[NOTEBOOK]Leadership on a national scaleHyundai Group’s chairwoman, Hyun Jung-eun, emerged from being a housewife to head the group after the suicide of her husband, Chung Mong-hun, the group’s former chairman. A mother of three children, she was not a society woman. Her only activity was to serve as a director of the Girl Scouts of Korea.
In this situation, her rise to the head of the group was difficult. She faced a fierce fight for control of the company with her uncle-in-law, Chung Sang-young of Kumgang Korea Chemical Co. KCC bought Hyundai shares to become its largest shareholder. Having no particular measures to take, Ms. Hyun held a press conference to appeal to the people. On the eve of the conference, she rehearsed with her public relations staff. One of them said later, “We planned to practice the questions and answers briefly, but she was not confident until 1 a.m.” He also said,“Our morning report was embarrassing to her. She couldn’t understand ‘mutual funds’ or ‘private placement corporate bonds’. She just seemed to pretend to know.”
Hyundai’s management was not in good condition either. It had a load of debts from its unprofitable North Korea projects. The top-ranking business until then, with 90 trillion won ($ 78.57 billion) in assets, it fell to 19th after Mr. Chung’s suicide. In this turmoil, Ms. Hyun became the captain of the ship. Even insiders were agitated. Some suggested that the group be turned over to KCC. Management was divided in some affiliated companies, including Hyundai Securities.
But this ship has recently begun to sail smoothly. Hyundai Merchant Marine, a core company, in the first half posted its largest operating profit, 260.5 billion won, since its establishment. The company was in the red a year ago. Hyundai Elevator recorded its largest sales and Hyundai Asan saw a marked improvement in its financial structure thanks to the recent increase in tourists to Mount Geumgang. All affiliated companies in the group are noticeably vigorous. They are so encouraged as to argue for reclaiming its origin, Hyundai Engineering and Construction, which was handed over to creditors in a feud among the sons of the founder.
How could Ms. Hyun have managed Hyundai? She did not display rich social experience or managerial knowledge. Nor did she bet “all or nothing” to win. Nor can luck explain her success. A more credible explanation is that she managed her group with leadership that came from her calm words and deeds.
“Let’s follow the natural course,” were her first words, which captivated her employees. She encouraged them to follow the natural course in their fight over managerial rights. Finally, the Financial Supervisory Service sided with her, asking KCC to dispose of its Hyundai shares. Hyundai Elevator’s president, Choi Yong-mook, said, “The late honorary chairman Chung Joo-young overcame difficulties according to the natural course. Ms. Hyun followed her father-in-law’s management philosophy.”
She emphasized vision. “When I got married, the pride of Hyundai men was great. Despite their meager pay, they enjoyed their work. I’m going to make Hyundai such a work place again,” she said. Last month, she held a ceremony to declare her vision for 2010, and also stressed organizational stability. She quietly removed employees with family ties who were objects of jealousy. She embraced all regardless of their origins. She buried the faults of some managers that the press had dug out.
It is too early to say that Hyundai’s problems are over. The shipping line, its major business, fluctuates and prospects for its North Korea projects are unclear. But Ms. Hyun’s leadership, which has encouraged 8,000 employees to get up and run again, cannot be underestimated.
The ship “Korean Economy” is in no less grim a condition than the ship “Hyundai” a year ago. About 810,000 people have lost their jobs and 3.7 million became insolvent. The economy is sustained by exports, but there is no visible end to stagnant domestic demand.
There seems to be no leadership of the national ship that can give hope to the people.
* The writer is a deputy industry news editor of the JoongAng Ilbo.
by Kim Si-re