I would not be fitting without sharing my thoughts on the recent US presidential election and its potential impact on US Korea global business. To many in Korea the election results are troubling… another layer of stress and concern amid a downturn in Korean exports.
Trade agreements, US military support for South Korea and dealing with North Korea top the list. On the trade agreement front, I was a supporter of KORUS FTA both prior to its ratification and contributing a number of high profile articles on the benefits of the treaty.
More so, I’ve commonly referred to KORUS FTA is news articles, interviews and speaking engagements.
My clients Hyundai Motor America, Kia Motors America and well as Mobis Parts America benefit from the treaty… although I’m told 60% of the two OEMs finished product sold in America are made in US plants. (Some engines and a number of Tier 1, 2 and 3 components are still imported, but much less than when the plants were established).
Frankly, I am more concerned with trade agreements with Mexico. Korean Groups, Hyundai, Samsung and LG operate plants across Mexico for local demand and export to America.
As an example, a new Kia Motors Mexico plant opened earlier in 2016 with plans to supply up to 80% of their capacity for export. A heavy trade tariff on Mexican goods exported to the US would be troubling not only to Kia, but a growing wave of Korean Tier providers. On a side note, opening a plant in Mexico for an OEM is not only about labor costs and savings, but eliminates a heavy tariff on vehicles the brand also wishes to imports into Mexico.
In addition and less know as another example is Hyundai Motor Group affiliate Hyundai Translead, who I have also supported. First developed under the maquiladora program, trailers made in the Mexico plant currently are sold in the US—check out the back of a Wal-Mart trailer you see on the highway for the Hyundai logo… or this Hyundai Translead video.
As for Samsung Electronics, since the 1980s, with the construction of an electronics complex (SAMEX) in Tijuana, where TVs, color monitors, and mobile phones are currently being produced. Samsung Electronics Mexico (SEM), a local sales subsidiary, was established in 1995, and now the operation has been expanded to include refrigerator and air conditioner production. Samsung Electronics also has local production of side-by-side refrigerators, front-loading washing machines and other high-end appliances.
All said, Detroit’s Big Three automakers — GM, Ford and Chrysler — all have production plants in Mexico, and any hefty tariff would impact them as well. In addition, GM’s Korea plants produce cars for the US market.
With more questions that answers, I’ll be revisiting the impact of the elections as it unfolds over time. So stay tuned.
Oh one more thing-
Regarding North Korea, I see with President- elect Trump’s unpredictable, and aggressive way of thinking it may make Pyongyang more cautious about its military provocations.
One of my passions is mountain trail running—the more demanding the terrain–the better. It’s the same in my consultancy –I enjoy tackling tough challenges – and providing sound solutions and a work through.
Over the past few days, I’ve had inquiries on resources to help western managers and teams better work with their Korean counterparts. As I’ve mentioned, for example, we’re seeing local teams increasingly in daily correspondence and on calls with Korea HQ teams, so practical skills and insights can help traverse the cross-cultural challenges.
In addition to my weekly vodcasts, now with more than 100 videos on the BCW YouTube Channel and over 20,000 views, I’d like to share another web-based resource –Issuu—where I’ve uploaded 22 publications.
Subjects are wide ranging from my 10 insights into Hyundai Motor Company culture to articles in Forbes, Chief Executive (Korean language), The Economist, The Korea Herald, Yonhap New Agency, FSR Magazine, and US Korea Connect to name a few.
Collaboration. We hear the term promoted both as a core value and expectation in Korean global business. For me, it’s building a solid relationship with Korean teams—one by one.
In fact, whenever I take on a new Korea facing project, I seek out a team member, first as a point of contact and then someone I can strengthen the relationship building trust and mutual understanding. This can include daily chats by phone, email and Kakao.
In most cases, over time I add layers of support … understanding they are in a tough place… at times having to relay requests and demands they themselves may not clearly agree but nevertheless need to communicate.
In particular, I’ve found they may not be familiar with the project nuances—in contrast the experienced Western team. In my role, and to build the relationship I work as the go-between, mentoring and even share (confidentially) how to best frame their company’s issues and avoid if handled poorly what could result in an impasse.
Collaboration, all said, is about relationships, nurtured over time, and built on seeing a project through for both sides mutual benefits as well as the individual tied to the undertaking.
This remark can be heard often. I personally have experienced it pop up in discussions while at working for Korea companies. It surfaces often in chats with my Korea facing international clients. In particular, it’s an issue when Korean firms promote themselves as “global, “ but push back with few wanting to move beyond the standard response “That wouldn’t work in Korea” or the caveat “That’s not how we do things at [insert company name] – most often this is when international teams seek to share their global approach to business.
Frankly they are right–things do work well in Korea, but this is the very root of the problem for a list of reasons. For one, if global brand or company enters the local Korean market with a new product or service they bring an international model, which needs to be followed A-Z.
I’ve seen brands and projects falter when they do not embrace fully or the local partner picks and choices what they see fitting well, dismissing what they see as “different.” At times one has to question the motive behind this pick and choice, especially when drilling deeper –Control or Openness to Change– becoming the real issue.
On another level, asking global team to follow Korean corporate norms outside Korea is a huge and growing concern. Policy developed in Korea which works well in Korea, rarely translates internationally. More so, when this means decisions for what should be local have to come from teams Korean HQ.
Of course working through these issues is where I come in… mentoring, giving perspective, providing context, sharing workarounds and facilitating the change we seek.
A respected colleague shared their thoughts on last week’s commentary “Hit the Target”—noting is was “a timely topic!” “… Especially as we enter the fourth quarter…”
Several readers also chimed in– lamenting that local leadership and teams receive little guidance in HOW to hit the target.
To add some context, HOW has considerable to do with Korean workplace culture norms. Leaders give directives, and teams execute in a top down manner. In some cases, well meaning leaders withhold detailed instructions to empower their teams to work through it themselves…. In other cases, some in less progressive management feel there are being paid to do a job…. And teams need to struggle like they themselves had earlier in their careers… While others recognize providing direction may be efficient, but hope their team will find new and better ways to tackle the challenge. In particular, some form of “hail Mary” that drives sales and even better at a low cost.
Frankly, demands today on Korean export driven business have pushed and stretched teams. Many feel they are operating at maximum with little room for additional market share or sales.
Risk avoidance adds another layer when new ideas are presented, too.
Under these circumstances I have two recommendations.
Present multiple and alternative ideas and countermeasures… vs. selecting one idea. I know a common response is “we do this, but to little avail.” This does take some cultural savvy… the best teams in Korea do find ways to get their message heard. I can help here…. in providing you with a best approach.
Couple with suggesting a trial or pilot approach to minimize risk and investment— with the ability to roll out fast. Again, this takes some savvy in how best to share and present…. Something I do often….
Care to discuss solutions? My personal assistant Stacey at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.
A week does not go by without a colleague or client expressing deep concern for what seems an overarching and singular need for their company to hit their numbers. To most, despite a number of vital business initiatives, they feel the monthly demand to meet “plan” is all that matters.
Frankly, as long as I have been working with Korea facing global business it has been a (the) driven force. In fact, I can recall more than a decade ago while mentoring a new American divisional vice president that his Korean coordinator, obviously under some duress and knowing I understood the company well, pulled me aside. He asked passionately I stress to the new VP they needed to “Hit the Target.” Repeating the phase, 3 times so to ensure I got it… then patting me on the back and sending me over to the adjacent office with the VP.
In another case, I was a speaker at LG’s Mobile national sales meeting. Capping the upbeat and motivating event, the CEO with a huge graph projected behind him shared their amazing unit sales growth over for the years, then added the next year’s “stretch goal” as a hush came over the room. The new goal a huge bump over past years, which had pushed teams and the organization to their limits.
To be fair, this model is not unique to Korean business. It is also the subject on frequent discussion in Korea. However, South Korea’s modern economy was once rooted in a state run export driven model—the government fixing private industries and well as the nation’s overall production and sales quotas in many sectors. Today despite leading international as well as Korean economic experts arguing the old model is dated and need to move more to the service sector… the export production model still remains a driving force… one now where Korean Groups now direct their own organizations production and sales numbers across global organizations and into numerous markets. In part with so much of the Korean identify, economy and jobs tied to export production the Groups are under pressure to continue to seek growth each year—push the teams even harder. More so, with global stagnation in new markets and China, the past successes are marginalized. As a consequence Sales to move inventories has to rely on special pricing and incentives, which hurt brand image and profits.
Sadly Korea brands are world class and should sell based on their quality and value from cars to smartphones.
So what’s the solution?
First we need to accept this has long been the foundation of Korean business and it has been their proven success model. It’s part of their Culture and in a sense Tradition accepted by many. In turn, others do hope and argue for Korea to re-invent and redefine itself, less focused on growth numbers and more on a being a leader in new technology and innovation synonymous with Silicon Valley.
Care to discuss some additional solutions? My personal assistant Stacey at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.
It’s that time of the year with Chuseok, (the Korean Harvest Moon Festival) right around the corner.
In 2016, Chuseok holiday falls on September 15, the day before and after also celebrated as National Holidays.
Koreans previously followed the lunar calendar, but in recent history, they have followed the solar calendar in line with international practice.
While public holidays are based on the solar calendar, there are a few days that are celebrated based on the lunar calendar. These are the two most important traditional holidays, the Korean New Year’s Day (the first day of the first lunar month) and Chuseok mid-autumn festival (fifteenth day of the eighth lunar month).
In mass, (and I mean a substantial part of the population) families travel back to their home villages. Over the holiday they may perform ancestral rituals at the graves of relatives as well as share time with their family over traditional foods.
For your Korean colleagues (in Korea), you can wish them a happy Chuseok by phone, text, or email on Monday September 12 after 4 PM (Tuesday AM in Korea). Again, most Koreans will have a 5-day weekend starting their Wednesday …
For expat Koreans working outside Korea, here and globally you can wish then happy Chuseok on Thursday September 15.
If you’d like to try, here’s a common greeting.
추석 잘 지 내 새요
Chuseok jal ji nae sae yo..
To conclude, even though many things have been changed by Korea’s rapid industrialization, urbanization, and globalization we find in the celebration of Chuseok that family remains one of the bedrock of Korean society.
Over the past few weeks, I’ve enjoyed sharing resources. This week it’s my book from 2015, Korea Perspective—which I wrote as a road map to avoid the pitfalls, navigate around the roadblocks, and “thrive.”
In crafting the book I drew heavily on conversations with Western overseas teams, as well Korean leadership and teams. In particular, both groups openly shared their challenges and pressing concerns along with the inner workings of their companies with hopes for improving communication.
In turn, my goal was to provide a framework, strategy, and solutions.
To Dig Deeper
Since so many have opted to get copies for my other writings, here, too, is a link toKorea Perspective http://unbouncepages.com/korea-perspective-launch/, or you can request a PDF from my personal assistant Stacey at stacey@koreabcw.com.
As Always….
Have a Korea-facing situation that needs addressing? Need some insights into Korea-facing challenges? In many cases, we can provide solutions and workarounds. Questions@koreabcw.com
To follow up on last week’s popular commentary, I’d like to also share another resource….my highly regarded book from 2013, Korea Facing: Secrets for Success in Korean Global Business. In particular, it provides solid hands-on solutions to the many challenges in the global workplace. Working with so many of you, I, too, see the issues…daily.
The book’s focus was an ever-growing number of people employed by a Korean-based company outside South Korea. We know the challenges and, in particular, business norms, practices, and the decision-making processes vary across cultures. Expecting teams to “get it” seldom works. Hoping new employees and management can recognize and grasp Korean corporate norms is like throwing someone into a pool and assuming they will swim, not sink.
Who else will benefit?
Likewise, if your firm provides services or products to a South Korean overseas subsidiary or operations the exclusive coaching and consulting service will be beneficial and offer tactics to strengthen and maintain the relationship.
Finally, if your company has significant business in Korea, but leadership and headquarters are located in the West, we offer key management with coaching on how best to deal with pressing issues and challenges that surface.
Frankly, in all three cases I have had extensive experience. In each case I have seen people and companies both fail and succeed. Our coaching service will provide a roadmap to avoid the pitfalls, navigate around the roadblocks, and thrive.
In many cases, Korean leadership and teams have openly shared their challenges and pressing concerns along with the inner workings of the company with hopes I would “assist” in educating their overseas teams in the firm’s vision, values, procedures, and methods.
In sum, I have offered hundred of hours of coaching, consulting, and training to both leadership and team employed by Korean firms, and to firms providing key services to their Korean partners.
Have a Korea-facing situation that needs addressing? Need some insights into Korea-facing challenges? In many cases, we can provide solutions and workarounds. Questions@koreabcw.com
Heading this week to the 2016 Hyundai Motor America National Dealer Show in Las Vegas. I enjoy attending Dealer Shows (Hyundai’s as well as Kia Motors’). Not only for the immersion in the brand and the preview of new products, but it’s a great time to meet and support my clients.
In fact, it was at a Dealer Show that the term “Hyundai Whisperer” first surfaced as I was introduced to a team of executives new to the Brand.
Soon after it went ‘viral.’
The term, “Hyundai Whisperer” is now commonly used by many to describe my consultancy.
At one level it is an example of how one’s reputation matters…. on another level it shares that dedicating one’s work to a niche matters, too. Personally, I will continue to provide “knowledge of the tribe”, insights and client support worthy of the title—the “Hyundai Whisperer.”
Have a Korea-facing situation that needs addressing? Need some insights into Korea-facing challenges? In many cases, we can provide solutions and workarounds.
My personal assistant Stacey at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.
One more thing…
Would you like a copy of my book Korea Perspective?
Everything Korea: November 14 Episode: Trump and South Korea Trade
I would not be fitting without sharing my thoughts on the recent US presidential election and its potential impact on US Korea global business. To many in Korea the election results are troubling… another layer of stress and concern amid a downturn in Korean exports.
Trade agreements, US military support for South Korea and dealing with North Korea top the list. On the trade agreement front, I was a supporter of KORUS FTA both prior to its ratification and contributing a number of high profile articles on the benefits of the treaty.
From 2012:
https://bridgingculturekorea.blogspot.com/2012/05/korea-facing-business-2012.html
From 2013:
http://www.uskoreaconnect.org/blog/2013/04/trade-in-ideas-a-hidden-benefit-of-korus-fta/
From 2014:
http://www.uskoreaconnect.org/news-events/newsletter/newsletter-3-2.html
More so, I’ve commonly referred to KORUS FTA is news articles, interviews and speaking engagements.
My clients Hyundai Motor America, Kia Motors America and well as Mobis Parts America benefit from the treaty… although I’m told 60% of the two OEMs finished product sold in America are made in US plants. (Some engines and a number of Tier 1, 2 and 3 components are still imported, but much less than when the plants were established).
Frankly, I am more concerned with trade agreements with Mexico. Korean Groups, Hyundai, Samsung and LG operate plants across Mexico for local demand and export to America.
As an example, a new Kia Motors Mexico plant opened earlier in 2016 with plans to supply up to 80% of their capacity for export. A heavy trade tariff on Mexican goods exported to the US would be troubling not only to Kia, but a growing wave of Korean Tier providers. On a side note, opening a plant in Mexico for an OEM is not only about labor costs and savings, but eliminates a heavy tariff on vehicles the brand also wishes to imports into Mexico.
In addition and less know as another example is Hyundai Motor Group affiliate Hyundai Translead, who I have also supported. First developed under the maquiladora program, trailers made in the Mexico plant currently are sold in the US—check out the back of a Wal-Mart trailer you see on the highway for the Hyundai logo… or this Hyundai Translead video.
As for Samsung Electronics, since the 1980s, with the construction of an electronics complex (SAMEX) in Tijuana, where TVs, color monitors, and mobile phones are currently being produced. Samsung Electronics Mexico (SEM), a local sales subsidiary, was established in 1995, and now the operation has been expanded to include refrigerator and air conditioner production. Samsung Electronics also has local production of side-by-side refrigerators, front-loading washing machines and other high-end appliances.
All said, Detroit’s Big Three automakers — GM, Ford and Chrysler — all have production plants in Mexico, and any hefty tariff would impact them as well. In addition, GM’s Korea plants produce cars for the US market.
With more questions that answers, I’ll be revisiting the impact of the elections as it unfolds over time. So stay tuned.
Oh one more thing-
Regarding North Korea, I see with President- elect Trump’s unpredictable, and aggressive way of thinking it may make Pyongyang more cautious about its military provocations.
Questions and comments welcome.