As I pointed out in Part 1 of this series, recognizing there will be challenges is one thing, providing a solid solution is another. I’d like to address these and other issues when we look at Globally Mandated Program.
It is always best that globally developed and mandated programs are crafted to mesh and align well in support local operations…
So what are my recommendations? I’d be happy to share just a sample for consideration.
First all programs should:
Recognize the need for visual content to reflect our diversity– Low vs. high- context presentations, plus inclusive of individuals of Color, Ethnicity and Gender. (In many cases, I find global content is very White).
Get high-level local leadership input and support (vs. just input from working level team.)
Programs regardless of the content should align with local operations. For example with corporate culture, efforts should allow the local organizations to define their own corporate culture, and the global content developed to be flexible and easily incorporated into current training initiatives like New Employee Orientation and mandatory compliance workshops.
Avoid hiring an outside agency to craft, they rarely get True Vision–they understand the Data, but not Context. They may add credibility and professional look and feel, but to be cost effective, they usually plug Data into a generic Boiler Plate.
Craft content in a way to connect to a wide segment of the workforce including “The New Creative Class.” (See my case study on topic and who they are). Here is the Link.Creative Class Case Study
The program should be launched in a way that dazzles and impresses the local teams and leadership. Sadly I have seen well-crafted program presented poorly.
Concluding Thought
Shared globally programs can align an organization and serve as a compass to steer the respective teams forward. It is also a daunting task and one requiring a sound plan and execution.
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For questions raised, Stacey, my personal assistant at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.
Would you like a copy of my book Korea Facing: Secrets for Success In Korean Global Business? Click Here
This week I’d like to share three reports. All focus on Korea business. All easily accessed…read or download
….From the Korea-facing Global Business Toolbox: Strategies and Tactics
This report shares my recent thoughts on top strategies and tactics for tackling Korean facing global business. Note global is emphasized, since working outside Korea within local subsidiary operations is my primary focus and specialty.
This Case Study provides a roadmap and best practices to their Korean management and overseas divisions. This includes new Korean brands eager to launch their products and services outside Korea. The study is also applicable to those established Korean brands already in overseas markets who could benefit from benchmarking “what works” and “what doesn’t.”
The Challenges and Gaps in a Creative Workplace Culture: U.S. and Korea
The role of the creative class continues to pique my interest. In particular, I am drawn to uncovering the “culture” needed to foster the Creative Mind Process.
Oh, one more thing, in case you missed The Hyundai GalloperShinhwa, Myth and Legend, it is now available. Just go to http://unbouncepages.com/galloper/
Here’s a short lead into the article.
With the introduction of Genesis Motors Company in premium luxury car segment as well as the Hyundai Motor’s IONIQ, part of an expanded model lineup of hybrid and electric vehicles, many in the industry see these as bold moves by the Hyundai Motor Group and it leadership. Actually, it is but the latest chapter in a story and a legacy reaching back decades.
For questions raised, Stacey, my personal assistant at stacey@koreabcw.com can coordinate a time for us to chat by phone or handle by email.
Another Lesson from My Korea Facing Global Business Toolbox
More than a decade ago during a group session I hosted for overseas Korean and western senior managers, the discussion turned to the “role” of the westerners on teams engaged in local project development. The local western teams felt very under-utilized and wanted to contribute more. This, of course, was a source of considerable frustration for the westerners because their previous automotive OEM employers had given them considerable responsibility with little direct oversight and more fully utilized their experience and expertise.
Pondering for a moment during the discussion, a senior Korean pointed out that local input was respected, but perhaps this needed to be better communicated. The Korean manager went on to explain that his Korean teams knew how to do things “Korean style”, but what was needed were other ways of approaching work related issues.
More recently in early 2016, a senior Korean leader I have been mentoring echoed the similar sentiment. First, how local input was to be sought out and encouraged across the organization. And, second that seeking out “alternatives” was one of the company’s core tenets transcending the Group’s more contemporary updated values—but in actually deeply rooted solidly in the corporate culture.
The takeaway –share wherever possible other ways of approaching work related issues.
In closing, if you have questions regarding my Toolbox or Interested in how I work with companies? Stacey, my personal assistant at stacey@koreabcw.com can coordinate a time for us to chat.
This week’s episode shares thoughts from an interview with The Korean corporate culture. I have attached a link to a PDF version. Take a few minutes and read. BTW The article appears in this week’s Print Edition as well in the Digital version…. Circulation 4.5 Million paper/ 2.5 million Digital …
The Article paints the Korean workplace as softening…. And I agree this is true at Hyundai Capital as they cite… and I feel Capital is perhaps one, if not the leader in crafting less restrictive and innovative workplace in Korea…
This said, and not a surprise for my viewers and readers, is how the article– in probing deeper–how many Korean companies in contrast have gotten tougher on staff … in fact it’s my point of view that this is more dominate force today in the Korean workplace especially in overseas operations, than a softening ….
Don Southerton, who advises South Korean businesses on how to manage their foreign operations, says many have been “going back to basics” since the slowdown in China and other big emerging markets. Their Korean staff have reverted to working longer hours and straining to hit short-term targets, under pressure from the bosses back in Seoul.
The article adds some companies (code word for the major Groups) in Korea appear “to be tightening the screws,” “making them stick to a strict lunch hour,” or “asking them to arrive at the office an hour earlier.”
All in all, I feel The Economist article reflects an ever-changing Korean workplace, one I share in mentoring, coaching and crafting a strategy to overcome the challenges.
Stepping back to August 2005, I was conducting cross-cultural training and coaching sessions at a manufacturing facility. In the early months of the plant operations, tensions between the American and Korean teams were mounting.
Startup operations are always a daunting task. The additional cultural dimensions and language differences only compounded the odds of having a smooth launch.
Recognizing the challenges, senior Korean leadership asked if I could provide team- building workshops that would allow the respective managers to better address escalating concerns and issues.
Consensus was that the problem was “cultural”—Koreans not understanding Americans and visa-versa. I had been working across their organization for several years and I had dealt with what I thought were similar situations.
However, a few hours into the team-building workshops I uncovered the true cause of the strained relationship, but it was not what I had expected.
Most of the American teams were production veterans—hand picked because they had been top performers at Ford, Toyota, Nissan, Honda, Mercedes Benz, and GM North American plants. In contrast, the Korean teams were career employees—most having worked for a decade or more at a sister plant in South Korea.
What surfaced in discussions was that many of the new American managers had been searching in earnest for a Way—documented policies and procedures that would guide them in decision-making and day-to-day work. For example, former Toyota managers looked for a model similar to the Toyota Way, while others who had worked for Ford Motor Company sought standard operation procedure manuals (SOPS). Not finding a set Way resulted in some Americans feeling that there might be a communications and language issue. More concerning, a few hinted strongly at trust issues and that Koreans were deliberately withholding vital information.
Listening to the group, I had a realization. Over the years working with the company and other Korea-based businesses, I found sharing historic background and differences between Korean culture and other cultures as a proven, effective and commonly accepted cross-cultural learning model. Nevertheless, it became crystal clear to me that what was truly needed in this situation was to clarify and impart an intangible—the Way or vision.
A Shared Mindset
Jumping forward several years… on a number of occasions I have shared my quest to better understand the companies’ Way (and triggered by the work at the plant ) with veteran Korean staff and executives. Time and time again, I found those long employed by the Company reflecting for a moment and then stating frankly that the company’s approach was not easy to explain.
For example, one senior Korean pointed out that within company there are several management styles and approaches to tackling an issue depending on the person’s lineage.
Groomed by their seniors, junior members of teams adopt the mentor’s methodology and leadership style—some “hard” and demanding, others “soft” and preferring collaboration.
Another executive imparted that their Way was acquired over time. He added that,with the exception of some minor differences among the sister companies, the transferring of key people among divisions, creates a shared mindset.
At a minimum, Korean teams understand the thought process and methods of others across the organization regardless of the affiliations.
The Korean executives did agree that understanding the corporate mindset by both Koreans and non-Koreans working across the organization was vital to the continued success of the Company.
In Contrast
Recognizing lessons learned in incorporating a Way in the operations of other American plants, I’d like to share a success model. In 2009 Korea based Kia Motors Manufacturing Georgia’s senior leadership took a bold approach Day One. The crafted their “Kia Way.” Key elements include:
Continuous Improvement
One System One Team
Effective 2-Way Communication
Cooperative Mindset
Harmony Teamwork Trust
At the core, the “Kia Way” aligns teams—Korean and American. In particular, it provides continuity as new Korean expatriates are assigned to the plant, as well as Americans formerly employed within the manufacturing industry and who join the team in Georgia.
All said, I am strong advocate of crafting a “Way,” for Korean operations overseas—one that addresses and tailored to local needs while still aligning with the global organization Culture.
Would you like to schedule a time to discuss steps to implement a “Way” in your organization?
To facilitate and with my rather demanding workload and travel, Stacey, my personal assistant at stacey@koreabcw.com can schedule us for a time.
Supporting clients and their challenges requires getting to the core issues. It’s distinguishing between what are the organizational and what are the cultural impasses then providing practical solutions and work through’s.
Much of my work is first listening carefully to clients and their challenges. Equally valuable is walking around the corporate offices, observing and capturing multiple viewpoints. Nothing beats being onsite. Nothing beats getting face to face.
Too often, I find challenges as murky, complex and layered with frustrations, so a deconstruction is needed. Not to mention there is a growing Korean business dimension to an overseas operations.
In most cases I bring a fresh perspective—one rooted in years working with Korea-facing business. I’d like to share that in addition to mentoring, I have recently began to work directly on specific and very select high profile projects with clients. To often an initiative that can dramatic improve local operations fails to get the needed support or approval from Korean local leadership or from the mother organization in Korea. I work to ensure these proposals get taken seriously.
Don Southerton, CEO and president of Bridging Culture Worldwide, a global consulting firm that focuses on Korea business ventures, is one of 10 companies that rents and operates from Perc. Photo by Amy Woodward
1.Working with and within a culture is sensible, practical and effective.
2. Within an overarching corporate culture, there are generally several subcultures each with the own unique elements.
3. Use the culture you already have.
….take pains to stay within the most essential tenets of existing culture.
4. [it’s] Critical to fully understand the culture, then be able to de-construct and simply aspects relevant to your situation.
These quotes are from a well crafted article titled, “Stop Blaming Your Culture”
A colleague recently shared the article recognizing the concept had value for his own company in working with and within their Culture. In particular, I was asked then to assist with providing insights into the Korean side of my client’s Culture. Echoing the article “Culture matters!”
I strongly recommend you download the article and study. I’d then be happy to share my thoughts on how to work within your specific Culture.
In a June Vodcast I shared a “short answer” describing my work consulting for CEO and C-level management as well as the teams.
My short answer has been what client and long friend, 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…
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.
I also shared why I post weekly Vodcasts, frequent media commentaries, case studies as well as books on Korea facing topics. They all serve as channels to educate and inform.
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 Korean business insights, I’ve blocked out my availability to chat and discuss…. Just go to http://www.meetme.so/southerton
In closing, I’ve included a “Long Answer” List of varied media resources and interviews that share and highlight the scope of my work as well as advise for Korea facing companies.
Links
Wall Street Journal Korea Real Time
“Southerton Advises Non-Koreans in Overseas Korean Offices”
It’s hard not to be a watchdog for Korean facing issues that grow in concern and could potential have a global impact on the organizations and clients I support.
In an interview for an upcoming segment for the Korean media show “Koreascape” on globalization, I was also asked for my opinion on the recent drama within Lotte, Korea 5th largest chaebol over control of the Group. The host Kurt Achin, a seasoned journalist, shared concern over the bold move by one of the Founder’s son to take control of the Group, which has drawn considerable media and popular notice to the ongoing issue of succession among the chaebol. This media attention has not only been limited to Korea, but showed up on Page 1 of the WSJ as well as AP and the other leading wire and new service. [BTW Lotte is Korea’s largest retail, distribution, tourism and construction Group with a growing international presence and annual sales estimated at more than $100 billion. Also, Chaebol is a common South Korean term for their conglomerates, often multinational, global enterprises led by a Chairman and in most instances family controlled.]
This brings us to a media summary on the topic of Korean Family Succession, as well as a FAQ sharing my thoughts.
To prefix my comments, in her book, How to tell your story so the world listens, Bobette Buster author and USC Adjunct Professor notes:
“It has been said that Industrial Age ended after the end of World War Two. Then, it was superseded by the Age of Information via the computer, the 1960s boom in Madison Avenue advertising…and television. Then with the Internet boom of the 1990s, there followed in 2003 with viral explosion of the social media. With this a new deceiving conceit arose: anything worth knowing is available at our fingertips. This immediacy has curiously, made people less curious about discovering the world, at least to any depth.” The author then points out; we often “… know the facts, but not the context in which they happen.”
Let’s start with what we know and specifically fueling so much concern, and then I will share some context in a FAQ.
An editorial on the Lotte controversy in Yonhap, the Korean newswire service, writer sums up popular sentiment:
“Koreans are sick and tired of these internecine fights when the managerial control of a chaebol moves between generations.” More so, “who will succeed a family decision, rather than a formal shareholders’ meeting.”
Fuel to the fire… In July, amid considerable media attention, Samsung C&T and Cheil Industries agreed to an $8 billion merger that essentially consolidated the Samsung Group’s Lee family sway over Samsung Electronics, the Group’s flagship. This move sparked the ire of activist shareholder Paul Singer, CEO of U.S. hedge fund Elliott Associates. The American firm publically felt the deal would undervalued their substantial stock holdings in Samsung C&T while overvaluing Cheil to the benefit of the Lee family successor. Samsung rallied their supporters to win over Elliott in a heated vote.
Noting, I have prepared a three point FAQ look at context behind Korean succession, past and present.
1. What’s driving Korean family succession?
Looking back, Korea’s chaebol model is strongly rooted in their past. Neo-Confucianism, the dominant secular ideology of the nation going back to 1392, required all government officials and bureaucrats to pass rigid civil service examination for local, provincial or court positions. The Korean monarchy was the exception, male primogeniture used to determine the next ruler. Likewise, within Korean families, the eldest son and his descendants take precedence over siblings and their descendants. Elder sons took precedence not only over younger sons, but all sons took precedence over daughters—even elder daughters.
With the modern era and end of Japanese Colonial Rule, Korean business groups emerged. Family run, they gained considerable momentum during the 1960s, 1970s, and 1980s under the state-run policies mandated by the government.
At times this was a love/ hate relationship between the Groups and Government—with transfer of family wealth becoming an issue as the first generation of Founders handed over control to their children.
It is here we also see the first controversies surface. Following Korean traditional Confucian norms that dictated the eldest son be granted control over the family holdings as the next patriarch in some cases as with Samsung and Hyundai, a sibling or relative other than the eldest was selected by the Founder. In some instances, the elder sibling(s) fell out of favor of Founder, while in other cases a younger son assumed the role following the death of an elder son or if there was no son, a relative would take control.
2. How is the recent merger at Samsung associated with succession?
A second set of issues with wealth transfer centers on inheritance taxation—a tax levied up to 50% of the patriarch’s assets. To avoid the hefty tax, defacto holding companies allowed the second generation to gain control over the Groups with a marginal investment and little direct inheritance of the patriarch’s holdings.
As we move into a 3rd Gen of family control Groups like Samsung and Hyundai Motor have been engaged in similar lengthy and well orchestrated fiscal moves to transfer wealth and control. Much of this is through merging smaller companies, which the future successor has a substantial interest, with a larger Group’s firm, gaining control with no investment of monies. i.e. Samsung C&T and Cheil Industries.
A second method is work funneling.
In this process, Korean chaebol families have considerable ownership stakes in many of the privately held sister companies.
Next, the other subsidiaries give these smaller companies a huge amount of business to increase their revenue. Finally, these smaller companies grow considerably over time and can move to an IPO or sell some of their holdings to outside investors. i.e. Hyundai Glovis and Innocean Worldwide.
The families can then use the revenue stream to buy stock in other key publically traded subsidiaries and their chaebol’s defacto holding company.
In both cases, ownership stake along with circular, cross and pyramid (radiant) shareholdings give them direct and indirect control over the entire Group.
3. Noting public sentiment regarding succession, how likely is it for the South Korean President Park Geun-hye to toughen corporate laws?
As I note above, there has been a longtime Love/ Hate relationship between the chaebol and the Government. Despite the chaebols’ dominance and influence, they are increasingly coming under pressure from new laws and regulations designed to increase financial transparency and accountability of family members.
For instance, the government recently enacted a “deemed inheritance tax,” so that family members can’t get around South Korea’s inheritance tax laws, and has revised commercial laws to tighten requirements for reporting internal transactions.
This said, at time when addressing Korea’s sluggish economy is a priority for the current administration, few feel President Park Geun-hye will lash out at against the Groups. I see pressure being exerted on Lotte to resolve their family differences. I also see succession plans by Samsung and Hyundai continuing, with the reins of control and ownership transferred as planned—with hope to draw as little attention as possible.
To conclude, as a colleague expressed recently that for succession plans still in the works, their transition will come late in the cycle. As others bring attention to the issue, transitions that must and will occur from the current and aging leadership to the next generation will gets more a legal focus and public scrutiny.
I’d add this means focus and resources the Group’s leadership should have on running their business will be re-directed to dealing with succession. Decisions impacting their global operation could be delayed as well as the approval process, which require a high level sign off.
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…
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.
Everything Korea: May 2 Episode, Part 2 Globally Mandated Programs
As I pointed out in Part 1 of this series, recognizing there will be challenges is one thing, providing a solid solution is another. I’d like to address these and other issues when we look at Globally Mandated Program.
It is always best that globally developed and mandated programs are crafted to mesh and align well in support local operations…
So what are my recommendations? I’d be happy to share just a sample for consideration.
First all programs should:
Concluding Thought
Shared globally programs can align an organization and serve as a compass to steer the respective teams forward. It is also a daunting task and one requiring a sound plan and execution.
###
For questions raised, Stacey, my personal assistant at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.
Would you like a copy of my book Korea Facing: Secrets for Success In Korean Global Business? Click Here