What do you consider as the desired characteristics of the human organization that would help LG achieve Chairman Koo's "LEAP 2005" vision of the future?
The requirements of business organization in order to achieve "LEAP 2005" vision of the future of the company's as is to be world-class enterprise as follow;
Change management by transforming LG Group from a great Korean company into world-class enterprise
LG want to grow from around US $ 38 billion in 1994 to US $ 380 billion by 2005
LG's Financial performance had to be among the best in the world
High quality product rather than a low cost and put customers at the center of its new philosophy
Product technology innovation and product technology revolution
Change its decision-making style approach to become more decentralized
Market focused on international market rather than the domestic Korean, Which is China and Southeast Asia were identified as strategic market.
Managers had to change their mind set from flawlessly executing orders to determining strategic direction
Keep vigilant eye on cost and greater attention to quality which customer satisfaction became a key measure and important input into quality improvement program
Establish the New LG Culture and reinforce four new culture elements: Challenge, speed, simplicity and boundarylessness.
As above the business requirement of the organization in order to achieve "LEAP 2005", the desire characteristics of human organization that align and fit with that Seven S model of McKinsey as known Chairman Koo retained as an advisor, 7-S Model McKinsey is powerful to be a model of the new Human organization LG Group, which is the model starts on the premise that an organization is not just Structure, but consists of seven elements:
Those seven elements are distinguished in so called hard S's and soft S's. The hard elements (green circles) are feasible and easy to identify. They can be found in strategy statements, corporate plans, organizational charts and other documentations.
The four soft S's however, are hardly feasible. They are difficult to describe since capabilities, values and elements of corporate culture are continuously developing and changing. They are highly determined by the people at work in the organization. Therefore it is much more difficult to plan or to influence the characteristics of the soft elements. Although the soft factors are below the surface, they can have a great impact of the hard Structures, Strategies and Systems of the organization.
Description the desired Characteristic of human organization of LG to achieve "LEAP 2005" vision of the future.
The Hard S's LG organization
Strategy
Focus to "Customer satisfaction" which is put customer as the center and a key measure of the product
Proactive management that would anticipate customer need and satisfy them before the customer ever had a chance to voice dissatisfaction
Greater attention to the "High Quality" of the product, not just in the low-cost when develop the product
New and intense initiative around "Zero-defects" initiative were undertaken and supported from the highest levels
Transformation of value stream to be "operation effectiveness" in response to or anticipation of changes in its external environment
Company LG's "Strategic markets" of geographic strategy which based on expected economic growth and business opportunities, China and Southeast Asia were identified as strategic markets.
Structure
LG's Management approach had to become more decentralized and more participative in nature, decisions needed to be pushed down to where the action was.
Management by self-control that allowed for much greater decision-making autonomy.
Business organization based on Strategic Business Unit (SBUs) by middle managers that have clear idea of customer needs, values and preferences.
Systems
The product with "the latest and greatest" superior features and capabilities
Formal "Zero-defects" procedures that support the strategy and structure
Speed Systems are more powerful to support the growth of business
Availability, accuracy and completeness of the system
System integrity to all the unit business and Affiliate Company among LG's Group.
The Soft S's LG Organization
Style / Culture
Establishing the new LG culture of the next organization, consisting of:
Challege
LG needed to develop a culture that thrived on challenge rather on stability
Speed
Speed was critical to success in the fast changing global environment
Simplicity
Keeping things as simple as possible was absolutely essential and also help keep costs down
Boundarylessness
Functional, geographic and even business needed to work together to analysis problem and figure out solutions.
Staff
Like Microsoft and Asimco, LG emphasis on hiring the best staff, providing them with rigorous training and mentoring support, and pushing their staff to limits in achieving professional excellence,
LG change course to a global setting, leadership development emerged as one biggest challenges within the group.
Forms the basis competitive advantage over their competitors. It is also important for the organisation to instil confidence among the employees about their future in the organisation and future career growth as an incentive for hard work
The people/human resource management - processes used to develop managers, socialization processes, ways of shaping basic values of management cadre, ways of introducing young recruits to the company, ways of helping to manage the careers of employees
Skills
Good product knowledge, "HIPOs" (high potential individuals) with LG academy (LGA)
Entrepreneur and Leadership skill
Decision making and problem solving skill among the middle manager
The distinctive competences - what the company does best, ways of expanding or shifting competences
Shared Values / Superordinate Goals
All members of the organisation shared value by transforming LG Group from a great Korean company into world-class enterprise
New Logo "The Face of the Future" with five keys concept were; The world, the future, Youth, Humans, and technology.
Focus on valuing employees had been from beginning and on creating customer value.
Question No. 2
If you were a member of Mr.Y.K Kim's LG human Resources Team, What HR Strategies, Policies, program and / or practice would you recommend translating the chairman's vision into reality?
HR strategies, Policies, program and/or practice to translate the LG Chairman's vision into reality as follow;
Aligning HR Strategy & Practices to Business Strategy
Managing Transformation and Change
Business partner in conjunction to achieve the target
As Advisor to the business unit
Developing and Managing HR Infrastructure
Managing Employee Contribution
HR Program or practice to translate LG Chairman's is
Meeting with business unit to have the business unit strategy
Do socialize with the business unit to the all employee member
Periodic training program which the material and the trainer came from business unit
Prepare performance appraisal together with the business unit
Provide proper benefit and compensation
Provide job security and career path
Question No. 2a
What are they needed capabilities of LG's future global leaders?
Global leader's competence capabilities of LG's future consist of;
Thinking globally with best analytical skill is critical to success in the fast changing global environment
Business Intuitive which could select the geographic strategy for making strategic market
Business sense and entrepreneur competence
Good leadership and role model
Social and teamwork competence
Communication and negotiation competence
Knowledge technological savvy
building partnerships and networking competence
Question No. 2b
How would you identify, attract, select and hire, train and develop, motivate, appraise and reward to perform at peak level, and retain the global leader with the needed competencies and capabilities?
To perform a peak level and retain the global leader with the needed competencies and capabilities is;
Attracting/Recruiting, Deploying and Performance management
Developing and Improve employee satisfaction by others benefit
Reward and Recognition with executive stock option and Bonus from the excess target
Job Challenge and increase career path
Fairness in performance appraisal
Leadership and Training Management Development
Good working environment
Opportunity to have training development program
Question No. 2c
Could the team take the same approach with the Korean and non-Korean ?
In my opinion the team should take the same approach whether the Korean or non-Korean, because to be a leading global company, senior executive fell that LG would need to create a global working environment that include both Korean and non-Korean leaders, as the Chairman articulated several aspiration that would demonstrate that LG was well on its way to creating a global working environment:
Fill three to four business president position with non-Korean out of nearly 50 position
Fill 20 per cent of executive position at the office of the Chairman in Seoul with non-Korean
Fill most top executive position of foreign affiliates with local national managers.
Like Japanese Multinational Corporation had significant difficulty attracting and then hanging on to top local executive talent in country such as the US.
This was primary because local manager got frustrated by the "Bamboo Ceiling" The bamboo ceiling was the barrier non-Japanese executive ran into at certain point in the hierarchy of the Japanese subsidiary.
Consequently, smart and capable manager would simply use their experience in a Japanese company as a springboard to better position in other companies. This turnover of top local talent hurt the financial performance of Japanese companies throughout the world.
As a world class company LG should implement the fair HR policies which all the manager could have the same opportunity.
