[Viewpoint] In praise of pessimism“Will we be okay?” Doosan asked.
“You will collapse in six months unless you change,” McKinsey answered.
It was a shocking evaluation. At the height of a crisis, the Doosan Group asked the global consulting company McKinsey to evaluate its operations, and the worst scenario was presented. It was shortly after the 1997 foreign exchange crisis. Doosan, the oldest conglomerate in Korea, completely transformed itself. Its business focus was changed from food and beverages to heavy industries. Korea Heavy Industry and Construction (now Doosan Heavy Industries) and Daewoo Machinery (Doosan Infracore) were some of its acquisitions. If the conglomerate didn’t change, what would have happened? The oldest Korean business group would not be Doosan.
Ironically, the power of survival comes from pessimism. Optimism is slackness and sloth. Although the famous American evangelist Joel Osteen promoted the “Power of Positive,” that is a luxury to many companies. Samsung, whether the times are good or bad, is always on alert. Fortune magazine reported in July 2007 that the world was enjoying the “greatest economic boom ever” and gave a forecast that it was “as good as it gets.”
But Samsung at the time said the party was over and started hunkering down. Some executives resigned. Maybe the conglomerate has the power to foresee the future. The global financial crisis came the next year. As of now, Samsung Electronics’ sales are twice large as Apple’s and four times that of Google’s. And yet Chairman Lee Kun-hee said on his way to Japan for a business trip this year that there were still more things too learn. On his 70th birthday, he also warned that Samsung may fall behind again if it fails to get a grip.
Posco Chairman Chung Joon-yang agreed. Throughout this year, he repeatedly said that crisis brings about change, and transformations are the way to endure. Perhaps because of that belief, the company performed relatively well, while all global steel companies suffered throughout this year.
While looking through past email exchanges with Ahn Cheol-soo, the software mogul, I discovered an expression “The Stockdale Paradox.” It was mentioned in “Good to Great” by Jim Collins. Vice Admiral James Stockdale is an American war hero who was held as a prisoner of war in Vietnam and endured torture for eight years.
In his excruciating time as a prisoner, Stockdale discovered something that goes against many people’s beliefs.
The survivors were not optimists, he said, they were the realists. The optimists used to say they would be going home by Christmas. And when Christmas came and passed, they thought they would be out by Easter. After repeated disappointments, they died of broken hearts, he recalled.
In contrast, the realists never lost faith, tried to survive, and they told themselves they weren’t going home Christmas.
At the end of an email, Ahn wrote, “We must never be confused with our faith in some kind of success and the cold reality in front of our eyes.”
It is a new year. Although it may hurt our pride, we must realize that we are not dragons but serpents just dreaming to fly like dragons.
Young businessmen today actually learn business management from despair. Kim Sun-kwon, CEO of Caffe Bene, one of the frontrunners in the coffee and food industry, said his childhood was extremely poor. His room had a hole on the ceiling, and he had to dangle a string from the roof so that the raindrops would fall down along it. “Why am I so poor? Is there anyone who is poorer than I?” Kim once cried out.
And that is why the first of his nine resolutions was survival. He just wanted to survive. As we can see from the success of the young man, want and the desire to survive are driving forces. That’s why even Samsung Electronics, which has already become a great company from a good company, is pessimistic about today - for the survival of tomorrow.
*The writer is the business news editor of the JoongAng Ilbo.
By Chung Sun-gu