LG foreign executives face uncertain fate
By Kim Yoo-chul
It wasn't long ago when LG Electronics touted its fleet of foreign executives as symbols of its elevated status as a global technology giant.
However, with the company now facing a management overhaul after faltering in its main markets of consumer electronics and mobile phones, it seems unclear whether the high-profile foreign employees are considered as part of the future or the past.
Several industry sources have told The Korea Times that LG Electronics is likely to let the contracts of its key foreign executives, including marketing head Dermot Boden and chief procurement officer (CPO) Tom Linton, lapse when they come up for renewal later this year.
Didier Chenneveau, who left Hewlett Packard to head LG Electronics’ supply chain management in 2008, is also likely to be released.
The fates of the foreigners were perhaps tied to former LG Electronics chief executive Nam Yong, who was replaced by LG Group Vice Chairman Koo Bon-joon recently after being blamed for derailing the company’s efforts to better compete with bigger rivals Samsung Electronics and Sony.
Koo, a member of LG’s founding family, appears intent on ripping apart the current management lineup to give the company a needed jolt.
Strengthening the company’s marketing capability seems to be a priority _ Koo says he is putting together a tentatively-named ``global marketing team’’ that will be led by Kang Shin-ik, who formerly headed LG Electronics’ television division.
Linton, who joined LG in January of 2008, and Chenneveau are also likely to be let go by Koo, who appears to be preferring proven ``field generals’’ who have built their reputations in the company’s key business divisions rather than marketing professionals.
LG Electronics also has foreign executives heading their human resources and corporate strategies departments.
The company declined to officially comment on whether it intends to let its foreign executives go.
Good, but not enough
Nam had attempted to inject fresh perspective and innovation to the company when he hired his foreign lieutenants.
However, the foreign executives now seem to be in a position where they have to share some of the criticism directed toward Nam, who appears to have frustrated many within LG Group’s top brass with his supposedly slow decision-making and lack of assertiveness.
Some believe that Nam’s sudden resignation as CEO was a result of an inner-conflict over management styles, which was won by the backers of LG’s traditionally conservative corporate culture.
And Nam’s stressing of improved marketing strategies and management systems carried lesser weight when the company was continuing to be exposed for its lack of innovation in key products such as flat-screen televisions and mobile phones.
``Nam had his own idea of how to change the company, but you have to say that the culture shift was too forced and initiated too early. LG Electronics was no way ready for such changes,’’ said another source.
Communication was also a problem between the foreign executives and their Korean counterparts, according to company insiders.
``Not every single person in the building was a great English speaker, and reporting to foreign executives through interpreters was certainly time-consuming. And some of the requests of the Western executives didn’t go well with our Confucian culture,’’ said a senior LG official.
LG Electronics’ second-quarter report card was disastrous, with its profit plunging around 90 percent year-on-year, a decline that was blamed mostly on the company’s lack of smartphone products to compete with the iPhone and BlackBerry.
With the smartphone woes worsening, LG Electronics’ third-quarter numbers are likely to be ugly as well.
Nam offered his resignation in August, a move that many industry watchers predicted as inevitable.
Koo is obviously not the man to get too pretty about marketing ideas and trendy business strategies, and insiders are predicting a return to a more ``hardware-driven’’ focus aimed at creating better technologies for televisions and handsets.
``LG had failed to meet market calls for `wow’ products especially smartphones. What LG needs now is strong leadership and hardware-focused strategies not trendsetters,’’ Koo said recently.
LG has over 80,000 workers in more than 115 operations around the world. LG’s annual sales target for the full year is 59 trillion won from last year’s 55.5 trillion won.
LG전자, 외국인 임원 구조조정 나설 듯
구본준 부회장이 LG전자의 새 수장으로 부임하면서 후속 조직개편과 인사 방향에 대해 초점이 맞춰지고 있는 가운데 외국인 최고경영자들에 대한 거취 또한 관심사항으로 떠올랐다.
업계에서는 `현장경험’을 중시하는 구 부회장의 인사스타일을 고려할 때 외국인 최고경영자들의 역할이 대폭 축소되고 자리 또한 축소, 통합될 것으로 보고있다.
마케팅 전문가였던 전임 남용 부회장은 글로벌 시스템을 갖춘다는 목표 아래 외국인들을 최고경영진으로 영입해 왔다.
이들의 영입으로 마케팅, 공급망 관리, 구매등에서 일정부분 글로벌 시스템으로 다가설 수 있다는 긍정적 평가가 있으나 시스템에 너무 초점을 맞춘 나머지 제품 경쟁력 하락, 인사 적체를 야기했다는 비판 또한 적지 않다.
현재 10명에 달하는 최고경영진 중 절반인 5명이 외국인이다.
회사 관계자와 업계에 따르면 글로벌마케팅 담당이 신설되면서 그간 마케팅을 총괄해온 더모트 보든 최고마케팅책임자(CMO)의 퇴진이 예상되고 있다. 보든 부사장은 올 11월 3년 임기가 만료된다.
이와 함께 내년 1월과 3월 각각 3년 임기가 끝나는 토마스 린튼 최고구매책임자(CPO)와 디디에 쉐네브 최고공급망관리책임자(CSCO) 역시LG전자를 떠날 것으로 예상된다.
LG전자 관계자는 ``구 부회장이 외국인 최고경영진의 성과를 심도 있게 검토할 것’’이라며 ``단 이들도 국내 임원과 동일한 기준에 따라 인사한다는 원칙에는 변함이 없다’’고 말했다.
익명을 요구한 한 업계 관계자는 ``회의 때마다 통역을 대동해야 하는 등 소위 `영어스트레스’가 많았었던 것은 사실’’이라며 ``외국인 최고경영자들이 생각하는 사고가 회사 문화와 맞지 않은 경우도 종종 있었다’’고 설명했다.
이 관계자는 이어 ``빠르게 변화하는 소비자 변화를 제 때 파악하지 못했던 탓에 LG전자의 어려움이 지속되고 있다’’며 ``지금 우리에게 필요한 것은 `트렌드세터’가 아니라 강력한 리더쉽을 바탕으로 한 제품 경쟁력’’이라고 덧붙였다.