A client recently shared the content and deep understanding I had shared on Korea, specifically on working with Hyundai.
The term “Hyundai Whisperer” has been used to describe my consultancy both for working with teams and in the media.
This continues, and more recently, in my work and interviews with Korea Times, CNBC, and Branding in Asia, where I have focused on the “big picture” of transforming the Hyundai Motor Group from a fast follower to a game changer.
I see my role as supporting those new to Hyundai and those engaged but with little insight into “working with culture,” its processes, expectations, and ever-changing norms.
I will continue to provide “knowledge of the tribe, ”insights, and client support worthy of the title — the “Hyundai Whisperer.”
Would you be interested in learning more? Let’s chat.
On the recent 2024 CEO Invest Day, Hyundai Motor Company revealed its new “Hyundai Way” strategy and outlined its mid-to-long term goals.
For almost 20 years, I have explored and articulated ‘The Hyundai Way’ in my publications, media, and lectures. Early on, I realized that it was an innate quality and required a deep understanding of company and workplace culture gained through hands-on experience.
The Investor Day event outlined strategies, action steps, and timelines. Hyundai Motor leadership presented a flexible response to market conditions and a focus on electrification, as well as an expanded lineup of vehicles through its “Hyundai Way” strategy.
As Jaehoon Chang, President and CEO of Hyundai Motor Company, said, “Under the Hyundai Way, we will respond to the market with agility thanks to Hyundai’s unique flexible response system.”
In the following commentary, I look at the evolving but grounded “how” of the “Hyundai Way” and the methods Hyundai has used to achieve past successes, which I will strategically build upon.
“Can do Spirit”
First, and at the core, Hyundai has always been embodied with a “Can do Spirit” despite the odds—and this heritage is doing what others have said is impossible.
This “Can do” attitude means attacking challenges with 110% commitment through strong will to overcome obstacles.
In Korean, this is referred to as Ha myeon dwaen da, which translated means, “Even if it’s impossible, it’s still possible.” Then, I’d add “Move with Speed.”
For example, regarding “Can do Spirit,” in my work, I often share Korean core values, norms, and expectations with teams globally—those long associated with Korea would agree—a shared drive to tackle the impossible with a “Can-do Spirit.”
Even those entering the ranks in Korea soon acculturate and embrace these values… seeing what the company has achieved over the past decades.
Innovative thinking
Hyundai has a rich heritage of entrepreneurial innovation. This is forward-leaning, innovative thinking, especially when faced with challenges. Hyundai, the name adopted in the 1940s when an entrepreneurial startup, means “Modern,” showing forward-leaning origins, heritage, and DNA.
“Hyundai, the name adopted in the 1940s when an entrepreneurial startup, means “Modern,” showing forward-leaning origins, heritage, and DNA.”
In the rapidly evolving global automotive industry, Hyundai Motor has emerged as a trailblazing innovator, breaking away from its traditional role as a fast follower.
At the core of Hyundai’s future success will be its strategic metamorphosis. Its commitment to leading innovation, exemplified by its ventures into Boston Dynamics robotics, Supernal urban air mobility, and Motional autonomous driving, has redefined its brand identity and challenged the conventional paradigms of automotive manufacturing and design in many areas. I’d layer on the move to developing Software Developed Vehicles (SDV) equipped with High-Performance Vehicle Computers (HPVC).
Risk-taking
This means taking bold action. They seek opportunity and then act while assuming ownership and responsibility. Hyundai has transitioned from a Fast Follower to a Game-changer and first mover.
Generally, a fast follower closely watches and tracks a brand leader and then quickly emulates. This eliminates many risks.
Most significantly, fast followers can capitalize on profound economic savings that game changers and the first movers must invest in new technologies, such as development costs and investments running into the billions.
On a more practical level, fast followers wait for a concept to be proven and “bugs” to be worked out. Then, they can spare their customers from recalls, downtime, and inconvenience.
In highly competitive industries like automotive, Hyundai, now a first-mover brand leader, holds an advantage and will be seen by customers as offering something new and exciting.
This advantage can translate into new vehicle sales, which are the drivers for any OEM.
Bold Challenges
With that, I want to layer on a long-time intrinsic observation. Hyundai teams and leadership have embraced challenges over the years. This includes becoming a top automaker and now new targets such as 5.55 million annual global sales, selling 2 million EVs per year, offering a full lineup of EV models ranging from affordable to luxury and high-performance, launching Software Developed Vehicles, and bolstering corporate value and shareholder return.
In a Seoul meeting with several former executives, I discussed the Korean company’s move to Mobility. I mentioned that some in the West feel that Korean car makers still need to sell many ICE (internal combustion engine) cars and SUVs—the ICE vehicle profits as an offset required to fund the new projects.
Still, somewhat surprisingly, a senior Korean paused and, with conviction, pointed out, “They always needed a farsighted goal—best if it seemed impossible!”
Significantly, embracing bold challenges means that what others will doubt and may see as unreachable can and will be achievable—frankly, that has always been “The Hyundai Way.”
Reflecting on this, my most recent article, Hyundai, deserves some credit. Over the past several years, it has been trendy for Korean companies to tout themselves as Game Changers, but “few walking the talk.”
Hyundai is one of the few brands that aspire to be a mobility Game Changer with a significant forward-leaning commitment.
Game Changer—First Mover By Don Southerton
A Game Changer introduces something with so much added value that it sets them apart. Game changers break beyond the traditional confines of business, dominate their niche, and become the go-to company, service, expert, or influencer.
A First Mover gains a competitive advantage by being the first to bring a new product or service to the market and establish strong brand recognition and customer loyalty.
Over the past few years, Korean companies, big and small, have sought to become Game Changers, often to break out of their secure and well-earned niches.
In the rapidly evolving global automotive industry, Hyundai Motor Group has emerged as a luminary, breaking away from its traditional role as a fast follower to become a trailblazing innovator. This transformation, marked by a bold pivot towards electric vehicles (EVs), autonomous driving technologies, and a wider range of mobility solutions, has positioned the South Korean giant at the forefront of an industry facing unprecedented disruption.
At the core of Hyundai’s success is a strategic metamorphosis. The Group’s commitment to leading innovation, exemplified by its ventures into Boston Dynamics robotics, Supernal urban air mobility, and Motional autonomous driving, has redefined its brand identity and challenged the conventional paradigms of automotive manufacturing and design in many areas.
Generally, a Fast Follower closely watches and tracks a brand leader and then quickly emulates. This eliminates many risks. Most significantly, Fast Followers can capitalize on profound economic savings that Game Changers and the First Movers must invest in new technologies, such as development costs and with investments running into the billions.
On a more practical level, fast followers wait for a concept to be proven and “bugs” to be worked out. Then, they can spare their customers from recalls, downtime, and inconvenience.
We also see Hyundai as a First Mover. In highly competitive industries like automotive, the First Mover brand leader holds an advantage and will be seen by customers as offering something new and exciting. This advantage can translate into new vehicle sales, which are the drivers for any OEM, as we have seen with Tesla.
Notwithstanding Hyundai Motor Group’s new ventures in robotics, urban air mobility, H2, and robot taxis’ autonomous driving technology, I feel Hyundai, Kia, and Genesis have set themselves apart from the competition in their e-vehicles and the ramping up of hybrid rollouts—especially in showcasing exciting new designs.
Finally, and tied to being a Game Changer, Hyundai looks to command a market-leading position as a First Mover by implementing changes faster through a ‘Software-defined Everything’ (SDx) strategy, redefining vehicles, fleets, and transportation systems with software and AI. The plan is to incorporate software development methods into the vehicle development process and mobility at a time when the industry is being disrupted.
Many feel, and justifiably, it’s a great time to be a Hyundai…
I have a long history as a trusted advisor offering Korean business strategy and consulting services to firms across the globe. This includes major Korean groups, international brands, and government agencies.
Many see me as the “go-to” expert on all Korean business matters.
Have a Korea-facing question, issue, or project. Let’s talk.
There has been an expectation that Korean, Vietnamese, and other APAC companies would strive to fully localize as they expand overseas business operations in markets like North and South America, the UK, and the EU. With COVID we saw a change from the past with an annual dispatching of teams from Asia-Pacific HQs to a more reduced and limited role for expatriates.
There is a strong argument that local operations are best managed locally with minimal day-to-day oversight from the company’s HQ expatriate team. The exceptions in many cases, are expatriates assigned in a “designated” support capacity often in tech support and engineering.
As a thought leader in global business trends, I suggest a potential shift in global governance.
A limited expatriate support role has been a long-term goal. It’s costly, and the acculturalization for any expat in a new market takes time and an openness to learn and adapt.
This said, one constant is change. What potentially might have been the plan to reduce oversight may be altered to strengthen expat engagement and input in day-to-day business decisions and management. This frankly has been a cycle I have witnessed over the years. The current mode of reduced engagement has been, too, rooted in COVID where new overseas assignments were all but eliminated.
There are justifications and reasonings for the increased local engagement. One possible option for effective communication with APAC HQs is to assign expatriates for daily direct communication during evening hours, considering the time and work hour differences.
Expatriates can provide valuable insights into the HQ strategy, particularly in clarifying recent mandates and initiatives for local management.
Moreover, there is a growing need for broader HQ fiscal oversight during the rapid shift to capital-intensive ventures such as mobility, which requires significant infrastructure investment.
I want to mention that many Western brands, too, have long contemplated the right balance between a centralized company business strategy versus one driven by localization.
Bottom line… In today’s rapidly changing global economy, it is vital to comprehend the intricacies of Asia Pacific business, including the hows and whys, and to engage with local APAC teams.
Some suggestions:
For those in the West, it may be the first time working with a team from Korea, Vietnam, the Philippines, or Singapore. This opportunity requires an understanding of the new partner’s culture and expectations.
The assumption that local and expatriate teams can bridge cultural gaps through practical on–the–job experience might work with those few highly intuitive individuals with the exceptional ability to assimilate cultures.
What stands out in numerous studies, such as Forbes however, is the need for ongoing multicultural training, that can successfully impact people, especially those who need to quickly adapt to new or changing business culture and values, while fostering sensitivity and teamwork among all company members.
Finally, best practices have shown that a tiered service model with training, mentoring, and ongoing strategic support is the most effective approach for an organization. Leadership can greatly benefit from one-on-one coaching, too.
To conclude, to answer the question “Is it better to manage local operations locally?” International companies must seek the right balance between global oversight and striving for localization. This includes the best mix of an HQ team’s engagement in day-to-day oversight and decision-making while creating a level of direct communication to ensure expectations are addressed, especially aligning with global strategies and fiscal concerns.
Reflecting on Earth Day, my ties to Green and Sustainability have reached back in time and continue today.
They parallel my work with Korea and globally. In the mid-2000s, I was an advisor to developing Incheon, South Korea Songdo IBD (now Songdo International City), today one of the 3 Incheon Free Economic Zones (IFEZ). Incheon Free Economic Zone
Developed as a global model for urban sustainability, Songdo was envisioned as a Green, high-technology city of the future, and at the time, it was one of the world and Korea’s most significant foreign real estate development projects.
Built on reclaimed land and with partners like Kohn Pederson Fox, Cisco, and United Technology, the forward-leaning project also showcased the first LEED-certified buildings in South Korea and Asia.
In conjunction with the Songdo project and aligned with my work for Hyundai Motor Group, we had the opportunity for a VIP visit to Hyundai Motor’s R&D. I even got to fuel their 1st Gen Hydrogen Fuel Cell Electric Vehicles (FCEV), and then test drive the next generation of EV vehicles. At this time, Songdo’s leadership was very interested in FCEV buses for the district and powered by hydrogen.
Songdo’s innovations were again the subject of my 2013 article for the Korean government’s Ministry of Culture, Sports & Tourism, highlighting the city’s Green accomplishments.
KOREA Magazine
I also hosted a 2013 BBC World Service visit, too. We showcased Songdo’s Green smart city capabilities, capped off by an interview with Cisco’s former Chief Global Strategist Wim Elfrink. Wim was the thought leader who popularized the term IoT — the Internet of Things.
A day later, we visited Hyundai Motor’s Eco Lab and test-drove their 3rd Gen FCEV, a first-of-its-kind production SUV, which was soon launched in Korea and then California.
In the years that followed, as companies I supported moved to mobility and EVs, I, too, shifted my research and work to these new sectors. Electrification has been and continues to be a major part of my work, leading to an ongoing immersion in the sector supporting Korean startup Grinergy and Green lithium battery technology.
In the last months, my interest has expanded to the Critical Mineral sector as well as recycling of black mass and rare earth sustainability and supply chain.
I’d add, most recently, my work, number of articles, and support have returned to the City of Incheon, IFEZ, and Songdo, as well as Cheongna International City, and the airport’s Yeongjong International City. Each, with a renewed Green and sustainability agenda.
Finally, as we reflect on Earth Day, in both my work and pursuits, I find the need to embrace Green technologies and renew efforts, fueled by government and private funding and with a growing public interest in sustainability.
Earth Day- Earth Week- Earth Month 2024
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Hyundai MOBIS, a global leader in future mobility, will begin testing Level 4 autonomous driving in South Korea Incheon City’s Songdo and Yeongjong districts. These test rides aim to promote the commercialization of self-driving vehicles.
According to a Hyundai MOBIS article in the media, MOBIS, the Incheon Free Economic Zone (IFEZ), and the Incheon Technopark have signed a memorandum of understanding for Level 4 testing as well as plans to collaborate on nurturing startups that can innovate smart mobility.
The smart mobility project will engage 20 startups, partner firms, research institutes, and universities that will participate in the test-driving project. The expectation is that this will spur further regional IFEZ and Technopark smart mobility testing and R&D.
I see this as a smart move by Hyundai, MOBIS, local officials, and shareholders engaged in the project– as someone who has followed autonomous technology development, supported MOBIS teams, been a backer of IFEZ initiatives, and has considerable first-hand experience of the urban, bridge, and highway road network.
For example, in the 2000s, we built the Songdo IBD (today Songdo International City) smart road system to address future transportation needs… wide lanes to reduce congestion and traffic sensor data capture technology. Songdo, too, is designated by the City of Incheon and IFEZ as a “Smart City” and innovation hub. And, so frankly, it’s a great venue to be at the forefront of smart mobility. ( See my article on Songdo).
Under the memorandum, the test vehicle will be able to drive on a 60 KM/ 37 miles course. In addition to Songdo, the nearby Yeongjeong area is home to the Incheon International Airport.
Hyundai MOBIS noted that the Incheon municipal government had given its permission for test drives that include inner-city routes. This is a rare chance to test autonomous driving technologies under city traffic conditions versus exclusively highway drives.
Industry experts categorize autonomous driving into six levels, ranging from 0 to 5. Level 4 autonomous driving requires the vehicle to perform the majority of driving tasks independently. For example, and still a little unclear, a Level 4 does not require a human driver to remain engaged and ready to take over, though they’re limited by geographic and weather conditions, where human drivers need to take over.
I have been fortunate throughout my career to receive extensive media coverage in both Korean and Western publications. I feel a major contributing factor is that as a consultant I cover and am engaged in Korean business.
I have a lot to say, and many people seek out my perspective. In fact, in just the past 6 months, I’ve contributed to Korea Times, CNBC, Branding in Asia, Haps Magazine, and Sisajournal-e.com, not to mention releasing a new book and multiple press releases.
Topics often vary — Hyundai, Startup Ecosystems, EV and Critical Minerals, Smart Cities, and insights into the ever-changing Korean business culture.
So why “Tip of the Iceberg?” As a prolific writer, I enjoy sharing my perspective, but only a fraction of my insights are shared, like the tip of an iceberg.
It’s in my consulting work that I explore the difficulties that companies and teams encounter in greater detail. I have decades of experience providing solutions and workarounds.
All said, for those who follow my commentaries and writings as well as acquaintances — Have a request for an article? — please let me know. Have a question or opportunity… let’s talk.
Over the years I have been fortunate to meet with and interview many of the early Korean and Western Hyundai and Kia teams and leadership. Today’s successes were built upon their struggles and can-do perseverance.
Last week the Hyundai Motor Group posted some amazing photos of the Kia T600 circa 1969. I shared some more details such as in early 1962 Kia’s Shiheung production line launched the first in the line-up–the K-360. Production would continue until 1973 with over 25,000 of the sturdy vehicles sold.
I’d add the T600 would signal Kia’s rise … ( Kia= Rising out of Asia).
Kia Motors [Now Kia] Kia Worldwide is one of the world’s fastest-moving global automotive brands. It has earned a reputation as an industry leader in design styling along with a full line of fuel-efficient vehicles that have earned critical acclaim and dramatically increased consumer awareness. Interestingly, the carmaker had early roots as a Korean bicycle and motorcycle manufacturer.
In the early 1960s, the Kia Motors Company moved beyond first bicycle components, then bicycles, and motorcycles to produce a highly practical K360 three-wheel utility truck. Across much of Asia, similar vehicles met a demand for reliable low-cost commercial transportation that could transport goods and products often in tight urban areas.
Based on the Mazda Mazdago design, the K360 also signaled Kia Motors’ long technology alliance with the Japanese automaker with a number of cars and trucks eventually licensed from Mazda.
During this era of budding Korean economic development, strong technology ties with foreign partners were common. For example, other Korean firms entered into partnership arrangements with international carmakers, including Nissan (Datsun), Toyota, Fiat, GM, and Ford. Korean industrial groups desiring to enter the car sector forged these alliances to gain advanced automotive technology and know-how. In addition, the government implemented strong trade protectionism in an effort to build a self-sufficient import substitution economy.
In particular, the Korean Automotive Industry Promotion Law required cars to be manufactured locally versus imported from foreign markets.
When pressured by the government to produce Korea-assembled cars, Kia Motors leveraged its strength as an engineering-based company and chose not to assemble compact cars imported as knockdowns (CKD). Instead, Kia set up a full-scale production plant with considerable local sourcing of parts.
Sohari
In 1973, Kia’s Sohari plant opened with the initial production of a pickup version of the Brisa. Drawing on the ongoing relationship with Mazda, the Brisawas based on the second-generation Mazda 1000, which was marketed as the Familia in Japan.
Brisa
In conjunction with manufacturing the Brisa pickup, Kia Motors also began production of 1-liter gas engines. While the competition sourced engines from their foreign partners, this marked the first Korean company to manufacture its own engines. In the first year of production, 65 percent of the parts in the Brisa, including the engine, drive shaft, and clutch, were manufactured in Korea. This local sourcing was strongly encouraged by the Korean Government and the ratio of locally produced parts increased steadily over the years.
In the fall of 1974, the first Kia Brisa S-1000 four-door sedans rolled off the Sohari production line. Overall the Brisa was a success with 75,987 sold between 1974 and 1981. In 1975 the Brisa pick-up also became the first Kia to be exported when a number were shipped to Qatar in the Middle East.
Brisa Sedan, Sohai Plant
Oil Shock
Notably, what spurred the Brisa’s early success was actually its small 1000cc engine displacement. Starting in 1973, an international oil shortage forced gasoline prices to skyrocket creating a supply shortage in Korea.
Veteran Hyundai and Kia Motors executive Mark Juhn who began his career with Shinjin Motors noted that the oil shock had a devastating impact on Kia’s rival— a newly formed and much larger General Motors Korea, a joint-venture company between GM and Shinjin Motors.
Mr. Juhn shared that with high gas prices Korean consumers favored the Kia Brisa and its smaller more economical engine over GM Korea’s first production model, the Chevrolet 1700 with a larger 1700cc engine.
Mr. Juhn also pointed out, “I could say the oil shock brought good luck to Kia but GM Korea struggled.”
[For those of you long associated with Hyundai, Mr. Juhn would later in his career head up Hyundai Motor America and was the driving force convincing HMC leadership to approve and support the game-changing 10-Year, 100,000 Mile Guarantee program].
Mark Juhn with Don Southerton, Seoul, South Korea
Steady Growth
By 1976 Kia also strengthened its position in the commercial vehicle sector by purchasing Asia Motors based in Kwangju, South Korea. Asia Motors manufactured heavy trucks, buses, and a line of military vehicles. In addition, to meet the growing demand in Korea for cars, Kia even started CKD assembly of the Fiat 132 sedan, along with the Peugeot 604, a larger model sedan.
Government Intervention
Despite Kia’s successes, government intervention imposed new mandates over much of the growing Korean economy. Direct competition was regulated across many sectors of industry. In 1981, Kia Motors was told to stop producing cars and concentrate instead on light commercial vehicles. In turn, more light truck and van models were added, including the 1-ton Bongo, the Ceres pick-up and some larger truck models.
Ford Alliance
By the mid-1980s the Korean Government decided to change policy and relax its restrictions on the car and truck companies. Kia was allowed to return to car production. Working with Mazda’s Ford alliance, Kia Motors began to produce the Festiva (known as the Pride in Korea). Export to the U.S. began in 1988. The venture was extremely successful with 300,000 Festivas being shipped overseas between 1988 and 1993.
Earth Day- Earth Week- Earth Month 2023 By Don Southerton
Reflecting on Earth Day, my ties to Green and Sustainability have reached back in time more than a few years. In fact, it parallels my work with Korea. In the mid-2000s, I was an advisor to developing and building the Incheon, South Korea Songdo International Business District. Under the leadership of Green visionary Stan Gale, the city is the global model for urban sustainability.
Envisioned as a Green, high-technology city of the future — at the time, it was one of the world and Korea’s most significant foreign real estate development projects.
Built on reclaimed land and with partners like Kohn Pederson Fox, Cisco, and United Technology, the forward-leaning project also showcased some of the first LEED-certified buildings in South Korea and Asia.
In conjunction with the Songdo IBD project and my work for Hyundai, around 2007 the Songdo team and I had the opportunity for a VIP visit to Hyundai Motor’s R&D. We even got to fuel their 1st Gen Hydrogen Fuel Cell Electric Vehicles (FCEV), and then test drive the vehicles. At this time, Songdo’s leadership was very interested in FCEV buses for the International Business District powered by hydrogen.
I also hosted a 2013 BBC World Service visit to Songdo IBD, showing off its Green smart city capabilities, capped off by an interview with Cisco’s former Chief Global Strategist Wim Elfrink, an early adopter who popularized the term IoT — the Internet of Things. A day later, we visited Hyundai Motor’s Eco Lab and test-drove their 3rd Gen HCEV, a first-of-its-kind production SUV, which was soon launched in Korea and then California.
In the years that followed, as companies I supported moved to mobility and EVs, I, too, shifted my research and work to these new sectors. Electrification has been and continues to be a major part of my work, leading to an ongoing immersion in the sector supporting Korean startup Grinergy and Green lithium battery technology.
In particular, the focus on Green, Sustainability, and Resilience is this year’s Earth Day, or as one presenter at a recent webinar shared—it’s more of an Earth Week and Earth Month.
Personally, this includes participating in workshops and presentations at the Federal, State, and local levels, including groups like Yale Blue Green (YBG), who are engaged in environmental and sustainability topics and issues, and the Colorado Electric Vehicle Coalition.
This coming week is no different with plans to attend a Live Earth Day event at NREL—the National Renewable Energy Lab headquarters in Golden, Colorado.
Takeaways As a Colorado DOT electrification expert shared, the questions their office received just a year ago centered on “if” EVs and related mobility were a good idea—to now a heightened acceptance and questions on expanding infrastructure and issues like micro-mobility, battery recycling, and end-of-life—to expanding availability from urban centers to rural and less economically served areas.
More so, as noted above and in my previous article American-Made, Limits on Sourcing, Eliminating a Dependence on China there is a need for better sourcing and sustainability of the raw materials and components used in Green tech.
Finally, as we reflect on Earth Day, in both in my work and pursuits, I find a greater embrace of new Green technologies, fueled by government and private funding and with a growing public interest in sustainability.
Questions? Comments? Have a project in mind or need support? Urgent requests Text at 310-866-3777 All other Dsoutherton@bridgingculture.com
