Everything Korea, January 9 Episode, The Three Korea Facing Business “Must Do’s”

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Must do #1

Stay informed on the economic and political issues in Korea that will impact business in 2017.  For many of you, I do this in daily updates.  If you are not receiving and would like to be better informed, please let us know and we’ll add you these updates.

Must do #2

Mentoring and coaching has never been as vital. Anyone in your organization that has exposure and interactions with Korean teams and leadership need this support.  This can range from training sessions to one-on -one mentoring.  Assuming teams will “get it” is like throwing someone in the deep end of the pool and expecting them to swim and not sink.  Sadly, the later has been the model, with a few exceptions…frankly this attributes to employee and leadership struggles—for example, trying to second guess Korea HQs perspectives,  or investing time and resources in projects only to have them stalled, postponed or dropped.  The investment in mentoring always offsets the huge costs tied to frustrating and misunderstanding that lead to leadership and staff turnover, not to mention poor performance.

Must do #3

Finally stay flexible and be seen as adaptive to change.  Provide options vs. singular solutions to challenges.  Offer, when appropriate, even an “out of the box” additional option.

All said, look for more “Must do’s” in the following weeks, with this as a good start for 2017.

As always, we open to discussing your needs and concerns. Stacey, stacey@koreabcw.com, my assistant can schedule us a time to meet, or chat by phone.  For urgent matters, Text me at 310-866-3777

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End of Year 2016 Thoughts of Don Southerton

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My EOY thoughts…

http://brandinginasia.com/south-korea-2016/

South Korea 2016: Gazing Back and a Look Forward

Branding in Asia December 31, 2016

It was a challenging year for both western and Korean overseas business teams. We all felt the common sense of worry frustration; coupled with the need to hit steep sales targets, there was the mounting anxiety from South Korea over a declining export economy and a weakening Won.
Not to mention, the political scandals that reached into the very core of Korean business groups—who watched as their Chairmen were called into the National Assembly to be prodded and probed on contributions in exchange for special presidential preferences.

Still, we are honored to support so many in leadership who come to us for advice and perspective—a role we take with utmost seriousness and hold in deep confidentially.

With 2016 came opportunities to share my thoughts and perspective to a wide audience including Branding In Asia who both highlighted work in an interview as well as published a number of commentaries.

So what’s before us in 2017…Trump, the Korean Presidential Election, and Succession?

What stood out at the recent National Assembly grilling of the top conglomerate Chairman, many men in their late 70s, was the targeting of the now de facto head of Samsung, who has assumed his father’s role.
“Trump?”—a name and an uncertainty that surfaces often. I constantly field questions from both Korean and American business leadership on the impact of the election and the new administration. Who would know I would be asked to speak in December about Trump to 45 Korea executives. I also find it interesting that diverse Trump scenarios tied to possible renegotiation of the North American Free Trade Accord by the new administration were mulled at the Hyundai Motor global strategy summit in Seoul.

Looking forward, trade agreements, US military support for South Korea and dealing with North Korea’s nuclear buildup still top the list. On the trade agreement front, my expectation is at some time during the next year it will be looked at deeper by the Trump administration. However, until there is a South Korean president in office, with the impeachment waiting to be upheld by the Courts, we’ll see no Trump-Korean President summit to drill deeper.

Presidential Election 2017

What I will be probing for is the “tone” of presidential hopefuls—2017 an election year in South Korea. One candidate, for example, is already demanding the Chaebol model be dismantled.

In particular, my thoughts were summed up in Forbes, in a timely December Frank Ahrens’ article remarking that an incoming Korean president could “ride into office on a wave of populist anger directed at the nation’s elites. Still, says veteran South Korea business consultant Don Southerton, “a new administration will need chaebol support to drive the economy and jobs or quickly lose public support.”

I’d add we have experienced decades of “love-hate” between the Korean Groups and the government. One minute mandating new rounds of regulations such as restrictions on mutual investments and loan guarantees to curtail chaebols—the next minute persuading chaebol leadership to spur growth. The reality is Group support by Samsung, Hyundai, LG, Lotte and SK is needed to create jobs, invest in R&D and support an incoming president’s initiatives to grow the economy.

Less likely considering the emergence of a more cynical generation that may threaten to upend an old system, nevertheless seeing disruptive politics emerging globally, we could even have a new president promising change but openly allied with the chaebol as engines of growth. We’ll have to wait and see. That said, at least in the short run post-scandal I see Groups coming under pressure in laws and regulations designed to increase financial transparency and accountability of family members.

The Succession issue

What stood out at the recent National Assembly grilling of the top conglomerate Chairman, many men in their late 70s, was the targeting of the now de facto head of Samsung, who has assumed his father’s role. With the mantle of Samsung now handed to the third generation of the Lee family, we may see similar at Hyundai and the other top Groups. In fact, South Korea’s textile giant, Hyosung just announced with year-end the ushering in the era of the group’s third-generation management. I expect more announcements in the weeks to come…

What will this new generation bring forth? For one, Samsung’s successor Jay Y Lee has promised to abolish the conglomerate’s “control tower” the Future Strategy Office in response to criticism about the office’s role in the group-wide business command and control operations. No major decisions such as acquisitions or entering new businesses without the FSO’s scrutiny. On a side note, Hyundai Motor Group is one of the few groups that doesn’t operate a de facto control tower. Unlike more diversified chaebol, Hyundai core business is automotive with its affiliates already aligned in supporting a common interest.

As for succession and an indicator of change at Korea’s second largest conglomerate, Hyundai Motor Group’s heir E.S. Chung continues to take a more visible leadership role. For example, E.S. Chung has sought to break away from the old model of a strictly Korean leadership team to more diverse international team as part of his strategy to better position their brand.

More recently he re-structured the annual year-end global strategy meeting of 50 Hyundai and Kia Motors Korean executives from their overseas branches. What stood out was the collaborative, open discussion based structure of the summit vs. an older conservative and hierarchical format in which the head of each overseas branch would give a one-way briefing to the Chairman.

We can assume E.S. Chung will continue to follow his design-loving passion and consensus-building management style in 2017.

Summing up

2017 may be seen as a year of uncertainties—both domestically in Korea and internationally with the potential for a weakening global economy, more disruptive politics and tightening of budgets and spending. The later is concerning since cutbacks would only hamper sales in what may be a tough market.

 

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Don Southerton Korea-facing Legal Consulting

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C.V. and Contact Information

Don Southerton

President and CEO, Bridging Culture Worldwide

1-310-866-3777

Dsoutherton@bridgingculture.com

http://www.bridgingculture.com

Offices in Golden, CO; Irvine, CA; and Seoul, South Korea

Services Provided

Korea expertise includes: Anti-trust, Licencing, MOU and Agreements, Korean culture and norms, business culture, gender in the Korea workplace, Family, IP, and deep insights into most of Korea major global conglomerates (including, but not limited to Samsung, Hyundai-Kia Motors, and LG). Southerton provides strategy, expert opinion testimony, litigation testimony, and case review for Defense and Plaintiff.

Experience

Don Southerton is an author, advisor, consultant, strategist, and coach working with many of the top Korea-based global corporations, along with major western firms that have ventures related to South Korea.

In addition, Southerton has advised and supported Korean Ministry of Knowledge, KOTRA, Invest Korea, The Korea Society, and US Korea Connect (the Korean Embassy in Washington, DC).

Southerton’s work has recently been covered in The Economist, CNN Fortune, the Wall Street Journal, Automotive News, Bloomberg TV, Korea Herald, Korea Times, Yonhap, Forbes Magazine, FSR Magazine, and a wide variety of local Korea media sources and interviews. He is also an author of 12 books and publications.

As an expert witness, Southerton has worked on cases involving anti-trust, wrongful death, IP, international family law, labor law, and personal injury. By virtue of his education, experience, training, and skills courts in Illinois, Pennsylvania, and California have accepted his testimony and expertise.

 

Education

  1. A. History. University of Colorado, Denver.
  2. A. History. University of Colorado, Denver.

 

Post Graduate Study

University of Southern California (USC).

University of California at Los Angeles (UCLA).

Intercultural Institute of California, San Francisco (IIC).

 

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South Korean President’s Impeachment, a Growing Likelihood?

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From Branding in Asia

South Korean President’s Impeachment, a Growing Likelihood?

South Korean President’s Impeachment, a Growing Likelihood?
By Don Southerton – Nov 28, 2016
While I advise Korean businesses for a living, I have been hesitant to expand my purview into the political world and offer my views on the indictments against South Korean President Park.

Nevertheless, impeachment seems a growing likelihood, with Politicos predicting the National Assembly can secure the required two-thirds majority vote needed to pass articles of impeachment.

So, what’s next?

Poring over scholarly updates, including those of my longtime friend Professor Steph Haggard’s insightful, “ Park Unraveling” series, I’ve come up with a primer on how this whole thing would play out.

The “If’s.”

If the National Assembly moves forward and passes an impeachment bill, the Constitutional Court is then responsible for deliberating the case. In addition, President Park’s powers would be suspended with the Prime Minister charged to lead the nation during the interim.
The Court then has 180 days to make a ruling on whether charges against the president warrant impeachment. If the Constitutional Court upholds the impeachment bill, the South Korean Constitution stipulates a presidential election must be held within 60 days. That means if the Court takes the full six months to rule on the case, the election would be held in August 2017.
If the Court rules in favor of impeachment, President Park would be stripped of her post and could face criminal and civil charges. Under Korean law, presidents while in office are immune from prosecution short of treason or insurrection.
It is worth noting, the next South Korean presidential election is scheduled for December 20, 2017. In the event, the Court rules in favor of President Park, incumbent Korean presidents are limited to a single 5-year term in office, and President Park could not seek re-election.
With no clear favorite yet for 2017 presidential election along with if President Park is impeached triggering an earlier election, pundits do feel the current United Nations Secretary-General Ban Ki-moon, a former Korean Prime Minister, positioned well as the front-runner amid a field of opposition party hopefuls.
All noted, with the situation subject to change and quite fluid, we’ll have to take a wait and see approach to what unfolds next.

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Everything Korea November 7 Episode, Traversing the Challenges

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One of my passions is mountain trail running—the more demanding the terrain–the better. It’s the same in my consultancy –I enjoy tackling tough challenges – and providing sound solutions and a work through.

Over the past few days, I’ve had inquiries on resources to help western managers and teams better work with their Korean counterparts.  As I’ve mentioned, for example, we’re seeing local teams increasingly in daily correspondence and on calls with Korea HQ teams, so practical skills and insights can help traverse the cross-cultural challenges.

 

In addition to my weekly vodcasts, now with more than 100 videos on the BCW YouTube Channel and over 20,000 views, I’d like to share another web-based resource –Issuu—where I’ve uploaded 22 publications.

Subjects are wide ranging from my 10 insights into Hyundai Motor Company culture to articles in Forbes, Chief Executive (Korean language), The Economist, The Korea Herald, Yonhap New Agency, FSR Magazine, and US Korea Connect to name a few.

Link to Issuu –

https://issuu.com/bcwkorea/docs

Oh, one more thing –

Have a subject you’d like me to discuss or comment on in an upcoming episode?

Just email the request to questions@koreabcw.com

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Everything Korea October 31: Collaboration

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Collaboration. We hear the term promoted both as a core value and expectation in Korean global business. For me, it’s building a solid relationship with Korean teams—one by one.

In fact, whenever I take on a new Korea facing project, I seek out a team member, first as a point of contact and then someone I can strengthen the relationship building trust and mutual understanding. This can include daily chats by phone, email and Kakao.

In most cases, over time I add layers of support … understanding they are in a tough place… at times having to relay requests and demands they themselves may not clearly agree but nevertheless need to communicate.

In particular, I’ve found they may not be familiar with the project nuances—in contrast the experienced Western team.  In my role, and to build the relationship I work as the go-between, mentoring and even share (confidentially) how to best frame their company’s issues and avoid if handled poorly what could result in an impasse.

Collaboration, all said, is about relationships, nurtured over time, and built on seeing a project through for both sides mutual benefits as well as the individual tied to the undertaking.

Thoughts, questions, comments? Share at questions@koreabcw.com

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Everything Korea, October 24 Episode: Deconstruction

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As I have shared before, supporting clients and their challenges requires getting to the core issues. It’s distinguishing between what may be, for example, a local organizational, or what may be tied to the Company in Korea. It then requires probing for any cultural impasses before providing a practical solution and a work through.

Much of this work is first listening carefully to clients and their challenges.  Equally valuable is walking around the corporate offices, observing and capturing multiple viewpoints.  Nothing beats being onsite. Nothing beats getting face to face.

Too often, I find challenges as murky, complex and layered with frustrations, so a deconstruction is needed.

In most cases, I bring a fresh perspective—one rooted in years working with Korea-facing business.  I’d like to share that in addition to mentoring, my work also involves directly supporting specific and very select high profile projects with clients.

Next Steps

As a next step, I suggest we set a time to discuss how we can work together. My personal assistant Stacey at stacey@koreabcw.com can coordinate a time for us to meet or chat by phone.

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Everything Korea October 17 Episode: “That wouldn’t work in Korea”

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This remark can be heard often.  I personally have experienced it pop up in discussions while at working for Korea companies. It surfaces often in chats with my Korea facing international clients.  In particular, it’s an issue when Korean firms promote themselves as “global, “ but push back with few wanting to move beyond the standard response “That wouldn’t work in Korea” or the caveat “That’s not how we do things at [insert company name] – most often this is when international teams seek to share their global approach to business.

Frankly they are right–things do work well in Korea, but this is the very root of the problem for a list of reasons.  For one, if global brand or company enters the local Korean market with a new product or service they bring an international model, which needs to be followed A-Z.

I’ve seen brands and projects falter when they do not embrace fully or the local partner picks and choices what they see fitting well, dismissing what they see as “different.”  At times one has to question the motive behind this pick and choice, especially when drilling deeper –Control or Openness to Change– becoming the real issue.

On another level, asking global team to follow Korean corporate norms outside Korea is a huge and growing concern. Policy developed in Korea which works well in Korea, rarely translates internationally. More so, when this means decisions for what should be local have to come from teams Korean HQ.

Of course working through these issues is where I come in… mentoring, giving perspective, providing context, sharing workarounds and facilitating the change we seek.

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Everything Korea, October 10 Episode: Just Back from Seoul

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I’m just back from Seoul. With “Meet and Greets,” more than once casually bumping into few longtime friends in the hotel and at the airport, a number of high level presentations, a VIP tour of Hyundai Card’s two newest venues—the Music Library and the Vinyl and Plastic retail store, and an even a day trip to PyeongChang, home to the upcoming 2018 Winter Olympics, the days and nights stayed busy.

Amid all the travel, I study the corporate Korean workplace.  It’s the sub-culture within the different Groups and their affiliates—nuances– that capture my attention.  Marketing teams, for example, dressing ever more casual, ties less and less commonplace, meetings in coffee shops adjacent to corporate offices, not to mention many teams working Remote in the cafes with easy to access Wi-Fi.

Still often we see some constants—older senior executives in their company car, usually black Mercedes, BMWs or Hyundai Equus (now Genesis G90, but badged in Korea as EQ 900), the exchange business cards, although less formal in how they are presented, the dominance in the local market of the top Groups—Samsung, Hyundai, SK, LG and Lotte, as well as annual strikes underway—on this trip Hyundai Motor Company’s union and the subway and railway unions.

All said, what continues to linger in the workplace is rigid canons in the Day to Day — hierarchical top down management and communications, risk avoidance and zero-sum mindsets, and although companies boasting their globalism, few wanting to move beyond the standard response “That wouldn’t work in Korea” when international teams seek to share their global approach to business.

Of course this is where I come in… giving perspective, providing context, sharing workarounds and facilitating change.

Care to discuss?

My personal assistant Stacey at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.

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Everything Korea, October 3 Episode, The HOW

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A respected colleague shared their thoughts on last week’s commentary “Hit the Target”—noting is was “a timely topic!” “… Especially as we enter the fourth quarter…”

Several readers also chimed in– lamenting that local leadership and teams receive little guidance in HOW to hit the target.

To add some context, HOW has considerable to do with Korean workplace culture norms. Leaders give directives, and teams execute in a top down manner. In some cases, well meaning leaders withhold detailed instructions to empower their teams to work through it themselves…. In other cases, some in less progressive management feel there are being paid to do a job…. And teams need to struggle like they themselves had earlier in their careers… While others recognize providing direction may be efficient, but hope their team will find new and better ways to tackle the challenge. In particular, some form of “hail Mary” that drives sales and even better at a low cost.

Frankly, demands today on Korean export driven business have pushed and stretched teams. Many feel they are operating at maximum with little room for additional market share or sales.

Risk avoidance adds another layer when new ideas are presented, too.

Under these circumstances I have two recommendations.

  1. Present multiple and alternative ideas and countermeasures… vs. selecting one idea. I know a common response is “we do this, but to little avail.”  This does take some cultural savvy… the best teams in Korea do find ways to get their message heard. I can help here…. in providing you with a best approach.
  2. Couple with suggesting a trial or pilot approach to minimize risk and investment— with the ability to roll out fast. Again, this takes some savvy in how best to share and present…. Something I do often….

Care to discuss solutions? My personal assistant Stacey at stacey@koreabcw.com can coordinate a time for us to chat by phone, meet or handle by email.

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