Over the next 10 days or so, I will be sharing some hints for Korea facing business. In part, content will be excerpts from Korea Facing: Secrets for Korean Global Business. Plus, I will include some timely comments based on recent consultancy.
Approvals, Part 2
Within hierarchical business structures approvals usually require a number of people to "sign off" on a project or program before commencing the project. For westerners the process can be seen as time-consuming and lead to frustration and delays. First, once agreement to move forward on a project is reached within the local organization's team, the Korean team has their own procedures that usually include both Operations and Finance's approvals.
Depending on the size of your local organization and whether the project needs review by the Korea HQ, I've experienced the process requiring a number of "approvals" leading to a "final" approval.
For example, once the Korean team agrees to a project, it may mean their team has signed off, but the project must still go to senior management for their okay. Once senior management has given approval, it may then go a COO or CEO for "final" review. I've found Korean teams rather vague in sharing the number of approvals in part because the approval chain can change with each project. In other words, the Korean teams are aware there are a number of approvals, but depending on the nature of the project and costs involved higher levels of approval might be required. I recall the Korean team leader on one project rather humorously reporting approvals several times over the course of a week and then upon receiving a final approval at the end of the week remarking that it really was the “final” approval.
In some cases, I've seen companies with several CEOs have a junior CEOs sign off but the project still waits several more days for a senior CEO to approve. In the best instance, these senior approvals go smoothly when senior leadership trusts the judgment and needs of the local organization's team. However, in other situations, senior leadership may request additional specifics on the project. More concerning, I’ve witnessed senior leadership ask for modification, dramatically effecting previously negotiated terms and conditions of the agreement.
One example of CEO intervention that is not uncommon comes to mind. Several years ago I was organizing and facilitating a 10-day Global Manager Leadership workshop in Korea for one of the Hyundai Motor Group's top divisions. Participants from the U.S., Europe, the Middle East, India, and Asia- Pacific would be attending. Plans were set, dates confirmed and approvals were obtained all the way up to, but not including, the CEO, an approval thought to be just a formality.
To the surprise of some, the CEO asked the Korean team a number of pointed questions. Uncomfortable with the level of response and sensing the team was rather inexperienced at organizing a global event, he asked the workshop be postponed with the team re-grouping and coming back in a few days with some data/metrics centered on outcomes from past events and specifically their impact on long term employee loyalty.
Be aware that projects might be ‘approved,’ and you will be expected to move forward but there may be the ‘Final Approval’ before a true engagement. In the best cases, I have witnessed a quick sign off by a CEO. In the worst case they will either want things restructured or postponed.