“Let washing machine wash vegetables”

Donald Sull, an eminent scholar at London Businesss School, does appreciate the rapid catching up of South Korean companies in the global business arena. But he doesn’t like the way they are run now, which he believes is a strategy that make one stick to the number two, not the best.

The business consulting guru, in an interview with a local newspaper, Chosun Ilbo, points out that South Korean companies suffer from “active inertia,” a term he has popularized.

For example, “when the former Chairman of Daewoo Group Kim Woo-chung talked about the so-called ‘Daewoo culture,’ he encouraged others to follow suit. (But the problem is), when you advocate your success story, it makes it difficult for innovative voice to be heard,” he said in the report.

After examining the profiles of senior executives of major South Korean companies, Sull was also surprised to find out that they exhibited a notable same pattern of being a graduate of Kyungggi High School, Seoul National University.

“That’s a warning sign,” Sull said, noting the homogeneity of the individuals who make business decisions in South Korea and how the trait can limit creativity and diversity that are critical in today’s business success equation.

“Korean companies need a new paradigm. The past success stories of Korean business are mostly about how a company tried to reduce its gap with the number one company in the field. In other words, its goal was to become number 2,” Sull said, emphasing this strategy is a failing prescription today.

Sull wants Korean companies to be more flexible and innovative. And surprisingly, he takes an example of a Chinese company, Haier, which makes home appliances.

“When Haier engineers went to the Chinese countryside to fix broken washing machines, they often and surprisingly discovered vegetables inside the washing machine. It was because the farmers used the machine to wash vegetables, not just to wash clothes.

“Other global companies that sell washing macines in China also discovered the problem. But they just scoffed at the problem, arising from ignorant farmers who didn’t know how to use a washing machine properly. But Haier was different. It modified its washing machine so that it could really wash vegetables well. And its washing macine sold like hotcakes,” Sull said.