R&D, labor relations were keys
The driving force behind the robust growth lies in the CEO’s excellent entrepreneurship and a cooperative corporate culture. CEO Jeong Yong-hwan constantly extends Luxco’s business portfolio beyond switchboards. He moved to acquire an electronic component in order to diversify the product lineup and become a leading company in the electronic parts sector in broader terms. The acquisition turned out to create synergy with the existing business. In 2008, he took a further step by entering the solar module business. Luxco managed to turn the new area into a major source of profit. The quality and competitive price of the solar panels are credited with the success.
The company and its nearly 300 workers have been recognized for maintaining exemplary labor relations by the Ministry of Labor and Employment. The Labor Ministry and Human Resources Development Service of Korea also recognized Luxco as a recipient of the Best HRD award. The award is given to a select number of companies that have invested a great deal of resources into fostering human resources development. Overall, it can be said that the combination of great leadership, hardworking employees and sound corporate culture drove the growth of Luxco.
In addition, Luxco also dedicates a great deal of resources to its research and development, in which 20 Ph.D. holders work. The company invests approximately 20 percent of its revenue in research. This proportion is fairly large for small companies like Luxco. The constant investment in research and development is crucial for sustainable business operations. However, it is sometimes hard to do because the result is not always immediate. This is why it is important for the CEO to acknowledge the value of R&D. Jeong is certainly one of few leaders who place their faith in research.
Although Luxco maintains a fair market share in the solar module sector, it seeks to break into overseas countries for further growth. It recently opened an office in Vietnam. I believe the decision is prudent because the government of that Southeast Asian country is serious about the notion of green growth, which will likely help increase the demand for solar installations. The company also tries to enhance its marketing strategy and broaden its appeal by using consulting services.
A conciliatory labor-management approach also contributed to the growth of Luxco. When the company faced hardships, the CEO didn’t resort by laying off workers. Instead, he sought ways to make things better. This helps workers build a sense of ownership and affection toward their company.
*Noh Young-ho, Principal consultant at IBK Consulting Service Center