Tuesday, March 24, 2015

Hyundai MotorStudio Digital: An Interactive Brand Experience


Very cool. 

In 2014, I visited the Hyundai MotorStudio, an impressive five story building at a major intersection in Seoul’s style and fashion Gangnam district. The MotorStudio differs from the local competition in that the purpose of the showroom is not to sell you a car but rather to share the Hyundai’s brand direction of “modern premium”.  I have come to understand this to be a set of values less about luxury cars and more about striving to go beyond what customers expect in merging performance with reasonable pricing and fluid style.

While in Seoul last week, I came upon the new HyundaiStudio Digital in the COEX Mall complex.  My timing could not have been better since after my day of meetings and media interviews, including visiting the Hyundai Motor Company global HQ, I was able to attend the Grand Opening of the HyundaiStudio Digital experience. 

Targeting Seoul’s younger generation, the Studio shares the car brand through a mix of lecture and interactive technology—touch screens and 3D headsets. Interestingly, the lecture’s focus was the impact of digital technology across society versus pitching the car brand. I see this as a smart approach with studies showing the need to tailor sales marketing to Millennial and the current generation, the Digital center refers to as Homeland Gen 2005.

I expect to see more of these HyundaiStudio Design experiences launched in other high foot traffic Hyundai markets globally. 


Questions, Comments, Thoughts? 


About the author
Don Southerton has a life-long interest in Korea and the rich culture of the country. He has authored numerous publications with topics centering on culture, new urbanism, entrepreneurialism and early U.S.-Korean business ventures. Southerton also extensively lectures and writes and comments on modern Korean business culture and its impact on global organizations. He is a frequent contributor to the media (WSJ, Forbes, CNN Fortune, Bloomberg, Automotive News, Korea Times, Korea Herald, Yonhap, Korea Magazine, and FSR) on Korea facing business and culture. He heads Bridging Culture Worldwide a Golden, Colorado based company that provides strategy, consulting and training to Korea-based global business including the Hyundai Motor Group. An avid martial artist, Southerton has pursued the practice and study of Korean traditional arts for more than forty years.

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Sunday, March 22, 2015

A Global Approach: A Roadmap For Korea Management Teams, Part Three

Our suggestions and some guidelines for selecting the right local management. 

In Part 2, we noted the major issue in staffing an overseas operation is not in the recruitment of a local Korean resident over a Korean expatriate or a westerner but in the hiring of a highly qualified individual—Korean or Westerner. Setting aside my personal bias, I have worked under all three scenarios and found times when each scenario worked well and times when each was less than successful

I find that even the leading Korean groups with decades of international presence have no one model for staffing their overseas operations leadership (COO and CEO/President level).  Therefore, it is not surprising that I see the Korean brands new to overseas expansion facing the same dilemma when they look to go global.

To restate the options with some additional elaborating:
1. In some cases, Korean expatriates serve as key leadership for a subsidiary.   
The best scenario is when this Korean management receives the assignment after a career in the Group’s overseas divisions with past positions in Europe, the Middle East, Asia-Pacific or the Americas.   

2. In other situations, local non-Korean talent holds the executive level positions. An equally strong model is when the Western leadership has held long time management positions in the organization and over time has gained the trust of Korean leadership and has risen internally to Executive Vice President, COO and CEO/ President ranks. 

As I note, both situations have merit and can work quite well.    

This said, there are a number of situations that do not work as well. 
3. In particular staffing senior executive ranks with westerners who may be seasoned industry veterans and may even come into the situation fully acknowledging the need to accommodate Korea facing nuances has pitfalls.  In actuality the expectations of these new hires are that the Koreans will step aside in key decisions and let the westerners “run things.”  Adding to this flawed expectation, they assume they will have the ability to communicate upward in the organization only to find they have limited direct dialogue with Korea with most approvals and information to and from headquarters channeled through Korea expatriates in the local office.

4. What also works poorly is assigning talented Koreans who may have had successful careers within the organization in other positions, such as logistics, audit or finance, but have little or no specific experience in other business sectors. When newly assigned to a top leadership role in overseas’ market, they do over time come to understand the new responsibilities and the local market, but this typically occurs at a huge cost in ramp up time.

As one insightful reader with considerable first hand experience has shared, “The lack of industry knowledge leads to indecision and changing decisions based on influence from [their Korean] colleagues as opposed to decisions being taken on the basis of real understanding and experience of the market.”

Even in cases in which the expatriate may have an excellent track record in growing their brand in an emerging market, running an organization in a mature market, for example, North America, takes a seasoned professional. 

5. A more recent approach to staffing has been the hiring of high potential Korean talent from outside the company and assigning them leadership roles abroad. In part, the thought is that a new perspective will spur even further growth.  Sadly, the local organization (expat Korean and westerners) and their partners often find this new blood hinders growth since the new talent may have little or no support network and may lack industry and market insights.


All Said.
I strongly recommend supporting ALL overseas’ leadership, regardless of model chosen. This support must be more than the usual department by department updates. Mentoring and coaching is the key. Because experience and skills vary, each program must be tailored to address individual needs.

More significantly, successful mentoring requires a coach who understands both Korean and western business, not to mention the specific Korea-based firm and the industry in general. 

Frankly, I often serve in this role. Working across groups, such as the Hyundai Motor Group in the US, Korea and internationally, over the years, I have found that needs and circumstances vary even among sister companies.

Expecting leadership to simply "get it" seldom works—and even if this happens, this approach takes time, is costly, and contributes to stress, poor productivity and even employee turnover.

As an example
A few years ago, I had a conversation with a Korea-based C-level executive who was being let go from a top 5 Korean group at the end of his contract. The western executive openly shared the challenges of working for the Korea firm.  He was most surprised by the lack of orientation and training programs. Senior level executives had to take it upon themselves to learn the nuances of the company. Their Korean peers were sensitive to the situation but acknowledged that few resources were in place for these activities.  Instead there was an expectation that the executive would quickly adjust and engage in work as they would in any other company.


A forthcoming Part 4 will then conclude the series, and provide similar thoughts on selecting business partners and vendors.

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Disclosure
In this series of commentaries I depart from a previous focus on sharing insights specifically to non-Korean global teams working for Korean companies.

Instead I now provide a roadmap and best practices to Korean management and overseas divisions.  This includes new Korean brands eager to launch their products and services outside Korea. 

The series is also applicable to established Korean brands already in overseas markets who could benefit from benchmarking “what works” and “what doesn’t.”  

Frankly, too often I see the same missteps re-occurring.  What is frustrating is witnessing one company enduring the challenges in their market entry only to see the same scenario repeated by another Korean brand entering the global market. . 

So what are these common missteps and how can they be addressed?  That is goal of this commentary.


Sunday, March 08, 2015

Part 2, A Global Approach: A Roadmap For Korea Management Teams

Commentary 1, Part 2


In contrast to Part 1 (LINK) in which I discussed the disadvantages of dispatching dedicated teams from Korea to manage a local overseas operation, another alterative is the hiring of Koreans permanently living abroad.   The thinking is that these first and second generation Korean locals will be able to better represent the brand than Korean expatriates dispatched from their headquarters.  

This approach does have merit.

Koreans living abroad have been educated and employed locally and have considerable localization insights. They are hired with the assumption that their understanding of the Korean language and heritage enables them to bridge the cultures. 

While language and cultural understanding are huge pluses, a gap occurs as a result of the very advantage that local knowledge brings. These employees tend to be more comfortable with western business practices than with Korean workplace norms.

I have encountered two common situations.
One is the Korean locals who truly hope their heritage will help them overcome the cultural barriers but find working with their Korean counterparts to be more difficult than expected.  The new hire eventually leaves for another opportunity with a western company and the more comfortable work environment.  

The second situation occurs when the Korean local does not want to offend corporate management and becomes passive, avoiding pushing back against decisions and plans that are contrary to local practices and will not work outside Korea.  Like with the previous outcome, they become frustrated with the situation and eventually explore other employment options.

Local Korean or Westerner
This said, perhaps the real challenge is not the recruiting of a local Korean but the hiring of a highly qualified individual—Korean or Westerner.  Outside broad fields, such as Law and Finance in which Korean locals support launches very well, Sales, Marketing and Operations leadership require seasoned veterans in their market sector.  

As always we welcome your comments and thought.

Look for the next in the series in which we discuss seeking out the right local management, partners and vendors.

Disclosure
In this series of commentaries I depart from a previous focus on sharing insights specifically to non-Korean global teams working for Korean companies.

Instead I now provide a roadmap and best practices to Korean management and overseas divisions.  This includes new Korean brands eager to launch their products and services outside Korea. 

The series is also applicable to established Korean brands already in overseas markets who could benefit from benchmarking “what works” and “what doesn’t.”  

Frankly, too often I see the same missteps re-occurring.  What is frustrating is witnessing one company enduring the challenges in their market entry only to see the same scenario repeated by another Korean brand entering the global market. . 


So what are these common missteps and how can they be addressed?  That is goal of this commentary.

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Monday, March 02, 2015

Feedback: Challenge One, A Global Approach

By Don Southerton
Before I share insightful reader feedback from my first commentary “A Global Approach: A Roadmap For Korea Management Teams,” some background in case you are just joining us….  Challenge 1 is available upon request.  LINK

Background
In this series of commentaries I depart from a previous focus on sharing insights specifically to non-Korean global teams working for Korean companies.

Instead I now provide a roadmap and best practices to Korean management and overseas divisions.  This includes new Korean brands eager to launch their products and services outside Korea. 

The series is also applicable to established Korean brands already in overseas markets who could benefit from benchmarking “what works” and “what doesn’t.”  

Frankly, too often I see the same missteps re-occurring.  What is frustrating is witnessing one company enduring the challenges in their market entry only to see the same scenario repeated by another Korean brand entering the global market. . 

So what are these common missteps and how can they be addressed?  That is goal of this commentary.

To begin
I would like to share the thoughts of four insightful contributors—each with a unique point of view. Their viewpoints span the globe from working in the U.S and Korea, to comments from Europe and insights from India.   Your own comments as readers—Korean and Westerners – are also respected and appreciated.  Please add your own voice, experiences and perspectives.

Don
This is a very accurate reflection
Especially Challenge 1  – the solution suggested is essential to enable the markets to respond and adapt to market situations, reduce frustrations and act decisively and quickly. Furthermore the lack of industry knowledge leads to indecision and changing decisions based on influence from colleagues as opposed to decisions being taken on the basis of real understanding and experience of the market.

Regards
R

R. So well stated and very insightful, especially that allowed the local team to respond as needed will result in a better management of the brand. I need to stress this more with teams I work with daily.

Hi Don, 
Thanks for your profound insight on dispatching Korean management teams to the western nations. 

In most cases, Korean management team(s) will be confronted with tremendous "brick wall" called western business culture. I have seen many ju-jae-won in the US while successfully managing the US operation fail to integrate the US team in the manner expected by the Korean HQ.

Let us remember that nepotism exists on both sides... As an experienced Korean American expat to Korea, while US HQ may expatriate a US person as a US HQ representative to overseas, they are inevitably dependent on the local team(s) for their success.

It is same for a Korean HQ expatriates to a western nation. In order for the ju-jae-won to succeed, they will need to earn their merits by western cultural immersion including its business practices, policies, procedures and local labor regulations. While at the same time avoid being labeled back home as one who has been "assimilated" in to the respective local culture. You may find it interesting to analyze the succession potential for those ju-jae-wons who have returned back to their HQ in Korea.

While this is not new, Japanese companies dispatching Japanese management teams to the US are still fixated, though not as much in the past, on "educating" Japanese HIPOT managers in the western business environment.  As in the past, Korean business cultures usually emulate Japanese business processes and tend to follow Japanese patterns almost predictably.

However, "success" is in the eyes of the beholder.... clear definition of objectives and expectations upfront with global business mindset will truly define success for any expatriate in our current global business culture. From what I have observed based on Korean Chaebol's business expectations and practices, Korean expatriates to the western nations have to climb a steeper learning curve.

What do you think?

-K.S.L. –

K.S. L. Wonderful feedback and a quick comment:
We know returning ju jae won to Korea have to transition back.  Some find it a huge challenge to repatriate as you note.  Some, in fact, look for an alternative and seek local employment in the host country vs. returning to the HQ after the assignment. In my experience, many return to their HQs for a year and then get re-assigned to a different overseas post.  All said, a successful overseas assignment could have a very positive impact on a one’s career at least within the Overseas Divisions.


Dear Don,
…. I think that your way of thinking is really too revolutionary for Korean companies
 :-) . If you really asking me if that leadership in the overseas subsidiaries should be found in local Americans, Europeans, etc. (which is logical by the way) my answers is simple the following:

- Any change in this direction will seriously affect internal Leadership procedures and structure in Korea too. The all hierarchy structure may be affected and I hardly think that Koreans will ever accept a foreign "interference”.

- Western Management in overseas business are considered as merely executors of orders and sometime as informers. In a certain way Western Management feel in the same way as some Indians/scouts felt, when they were allied with Americans moving to west in the 19th century.

Cheers

R. E.

R.E., I agree.  We will see slow progress by the major groups in changing the model.  Some divisions within the Korean groups have eliminated Coordinator positions and made them managers with day-to-day roles, a very progressive step.  Japan's Nissan did this years ago with great success. 

What I find ironically is the major global brands entering South Korea hire local management and teams and do very well.... :)


Don,
Hi. How are you. Your emails and information is very useful. Though I am working with Indians, some of the topics parallel.

I have a question, if I understand your suggestions clearly, it's always better for the Korean team setting up overseas offices to have a local personal overseeing or managing operations to ease local understanding. So if they set up an office in the US, to find a long-time US citizen familiar with US ways would ease that burden?

If I have understood that correctly, I'd like to share a short story then ask a question.

I am working with an Indian company that has many offices worldwide, including the US. So, like Korean companies, they have set up the company locations abroad with Indian management, instilling Indian work culture. So, that being said, even if this company were to have employed a US citizen at first to localize operations a few things may have happened (1) found an Indian who is an NRI (non-resident Indian, or Indian expat who may or may not be a US citizen but has lived in the US a few decades or so) or (2) if they know an American citizen he (or she) may be of Indian origin. I am not sure the percentage they would go for a true-blue American from birth, which again would limit some of the local and national understanding depending on how long that Indian or ethnic-Indian has been in the US. But let's say they hire an American from birth- though this person would surely know more about the US culture, he or she is being mentored by the Indian manager who would be managing, directing and communicating in an Indian style, not a Western style, so some of the culture understanding would be limited in transitioning this to any employees on the ground. I see this happening in that Indian company in the US locations. Any Americans that are hired take up typical Indian work culture traits that really aren't so acceptable in other companies- such as it's ok to be late for meetings without warning, taking calls in between without warning is acceptable, even how people say yes or no have changed- even the Americans working there tend to adapt the Indian ways of doing things though they are in the US! Part of this is because many of the employees in the company are relocated from India.

I am curious (hoping I was able to articulate this properly), if this happens with Korean companies as well, and how much of Korean work culture is adapted by local Americans working for the Korean company.

Thank you for making me think,
J.K.

Dear J.K.

As always, your comments make “me think, “ too, so thank you.

In most cases, Korean companies in startup mode for a U.S. / global launch dispatch a Korea team.   They struggle.  The larger Korea companies hire many locals but maintain control through shadow management at department level and leadership positions.  This results in many issues.

Hiring primarily a local Korean team is usually not a good path either. (Actually Part 2 of the commentary, which I will share next week, addresses this).

Hiring seasoned and high experienced locals is the best path.   These individuals will still need lots of support to understand their Korean / Indian mother company---which is where we come in..... 


Don Southerton
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DS