I think the most desired is not about the organization itself, but more of how this organization can achieve the goals designed by the chairman. The structure of the organization is quite well designed but I consider it's a bit late. When the chairman created the goals in 1995, the LG management was starting the re-organization in 1997.
Two years late in the industry business of the 21st century is like a thousand years in the World Wide Web years.
However, if we analyze carefully the re-organization of the company, we can see that there is a big management problem, especially in the middle management since the Asian companies mostly have a more decentralized top down management type. This type of management has minimized the functions of the middle managers in the process of making decisions or creating strategies for their departments or divisions. This process has been done for so many years that it affected the middle management's ability in making decisions by their owns.
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The company's management type is not the only reason behind the setback LG had in mid 2000. The company's old cultural elements, they are stability, harmony, and respect, have created a complacent within each department. Stability makes people stable, meaning that the fast pace of the world's economic growth did not even bother the LG because they love and create and also encourage stability among employees. When the world around you moves in a very fast and dynamic motion to move forward towards success, and your company really loves to enjoy stability in the global industry, what do you think will happen to your company? Losing the race even before the game starts. Meanwhile, harmony and respect are definite aspects needed in a working environment, much needed than a full conflict work atmosphere.
To accommodate the vision, LG's top management reinforced four new cultural elements; they are challenge, speed, simplicity and boundarylessness. These four new elements add a total of seven cultural elements, a combine of old and new elements and match the total amount of seven S's; strategy, structure, staff, skill, style of leadership, system control, and shared values. I try to combine between the two 7's in order to create a great synergy between the value of LG as family company and the holy 7 S's of global business.
The 1st is the combination between Strategy and speed. A speed strategy means that LG's top management has to be aware with the rapid change in the global industry. Not only that the strategy has to be adjusted with the changing, but also it has to be adjusted quickly in order not to let the company being left out. The 2nd combination is Structure and simplicity, this combination means that LG's top management has to create a more simple and decentralized structure of organization. Simplicity is not a matter of operation in order to cut costs down but also a simple organizational structure will make it more manageable.
The next combination is Staff and respect. If there is a mutual respect among cross functional staff in the large LG organization, it can create a magnitude effect of self reliance and trust among cross department employee. Skill and Challenge are coming as the next combination. Management has to be able to push their employees to challenge their skill, to realize that there is no limitation in skill area. Technology, industry, business and the world will grow every single day, and all of them require an excellent ever growing skill to master them.
The 5th combination is between Style (of leadership) and boundarylessness. This means that a manager has to have a clear vision about his strategies and goals and it covers and is understood by employees from different departments or even division. System control and stability are the 6th combination. This combination means that the system used in across departments and division has to be able to control different disciplines of industries in a sustainable step, especially in operation and finance. To have a same set of standardized control in different departments can create reliability to the system. The last set of combination is Shared values and harmony. A harmonious set of shared values among employees and management are able to sustain the rapid industrial growth. This combination is definitely the basis of the first 6, because all of the 6 are shared values and they are needed always in harmony in order to achieve the "LEAP 2005".
2. If you were a member of Mr. Y. K. Kim's LG Human Resource Team, what HR strategies, policies, programs, and/or practices would you recommend to translate the Chairman's vision into reality?
Always on Time
Marked to Standard
A rapid change in the global world of business needs a fast changing strategy and policy in order to balance the unexpected changes that happened. I, personally, would recommend the team to only simplified and fasten all of the strategies, policies and programs that they have created. A program that has been 2 years late behind schedule is not proven wrong or fails yet; it just needs time adjustment, increase work speed, in order to achieve the goals.
a. What are the key needed capabilities of LG's future global leaders?
The key needed capabilities for LG's future global leaders are decision making, strong leadership and strategy planning. I think these three basic managerial skills are the weakest among LG's middle management. Sometimes a manager has to make a decision where he/she doesn't have the luxury of time of asking the top management first. This decision making skills has to be acquired before they even become managers, and the top management has to be able to let their middle management try to decide what is important for them and the company without the top management interfere their decision making time.
Strong leadership is needed in order the managers are able to lead their departments or division to achieve goals being made by the management. If a manager fail to show a strong leadership in managing his/her departments/divisions combined with his/her weak decision making process, I am sure that his/her subordinates will not give him/her respect. Last but not least needed is the ability to craft a strategy. This ability is needed in order to achieve top management's goals; a middle man needs to craft his department's strategies in order to support and to help the company's bigger picture. A short term or a long term strategy is needed in every time the company creates new strategies.
b. How would you identify, attract, select and hire, train and develop, motivate, appraise and reward to perform at peak level, and retain the global leaders with the needed competencies and capabilities?
These future global leaders will be easily identified with their abilities and track records in the previous companies. In order to attract them to work for LG, I think explaining LG's vision in the global market and asking them to be involved in the mission is the first step in order to attract them to work for LG. Offering better salary and incentives is the second step in attracting them.
The process of selecting then hiring them is another tricky way to take. After identifying then attracting them, selecting the best to work for us among the best is like finding a needle in a haystack. They are all sharing the same competencies and capabilities needed but who are among them is the best candidates to be trained and developed into the LG's shared values and can be the driver of success. As the key success of the company, HR and management have to be able to motivate, appraise and reward them in time when they needed the most. Motivating them when the success is in waiting list, appraise and reward them fairly based on their successes and failures.
c. Could the team take the same approach with the Korean and non Korean managers?
I don't think the same approach can be applied to both. The team has to create a system and requirements that supports the plan. If LG will go global and what the company needs is a global army, then the system created has to be adjusted. Let us assume that the non Korean is already in the global business mind set, but in order to help LG achieve its goals, the non Korean also need to understand the company's shared values so that they can represent the company as true Korean.