Making your firm larger than life
How to improve an organization is every CEO’s ultimate question.
In a broad process of improvement, an organization is bound to face a constant stream of challenges from inside and out and it’s a CEO’s role to come up with responses. When challenges overwhelm answers, the organization loses balance and direction. If it is stuck in a state of aimlessness for long, it will be swept by the following waves of challenges and sink.
CEOs have different regimes to keep their organizations on their toes and make sure all subordinates will meet a given challenge head-on or from behind.
Woori Investment and Securities CEO Hwang Sung-ho explained this during a recent interview at his Yeouido office.
The 57-year-old top financier’s formula is all about making his organization score 110, above the scale of a perfect 100 points or simply put, motivating, cajoling, rewarding and disciplining it into outperforming itself. Obviously he thinks that he knows ways of making his organization bigger than the sum of its parts.
“Authoritarianism is an anathema to a good organization,” Hwang first declared.
He says that a hard-headed boss kills the creativity of his subordinates, forcing them to adhere to a strict set of rules, written or unwritten.
This means that a boss whose ability scores 90 out of a 100 plays a role in limiting his organization from outperforming its leader.
In contrast, if a boss limits his role to encouraging his subordinates to work and provide them with an environment where their proven initiatives flourish, it will help his organization exceed the perfect score in performance.
Hwang cites a couple of conditions that should be met before his leadership formula can kick in. First, the organization can imbibe a sense of expectation in its members. In other words, Hwang describes it as CEO’s work of planting a dream, a process in which its members are personally motivated to work hard, encouraged without reservations to put forward their ideas and believe that the success of the organization is identifiable with their personal success.
Thus, Hwang believes that a boss should choose camaraderie over loyalty.
He says that a boss can feel good about himself when his subordinates show personal loyalty to him but leading an organization is not so much about a happy CEO as about making the organization a vibrant, expanding one.
He pointed out the danger of a bullying pulpit given to CEOs, often making the members of their organizations identifying the boss’ welfare with that of the firm. “It is not organized crime,” Hwang noted.
“It all comes down to judgment,” he said about the key factors he thinks make or break a CEO.
This ability to judge helps CEOs distinguish truths from lies, pick out sycophants, chart a new direction and earn the respect of those along the chain of command, thereby enabling them to spearhead an initiative with the full power of the organization behind them.
Doesn’t Hwang worry about insubordination from individuals given too much freedom?
He answered a definite “no.”
“It is a shared sense of purpose that binds us together and drives us to work in the organization.” He stresses that an organization doesn’t belong to a CEO but its members, consumers it serves and a broad community it belongs. “It is not mine but belongs to all of us,” he said. “No CEOs can own their organization 100 percent.”
Two factors appear to be prominent in Hwang’s leadership formula _ his extended association with foreign financial firms and “a give your all or else” investment strategy.
His experience starting with 15 years in Citibank has obviously given him an acute sense of need to go out and expand. Hwang has set the goal of making his firm the No. 1 investment bank in Asia. His expansion view, among other things, is not a one-way street, pointing out that the Texan private equity fund Lone Star took the risk to buy a controlling stake in the Korea Exchange Bank KEB) at a time when few were willing but now finds itself stuck when trying to leave with a hefty profit.
But he said the whole situation has a greater context than one foreign investor’s success/failure story. “All things considered, I don’t totally blame the regulators for linking their decision to that of the court.” The Supreme Court recently overturned a not-guilty verdict on a former Lone Star employee, confirmation by the Seoul High Court to disqualify Lone Star as KEB’s majority shareholder. This would force it to sell its stake, potentially leaving a question mark over Hana Financial’s bid to buy the KEB.
On his investment secret, Hwang said that he would be willing to explain it over a lunch.