Korean firms urged to focus on software
By Kim Jae-kyoung
For most big Korean companies, the biggest issue now is how to turn into innovative leaders from being mere followers in the past. Korea’s manufacturers such as Samsung and LG have emerged as world-class companies by adopting fast follower strategy over the past decades.
However, with Apple becoming one of the world’s most powerful companies with its smart products _ iPhone and iPad, _ local players are feeling the urgency to revamp their strategies toward innovators in order not to fall behind.
A former senior executive of Apple point out that it is time for leading Korean companies to shift the focus of their strategies to “software and human” sides from “hardware and technology.”
“Last 10 years, Korean firms, including Samsung and LG, have become the master of physical hardware development innovation. They took over the role from Sony. I believe they have done a great job,” Jay Elliot, the former senior vice president of operations for Apple, said in an interview with Business Focus.
“However, it’s only half their job. They have got to get the other side done. If they are so innovative in technology, they’ve got to be innovative on the human side. The human side is directed by software _ interface with the product. They got to move to that and have to integrate their own products.”
The comments by Elliot, who has more than 30 years of operations’ experience with such corporate giants as IBM, Intel and Apple, suggest that what made Apple special was Jobs’ innovative approach to combine technology with the humanities.
In fact, what’s common in popular products, such as Apple’s iPad, Nintendo’s Wii, and Facebook is that they all tried to develop human desire and needs into technological services.
The software expert emphasized that what is most important in strengthening software side is to attract talents.
“First of all, they (Korean firms) have got to decide to do it. Then they have to find the fine people to do it. There are a lot of great software people around the world. I believe they are probably here in Korea. That has to be their charters,” he said.
In Elliot’s view, what companies need to learn from Apple is that the firm’s success is based on having the best user-interfaced designed products, meaning that being completely product oriented is the key secret to competing with Apple.
“To Apple, building a product is to make a little movement in the market. They are going to make big leaps of market change. I think that is the attitude that you have to have. Otherwise you are a follower,” he said.
“There are all the corporations out there, Sony, Nokia and HP, they are just following, and they are not really innovating the next level of products,” he added. “In today’s market if your products are not compatible with each other _ such as phones with computers _ you cannot compete with Apple.”
Elliot, who is founder and CEO of Nuvel, stressed that Korean firms should not try to churn out many products but instead focus on a family of products like Apple does.
“Apple doesn’t have many products. Look at Sony. They have hundreds of products. How could you connect all those products? Are you just filling the marketplace? Your products should be a family of products,” he said.
“The product somehow needs to be connected to each other. I’m critical of companies who have Windows on their computers and Androids on their phones. That sounds like families but those are three different products. You got to find the way to make these families of products.”
The following is an excerpt from the interview.
Q: Businesses are facing a myriad of challenges following the global financial crisis. In these turbulent times, leadership has become more important than ever. How do you think leadership is different now than it was in the past?
A: First, you have to make sure that leadership is built up underneath you when new leaders are coming along. But it is very difficult to bring in outsiders and start administrating a company.
Second, passion about products is essential. Companies don’t care about their products. It’s amazing to me. When I watched executives in the car industry going to Washington to beg for funding to get their companies out of bankruptcy, they arrived in their private jets and got picked up by Mercedes sedans. They should have been picked up by their own cars. That’s shows how people have lost their passion for products.
Third, when you bring in other technologies into your company, you have to make sure that it fits in your company. Apple would acquire technologies and people, not companies. Finally, leaders have to have vision on where they are going to go and what’s the next pipeline is going to be.
Q: How do you define Steve Jobs’ leadership? Do you think his leadership can work for every company?
A: Absolutely. I believe that some elements would do. I believe the company has to have its own culture, own style and own personality. But I believe that leadership is adaptable.
I was at Apple with Steve Jobs for five and a half years and I was with him almost every day. There are clear principles at the company that show how to lead and manage a company. I think any company can understand those principles.
There are two different thoughts _ managing and leading _ and that is really important to understand them. If you are managing you can end up where they are today, and if you are leading you may go someplace else.
Q: Can you introduce an episode illustrating Steve Job’s innovative aspect?
The original Mac was supposed to get to the market in May, 1983. In April, 1983, we finished. We set the Mac on, went through the performance and saw it was working great. We all were excited about it so we brought out the Champaign to celebrate for the milestone that we delivered. We were all sitting and Jobs said “What’s that sound?” It was the sound of a fan. “I don’t like that sound. I want that fan out.” We replied, “You got to have a fan; otherwise it’s going to burn up.” Because of Jobs’ claim, we delayed the introduction of the Mac for six month until January 1984, and solved the problem of the fan. That’s the example of innovation. The Apple from then on became products that had no sound. That became the legacy but at that time, it cost six months to dissipate heat out of there.
What are the strong points of Korean companies?
I think they have technologically great abilities to produce hardware products, to implement their strategies to deliver products, and to get to the logistics of delivering the products. I believe the logistics of Samsung is incredibly great. Samsung has made incredible inroads into flash memories. They have good ability to get into the market place. Now the whole chain of logistics of how to get to the consumers is changing. They have to find the new way to do that.
What would be key trends in the technology industry?
Up until recently, the IT technology business froze out Apple. If you are in the IT department, you didn’t allow Apple because all of the sudden it was all Microsoft based. But the iPad changed the whole spectrum of what a product is and how it operates. It has changed the direction. I believe that desktop and laptop computers have been dead.
Second, it is the whole cloud, the ability to move information into the cloud. We’ve got iCloud, which is incredible. The backs of my computer instantaneously and automatically have to deal with that. I think it’s the next big direction in the IT.
Third, we’ve got to find the way to minimize the storage of the materials. It is a big issue we face these days. All of those materials have to be stored. We are storing the materials two or three times faster than we can. We’ve got to find a way to minimize information, make it less storageble, or make it more flexible to the users.
Business Focus intern Kwon Eun-young contributed to this article.