By Cho Mu-hyun
LG Group Chairman Koo Bon-moo has called for executives and employees to change the way they work.
He said, “To lead the market we must fundamentally change the way we work” and added that affiliate companies will from now on be judged on what they produce.
“Now more than ever if we cannot lead the market we will be left as an average company that doesn’t draw the interest of consumers and talented people,” Koo said forcefully at a seminar attended by 300 board members at the company’s LG Twin Towers headquarters in Yeouido, Seoul, on Wednesday. “We must change our temperament and the way we work fundamentally to build a wall of ability that our competitors cannot easily climb over.”
LG Group has been facing mounting difficulties amid the global recession and falling behind competitors. For the past few years, it has lost a significant market share in the important smartphone market. But the chairman is not relenting and vows to climb back up.
Though Koo has previously spoken publicly for a need to change the way things are run in the group, he stressed that plans must now lead to action.
“LG has for the past few years put in efforts to change business methods and prepare for the future. But because we failed to change them into action, most of our businesses have not scaled the walls of industry leaders.
“To overcome this situation, I have deliberated deeply with the CEOs of respective companies.”
The chairman attended a workshop on Sept. 14 attended by CEO and heads of affiliates where they outlined specific plans that will make LG Group a market leader.
He highlighted three key points decided after discussions that all affiliates “must concentrate on” to again lead various business areas: “Each business more than anything must make excellent products with customer value. We must secure competitive meritocracy in line with a market leader.”
He stressed more than anything “establishing an LG way of working, where every one of our members concentrates on creating customer value.”
He also said board members will be judged on results, on how they succeed in lead their industries by following the three principles. The chairman said he would watch every board member “closely.”
Some concrete plans were also unveiled. LG’s main resources will be focused on making the best organic light emitting diode (OLED) televisions and displays, which the group considers one of its future growth engines.
More board members will be selected from engineers and developers working in research and development (R&D). Their promotion and rewards will be based on creating patented technology, while they will be given portions of royalties if the patents lead to cross-licensing deals. R&D manpower will be expanded as well.
Starting this year, all board members will be judged by new criteria that measures investment foresight and pragmatic activity.
“It is the cold truth that LG, though an established global company, has not made clear dents in various areas despite its continuous efforts on building foundations,” said an LG spokesman on the background of the chairman’s speech.
“Amidst the likelihood that the global economic recession will continue due to exports from rising nations, the eurozone crisis and shrinking of the domestic economy, the chairman’s words reflect our desperation and our attempts to revolutionize the way we work.”