kolon have finally started their annual shifting of staff…… Media reports Samsung and SK to do so very soon, too… with the Hyundai Motor Group planning to announce promotions of executives at the end of the month

So what to look for later this month.

The top Chaebol will post their promotions and provide some insight on trends.  For example, we’ll see public announcements in the Korean language business media on a total number of the leading chaebol executives promoted–those advancing from General Manager (bujang) to Director (e-sa), and above. The Chaebol usually also comment on whether this year’s promotion number is more or less than in the past and “why.”

More recently the number of female employees who are made executives with a Group has been highlighted, a gradual move upward by women in the ranks. This is in contrast to a time when they were considered temporary staff and not long-term staff on track to be considered for management.

Finally, for teams below Director, time in rank promotions follow a model of 3-4 years for each of the first tiers up to Manager.  For each upper managerial level—Deputy General Manager and General Manager– 5 years in a common tenure between each grade level.

For global teams, I suggest you congratulate those promoted, but also be sensitive to team members who were passed over… time in grade just one criteria for promotion.

Questions? Comments?  Just ask

Everything Korea: November 28 Episode, South Korean Impeachment, a Growing Likelihood?

Commenting on the impact of the Trump election on Korean trade for the past weeks—Korea-facing trade an area of my expertise– I have been hesitant as a Westerner to offer my views on the indictments against South Korean President Park.

Nevertheless, impeachment seems a growing likelihood. Politicos now predict the National Assembly will secure the required two-thirds majority vote needed to pass an impeachment bill. To this point, I feel the compelled to share what “next steps” we may see unfold. Pouring over scholarly updates including my longtime friend Professor Steph Haggard’s insightful “ Park Unraveling” series https://piie.com/blogs/north-korea-witness-transformation, I present a number of “If’s,” in short of President Park stepping down and resigning.

The “If’s.”

1. If the National Assembly moves forward and passes an impeachment bill, the Constitutional Court is then responsible for deliberating the case. In addition, President Park’s powers would be suspended with the Prime Minister charged to lead the nation during the interim.

2. The Court then has 180 days to make a ruling on whether charges against the president warrant impeachment. If the Constitutional Court upholds the impeachment bill, the South Korean Constitution stipulates a presidential election must be held within 60 days. That means if the Court takes the full six months to rule on the case, the election would be held in August 2017.

3. If the Court rules in favor of impeachment, President Park would be stripped of her post and could face criminal and civil charges.  Under Korean law, presidents while in office are immune from prosecution short of treason or insurrection.

4. It is worth noting, the next South Korean presidential election is scheduled for December 20, 2017. In the event, the Court rules in favor of President Park, incumbent Korean presidents are limited to a single 5-year term in office, and President Park could not seek re-election.

5. With no clear favorite yet for 2017 presidential election along with if President Park is impeached triggering an earlier election, pundits do feel the current United Nations Secretary-General Ban Ki-moon, a former Korean Prime Minister, positioned well as the front-runner amid a field of opposition party hopefuls.

All noted, with the situation subject to change and fluid, we’ll have to take a wait and see approach to what unfolds next.

Comments and questions welcome.

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