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.
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.
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.