Korea - Reading Between the Lines

That's "noonchi", not "kimchi"

If you've been in a Korean restaurant you know "kimchi." Most people associate it with cabbage; however, it's really a spicing and marinating technique that can be applied to any vegetable. A lot of people like it, but after two years in Korea that still doesn't include me.

What does fascinate me is the concept of "noonchoi." In the western world we might think of this as "reading between the lines." But the idea is much deeper. It's about anticipating what the other person wants to say and even finishing the thought for them. Generally it's the responsibility of the subordinate in a relationship to have "good noon chi." It's the subordinates responsibility not to embarrass the superior.

You Better Have Good Noonchi

Usually "noon chi" is at the emotional, feelings level. Korean's are ok exchanging on a rational, factual level; however, they are loath to expose their feelings. For example, if a father has decided they don't like the daughter's new boy friend - the father would never say so. It's the daughter responsibility to read words and gestures and come to the right conclusion. The father would never expose his feeling, or conclusion. We can only hope that the daughter reads it right.

Noonchi at Work

Noonchi is more than a social requirement, it's a core competence at work. Confucius learning instills a set of values and one of the strongest is the respectful relationship that an employee must hold for their boss. Respect is good; however, when it turns to deference in the work place then lots of things can wrong. Specifically: change, innovation, & growth.

I have been working on organizational transformations in Asia and most recently in Korea. Noonchi is my nemesis. We work hard to bring new learnings into an organization so that people can break their paradigms and create new business opportunities. Noonchi is a barrier that we do not face in the west.

This has been exposed to me as I work with executives to engage their employees so we can unleash ideas from everyone, everywhere. We ask executives to balance their management style with inclusive behaviors of leadership. We ask them to become more transparent and authentic. Yes, this is an issue with western executives as well; however, it is not as ingrained nor does it have such a wide work and social impact as it does in Korea.

Executives don't want to let down their guard, and I'm not sure that employees want to see it either. Both sides would be confused and uncomfortable.

The "So What?" of Noonchi

The positive part of the global economy is in Asia these days. While the west struggles to slow its "race to the bottom," the opposite is true in the east. Holding back run away growth is the economic struggle here.

This puts fear and paranoia into western thinking. I'm not sure it's justified. The west still has a spirit of innovation and sufficient disrespect for authority that it will find a way out. The east is living in an economic bubble driven by its strategy of "second in." All boats are rising on the tide of: "we can do it better than the originators in the west."

As visibility and law suits expose this strategy the east will need to change horses. If the horse is still eating "noonchi" it will slow down in the global race.

Police Democracy in South Korea

I've had the pleasure of working in South Korea (they just call it Korea) for more than a year. We're working on transforming a large public corporation. I have made many new friends and have come to love this beautiful country of 48 million people.

But at the end of the day Korea has not gotten far from its military roots. It is a surface democracy in a police state.

The Economic Miracle

Korea is an amazing story. I believe that Koreans are kind and passive by nature. This has not served them well in their history. They have been constantly invaded and occupied. Their Buddhist stoicism has contributed to their survival. Patience has been the winning strategy.

The past century has been nothing less than a miracle in Korea. From 1910 to 1945 Korea was occupied by the Japanese - a historical fact that continues to sting. On the heels of the occupation came the Korean War, which has never officially ended. Coming out of the Korean War the country was one of the poorest in the world - the war not only killed more than a million people but it destroyed the economy. Poverty and starvation were the color of the day during President Rhee's first republic. Even today when elderly Koreans meet they rarely say "hello"; it is more common for them to ask, "have you eaten today."

But all of this changed. Today Korea has joined the trillion-dollar GDP club and is one of the worlds 20 strongest economies. From 1953 to 1995 the Korean economy grew at an annual average rate of 7.6% - it grew 21 times. Although growth from 1953 to 1960 was slow, the economic growth started to rocket and finished as the "miracle on the Han (Seoul's major river)" before the economic crisis of 1997.

Even the economic crisis was only a minor set back. With the help of the IMF and the world community Korea reestablished its economy and the economic picture has looked pretty good through out the 21st century. Generally the economy grows in the 3% to 5% range and unemployment hovers around 3%. Yes, there is poverty and some employment is artificial: the average wage in Korea is less than $30,000 US because many jobs are ceremonial, lots of security guards, helper staff (a gentleman and his assistant collect my shoes three times a week for cleaning), and excess staff in service businesses.

But when you add it all up Korea is a good place to be. The local news here is always better than the reports I hear about PIG (Portugal, Ireland, Greece), most of the EU and the stumbling US. So what's behind all of this?

The Economics Of Survival

As with any social/political/economic analysis there is no single factor; but let me offer an observation. Korea's military history serves it well economically. I always feel totally safe here, but that's because of the not so subtle presence of police.

When you go back to the economic miracle starting in the 1960's it is supported by a democracy wrapped in autocracy. A democracy run by the military. President Park's government had a clear policy for economic revival. Korea would move from a domestic, agrarian economy to one that was export driven. This required help form the cheabol - the family monopolies that had taken over the industrial threads of the economy from the Japanese after the occupation.

The government set up a policy and financial structure to support the cheabol. The brand names of Samsung, Hyundai, and LG didn't materialize on their own.

In fact, these brand names and many others rose on the backs of Korea's workers. The story of Korean labor is often not pretty. During the Park regime (he was assassinated in 1979) labor was treated harshly. Dissent was put down, and often harshly. In 1970 a young labor leader protested by pouring gas on himself and incinerating himself. Economic success came with a social expense.

Fast forward, and excluding the military uniqueness that causes a constant string of conflicts with the North, what is the picture today? On the surface it's great, and it will always be great if you know and follow the rules. Let me give you a glimpse of the rules.

Protest Within Established Guidelines

First, the police are never far from hand. I live in a hotel residence that is several blocks from my client's office in the financial district of Seoul. Between here and there are two land marks: the Japanese and US embassies. On my walk to work everyday I likely see 100 young uniformed police, men and women.

Half way on my walk to work I always pass a lone gentleman with a placard. He's protesting something, but my poor Korean reading skills don't tell me what. I know he's a protester because he's alone, and he doesn’t have a police escort. Dissents of more than one require a permit in Korea and those are hard to come by because the state needs to incur the expense of assigning police to watch gatherings of more than one person.

And that's exactly what happens several times a month when I return to my residence. Protests happen regularly on the street backing onto the Japanese embassy. Usually there are several vans, a crowd of 20 and about a dozen "comfort women." If you haven't read about the Japanese treatment of Korean "comfort women" its worth a Google. The Korean's want an apology and I think the Japanese are just waiting for the women to die off. In any event, when the scheduled time for the protest is over the leaders load up the vans, clean the site and drive off. It's like pulling your hand out of a bucket of water. You'd never know it was there.

Strike, Please. Not!

Then there's the famous Japanese triple header this March: tsunami, earthquake, and nuclear meltdown. Although the Koreans have a hyper-fear of the "nuclear rain" (you should see the umbrellas go up in a drizzle) the Japanese disaster has been a gift for the Koreans. The disaster for the Japanese car industry has been a gift for the Korean car industry. Or, maybe not!

About a month ago workers started to take advantage of the disruption in the global automotive supply chain. Korea, specifically Hyundai and its subsidiary Kia, were seeing that they could take away huge segments of the Japanese auto market; but not so fast. Labor in one of the large auto parts suppliers decided to use this as leverage. They went on strike. I watched the media reports with interest for several days as negotiations faltered. Then I watched no more. Without warning, one night, the government sent 3000 police into the factory. The strike was over. Labor would not be a barrier to an economic gouge that could be inflicted on an old enemy.

It’s Not Tienanmen

Then there is the student protest that is taking place; a protest that no one knows about. Like everywhere else students are being asked to take more of the tuition load. Like everywhere else, they don't like it. So for the past few weeks you'll hear a bit of noise in the Gwanghwamun area of the city near the palace. When you look you'll see a well-guarded "gathering" of students doing their "riot" thing. Then they disappear and so do you. But the police don't.

On Friday nights it’s my tradition to walk into the wealthy boutique and restaurant area of Samcheong Dong. I have dinner then a drink with friends at a wine bar. The last two Friday nights have been different. This Friday was the most different. You could feel them everywhere. Police!

I have to walk about a mile before getting to the shops and bars. The palace wall runs the full length on one side of the boulevard while art museums and small businesses line the other side. Usually this is a crowded walk until you hit the turn where the commerce really begins, and then it's mayhem. The street is full of cars and you can hardly move on the sidewalk. But not last Friday.

Walking up the boulevard there was no one on the walk and for the first time ever the street lamps were off. When I hit the turn the sidewalks were vacant. I was almost alone for dinner at Eight Steps and when I crossed over the street to Pason the wine bar was empty. My friend who owns the bar told me that the student unrest had been ruining his business for more than two weeks.

The walk back to my room was safe, but eerie. Once I got to the darkened part of the boulevard I could feel the return of my protectors. I was in a mile long dark tunnel that concealed the presence of several hundred police. After every few yards I could make out the vague shimmer of their chartreuse vests. Across the street was a squad of 20 with riot shields; down the alley was a neatly ranked group of ten with their batons in hand; at the stop sign were four more, two in front with two behind holding the shoulders of those in front; there was a big group of protectors in the museum parking lot; there were pairs patrolling the walkway and others in cars in the street; there was a stretch of five police buses book-ended by paddy wagons on the other side of the boulevard and lined up behind this string must have been a group of 50 standing at ease pinched up against the palace wall; as I got to my traffic intersection I wasn't surprised to see large groups of police on each of the corners, but I was caught off guard by the team that was hidden in the shadows of the old hanok behind me.

I was back in the light and a few hundred yards away from home. Oh, how I hoped that those violent students wouldn’t come out to play! If they did then thousands of police would pour from the darkness into Gwanghwamun Square and the riot, like the strike, would vaporize.

It’s All About Trade-offs

So what does all of this mean? I wish I knew. You can go any where in Seoul in the middle of the night and never think of your safety. There aren't many other cities in the world where I can say the same. As for the economy, Korea isn't looking back; it's part of the Asian miracle that sees itself as the new economic order - strengthening everyday at the expense of the decaying West.

Maybe the lesson is simply that world is made up of people just trying to get through their day. They have to find ways to make this happen. That means political trade-offs. In the West we value individual freedom to the point that we have incapacitated our governors; in the East people hold more holistic traditions to the point that the individual is subordinated.

Do you like your trade-off?

Powerful Ideas Drive Transformation

Olleh KT (formerly Korean Telecom) has to change. Its goal is to double revenue by 2020; however, its core business is in decline.

To grow, and even survive, it will need to fill the revenue gap with new products & services. Doing this requires ideas. New ideas. Powerful ideas.

For more than a year, Bud Taylor led teams of KT professionals in the Mobile & Enterprise business units in their quest for radical ideas that could be implemented in a short cycle.

Crashing Lenses = Ideas
Generating radical ideas starts by asking new questions to find new answers. This is done by using the power of four lenses:
1. Discontinuities
2. Customer Insights
3. Core Competence
4. Orthodoxies

By crashing these lenses we can see opportunities that used to be concealed.

At KT we generated 1000’s of idea candidates from every corner of the organization. Small, dedicated teams synthesized and grouped these candidates into domains and from here they selected the first business opportunities.

Next the high impact business opportunities were explored and expanded; business models were refined; action plans developed, approved, & implemented.

The teams made big changes in:
• Customer service
• Online sales channels
• Retail operations
• Smartphone & tablet sales
• Account management, &
• Operational processes

Idea Graveyard
It wasn’t always easy. Often we had to call on the executive team for help to stop ideas from going to the natural graveyards caused by:
• Silo politics
• Committed resources
• Lack of priority, &
• Bureaucratic controls

In fact we leaned heavily on the executive team. We involved them as sponsors in all of the work & we held working sessions every month to break through barriers & develop their skills as leaders of Innovation.

The Result
It’s been a long & continuing journey that has engaged employees, changed the culture & built capability for the future.

Korea - Living With The Threat of War

Well, by the end of 2010 I had spent about 9 months in Seoul working on a major transformation sponsored by the CEO of one of Korea's largest companies. Living in Seoul has been life changing. For one thing I've experienced how Koreans live with the constant threat of war.

Sinking of the Chenon
When I arrived in Seoul in April of 2010 the Chenon had just been sunk. You'll remember this as the sinking of a naval vessel where 46 South Korean sailors lost their lives. An international panel concluded that the sinking had been at the hands of the North Koreans - who of course strongly disagree.

The politics surrounding the Chenon were interesting to watch. The US decried the North while China took a strong stance on non-committal. There were several months of blustering and then things cooled down.

For my part I was amazed at how the average Korean took little notice of what was going on. It was business as usual ... "what can we do."

Then in early November, militarism faded while hopes turned to financial reform on a global scale and US-Korean trade on a bi-lateral scale while the g-20 met in Seoul. However, even the graciousness of the Koreans couldn't bring success to the G-20. Everyone went home extolling their agreement to sit down and develop agreements at a later time.

Shelling of Yeonpyeong Island
Everything seemed normal on the Korean peninsula until November 23rd. I was sitting at my desk that afternoon when I got an email from my son who works in Paris. It had a tone of panic: "are you alright? can you get out of there? be safe!" I had no idea what he was talking about. I went to the web and sure enough, the North had just unleashed an attack on the island of Yeonpyeong. Two military were dead as well as two citizens. Here we go again.

I got up and walked around our offices to ask how people viewed the incident. Most people didn't know it had happened and those that did still had a nonchalant attitude. That evening I was driving to dinner with one of my client EVP's. I asked about her reaction. She hadn't heard. Her driver turned on the TV to show her the news. She was annoyed, but not concerned - "what can you do?" This was fully four hours after the attack. She floats around at very senior levels and yet no one she dealt with that afternoon had mentioned the attack.

Ever Decreasing Concentric Circles
I've learned a lot about Korea in the last year. I've learned that things aren't black and white even when we want them to be. I've learned that South Korea has not signed the armistice to officially end the Korean War - they live in hope of reunification. I've learned that the demarcation border that runs into the Yellow Sea has always been disputed by the North; and I've learned that the North warned the South not to do live ammunition naval exercises in the disputed waters.

So yes, we all believe that Kim Jung-Il and his heir apparent Kim Jung-Un are pushing the envelope, but does President Lee Myung-bak of the South have to keep the tension high? Since the Yeonpyeong bombardment the South has put a more aggressive defense minister on the job and it continues to flex it military muscle - along with its alley the United States.

It seems that this whole Korean mess just continues in a state on numbness. Everyone knows that all out war would be devastating and would also be over in about 10 minutes. It's questionable whether the Chinese would engage - it sees the North more and more as a "bad boy" and its global economic power has taken away the need for the North to act as a protection buffer from the US in the South. The only problem is that 10 minutes of hell from the North would result in millions of dead in the South.

Why do North and South put up with this? How do they break with the tensions of the past? You would think that after almost 60 years that someone would find a way to break the cycle. Why hasn't it happened? I'm sure there are many social-economic-political-military reasons that make sense; however, maybe they simply can't break with the orthodoxies that keep them apart. Maybe tension is better than the alternative; that is, figuring out how to include everyone on the Korean peninsula in the modern world.

The Seoul of Kafka

I'm back in Seoul for the next few weeks to complete some organization transformation work with Korea Telecom. I first arrived here in early April, just a few weeks after the South Korean naval ship, the Cheonan, was sunk. All 46 sailors were lost.

Although the sinking was big news on South Korean channels it only got minor play on the English channels that I receive in my hotel room - even though two are brought in from the region, one from China and the other from Australia.

Out of curiosity, on my first weekend here I took a tour to the DMZ (Demilitarized Zone) that maintains the cease fire (there never has been a peace treaty to conclude the Korean war) between the northern and southern parts of the Korean peninsula. In fact, it wasn't a tour. It was me, my work colleague from the Netherlands, and a guide - she said that business had fallen off dramatically following Cheonan.

The DMZ was what you'd expect. Barbed wire fences, guard houses, and soldiers. The interesting part were the few viewing points where you could look across the river. A stark reality is that the hills on the other side are barren. No trees. They have been forested long ago for fuel. Your looking at a country that is low on energy, and even food - to feed its 22,000,000 citizens. And yet it boasts of a 1,200,000 soldier army, the fourth largest in the world. Behind China, the US, and India.

Gazing to the south there is a different reality. South Korea is somewhat of an economic miracle. It has put big brand names on the global stage, like Samsung and LG. It has almost 50,000,000 citizens - and more than 20% of these live in the capital, Seoul.

Over the past few weeks the world has become acutely aware of Cheonan. An international panel of investigators concluded that it was sunk by a North Korean torpedo. Political tensions have gone on the alert. This little peninsula between Japan and China has become a center for concern. South Korea says it is not ready to retaliate with force. It is looking to the world community to bring clarity and some form of resolution.

However, it's not the South and its President Lee that is the concern; rather, eyes are on the totalitarian regime in the north led by Kim Jung Il. North Korea has about 10,000 artillery pieces aimed south. A hellish devastation could rain down from the sky in minutes. It would not succeed as an act to occupy the South. The South would retaliate in force backed up by the US. However, the loss of life in and around Seoul would be enormous.

So how do people in South Korea live with this? The answer seems to be, "they just do." Yes, the media is filled with Cheonan; however, the people go on with their lives.

I have developed many good friendships while I have been here. I sense that the people of South Korea (they just say "Korea") just want to be left alone. But this is not their history. They are a proud people who, maybe because of their kind nature, have been invaded and occupied for centuries.

A striking fact about Seoul is that it has no soul. It's not like an Istanbul where you can go to the Grande Bizzare, the Spice Bizzare, the Blue Mosque, and the Topkapi Palace to feel the history passing from east to west. Seoul has been occupied and burned so often that now it builds big buildings to the future and rarely looks to the past. This is attested by the beautiful Gyeongbok Palace that was originally built in the 14th century at the beginning of the Chosun Dynasty. The buildings of the palace have been destroyed several times. The last raising was during the Japanese occupation of 1910 to 1946. What you visit today has been constructed since 1995.

Koreans have been living in an uneasy calm for almost 60 years. This is testimony to both human will and human insanity. I'm starting to understand how invading armies often seem to arrive "by surprise." People were just going about their lives.

Can You Find Me Now?

I've been fortunate enough to be on a transformation project with South Korea's primary teleco, KT (Korean Telecom). They introduced the i-phone to the Korean market and they were kind enough to give us phones for the duration of our stay - phase I ends in mid-June.

Both of my colleagues have been i-phone enthusiasts in their home towns of San Jose and Amsterdam. This is the first time for me and I have to admit to its ease and usefulness of Apps. But I wonder what all of this is doing to the way we work and think. Yes, it changes your life, but what are we losing?

Here's my specific example. On day one our client met us at the hotel. The KT office is about five miles away and although Seoul is a sprawling metropolis of about 11,000,000 people, the drive to the office is not complicated. You turn right out of the hotel for half a block, right again for a long block, and then right onto Tehran. Go five miles and its the big blue building on the right. Easy, right? No!

We have i-phones with Google maps, text messaging, voice recordings and even a phone. Why use the physical world and the recognition features that humans have used for thousands of years to survive when you can use technology.

Day two we were on our own. We jumped into the cab and showed the driver the directions that our client had given us. The driver didn't understand. Panicing, we texted our client who emailed a new set of clearer directions - in Korean! The cabbie still didn't understand. We called our client who spoke to the cabbie. We finally got to work.

The next day was the same confused scene, but this time we couldn't connect with our client. I made the suggestion that we just turn right, right, and right. My colleagues that I was nuts. Why would we do that when we had our i-phones. Finally our client called and we rolled out of the hotel entrance.

Day four had all of the characteristics of the previous days, but this time technology saved us. We had been smart enough to record the directions from our client on our i-phones. Out we went into the world, but the driver still didn't understand. By the time we crossed over Tehran street there were three screaming passengers and three i-phone map Apps in the drivers face.

By the time we got to day five I convinced my colleagues that we just might be able to get to work the "good old way." It worked beautifully. Since then things have been fine.

I love technology. It has its place. But it can erode our survival skills. I suspect that children have already lost directional skills. They put their faith in GPS. It's a different world with a different way of thinking; but I'm not quite ready to give up my internal compass.

Change Management & The US Health Care Debate: A Case Study

The United States has gone through a wrenching debate over the reform of health care. The new bill cut to the essence of the United States as a republic and the sole of its citizens. This has been high stakes change management. What can the business world learn from this as a case study?

There is an alternative to Private Insurance

The first step in implementing change is for the leader to articulate a vision – what will the new world look like? President Obama’s vision a year ago had tenets such as “single payer and public option”. This is not idealism; it is real life practice that is the norm in most western democracies. It is an alternative and in places like Canada it is less costly and produces better outcomes. Although open to interpretation, here are some numbers.

• Spending as a % of GDP: in US 15%, in Canada10%
• Spending per capita: in US, in Canada $6700 $3700
• Life expectancy - age: in US, in Canada 78.5 80.5
• Very satisfied: in US, in Canada 25% 57%
• Very dissatisfied: in US, in Canada 44% 17%

The gap exists for two reasons:

1. Administration: A single payer dramatically reduces burdensome administration. In the US this activity constitutes about 1/3^rd of the cost of health care. In Canada it’s a little more than 1/10^th. In other words, the single payer approach would save the US about 20+ percentage points on cost. That adds up when you’re talking about trillions of dollars.

2. Treatment: In Canada there are fewer medical resources than in the US – people, equipment, supplies, facilities. This means priorities are required in the allocation of these scarce resources. In the US, where there has always been a luxury of supply, this idea of “allocation” is interpreted as “rationing”.

America was looking for a new model for health care. Canada provides an alternative, but Americans didn’t choose it. They came up with a framework that is uniquely American; a solution that does not look like the starting vision that included single payer and a public option. Erosion of the vision is a common result in the change business. What happened?

In my view The Administration did not recognize the enormity of the change it was proposing. How do you radically change the private health insurance sector in the US. It’s fundamental to the American DNA of individualism and capitalism. The orthodoxy is that corporations have the right to make profits and individuals have the opportunity to earn money to provide for their health care.

Such a discontinuous change requires strong, directive leadership. Although bipartisanship is a rhetorical principal of the American political system it is not an ally to radical change. The effort to develop consensus opened the door to incrementalism, which is resistance in disguise. Ultimately the bill that got passed did not please anyone.

Lessons Learned

Most changes fail – even when the sponsors don’t admit it. This result comes from not understanding the nature of change and the leadership style required to implement change.

The US health care debate highlighted principles that CEO’s should take to heart.

• Know your organization’s DNA. Resistance is directly related to how hard you swim against the organization’s heritage.
• Know the type of change you seek – continuous means incremental, discontinuous means breaking with the past.
• Know your leadership style. Don’t attempt discontinuous change if you are a consensus builder.

In our culture it is unnatural for leaders to adopt a harsh style. Everyone wants to be loved. That implies that most changes will be incremental. CEO’s should know this before they set their visions for change and underlying migration paths.