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Everything Korea, April 3 Episode –Working with Korean Teams, Part 1

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For most of my career I have worked with Korean teams—many based in Korea, many in local overseas operations. I find both exchanges rewarding, but very different and require a varying set of skills.
In this Part 1, I offer some insights into the overseas teams assigned to local subsidiaries.
Part 2 will cover my recommendations and best practices for supporting overseas teams, including work-arounds to common issues that surface—for example when department-level expats assigned to “support” local executives begin to assume more direct control over day to day operations.
Part 3 will look at working with Korean teams based in Korea.
To begin
We find with Korea facing international operations the communication channel between the Korean HQ and local subsidiary is through expatriates– although it is shifting some and I’ll cover more in Part 3.

In key positions, Korean expats serve in roles including the CEO who is responsible for managing the local company or region. The CFO and technical support can be expats, too. Most often these Korean expats along with local leadership executive form the core for business operations in the host country.

By the way, the expats below senior management are often referred to as “Executive Coordinators” or “Executive Advisors” in the West.   As a caveat, this model does vary some and in some organization we see a mix of  “Coordinators” and Korean assigned as line managers. However, the Korean term for these expatiates is ju jae won.

In the larger overseas subsidiaries, the Korean expats are assigned to the major departments.

In many instances, as I mentioned, the expats Coordinators are not assigned a direct managerial role but still hold considerable oversight over the local operations.
Roles vary with each company, but frequently a Coordinator’s primary role is to be a departmental liaison between Korea and the local subsidiary.

That said, for westerners unfamiliar with the Korean model, this “oversight” usually translates into the Korean expats requiring sign off on all decisions—trivial to substantial.
This can be a huge challenge when newly assigned expats have little specific background in or knowledge of the host country’s operations and market.

Cognitively, they recognize local management skills and expertise, but especially if under pressure to perform and meet expectations may defer to engaging in decision-making.

Of course this can be challenge.
New ju jae won are skilled and accomplished in Korean style business operations, norms and practices.

However, they are now assigned to an overseas subsidiary where norms, practices, expectations, and laws differ.  Adding to this “Managing westerners” is very different than overseeing a Korean team…

All said, I do have proven recommendations and workarounds, so look for Part 2 in the series.
In the meantime, I’d like to ask if you could share your experiences working with expat teams.  Email me @ questions@koreabcw.com  Your comments, all kept private and confidential.

Other questions?  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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Everything Korea: September 26 Episode, “Hit the Target”

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A week does not go by without a colleague or client expressing deep concern for what seems an overarching and singular need for their company to hit their numbers.  To most, despite a number of vital business initiatives, they feel the monthly demand to meet “plan” is all that matters.

Frankly, as long as I have been working with Korea facing global business it has been a (the) driven force.  In fact, I can recall more than a decade ago while mentoring a new American divisional vice president that his Korean coordinator, obviously under some duress and knowing I understood the company well, pulled me aside. He asked passionately I stress to the new VP they needed to “Hit the Target.”  Repeating the phase, 3 times so to ensure I got it… then patting me on the back and sending me over to the adjacent office with the VP.

In another case, I was a speaker at LG’s Mobile national sales meeting.  Capping the upbeat and motivating event, the CEO with a huge graph projected behind him shared their amazing unit sales growth over for the years, then added the next year’s “stretch goal” as a hush came over the room. The new goal a huge bump over past years, which had pushed teams and the organization to their limits.

To be fair, this model is not unique to Korean business. It is also the subject on frequent discussion in Korea.  However, South Korea’s modern economy was once rooted in a state run export driven model—the government fixing private industries and well as the nation’s overall production and sales quotas in many sectors.  Today despite leading international as well as Korean economic experts arguing the old model is dated and need to move more to the service sector…   the export production model still remains a driving force… one now where Korean Groups now direct their own organizations production and sales numbers across global organizations and into numerous markets. In part with so much of the Korean identify, economy and jobs tied to export production the Groups are under pressure to continue to seek growth each year—push the teams even harder.  More so, with global stagnation in new markets and China, the past successes are marginalized. As a consequence Sales to move inventories has to rely on special pricing and incentives, which hurt brand image and profits.

Sadly Korea brands are world class and should sell based on their quality and value from cars to smartphones.

So what’s the solution?  

First we need to accept this has long been the foundation of Korean business and it has been their proven success model.  It’s part of their Culture and in a sense Tradition accepted by many.  In turn, others do hope and argue for Korea to re-invent and redefine itself, less focused on growth numbers and more on a being a leader in new technology and innovation synonymous with Silicon Valley.

Care to discuss some additional 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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Everything Korea August 29 Pitfalls and Roadblocks—Korea Perspective

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Over the past few weeks, I’ve enjoyed sharing resources. This week it’s my book from 2015, Korea Perspective—which I wrote as a road map to avoid the pitfalls, navigate around the roadblocks, and “thrive.”

In crafting the book I drew heavily on conversations with Western overseas teams, as well Korean leadership and teams.  In particular, both groups openly shared their challenges and pressing concerns along with the inner workings of their companies with hopes for improving communication.

In turn, my goal was to provide a framework, strategy, and solutions.

To Dig Deeper

Since so many have opted to get copies for my other writings, here, too, is a link toKorea Perspective http://unbouncepages.com/korea-perspective-launch/, or you can request a PDF from my personal assistant Stacey at stacey@koreabcw.com.

As Always….

Have a Korea-facing situation that needs addressing?  Need some insights into Korea-facing challenges?  In many cases, we can provide solutions and workarounds.  Questions@koreabcw.com

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Everything Korea: September 21 Episode, Where to Begin

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Where to begin?  What are the essentials to better understanding the Korean mindset with regard to Korean business? I fall back on to three fundamentals.

Hierarchy—place and order

Hierarchy is one of the most distinguishing characteristics of Korean culture and deeply embedded in the Korean workplace in Korea and overseas.

Reaching back to Korea’s Neo-Confucian past, social stratification is apparent in Korea’s top companies. More so, South Korea’s authoritarian military regimes of the 1960s, 70s, and 80s reinforced the model.

For Koreans hierarchy brings place and order to society and the workplace. Unlike the West, within this hierarchy no two individuals have the same place within the social matrix–age, education, family, employment and title /position with a company or organization determining where one stands within this matrix. So deeply does it impact Korea that rankings from one’s class standings to consumer rating of the major Group global brands matter considerable.

Status—upmarket and Lux

Traditionally Korea was a status conscious society.  For the elites this manifested in a wide range of status markers from Celadon pottery, refined behavior, ritual robes, distinct cuisine, and table manners. Today a former rigid class structure no longer dominates—class distinction and status more determined by one’s education, employment, job position, and personal income. More so, we have seen considerable upward social mobility within Korea—a direct results of the nation’s economic successes.

Going hand and hand with the upward mobility has been the demand for luxury and premium goods and products.  In fact, these (most often Western) lux items have taken on the role of status markers.  This list can include designer eyeglasses, handbags, and watches, as well ties, scarfs, belts and name brand clothing.

Although some Koreans have shown concern over the desire for pricey goods, in the eyes of many Korean customers, the more expensive and the rarer, the more desirable the brand. Consumers equate value with a high price tag.

All and all what we see unfolding is an ever growing demand for upmarket goods and product in Korea—this consciousness driving a repositioning of Korean brands globally, too, — Korean brands wishing to be seen as premium and among world’s leading consumer goods from cars to home appliances to electronics.  

Generations—shared experiences

South Korea’s dominant age groups have great impact on Korean business culture, so there is value in understanding the differences in Korean generations. In South Korea, a generational group is defined more by its shared experiences than by a specific number of years.

For instance, older Koreans (50:60ers) who lived through the Korean War and its aftermath are more conservative, strongly allied with the U.S., and uncompromising towards North Korea.

In contrast, a group called Generation 386 (a phrase coined more than a decade ago, and comparable in some aspects to American baby-boomers) grew up in a period of great student unrest and tend to be more socially conscious and liberal than their forbearers. 386, no longer literally accurate term, stands for Koreans in their 30s in the late 1990s, born in the 1960s, and educated in the 80s.  (Re-coined now as 486’s in some circles.)

A third generation of South Koreans, those in the age group of 26-35, is commonly referred to as the New Generation or Shinsedae. Many of this group have studied abroad, worked most of their careers on overseas support and projects, are fluent in English (and often another language or two), and have a global perspective.

This group grew up after the 1997 economic meltdown in Asia, which strongly impacted South Korean culture. This younger generation of Koreans is less concerned about ideology and more pragmatic. Their primary concern is finding a job. They are also a strong “gotta have it” consumer class and individualistic as a result of the impact of globalization, the Internet, television, and the high percentage of students who attended U.S. schools and universities.

All three noted, I see hierarchy, status and generations as a lens to better understand the Korean mindset, both within their society and in the workplace across their global organizations.  

For more insights, questions or comments, I am available to discuss.

Just go to http://www.meetme.so/southerton

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Everything Korea August 3 Episode: K-lobalization, A New Concept?

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In the recent case study, I mentioned K-lobalization. To many, this was a new concept. In reality K-lobalization was something I coined in 2008. I’d add to a video’s content, which I recorded in March 2008 on the topic (but still very relevant).

In particular we find Korean companies in 2015 are better defining their strategy globally. This means they are instituting a bolder standardized approach to marketing, branding and operations. In the past they have taken a more fragmented approach, with lots of variations from region to region.

Please take a few minutes and review the video from 2008…

 

Oh, one more thing. As an additional resource, here’s an excerpt from

Korea Facing, Secrets for Success in Korean Global Business

By Donald G. Southerton, 2013

Chapter 1 K-lobalization (Globalization with a K for Korea)

When I began supporting overseas non-Korean management teams for Korean companies, I often heard staff looking for a time when Koreans would fully embrace local western business norms, step aside in key decisions, and let the westerners “run things.” Why?

The overseas branches of Korean companies commonly have a CEO who is a Korean expat managing the company or region with local support. The CFO and technical support can be expats, too. Most often these Korean expats form the core for business operations in the host country. By the way, the expats below senior management are often called “coordinators” in the West. However, the Korean term is ju jae won.

In the larger overseas subsidiaries, Korean expats are assigned to the major departments, including sales, marketing, HR, and product development, along with engineering, and design divisions. In many, if not most, cases these expats are not assigned manager roles but operate as a “shadow management” with considerable oversight of local operations. For westerners unfamiliar with the Korean model, this “oversight” usually translates into the Korean expats requiring sign off on all decisions—trivial to substantial. This can be a huge challenge when newly assigned expats have little specific background in or knowledge of the host country’s operations and market. Cognitively, they recognize localization is needed but, especially if under pressure to perform, may defer to their Korean company procedures and cultural norms. In other cases, Korean firms have also initially resisted local management guidance and followed what they felt would be the best approach. Sadly, they performed poorly and eventually yielded to the local teams.

Times do change. Recently, and unlike a decade or so ago, many Korean teams and management have become increasingly global savvy. More significantly, following the global recession of 2009-10 when many international firms experienced setbacks, Samsung, Hyundai Motor Group and LG soared and as a result some Koreans see their model as superior to rival western brands.

I call this K-lobalization—when Korean firms boldly promote their own unique management style and corporate culture internationally and across many markets.

Book Available on Amazon at:

http://www.amazon.com/dp/1481224336

I look forward to your questions and comments

questions@koreabcw.com

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Everything Korea, July 6 Episode: An Edgy Korean Counter-culture?

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To recap my thoughts in previous posts, a strong Creative Class is seen as key to sustaining a forward-leaning, innovative economy. Going hand in hand with this is workplaces that embrace diversity and openness, are not opposed to self-expression, promote individual recognition for hard work as well as resulting compensation (more than a base pay) for doing what they are good at… and they work in a community offering an engaging and even edgy lifestyle.

So where do I see disconnects between South Korea and America?

For starters in America the old Fordism and Company Man model at least for the creative class has shifted. Workers were once strongly tied to the company, this relationship nicely summed up by Richard Florida, “You were a company man, identifying with the company and often moving largely in the circles created or dictated by it.” Today, creatives value their unique social identity–one able to move intact from firm to firm and well as assuming the risks and absorbing the benefits companies once backed.

In contrast, rooted in Korean norms and collectivism, Korean workers strongly identify with their company—perhaps more so within the major Groups like Samsung, Hyundai, LG, and SK, as well as those working for a high profile global brands in Korea like Nike.

These organizations tend to be highly traditional vertical (and often horizontal) corporations— top-down management hierarchically flowing workload down to teams (most often operating in silos) with the Taylorized expectancy they follow routines and norms long established. In contrast, a creative work culture dies when so regimented as Florida points out, “ like rote work in the old factory or office.” A long hour chained to cubical cranking out Point points is very different than a culture where ideas are conceptualized inside one’s head in a café over a latte or during a trail run.

All said, one could argue Korea may not be wired for fostering a sustainable creative culture.

What I do find as encouraging is many in Korea on a personal level attracted to and appreciate counter-culture. There is an ever growing segment is their society adopting a lifestyle more conducent to creativity. Much of this influence has been Koreans exposed to the global art scene, the influence of expat non-Koreans, plus Koreans embracing their own traditional artisan heritage. In some ways, this movement has taken on a rather edgy Bohemian feel… one I find very cool.

For example, Korean media reports there are a growing number of “dives with DJs and extensive collections of LPs,” many located in ultra-hip neighborhoods…. walls plastered with album covers from the likes of Pink Floyd, Jimi Hendrix and B.B. King. The interiors shrines to Bob Dylan and Neil Young and the cultural revolution of the 1960s.

One more thing,

I have a request for my friends both Korean and non-Korean expats in Korea to share their observations, especially on the emerging counter-culture.

I’ll also be pulling together some example of a budding Korean counter-culture scene and what I see as roadmap for workplaces looking to attract and groom creatives—not only for Korea, but also for their U.S. and global operations.

Until next time…

Schedule a chat?   http://www.meetme.so/southerton

or

Direct Questions? Go to questions@koreabcw.com

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Everything Korea: May 11 Episode, Startup Culture

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Summary and Links:
Just back from NYC, so I wanted to share the link to The Korea Society presentation. Nikita Desai and the team did a wonderful job hosting and then professionally producing and uploading the event. You’ll want to set aside some time to watch the recorded session. I have included the YouTube link in week’s copy.

The topic of Korean startups seemed to come up lots last week. We touched upon it in The Korea Society interview, but it was a subject of discussion in several of my high level meetings while in the City.

I feel it is a “talking point” that I will be elaborating more on in the next few weeks, but frankly Entrepreneurship and the roots of Korean style Entrepreneurship has long been a subject of my study, writing and work.

In fact, my first book was titled, The Filleys: 350 Years of American Entrepreneurial Spirit

A second book Intrepid Americans: Bold Koreans—Early Korean Trade, Concessions, and Entrepreneurship

As well as Chemulpo to Songdo IBD: Korea’s International Gateway, and Hyundai Way: Hyundai Speed all approach Entrepreneurship from different perspectives, historically and culturally.

So today, just as an introduction to the topic of Korean startups, I see the major challenge with Korean startup is culture. Let me explain, what has evolved in America regarding startups is they tend to hub in cities like Boulder, Colorado, San Francisco, Austin, TX, and NYC, although more and more scenes are emerging like here in Golden, CO…

Within these communities I have witnessed an amazing synergy not only in day-to-day interactions and dialogue, but also in resources. Actually spending an hour and listening to the chats and even pitches for funding in edgy Caffe Centro on a South Park Street in San Francisco (the couple of blocks once referred as Ground Zero of the dot.com, where concepts like Twitter were launched and scores of tech companies and startups now call home ) one quickly sees why locating in one of these scenes is key ….

Noting this, where the gap between US and Korea occurs is primarily in mindset. Today the entrepreneurs, angel investors and VC who launched Facebook, Twitter, Instagram, Linkedin and Shopify continue to look for, invest and provide mentorship and guidance to what they hope will be the next success story…. In most cases they are investing resources in multiple ventures….

This said they know and accept that failure is part of the process…. As Biz Stone (Twitter, Square, Xanga, Medium…and a bunch more) said at SXSW… “the failure of one venture, Jelly, led to success at a venture, Super.”

So getting back to Korea the real challenge is not in lack of ideas, innovation, and talent, but in allowing and fostering a culture for an acceptance of failure. And this is where I will take up in the next episode of Everything Korea and share some an exciting developments, which may be the very answer…so stay tuned.

Until next time….

Link to The Korea Society
https://youtu.be/oDo6y1RD3s8

Link to Don’s Books
http://www.amazon.com/gp/search?field-author=Donald+Southerton&index=books

For some fun with your iPhone
https://super.me/

Questions? Go to questions@koreabcw.com

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Listen to Podcast from the Korea Society Corporate Series Featuring Don Southerton

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Listen to Podcast Here:

Korea Society Corporate Series

Featuring Don Southerton

 

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Don Southerton is highlighted in the month’s Global Success Newsletter from Frankfurt, Germany.

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Doing business in Korea- Contractual Agreements

Contracts, legal agreements and negotiations 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 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, a legal agreement in the West is 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 change after change and alterations 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 departments – often with limited or no international legal or business experience –  despite months of work between the Western and Korean lead teams!

As the Ink dries

Perhaps of more concern is that terms mutually agreed upon within the binding agreement can be subject to re-interpretation. Most often, Korean and western senior leadership teams did a great job gaining mutual trust. Both negotiated well. The deal is signed and its time to perform.

Sadly, the honeymoon is over. Challenges arise, what appeared to be clear expectations could now seem murky with poor alignment and weak communications. 

 Why?

There are a number of reasons. Over time, as Korean team members are reassigned to the project, the new staff will be unfamiliar with previous compromises and understandings. This new staff, often in response to changing business conditions, will have different expectations and want to implement fundamental changes that alter the agreement.  This will require amending the original agreement with all of the associated time and costs. In the worst cases, Western companies will not be open to altering what they feel is fair and binding, resulting in seriously jeopardizing the relationship and creating potential legal action.

Conclusions

In dealing with Korea-facing business partnerships ensuring success and sustainability will require well-communicated expectations and cross-cultural understanding. In particular, any business plan and strategy needs to take into account differences the cultural realities between the West and Korea.

Excerpt from: https://www.globalsuccess-club.net/newsletter-april-2015

https://www.globalsuccess-club.net/business-in-korea?utm_source=april+Newsl

 

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Korea’s Economic Recovery ?

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With September’s days passing quickly, a short update on Korea is timely.
1. It seems the Korean economy is recovering. In 2009, we might see the Korean economy only shrink 1.5%. This is considerably less than earlier economic predictions.

2. Although export volume is down ( 20 %), a weak Won has resulted in strong profits for many Korean global firms. (This always seems counter-intuitive, but remember a few years ago when the Won was strong to the U.S. Dollar? Profits plunged and many Korean firms were in a crisis mode with last Q budget cuts, etc.)

3. Many Korean global firms have recently seen record sales numbers. Analysts’ note that Korean firms are among the few to make gains in markets–capitalizing on opportunity. (Remember early this year I stressed this would be an aggressive Korean strategy).

4. I’ll continue to watch trends carefully and report. Meanwhile, please share with your teams Bridging Culture Worldwide Blog’s daily hints on Korean global business. I’m posting one hint each day in September.

BTW My lecture at The Korea Society was well received. I spoke on the Korean car market, and the recent successes of Hyundai and Kia Motors. Lots of Korean media covered the event, too. They seem very interested in thoughts and insights into why Korean cars were making huge strides in market share, etc. (TKS will soon offer a video version of the lecture).

As always, I’m here to support you and your teams. 24-7-365 Please feel free to call 1-310-866-3777 or email.

Regards,
DS

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