[Viewpoint] Go back to your roots, my grandsonYou have grown nicely, my grandson, Koo Bon-moo, chairman of LG Group. In last month’s celebration commemorating the 65th anniversary of the founding of the second largest conglomerate in Korea, you said you will make the company prosper even 100 years later.
The company was founded in 1947 under the name “Lak-hui” - pronounced Lucky - with the hope to flourish for more than a century and has now sprawled into various manufacturing and service fields. The revenue has ballooned by 470,000 times and employees by 10,000 times since my day. How proud you have made me as the founder.
But the future path does not look so bright. Many say the group is in crisis. The mainstream business lines of electronics and chemicals are particularly difficult. One of the most frequent questions journalists covering the electronics field hear is their bets on the prospects of LG. The electronics company’s first quarter numbers were not so bad, compared with the staggering red figures incurred by Japanese competitors.
But the group faces a foggy outlook as it lags behind front-runners and is closely trailed by Chinese competition. But you should keep your chin up. Goldstar, the former name of LG Electronics, produced the country’s first radio and remained a household label in home appliances in electric fans, refrigerators, TVs and air conditioners.
Some say LG had it coming by being stingy in investing in new technology and late in riding the smartphone wave. But that alone could not have caused the self-caused situation. We may have been too self-indulgent and lackluster in our comfortable status quo.
The group captains have been shouting for more aggressiveness these last few years. Strong and aggressive is the right strategy. But offensive moves without skills and a good plan can only worsen performance on the field. When one is cornered in the game, it is best to return to the basics. The team should take the time to sit down, re-examine its strengths and weaknesses, kindle a winning spirit and draw up a new plan to win the contest.
One time when my business was going well, a businessman asked me to guarantee his debt. The Korean entrepreneur sought a loan from a wealthy Japanese businessman who ran a rubber business, so the Japanese businessman demanded a cross-guarantee from me. But the Korean entrepreneur went bankrupt. The Japanese invited me to dinner and said that since I guaranteed the loan, I should make the payment. I thought about it and said I would comply.
Upon my answer, the Japanese chuckled and gave me a long look before saying, “I knew you would. You prize credibility. I am content that I had not been wrong.” I then was reassured of the value of credibility in business. The current business struggle is nothing if we do not lose consumers’ trust in our brand.
I must talk about our biggest strength, which is man power and harmony. I do not agree that LG has become weak because we emphasize too much on the humane side. Let’s go back to our roots. My brothers Tae-hwoi and Pyung-hwoi together with recruited CEO Park Seung-chan for Goldstar joined forces to build the LG corporate empire. How can I not remember their toil and sweat?
What about our people? I sent an employee to the military bidding for toothpaste supplies with the order to submit the lowest bidding price at 100 won ($.08). The employee felt that the bidding would be awarded to a company offering less than 100 won. He wrote in 88 won, beating the competition who bid at 90 won. He did not follow my order, which was good as we eventually won the military supply and became the leader in the toothpaste market. Confidence in our people is our strength. The criticism that we are too weak at the same time may suggest that we have become too narrow-minded and lenient in rewards and punishments. The people at the top as well as the middle all must be open-minded to new talents and ideas, encourage creativity, and allow for failures.
There is no need to fret over today’s difficulties. My father one said, “Don’t underestimate the world. Be someone trustworthy and not one who easily gives up.” The world indeed is tough. Don’t look for answers from outside, but within yourselves. It is time we change LG’s synonym from sigh to awe. I, Koo In-hwoi, will be watching with blessings.
*The author is the industry news editor of the JoongAng Ilbo.
by Chung Sun-gu