In recent years my works Korea Facing, Secrets to Success in Korean Global Business (2013) and Korea Perspective (2015) both looked at Korea business–outside Korea, while Hyundai Way: Hyundai Speed (2014) was a deep dive into Hyundai Motor and Korean corporate culture. That said, over the past 3 years I have continued to author numerous published articles…. all the while pondering the next book-worthy topic.
My recent non-stop rounds of travel to South Korea has not only piled on the air miles but provided the needed research required to again begin crafting my next book.
Seoul
As with past three books and those prior, I’ll be sharing chapter by chapter sneak peeks for comments, questions and in many cases your additional and much-needed thoughts.
To begin…Korea 2020
I work within two worlds, two cultures. In my first, I support organizations outside Korea, often advising major Korean companies on their international operations or assisting western firms’ HQ C-suite leadership in their market entry ventures into South Korea.
My second is counseling leadership and teams, both western and domestic, in Korea. As a highly respected friend and colleague recently noted to a group meeting introduction, “Don has lived many lives in Korea.”
For the former, the overseas subsidiaries of most Korean companies have Korean management assigned to the host country. The general term for these representative employees is ju jae won. Within the local overseas organizations, they may be called Coordinators, Executive Coordinators or Executive Advisors.
Some expatriates may hold a line managerial position with day-to-day responsibilities alongside western managers, while others hold key management C-level positions, such as CEO, COO, and especially CFO.
Little Change
Frankly, over the past decades, little has changed in the expat model. The expatriates are consistently highly engaged in the local operations and decision-making. More so, I see few differences from the past in their workplace dress, protocols, work habits and grueling long hours—even with generational shifts occurring.
Radical Change
Surprisingly, where I see the contrast is with the companies in Korea. In fact, in what was once a sea of conformity and protocols, the workplace is undergoing radical change.
Exploring this change will be the core for my new book in progress—working title Korea 2020. As I explore and share the new Korean workplace, I envision two audiences. My first target group is those new to Korea and its workplace. For this, my work can serve as a study guide and primer. The second target readership is the leaders and teams outside Korea and my goal is to help this group understand the changes underway within Korea. I see this as vital to help them better make decisions.
Snapshots Tuesday PM`
Driving across Gangnam amid a summer rainstorm to a meeting with a Korean multi-national firm’s CEO, the newly appointed domestic leader—a Korean American expatriate. His challenges—getting the local team to be open to change.
Wednesday AM
Meeting with senior leadership of a major Korean chaebol’s tech division. The Korean senior vice president, a newly recruited America educated Ph.D., walks into the meeting in jeans and a dress shirt. His team– in a mix of casual dress –polos and collared dress shirts.
Thursday Early AM
Arriving at the worldwide headquarters for a top global brand, one notices the high-security measures now in place from vehicle checkpoints to heightened levels of document verification when signing in for the visit.
Escorted by a staffer, we’re joined by the team again in casual dress… in a workplace once best described for decades as “ a sea of white shirts, ties, and dark suits.”
Thursday PM
Passing through similar security some hours later, we were greeted by a team and its lead engineer—again sporting a very trendy Ralph Lauren branded shirt. In quizzing his past work experience—we learn this engineer was recruited from a rival Chaebol—a once unheard of recruiting practice.
Their Vice President, a European—one of several in the company, and now heading up the division, joins the meeting. . Despite a considerable difference in rank and experience, the Korean team and the VP collaborate as equals—their common ground—they are engineers.
Friday AM
A mid-level manager arrives in the office shortly after 9 AM—not unusual for the worker with a 45 to 60-minute commute. Reflecting today’s workforce women in the office number the same as men. One notices the manager’s casual dress–sneakers and jeans with cuffs rolled up 10+ inches, the new trend. Few heads turn as the employee walks over to a workstation. All is considered normal.
Stay tuned…
It is apparent to those long associated with Korea that the workplace culture is changing. In sneak peek previews, as an observer of Korea, I’ll be sharing not only trends but also the impact of Change both in Korea and for operations and HQs outside Korea. Plus, my focus… the “why’ behind …
More to come… comments and questions welcome…Korea 2020
Don
Copies of ALL my previous works are available complimentary… just ask.
This week we look at Korean facing business interactions in the workplace.
By its very nature, Korean facing business is the interaction of worldwide teams.
This necessitates colleagues of different cultures working together on a daily basis. How we see others culturally is often in the differences and similarities. (I like to focus on the later; as differences pull us apart and similar brings us together. More effective, too.)
Most old-school cross-culture books and program content dwell on sharing differences… so be wary.
Particularly for U.S.-based western teams engaged in Korean operations, I believe in the importance of learning about the workplace in Korea—the 2018 norms, practices, and day-to-day life. These insights allow us to better understand our Korean teams and their expectations. Recognizing can dispel stereotyping, prejudices and ethnocentrism.
Recognizing similarities is one of the most powerful cross-cultural bridges. In other words, to what can you relate in routine day-to-day life? This requires identifying the local beliefs, values, expectations, traditions, and culture.
BTW They are ever changing.
Outcomes
Although there is bound to be friction between home and host country cultural values, a successful model accomplishes:
Awareness and appreciation of both the home and host country with the ability to gain an insight into one’s own personal traits, strengths, weaknesses, attitudes, and interests.
Realization of similarities and shared values, along with an awareness of and respect for the cultural differences.
Noting the 2018 generational differences. ( if you missed my recent article on Korean generational in the workplace, let me know and I’ll get you a copy). Lots vary in how Korean generations see and do business.
In closing.
How do you see applying Korean facing business interactions to you and your own experiences as well as working with Korean teams?
Happy Memorial Day…. some thoughts for a holiday read on the cross-cultural workplace.
Contracts, legal agreements, and business plans go hand in hand with global business. I was once told that in Korea the purpose of signing a contract or agreement was essentially to formalize the partnership. Over time terms would be subject to change and re-negotiation.
My Korea facing experience has been that agreements fundamentally solidify the working relationship. However, to maintain any partnership contractual obligations will require on-going changes to reflect business conditions. In contrast, a legal agreement in the West is immutable.
This week, I’d like to elaborate and bring into a broader cultural dimension re: the cross-cultural workplace.
Don Southerton
This Culture (with a big C) lesson is Koreans in the workplace and business see and prefer most things as “ gray” ever-changing and subject to revision. What’s set on paper matters, but as just as a Roadmap.
In fact, Koreans in contrast to the Japanese see this “ flexibility’ as a competitive advantage…. They do craft elaborate and thoughtful business plans, organizational charts, job descriptions, and workflows — often crafted by junior and less experienced teams, but in reality, feel these are subject to change as circumstances shift. In the Korean workplace, the reality is all is ever evolving — shifting and adjusting daily.
In contrast western (US, UK, the Germans, AU) business feels most comfortable when we think through all the potential issues (often based on years of first-hand experience by senior executives) and then set things firmly on paper. In turn, any changes to for example, to a business plan, are subject to considerable scrutiny and critical thinking before altering.
As an option and best practice to working with both Cultures, first and foremost building the relationship and communications matters most. Misunderstandings will surface, but when both teams better understand each other’s mindset, we can move to collaboration and compromise.
In mentoring, I strive to build this understanding, pulling apart the issues to their cultural core, and sharing how to best build bridges and close gaps — something which is more art than science ☺ and not without its challenges in the cross-cultural workplace.
Today we are witnessing increasing generational influences and a divide in the Korea workplace. Many firms are adapting to this change, as the workforce is increasingly a younger generation.
Much of the generational influences change is driven by an Old Guard mentality vs. the New Guard. The Old Guard, people in the 60s and 70s, holds to values and norms once common business practices in Korea. With the rise of the New Guard the older generation is increasingly marginalized as well as their influence.
This generational influences marginalization has accelerated with the latest round of Chaebol family succession well underway. As before with succession of the Chaebol Founders to a second generation of family control, which mostly occurred in the mid 1990s, all now is moving in to the third generation These heirs in the 40s are at the helm at Samsung, Hyundai Motor Group, and LG (as recent as this week), etc. In turn, management and trusted advisors surrounding these Chaebol heirs are now of the same generation, too.
In fact, as a prelude to the recent successions we’ve seen the exiting of older senior management, most stepping down and into retirement.
Between these groups we find a layer of managers and executives described by the term “sandwiched” — used to denote a generation now in their late 40s and into the 50s.
This age group has social, workplace and political views influenced by western education and work abroad that differ from those of the older generation of people in their 60s and 70s.
But in many ways their values, which emphasize the importance of collective organizations such as work, nation, and society, are still similar to those of the Old Guard generation.
As a result, the “sandwiched” group’s mentality often clashes with the younger generation whose top priority is individual freedom.
As one “sandwiched” executive shared “When I was a rookie, I didn’t have any choice but to be quiet when I had an issue or I disagreed with my superiors. But nowadays, the younger generation boldly express their opinions in the workplace.”
In turn, this younger generation now expects management to emulate this norm of open discussion and expression—a behavior that the Old Guard also find unacceptable and improper.
A Changing Workplace
The introduction of the “team system” and western norms by many Korean companies to address issues of a hierarchy system and to improve efficiency has increased the difficulty for the Old Guard to give direct orders to younger workers.
As noted a veteran manager, “Many young workers don’t recognize the authority of their seniors. They often say ‘we are all members of a team. No more, no less’.”
Other Concerns
Adding to the challenge, the younger generation sees many faults in both “sandwiched” managers and well as the Old Guard.
For example, the younger group argues that both older generations often erroneously blame others for problems. “They don’t realize the real problem. They are really stubborn and pigheaded. They are not ready to listen to younger workers.”
“They keep saying that we have to do this and that, but they never set a good example for us. Naturally, we don’t respect them at all,” said a young Seoul professional.
An Internal Challenge
Similar to today’s organizations in America, Korean organizations are presented with the internal challenge of creating harmony and cohesiveness among multi- generational employees.
Individuals from each generation (i.e. traditionalist, baby boomer, Generation X, or Generation Y) bring divergent values, beliefs, attitudes, and expectations based on their life experiences.
These multi-generational labels may not be used exactly the same in Korea, but the issues that Korean organizations face caused by the gap between different generations are the same.
Individuals of each generation group grew up in the same time period witnessing and participating in common historical events as well as political and economic changes.
Therefore, these individuals with similar frames of reference have an easier time building bonds and working together in harmony than working with individuals from other generation groups.
The particular characteristics of each generation deeply influence how employees think about many aspects of organizational behavior, such as motivation, satisfaction, creativity, innovation, loyalty, commitment, and teamwork.
This accentuates the importance of understanding the distinctive characteristics of each generation group in order to engender successful outcomes.
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.
Bill was the first westerner hired by the Hyundai Group.
As a follow up to news on Hyundai Motor Group chaebol reform, 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 the Hyundai Motor Group Chaebol reform, 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 Chaebol reform…. If not I please contact me… as has been very well received.
I’m also available to comment and answer questions as always…
As a trusted friend constantly reminds me, “Don, no one does what you do,” providing solutions as a highly respected 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.
Challenges
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.”
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.
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.
With short timelines, the focus is then on identifying the critical tasks that contribute most and with quickly moving on to execution.
The longer the deadline, the more time gets spent in analysis and discussions with an ever-lessening focus on the task.
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.
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.
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?
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.
Sneak Peek Korea 2020
Working Title Korea 2020 Sneak Peek 1
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