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.
##
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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