Working for Korea Inc

Details: Thursday, June 27 , 2013 | 5:30 PM

About the Speaker Title: Working for Korea Inc
About the Speaker: 2013-06-27 17:30:00
Event Name: Studio Korea: Be a part of a live audience for special recording sessions. -------- Non-members $10
Event Time: ../tickets/2013/2013_06_27__working-for-korea-inc__ticket.html
Event Content: itms://itunes.apple.com/us/podcast/challenges-to-building-stability/id210903888?i=161898274
Event Link: Don Southerton has a life-long interest in Korea and its culture. He has authored numerous publications on the Korean auto industry, new urbanism, entrepreneurialism and early U.S.-Korean business ventures.  Southerton has commented on modern Korean business culture and its impact on global organizations for the BBC, Korea Times, Yonhap, Korea Herald, Wall Street Journal and Forbes. He heads Bridging Culture Worldwide, which provides strategy, consulting and training to Korea-based global business, including longtime support of many of Korea's top chaebol.   Of interest: <a href="http://blogs.wsj.com/korearealtime/2013/01/14/southerton-advises-non-koreans-in-overseas-korean-offices/"></a><a href="http://blogs.wsj.com/korearealtime/2013/01/14/southerton-advises-non-koreans-in-overseas-korean-offices/">http://blogs.wsj.com/korearealtime/2013/01/14/southerton-advises-non-koreans-in-overseas-korean-offices/</a>
Podcast URL: Working for Korea Inc with Don Southerton, CEO & President, Bridging Cultures Worldwide In conversation with Nikita Desai, Director of Policy and Corporate Programs, The Korea Society   NIKITA DESAI: (Moderator) Welcome to The Korea Society, and welcome to Studio Korea. I'm Nikita Desai, director of policy & corporate programs. Korean firms operating internationally employ a multitude of non-Korean workers. What’s it like to work for Korea Inc? Don Southerton, CEO and President of Bridging Culture Worldwide, author of Korea Facing: Secrets for Success in Korean Global Business, and a recent subject of a Wall Street Journal feature, will tell us today. Welcome Don.   DON SOUTHERTON: Thank you, Niki. I'm very pleased to be here.   NIKITA DESAI: So, Don, given the growth of major Korean corporations internationally, what are the pluses and minuses of working for Korea Inc.?   DON SOUTHERTON: Well, as we all are aware, the international expansion of Korean brands has been quite successful. A lot of Korea's growth occurred during the global recession as other global brands reduced their operations. Korean brands like Samsung, LG, Hyundai and Kia expanded at this time, and that growth led to a need for more employees. Working for international companies is always a challenge, whether that company is located in Germany, Switzerland, France or Korea. Some people are prepared for it, but many require coaching and support.   NIKITA DESAI: What kind of coaching and support?   DON SOUTHERTON: Korean brands have handled this issue very successfully as they've gone global. Take someone who has worked for Volkswagen or Toyota. If that person is moving to Korea, even if they've had international experience, they will need coaching on the nuances of Korean culture and of the dynamics of working for Korean companies. In addition, there are differences between each of the Korean brands. Many non-Koreans hired to work at Korean firms believe the policies are identical from Korean company to Korean company. In fact, there are operational differences, and any employee moving into one of these companies has to understand these differences.   NIKITA DESAI: The passage of KORUS FTA means lots of new jobs for Americans, right? What are some of the opportunities and challenges there?   DON SOUTHERTON: One of the impacts of KORUS FTA will be an expansion of the types of industries doing business in South Korea as well as the expansion of Korean firms into more sectors in the United States. The dynamic growth of the electronics and automotive industries in Korea will now be joined by growth in agriculture, wine. Conversely, American companies involved in technology and service industries will be able to expand into Korea. This goes for legal and accounting services along with other nontraditional sectors we haven't seen in Korea in the past.   NIKITA DESAI: Through the Korea Society’s national outreach programs, we witnessed a tremendous interface between Koreans and Americans working side by side at the Hyundai R&D facility and the Samsung Semiconductor in Austin. Tell us more about this cultural fusion?   DON SOUTHERTON: Korean companies are making massive multi-billion dollar investments in the United States, including Samsung's semiconductor plant in Austin. This means there are teams of Korean engineers working alongside teams of American engineers at all levels of employment. This dynamic leads to cultural diversity and exchange. Hyundai has an engineering facility in Detroit, Michigan. You have American automotive engineers working with Korean automotive engineers. In prior years the focus has been on importing sales and marketing teams, but communications between global marketing and sales teams is very different than communications between global engineers and people engaged on the production side.   NIKITA DESAI: How is that dynamic different?   DON SOUTHERTON: Many of the people working globally for Korean brands have more of a global background. Some have spent their entire careers outside of Korea. They were in New York City or Southern California. Prior to that, they were in Germany. Prior to that, they were in India. They may also have worked in Korea supporting the international organization. There is a different dynamic when talking about engineers, because few have had the same level of experience globally. They've worked at an R&D center or on a production line in Korea, and now they're working at an R&D center or a production line here. They have to quickly learn the differences between cultures, and that brings a new set of challenges.   NIKITA DESAI: Let's talk about the other side now. What are some common misconceptions that non-Koreans have about working for Korea Inc?   DON SOUTHERTON: One common misconception is that the international experience and expertise they gain working in one culture can be carried over to another culture. Let's say a person worked for a Japanese brand and then started working for a Korean brand. They think they can move from one to the other without having to adapt very much. That is the first misconception. That first misconception leads to the second problem. Employees trained by a Korean team may choose to ignore what they were taught by that team, figuring they'll continue to do their own thing. They can't do that. They don't realize how well established Korean brands are. Korean companies have tens of thousands of employees in Korea. I believe Samsung has close to 6,000 PhDs. These are very solid companies. Korean companies are very successful, and a non-Korean needs to appreciate that.   NIKITA DESAI: Tell us a little bit about your new book, Korea Facing: Secrets for Success in Korean Global Business. What inspired you to write the book, and who is the target audience?   DON SOUTHERTON: Thank you for asking, Niki. There are a lot of publications about Korea which are meant to give the reader a better understanding of Korean culture. Some are written to benefit people visiting Korea for the first time. Others are written to help those moving to Korea to live. There's great value in those books and there's many of them out there. Now Korean brands are going global. They've hired tens of thousands of people. A lot of my clients are Korean firms with global teams in Southern California. I also support Korean teams in West Point, Georgia; Montgomery, Alabama and Austin, Texas. Many Koreans who come to the United States have had global careers. One Korean-born CEO I worked with had spent his entire career outside of Korea. So, there's several different dynamics at play. I wrote this book for three target audiences. The first audience is people working for one of the major Korean brands, but outside of Korea. It talks about some of the do's and don'ts as well as providing some insight into Korean culture. The second group is working for a subsidiary or a major vendor of a Korean conglomerate. An example is Korean brands hiring American and global firms to create media campaigns. The firms that place ads for their brands during the Oscars or the Super Bowl. I believe Hyundai, Kia and Samsung all ran ads during the Super Bowl. These Western firms need to have a thorough understanding of Korean culture. We're talking about hundreds of millions of dollars spent on advertising. The third audience is American companies working in the Korean market. Starbucks is just one example. The home offices of these companies might be in New York or Los Angeles, but they have operations or subsidiaries in Korea. A senior executive in that position needs to be able to interact with Korean teams as well as support any expats that may work there.   NIKITA DESAI: Can you share some of those do's and don'ts that you just alluded to?   DON SOUTHERTON: The first is expecting your teams to work in Korea without any training in Korean culture. That's like throwing someone in the deep end of a pool and expecting them to swim. It's a road map for failure. Make sure your team gets a lot of support. People working for Korean brands outside of Korea can get plenty of education. The Korea Society is a wonderful resource for people trying to learn more about Korea as well as other Asian cultures. They can follow your national tour and watch the video series you're doing. That's the first thing I think is important. The same thing goes for a Korean being sent to the United States to work. The expats coming here vary in their levels of experience. Some have spent their entire careers outside of Korea. Some have been educated in the United States and gone back to Korea. But many working for a Korean brand are expats here and it's their first overseas assignment. They've been very successful in Korea, and that's one of the reasons why they're being assigned here. But just sending them to a U.S. or European operation without training is not the route to take today. The expats, the ju jae won, need a lot of support. This support goes far beyond learning how to speak English. They also have to understand the three levels of localization. First, how are things done in their particular industry in the United States? Second, how are things done within their particular company? Third, how do you interact with the local community? For example, it's certainly easier in Irvine, California (which has a large Korean population) but expats relocating to West Point, Georgia are going to need a different level of support.   NIKITA DESAI: This is so fascinating, and your experience is so far reaching. Tell us a little bit about how Bridging Cultures Worldwide works, and how you got into this field.   DON SOUTHERTON: It started in the New York area around thirty-five years ago. I had a Korean employee who shared some of his experiences with me and also involved me in a lot of his family activities. I became very interested in Korea at that time. I went back into academia over ten years ago. That’s when I started working with Korean executives coming to America. I was teaching them about the dynamics of working in U.S. businesses. One day I received a call from Hyundai Motor Company. They wanted me to work with their American teams. This eventually grew to helping the entire U.S. subsidiary both here and abroad. Over the years, I've continued to add more layers to that. It's not unusual that I'll be working with [Korean] executive teams in the morning and with a major American company looking to better understand entry into the Korean luxury market in the afternoon. Bridging Cultures Worldwide is pretty diverse, but it focuses on providing strategy for market entry and the coaching and training of personnel.   NIKITA DESAI: Thank you so much, Don. I'm now going to open the floor for questions and answers from our audience. I will rephrase all questions for recording purposes. The first question is what Korean brands are successfully moving into the U.S. market?   DON SOUTHERTON: Some of you may be familiar with some of the major Korean brands. We're all familiar with brands like Samsung for their technology products, but you also have to look at the sectors within these brands which are becoming more important today. For example, we know the Samsung smartphone is phenomenally successful, but Samsung is starting to move into the appliance sector. They're also moving into the media sector. LG has been very active in the electronics field but their appliances have been doing extraordinarily well and they're moving into additional technology areas in the United States. They've built a new battery plant up in Michigan that will soon be producing electric car batteries. The Hyundai Motor Group (Hyundai and Kia) is massive. They have automotive production, but they also have R&D, design, Hyundai Capital (their finance arm), Innoceans (their media arm) and Glovis, their logistics arm. They have a tremendous presence in America. We're going to see more Korean brands come to the States. Acushnet (which is Titleist and FootJoy) was recently bought by a Korean entity. A number of years ago Doosan bought Bobcat. Korean companies are now investing in food production, particularly in California. There is CJ and some other Korean food brands there. We're going to start seeing new products beyond the core groups of electronics and automobiles, probably in the next year or two. Those familiar with Korean dynamics understand that they tend to build their brands from within. I think that in the next year or so we're going to see more M&As by Korean groups—major Korean companies acquiring global brands as American entities bring M&A opportunities to Korean groups.   NIKITA DESAI: We've talked a bit about general misconceptions between the American and Korean corporate cultures. The question is whether there any specific disconnects between Americans and Koreans you can share.   DON SOUTHERTON: One of the disconnects concerns expats (ju jae won) sent over here. Americans tend to stereotype people from Korean companies as inflexible or stubborn—that they don't understand how we do things here and that this is the way they are. I think it depends on the expat. Some of them are very flexible and come to the United States as a learning opportunity. My experience is that everyone is different, just like all of us here tonight. We all have different backgrounds. We've all had different experiences. Americans need to be more open about this. It will take Korean expats several years to figure out how we do things here, and it's always possible that once they figure it out they'll have to go back to Korea and learn about new things going on there. The Koreans coming here have to realize that there are very established procedures in most sectors, and what worked in Korea does not necessarily work here. My experience has been that many expats coming here don't have the backgrounds they need at first. Unfortunately, just because it worked in Korea, it may not work here. It might work in L.A. but it might not work in New York. That type of localization is important for them to understand.   NIKITA DESAI: That's really interesting. If you sum it up, it's about personal behavior versus institutional process.   DON SOUTHERTON: That's right, Niki. All expats have a misconception that every sector in every industry is the same no matter where they go. No two Korean companies are alike and no two American companies are alike. No two Koreans are alike and no two Americans are alike. To stereotype either side is a big mistake.   NIKITA DESAI: The next question is what has your experience taught you about the differences between Korean, American and Japanese companies?   DON SOUTHERTON: I think they are very different. At most of the major conglomerates, the Japanese process is very consensus-based. The entire team has to come to a consensus before moving on. With Koreans, there is a lot of discussion at some level, but once they make a decision they take off. The competitive advantage for Korea Inc versus Japan or other countries is the ability to change very quickly. I'll give you an example. If you were in Southern California several years ago, you probably remember seeing these cool-looking bright yellow cars. Not taxis here, of course. I believe Toyota takes about three years to go through the process of adding a new color to a model and then getting that model on the road. It takes only three months for a Korean brand to do the same thing. They're able to change very quickly. That's their competitive advantage.   NIKITA DESAI: This question is in regards to a comment you made earlier about expats understanding the American system—that it takes them three to four years to understand the system and then they may have to go back to Korea. Are they getting cross-cultural training? I'm sure your organization is working on that.   DON SOUTHERTON: It's interesting. Before they started their global expansion, some major Korean companies had me go to Korea to work extensively with their overseas teams. Today the hiring criteria for Korean brands requires proficiency in English and usually several other languages. It may be an Eastern European language or Spanish. Most new hires have global educations, which means that they went to the University of Michigan in Ann Arbor, got a four-year degree and then returned to Korea to work for a Korean company. A lot of them have international MBAs. I think the hiring criteria for most of the big Korean brands today require international experience. The dynamics of most Korean groups is just "do it." Get out there and do it. Unfortunately that translates to a lack of cross-cultural training because they want to move quickly. They're very forward leaning. This practice is not any different than many American companies that dispatch people globally. They might have a one-day cram course on Germany. It varies from company to company. The greatest supporters of cross-cultural training are the current senior leadership of Korea. They realize that their people need cross-cultural training, especially if that senior leadership has spent years overseas. The challenge (and I hear this constantly) is that if you work for a Korean-based company, you're working at a very fast pace. The car and electronics companies would love to do two-day training programs, but they're just moving too fast. America has to deal with the issue of compliance as well as the cross-cultural issue. I think it varies a lot with the company. They all realize they need it, but they don't know how to fit it into the program. It's a logistics issue. But production is expanding. Personally I've never been so busy. This doesn't mean there are a lot of problems. It means that people see cross-cultural training as really important.   NIKITA DESAI: This is a two-part question. The first part is prefaced by the statement that a key indicator of a multinational corporation is a CEO who is a foreign national. Do you believe that the hierarchies of Korean chaebols will begin to disappear, and that eventually we will see non-Korean CEOs? The second question is do you find that working for a Korean organization helps you become an effective international player?   DON SOUTHERTON: The best way to answer the first question is that no two Korean companies are the same. Some have started bringing in more international, non-Korean executives. Hyundai Kia has German Peter Schreyer as their chief designer and also as a president within the organization. There is some criticism in Korea that there are not enough non-Koreans working in executive positions, and I think as they continue to go global they will have to expand. Most members of Korean international teams have been educated abroad. And then there is the dynamic of the strong family ties within the Korean chaebols. I believe those will continue to restrict professional management within Korean companies for a period of time. Every year we see changes as well as struggles. Some Korean companies have hired non-Koreans to fill top positions. In many instances it has been a challenge for the executives to figure out how the Korean groups operate, so it hasn't been that successful. But I do see it as a future trend. Everyone is talking about it over there. Now, for segments of the companies run outside of Korea, they do tend to hire non-Koreans. They don't need to bring people into Korea. They already know how to do things in Korea. They hire people from outside Korea when they need an international team in the United States, the United Kingdom or India. As to the second part of the question, it's a matter of the industry sector. When Korean companies first entered the U.S. and global automobile market, they recruited people who had worked for the Big Three automotive in America or for Japanese car manufacturers. Now those same people work for the Korean brands. And because the Korean brands are so successful, their competitors want to hire those people who have been successful launching automotive plants in Korea. It's interesting. People originally worked for the Japanese, then the Koreans and now they're back working for Ford. So, it's a good career path for many people, but I think you have to look at it sector by sector. And you have to make sure that the Korean brand is doing really well, because that's where the recruiters are going. It's occurring right now. We call it "shopped." People who have worked for successful Korean brands are being shopped a lot.   NIKITA DESAI: This question follows your previous answer. When you said that Korean companies set up international teams abroad, what is the communication like between the home-based headquarters in Korea and their international facilities?   DON SOUTHERTON: I'd like to step back to when we were discussing the expat network. About seven to ten years into your career with a major Korean group, you will be dispatched someplace in the world (the Korean term is ju jae won). Most of these expats do not come here to be in management. They are not coming here to manage local operations. There might be 900 people already working in management here. They are hired to be a communications channel. They might be put into the finance department to expedite communications back to different divisions of the home office in Korea. Quite often the CFO of a Korean brand is an expat. This is no different than Pfizer operating in Korea. Pfizer sent an American CFO to Korea to serve as a communications medium. Most of the Koreans sent to the United States are not manging here, they are providing this flow of information. This is basically the Korean model.   NIKITA DESAI: In other words, these executives assist in brand management across a company's international operations.   DON SOUTHERTON: Yes, that's right.   NIKITA DESAI: This question has to do with globalization. How much does Korean culture need to change in order to adapt to international standards? An example that comes to mind is Korean Air—the turnaround from being one of the worst international airlines to one of the best international airlines.   DON SOUTHERTON: This has to do with what we refer to as the "hard" style that older generations of Korean management practiced. It was very top down. It goes back to the Korean military regimes of the 1960s, 1970s and 1980s where there was a state-run economy and an authoritarian, bureaucratic management system. The government specified to chaebols where they could put a plant and how much they could produce. There was no communication backup. It was I'm the senior and you're the junior. That mentality permeated much of Korean chaebol management systems throughout the 1980s, 1990s and into the 2000s. The big Korean groups have had to change their internal dynamics. They've had to become more collaborative. The brilliant and creative female or male they hire today needs to work in a different climate where their input is accepted and appreciated. This has been a major paradigm shift in Korea from the old, hard model to what we call a softer model—from top down (where there is no communication going back up) to a collaborative model and mind-set. This is one of the biggest changes I see.   NIKITA DESAI: Do you think that shift occurred because of the external environment? Or was that an organic shift?   DON SOUTHERTON: It was an organic shift. You start hiring the younger generation for senior leadership. They understand that in order for the company to successfully go global, they have to be more collaborative. I actually adopted the use of the word "collaborative" after spending so much time with my Korean colleagues. They talk about collaboration all the time. The newer generation of Korean management (again very much of it international) listens to TED. They're very open-minded. You look at any Korean executive today and they'll be reading a global management book. They have international MBAs. And Korean management is learning the importance of listening. They listen to Westerners a lot more. They're bringing in McKinsey and Bain to help them go global. They know how to do this very well in Korea. Had they decided not to expand globally, you never would have seen this shift. But they realized in order to go into new markets they had to change their mind-set. It was very organic.   NIKITA DESAI: Please join me in thanking Don Southerton for being here. That was an excellent presentation. [Applause]   DON SOUTHERTON: Kamsahamnida. Thank you. [Applause] [End]
Custom HTML field content: About the Speaker
Third Tab: http://traffic.libsyn.com/koreasociety/2013-06-27_WorkingForKoreaInc.mp3
Registration Form: Studio Korea @ The Korea Society
Summit External URL: <img src="images/icons/2013/studio_korea-logo.jpg" width="238" height="142" alt="studio korea-logo" /> Be part of a live audience for special recording sessions. Delve into the day’s headlines, dialogue with special guests from policy, finance, research, academe, international organizations, and the media, and determine new trends, priorities, and approaches in and toward East Asia and the Korean Peninsula.

2013 06 27 Working-for-Korea-Inc icon

Korean firms operating internationally employ non-Koreans at all levels. Don Southerton, CEO of Bridging Culture Worldwide and author of Korea Facing: Secrets for Success in Korean Global Business, shares insights on working for Korea-based companies and understanding Korean operational norms for goods and services providers.

{youtubegalleryid=10,4}

Thursday, June 27, 2013

5:00 PM | Registration
5:30 PM | Discussion

Working for Korea Inc

with

Don Southerton
CEO & President, Bridging Culture Worldwide

Moderated by Nikita Desai
Director of Policy & Corporate Programs, The Korea Society