Saturday, April 21, 2018

Globalization and Trustworthy Management

Each weekend I turn my thought to sharing topics on Korea business. This week it's my article on Globalization and Trustworthy Management  from Korea Herald titled:

'The Tall Man’ and the Globalization of Hyundai Construction

Hotel Architect Bill Swank opens Chaebol to West through Trustworthy Management

Bill Swank The Tall Man

Bill was the first westerner hired by the Hyundai Group.

The story was written in 2013, but still timely.
Bill passed away in February 2014.  It was an honor to know him.

Bill was a huge advocate for my work.

Article Link

Questions, Comments, Thoughts?


Friday, April 06, 2018

Hyundai Motor Group and Chaebol Reform

As a follow up to news on Hyundai Motor Group restructuring, we are seeing some interesting developments.  First Samsung is one of the few Groups yet to reform their shareholder structure.  That said, I feel they will adopt one similar to Hyundai's recent plan-- a hybrid from the traditional Korean Holding Corp. model.

For starters and some clarity regarding the spin-off and merger within Hyundai Motor Group, Hyundai MOBIS, the new de facto holding company still plans to further beef up its core auto parts business. That said, operations for both domestic Korea modular and A/S parts will move over to GLOVIS as announced—overseas operations will remain under MOBIS.

In particular, MOBIS as the Group's nerve center will focus more on R&D, and investing in future growth drivers like autonomous vehicles and connected cars.

Next… and getting lots of media coverage and in my opinion nothing that radical.

On Wednesday, Elliott Advisors, a hedge fund sponsor subsidiary of the U.S. fund, called on Hyundai Motor Group to step up its efforts to overhaul its governance structure after announcing it had acquired more than US$1 billion (1.05 trillion won) worth of stocks in three key affiliates of the Korean automotive group.

"While this step is encouraging, more needs to be done to benefit the companies and stakeholders," Elliott said in a statement.

The hedge fund sponsor also called for a detailed roadmap to further enhance the Korean auto giant's corporate governance, optimize balance sheets, and enhance capital returns at Hyundai affiliates.

Elliott Advisors said in the statement it looks forward to engaging with management and other shareholders directly on these issues and offering recommendations regarding the proposed plan.

In response, Hyundai said it will make continued efforts to enhance shareholder value and the worth of its affiliates while focusing on better communicating with shareholders.

I’ve also seen HMC sources note they plan to meet with Elliot teams during an upcoming investor event.

Again foreign investment in Korean publically held companies is nothing new.

For example, HMC’s total foreign ownership is about 46% of the Common Stock. Kia is at about 38%.

Elliott Advisors is estimated to own only a combined 1.4 percent stake in  Hyundai Motor, Kia Motors and Hyundai MOBIS.

One more thing…
Did you have an opportunity to review my detailed 5 Page Report on Hyundai Motor Group restructuring…. If not I please contact me…  as has been very well received.

I’m also available to comment and answer questions as always…


Saturday, March 31, 2018

No one does does what you do: Korean business advisor

As a trusted friend constantly reminds me, “Don, no one does what you do,” providing solutions as a highly respected Korean business advisor.

Don Southerton Korean business advisor
This noted…Contracts, legal agreements, and negotiations go hand in hand with business. I was once told that in Korea the purpose of signing a contract or agreement was essential to formalize the partnership. Over time terms would be subject to change and re-negotiation.

My Korea facing experience has been that the contract fundamentally solidifies the working relationship. However, to maintain the partnership contractual obligations the contract will require on-going changes to reflect business conditions. In contrast terms in legal agreement in the West are seen as immutable.
Major differences in how Korean and Westerners perceive legal agreements can surface during the negotiation stage and even after the contract is in place. In particular, requests by Korean teams for changes to a Western company’s standard agreements and contracts can cause considerable frustration, especially for their legal counsel. In the West some “red lining” of a document may take place but legal teams may see unprecedented levels of questioning the most basic contractual language. Great patience may be required to walk Korean teams through the Western legal terminology and clarifications of what cannot be changed within the document to maintain compliance with international laws.

Finally, it is not uncommon for terms to be re-visited and questioned by other Korean departments—often with limited or no international legal or business experience— despite months of work between the Western and Korean lead teams!

Oh, one more thing
Ensuring success and sustainability in dealing with Korea-facing business partnerships will require well-communicated expectations and cross-cultural understanding. In particular, any business plan and strategy need to take into account differences in the cultural realities between the West and Korea.
It’s here I can help as a Korean business advisor proving solutions., and echoing my opening statement. “Don, no one does what you do.”


Thursday, March 22, 2018

Korean Business Speed: Real Fast

For those with ties to Korea as well as popular brands like Hyundai, Kia and now Genesis, we realize Korean business speed is critical — a competitive advantage used to leapfrog past more established rivals.

Kia Motors' Stinger… one fast car

Korean business speed means things need to get done today and now, not tomorrow.
Others, too, have observed similar, and as Automotive News Asia Editor Hans Greimel pointed out in his 2017 article, “Hyundai Motor Group employees pride themselves on a frenetic corporate cadence dubbed Hyundai Speed, a kind of pedal-to-the-metal obsession with doing everything fast. Real fast.”

I, too, have long found it as the driving force in Hyundai’s DNA. In fact, when quizzing seasoned Korean executives on wording for the title for my 2014 book, the term “Hyundai Speed,” was came up often and was strongly recommended.

I noted in my book’s Forward…
In the wake of the recent accomplishments of the Hyundai Motor Group and respectively the Hyundai Motor and Kia Motors brands a question is often raised, “What makes Hyundai so successful? As author, I tackle this question from a cultural perspective, leaving aspects of such as sustainable production networks, ever-changing consumer appeal and brand image staying power for my colleagues in the industry.

My objective for Hyundai Way: Hyundai Speed is simply to share insights into the Hyundai Motor Group — a unique inside view of a unique corporate culture. In addition to the growing number of Hyundai and Kia Motors enthusiasts wishing to learn more about the carmaker…

Moving fast — a common trait
To answer my own question on what makes Hyundai so successful, as well as Samsung and other successful Korea brands, I’d say moving fast — real fast — was a common trait.

That said, moving fast to many Koreans and Westerners working with Korea, means balli balli, a defacto core value impacting everything from immediately responding to email requests for data to launching major projects.

[For the pros- and- con’s of balli balli see my article. PP. 3–4 ]

As for moving fast, here are my 3 takeaways…
  1. With short timelines, the focus is then on identifying the critical tasks that contribute most and with quickly moving on to execution.
  2. The longer the deadline, the more time gets spent in analysis and discussions with an ever-lessening focus on the task.
  3. Noting the Korean decision process can be time-consuming when a decision is made, all come together and move forward
All said when working with Korean leadership and teams understanding their perspective is key…. and allows us to, in turn, “ work within the Culture,” and then provide alternatives. The later, something I strive to provide as a trusted advisor.

Here as needed…Call, Text, or Email… all work.


Saturday, March 17, 2018

Korean Business: Similar but Different Norms

This week's read looks at Korean Business and, similar but different norms.

For starters, I was asked last week re: my availability for Bookings & Requests. Best to email me, or call.

That said,.. Following a recent C-level meeting, I had the opportunity to chat with the local subsidiary's Korean CEO. He hoped I'd shared with his team how the company in Korea and the US differed from the Group's many sister firms—many westerners wrongly assuming a high level of conformity across the Group.

Similar but different norms
I assured him that "yes," I shared in mentoring how even within the Group I, too, had experienced that each company had its own unique culture. And, not only did sister companies differ but in some cases how the Koreans recruited and working at companies within the Group were different.

On parting the CEO pointed out another key point to be shared was that Koreans dispatched to support the division's overseas operation over time came to see things differently than domestic Korea-based teams. He, for example, had come to “see things differently, too.”

Building on this...
Prior to a global workshop on the ever-changing Korean workplace, a senior Korean executive asked that I also explain to the group of predominately North Americans and Europeans that despite perceived outward appearances and their homogenous society that no two Koreans are alike....In other words, he asked that I help dispel common stereotypes, etc.
I agreed and did my best to pass on the message that like Westerners--behaviors, mindset, and experience varied among Koreans...this despite strong corporate culture and indoctrination.
In particular, factors contributing to how Koreans might differ can include: generational issues, global travel, work, and educational experiences, and significantly how they were mentored in a management style.
As for the later, during a team-building workshop held several years ago, a senior Korean manager openly shared some insights on Korean management styles.
He noted that within his Korean division teams were mentored by seniors in one of several styles....  Some senior managers fostered a "soft" management style of collaboration, while others used a "hard" autocratic style.
Elaborating more about how he was mentored, he learned to first present the challenge to his team, then ask his juniors to prepare their recommendations. And in the case of working in the overseas' subsidiary, he learned to ask the American colleagues for their ideas vs. directing the team on what to do--a style he'd been taught by his longtime boss.

Pop Question.
What similar but different norms and styles have you experienced with Korea based companies?  


Wednesday, March 14, 2018

A Question on Korean Decisions

Earlier this week I was asked for a cross-cultural insight into the "why” behind Korean expatriates intervening in what some feel is the local decisions process. More so, these decisions may be one-sided, lack collaborative and mutual engagement and have consequences. 

In turn, western teams see themselves consulted only to validate preconceived ideas or to implement directives from Korea.
This has to lead to in some cases local Western management seeing their input and expertise being marginalized-- more so with complex situations and long-term planning “drilling deeper” may uncover ramifications.

In my experience due to the hierarchical Korean approval model, decisions take time--lots of time :)  

That said, when Korean teams are under enough pressure they are driven to take immediate action. With no ill intent and out of expediency, it can result in little local joint discourse related to potential trade-offs and risks in projects assigned to the local subsidiary.
Particularly deep local concerns on this narrow and reactive workplace approach, one can draw an analogy to jigsaw puzzle building.
All Possible Options? 
The pieces to a puzzle have many unique sides. There may be different ways to place them into the puzzle. What is required is to look diligently at all possible options.
Like all challenges, one needs to explore the different possibilities to find the right solution and how the piece fits into the overall puzzle—essentially one needs a reflective mindset.
As a Korean colleague has pointed out, their society beginning with grade school does not promote reflective thinking and instead looks to promote a thought process that leads to more immediate results. In fact, Korean high school students spend more than 14 hours a day studying, memorizing and preparing for exams—a model that stifles creativity.
I also see a cross-cultural aspect with many Korean decisions the result of a team workplace’s collective thought process, and in contrast, reflective thinking stems from an individual’s core consciousness.
Bottom line - reflective thinking requires taking acquiring knowledge and then calling upon one's own experience, utilizing evaluative skills and admitting a personal bias.
The result is a broader perspective and a better view of the bigger picture.
Without working through a robust analysis of a problem from multiple angles and considering potential repercussions a solid evaluation can never arise.
All this said, my message for Korean teams is that there are immediate benefits to thinking outside the box through a reflective and conscious lens, the time invested in the analysis will lead to most effective solutions—required in times of high stress.
Questions? Here as always...

Saturday, March 10, 2018

Ten Valuable Insights into Korea Business

We have to admit US-North Korea talks top the list of newsworthy topics this week, although the Steel and Aluminum trade issues are not to be overlooked. 

I do have my opinions :)

All said, this read shares: “Ten Valuable Insights into Korean business.” This is something I often incorporate into advising and mentoring.

As food for thought, I am not advocating we drop Western norms and practices. In fact, it was developed in collaboration with a senior Korea manager more as a reference.

Specifically, we looked to share a perspective and explain to the local team the company culture in Korea — the Westerner employees lacking first-hand knowledge in the mother company and seeing the Company only in their local operations.

Ten Insights
• Trust There is a very strong trust within teams and in the company. This is often because of a legacy in achieving many bold accomplishments — often seemingly impossible tasks.

• Family Traditional family norms permeate the work culture (Elder brother as boss, senior managers, etc.) and the related concept that co-workers are seen as family.

• Challenge A one-word summary of the Korean workplace would be Challenge — both in what it has overcome and in what it expects of its global employees.

• Input Companies are very hierarchical but actively demands input from all levels. In fact, top management make decisions based on the expectation that the lower levels have considered all possible outcomes and challenges.

• Teamwork Once a decision is made all dissenting or differing opinions unite to embrace success.
• Solution In Korea, employees do not bad mouth or put down their company. In fact, employees feel that such an attitude is “part of the problem” and not “part of the solution.” Even among friends, negative thoughts are not shared.

• Relationships From higher ranks to the lower ranks, they are very hierarchical. But, here are also very protective organizations. On one level, norms dictate that Seniors are demanding of their Junior employees. One reason is to make sure Juniors learn the work expectations, practices, and culture.
On another level, workers must ensure that mistakes are not made that could reflect badly on their Seniors the department or the company. Once a Junior works for a Senior that Jr. is part of a network of other employees under the umbrella or protection of the Senior.

• Expectations There are very high expectations that must be met. Doing a great job is what you are paid to do…
• Collaboration The American workplace process is often to receive an assignment, clarify details, go off, work hard, and come back to the manager with the result. The Korean staff will take a different approach. They will receive an assignment, work and discuss it collectively with others, and go back to the manager on multiple occasions informally to make sure they are following the path the manager wants. This method takes times, but Korean workers know when the manager sees the result, it will be what the senior requested.

And in closing…Adaptability     Flexibility and acceptance of change. Projects are subject to lots of change — some speed up, while others stall.