LG Chairman Pushes for Change

A characteristic of Korean big business is their top-down management style. More significant is the role of the "Chairman." Most significant decisions are made by these top executive. This includes the Group's direction, operational theme and strategy. In fact, Change within the Group is driven from the top. For example, this Korea Times article notes the strong role LG's Chairman Koo Bon-moo exerts over his Group to move LG from Supplier-focus to Customer-focus. (A Push vs. Pull manufacturing model).


Customer satisfaction is the main theme pushed by LG Group Chairman Koo Bon-moo this year.

In a meeting with some 40 top executives of the group last Friday, Koo stressed the importance of customer-oriented management, for the seventh time in eight months.

I have consistently stressed customer-focused management, but some of our inner management is still done from the suppliers' point of view, Koo said at the group's training center in Ichon, Kyonggi Province. The priority of management should be put on customer satisfaction. Each company should come with innovative plans to improve customer value and must stick to the plan.

The two-day meeting from Thursday featured some 40 top managers of the group, including Kang Yu-sig, vice chairman of LG Corp.; Kim Ssang-su, vice chairman and CEO of LG Electronics; Koo Bon-joon, vice chairman and CEO of LG.Philips LCD; and Kim Bahn-suk, president and CEO of LG Chem.

George Day, a professor at the Wharton school of the University of Pennsylvania, was also invited to the meeting to give a lecture about customer-oriented management.

Since his New Year's speech in January, Koo has ordered the CEOs to be obsessed with the idea of customer value innovation.

In March, he called for fundamental changes in management to follow customers‚ demands, and said technologies only matter when they can provide new value for customers. During a factory tour a month later, the chairman praised LG Electronics Chocolate Phone as the role model of product designing as it won the customers heart and maximized the user interface.

Koo said he is not yet satisfied with the efforts the group affiliates have made. I still see the bad habit of managers neglecting long-term goals as look to just short-term performance, he said.

On Friday, the LG CEOs participated in a five-hour long discussion dubbed customer value innovation plan, and agreed to yield more control to on-site managers who meet customers face-to-face, a group spokesperson said.