Tuesday, February 18, 2014

Hyundai Way: Hyundai Speed, Part 6 Conclusions

Don Southerton Hyundai

"Conclusions", my final article in the Hyundai Way: Hyundai Speed series, shares my personal thoughts and opinions.  I begin with the question, “Considering its strong Korean heritage and corporate culture, is the Hyundai business model globally sustainable?”  I tackle this question from a cultural perspective, leaving aspects of sustainability, such as the production network, consumer appeal and brand image staying power, for my colleagues in the automotive industry.

In my 2012 book, Korea Facing: Secrets for Success in Korean Global Business I note that Korean global companies as a whole have prospered and adapted well to an expanded international scope. Specifically, I call this trend K-lobalization.

To further define K-lobalization, I find Korean teams and management becoming increasingly global savvy. More significantly, following the global recession of 2009-10 when many international firms experienced staggering setbacks, the profits, sales and market shares of Samsung, the Hyundai Motor Group and LG soared.  As a result some Koreans consider their business model superior or at least equal to rival and established western brands.

An additional characteristic of K-lobalization is that Korean firms are boldly promoting their own unique corporate culture and management style across their global organization.  This may take the form of the company-wide introduction of the corporate core values and vision, along with global training initiatives and directives. In Hyundai’s case, we see this in the 2011 introduction of the new HMG management philosophy, core values, and vision (all well discussed in Part 4).  

So, if K-lobalization is the new model, then why still hire local western leadership and management teams? Two challenges for Hyundai and other Korean multi-national Groups have been launching overseas operations and staffing the local branch or subsidiary. In part, Korean leadership is well aware that local expertise is vital for success, and, in part, no Korean Group has a sufficient Korean workforce or desire to entirely staff their international operations with expats.

Several years ago during a group session I hosted for overseas Korean and western Hyundai senior managers, the discussion turned to the "role" of the westerners in local project development. The local western Hyundai teams felt under-utilized and wanted to contribute more. This, of course, was a source of considerable frustration for the westerners because their previous employers had given them considerable responsibility with little direct oversight and fully utilized their experience and expertise.

Pondering for a moment during the discussion, a senior Hyundai Korean pointed out that local input was respected… and expected, but perhaps feedback from his side needed to be better communicated. The Korean manager went on to explain that his team knew how to do things "Korean style", but what was needed were alternate ways of approaching work related issues. Even if the local ideas were not adopted, he noted, senior management reviewed those options and took them into consideration.

In fact, on a number of occasions Korean management has shared with me that Hyundai leadership had high trust in the global organizations. They hired the local teams to provide much needed expertise and know-how. 

Highly relevant to the Hyundai Way, the Korean team explained that the challenges and frustrations they were hearing from their western colleagues were an aspect of the company’s top down “culture.” Specifically, a department’s role (even in Korea) was to provide support and once given an assignment to implement the project. Although perceived as restrictive to the Americans, the approach was never an attempt to limit and downplay the local teams’ expertise.

Listening attentively, one of the western managers smiled and, as I recall, thanked his Korean co-worker for sharing and promised he would convey the message to his team. The western manager also commented that he wished he had understood this corporate culture dimension two years earlier, since the feedback would have reduced stress in his department.  Once again Culture matters.

My concerns regarding sustainability
Over the years as I have worked across Hyundai as well as with other global and domestic organizations, I have come to recognize their gaps, strengths, and weaknesses. On a positive note, top management, especially at Hyundai, has increasingly becoming skilled in handling cross-cultural issues within their organizations. However, a company’s success is highly dependent on the entire team’s collective grasp of the corporate culture and, in our case, the Hyundai Way, which I have pointed out in Part 1 as an intangible acquired over time.

My concern on sustainability is that few individuals can quickly develop a true understanding of Hyundai culture without training and coaching. It just does not “happen.” Hoping the team can grasp understanding or allowing it to unfold over time is a recipe for failure and high employee turnover. More so, even a well financed and professionally crafted Corporate Culture program will have limited impact if offered one time or in some form of a routine annual workshop.

I do recommend teams and key executives receive ongoing support in addition to the company’s corporate training programs. In addition executives will benefit from-- and appreciate-- one-on-one coaching sessions that offer  them an opportunity to discuss situational work-related issues privately and confidentially.

In Conclusion
Not withstanding times when directives from senior leadership take priority, Korean management looks to the company’s global teams and top partners for new ideas. I suggest local teams embrace the Hyundai Way, core culture, vision, and principles. This means moving at Hyundai Speed to discover innovative ways to overcome challenges, and to contribute “out of the box” thinking to accomplish “the impossible.”

Look for Hyundai Way: Hyundai Speed in eBook and print formats.  
Publication date March 2014.

Copyright 2014 

1 comment:

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